Temairazu (2477) FY2026 Earnings Analysis: Growth Strategy Driven by High-Margin SaaS Evolution and Robust Inbound Demand

1. FY2026 Earnings Summary: Record-High Revenue and Profit

Temairazu, Inc. reported strong full-year financial results for the fiscal year ending June 2026, with both revenue and profit at every level exceeding the initial forecasts and surpassing the previous year's performance.

Key Financial Highlights

• Revenue : ¥2,414 million (+10.5% YoY, 102.1% of forecast)
• Operating Profit : ¥1,747 million (+8.6% YoY, 106.5% of forecast)
• Ordinary Profit : ¥1,773 million (+9.4% YoY, 107.2% of forecast)
• Net Income : ¥1,172 million (+9.8% YoY, 105.8% of forecast)
• Earnings Per Share (EPS) : ¥192.25 (+16.0% YoY)
• Operating Profit Margin : 72.4%

As shown in the slide above, the company maintains its hallmark exceptionally high profitability, with an operating profit margin exceeding 70% . Driven by the recovery in domestic lodging demand and the surge in inbound international travelers, the core lodging reservation site controller business propelled double-digit growth across all key metrics. Furthermore, the share buybacks conducted during the fiscal year contributed to a significant 16.0% year-on-year increase in EPS.

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2. Segment Performance: Application Service Business Accounts for 99.8% of Revenue

The company operates through two segments: "Application Service Business" and "Internet Media Business," though its revenue structure is almost entirely concentrated in the Application Service segment.

① Application Service Business (Core Business)

• Revenue : ¥2,408 million (+10.8% YoY)
• Segment Profit (after allocation of corporate expenses) : ¥1,751 million (+8.8% YoY)
• Segment Profit Margin (after allocation) : 72.7%

This segment, which provides the "TEMAIRAZU" series of lodging reservation site controllers, is the primary engine of the company, accounting for 99.8% of total revenue. Growth was driven by active demand from new lodging facility openings and increased usage-based revenue from existing clients as reservation volumes grew.

② Internet Media Business

• Revenue : ¥5 million
• Segment Loss (after allocation) : -¥4 million

This segment, which operates comparison sites such as "Hikaku.com," experienced a decline in revenue and a minor loss due to traffic drops caused by search engine algorithm changes. The company is continuously working on SEO and UI/UX improvements.

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3. Revenue Structure Analysis: A Robust Hybrid Model of "Fixed Monthly Fees + Usage-Based Revenue"

The strength of the Application Service Business lies in the balance between stable recurring revenue and variable income that directly captures the expansion of lodging demand.

Breakdown and Trends of Revenue Streams

1. Fixed Monthly Revenue (Basic fees and option fees)
   • Full-year result: ¥1,794 million (74.5% of total revenue, +9.8% YoY)
   • Quarterly trend: Steadily increasing every quarter from ¥399 million in Q1 FY2025 to ¥463 million in Q4 FY2026, supported by a low churn rate and new installations at hotels and inns.
2. Variable Monthly Revenue (Communication fees based on reservation volume)
   • Full-year result: ¥558 million (23.2% of total revenue, +17.7% YoY)
   • Quarterly trend: Linked to rising lodging demand, this grew from ¥114 million in Q1 FY2025 to ¥144 million in Q4 FY2026. The increase in lodging reservations, particularly from inbound travelers, is a direct driver of this growth.

This structure establishes a solid revenue foundation through fixed income, while simultaneously capturing the upside of the travel demand recovery.

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4. Business Strategy and Functional Enhancements: Addressing Labor Shortages and Expanding Inbound Channels

To address the "severe labor shortages" and "diversification of inbound travelers" facing the lodging industry, the company is aggressively pursuing functional expansions and strategic alliances.

• Expansion and Updates of "Temairazu Jido" (Automation) The company provides services to automate revenue management (optimizing room rates and occupancy). Features include automatic rate adjustments based on remaining inventory, automated stay-duration restrictions, best-rate checks for official websites, and automated report generation, helping lodging facilities reduce operational man-hours while maximizing revenue.
• Expanding Integration with Global OTAs and PMS/CRS The company has strengthened connections with inbound reservation channels, particularly in Asia, including Traveloka (Southeast Asia), Tiket.com, KKday (strong in Taiwan/Asia), and HKTV Booking (Hong Kong). Furthermore, it has begun or expanded integrations with Oracle OPERA Cloud, China's Smart Order PMS, and the revenue management system IDeaS G3 RMS, solidifying its position as the DX foundation for hotels.

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5. Financial Soundness and Proactive Shareholder Returns

The company maintains an extremely healthy financial position and implements proactive shareholder returns based on its high cash-generating capability.

• Solid Balance Sheet
  • Out of ¥7,145 million in total assets, net assets stand at ¥6,658 million .
  • Cash and deposits total ¥6,410 million , accounting for approximately 90% of total assets, maintaining a debt-free management style.
  • The equity ratio is an exceptionally high 93.2% .
• Shareholder Return Track Record
  • In FY2026, in addition to dividend payments (¥242 million), the company completed a large-scale share buyback totaling approximately ¥1.04 billion (buying back a total of 520,000 shares across two programs) .
  • As a result, the total return ratio reached 109.5% , demonstrating a commitment to enhancing capital efficiency (ROE/EPS).

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6. FY2027 Earnings Forecast and Outlook

For the fiscal year ending June 2027, the company expects continued growth in both revenue and profit , supported by a robust business environment.

FY2027 Earnings Plan

• Revenue : ¥2,713 million (+12.4% YoY)
• Operating Profit : ¥1,979 million (+13.3% YoY)
• Ordinary Profit : ¥2,023 million (+14.1% YoY)
• Net Income : ¥1,335 million (+13.9% YoY)

Assumptions and Key Initiatives

• Macro Environment : While there are concerns regarding economic fluctuation risks due to inflation, exchange rates, and interest rate trends, as well as a potential slowdown in new lodging facility construction due to rising costs, the company anticipates a continued upward trend in inbound travelers (government target of 60 million by 2030) and steady domestic lodging demand .
• Growth Investment : The company plans to continue investing in human capital, system infrastructure (including information security), and functional development (such as "Temairazu Jido") to ensure long-term competitive advantage.

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Conclusion

Temairazu continues to benefit from the lodging industry's need for DX and automation, as well as the expansion of inbound tourism, all while maintaining a high market share and an astonishing operating profit margin exceeding 70%. These earnings results demonstrate a sustainable growth model that balances a solid financial foundation with a strong commitment to shareholder returns, aiming for double-digit growth in the coming fiscal year.