Transition to SaaS and recurring-revenue businesses built on a transaction-based business

「Against this backdrop, based on the medium-term management plan announced in June 2024, the Group has sought to expand the top line, including by broadening its product lineup, and improve margins in its marketplace business, while building up its stable recurring-revenue business to transform its earnings structure into a robust one.」

「The revenue structure is becoming more diversified through growth in recurring revenue and the US business. To communicate the substance of each business more clearly, the disclosure groups have been reorganized around three pillars.」

「Against this backdrop, based on the medium-term management plan announced in June 2024, the Group has sought to expand the top line, including by broadening its product lineup, and improve margins in its flow business, while building up its stable recurring-revenue business to transform its earnings structure into a robust one.」

「ITANDI ・Expand market share for rental management SaaS in priority areas ・Build platform power and realize cross-selling benefits ・37% nationwide share (approximately 7.2 million managed units using the service) ・15,000 products implemented」

「Against this backdrop, the Group concentrated resources on the RENOSY Marketplace business※1 and the ITANDI business, making growth investments to maximize future profits through market share expansion. The results of structural reforms undertaken previously are also being steadily realized. Other key KPIs were net revenue※2 of ¥14,470 million, up 39.7% year on year; gross profit from the recurring-revenue business※3 of ¥3,435 million, up 72.8%; and an adjusted operating profit margin※4 of 15.4%, compared with 8.7% in the same period of the previous year.」

「Other key KPIs were net revenue※2 of ¥5,914 million, up 48.3% year on year; gross profit from the recurring-revenue business※3 of ¥1,332 million, up 50.0%; adjusted operating profit margin※4 of 6.8%, compared with negative 13.8% in the same period of the previous year; and the non-organic ratio※5 of 39.0%, compared with 41.0%.」

「Amid rising market needs following enforcement of the revised Real Estate Brokerage Act, we continued to make cost-effective investments in the SaaS business. Driven by sustained strong demand and the network effects of vertical SaaS, the Company achieved high growth while remaining profitable, including ARR※６ of ¥2.45 billion, up approximately 42% year on year, 2,474 customers, up approximately 48%, a churn rate※７ of 0.50% versus 0.48% in the previous year, and unit economics※８ of 24.1x versus 30.6x.」

「Driven by sustained strong demand and the network effects of vertical SaaS, the Company achieved high growth while remaining profitable, including ARR※６ of ¥2.83 billion, up approximately 55% year on year, 2,320 customers, up approximately 57%, a churn rate※７ of 0.42% versus 0.55% in the previous year, and unit economics※８ of 34.3x versus 34.9x.」

「Amid growing market demand following enforcement of the amended Real Estate Brokerage Act, the Group achieved high growth while maintaining profitability through cost-effective investment in the SaaS business, including ARR※6 of ¥2,250 million, up approximately 54% year on year, 2,146 customers, up approximately 59% year on year, a churn rate※7 of 0.48% versus 0.44% in the same period of the previous year, and unit economics※8 of 24.5x versus 33.4x.」

「Through the effects of free promotions launched in line with the enforcement of the amended Building Lots and Buildings Transaction Business Act, new service releases, and the high awareness and satisfaction achieved by ITANDI BB, an inter-agent platform that supported the growth of each SaaS product, the company achieved high growth while maintaining profitability, including an ARR※3 growth rate of 70%, a churn rate of 0.47%, and unit economics of 33x.」

「Through the effects of free promotions accompanying the enforcement of the amended Real Estate Brokerage Act, the launch of new services, and the high awareness and satisfaction achieved by ITANDI BB, an inter-agency website, which supported growth across the SaaS products, the Group achieved high growth while maintaining profitability, including ARR※5 growth of 60.2%, a churn rate of 0.52% and a 75.5% share of electronic rental applications.」

「Through cost-effective investment in the SaaS business and the effects of marketing ahead of the easing of regulations on electronic contracts, the company achieved high growth while maintaining profitability, including an ARR※5 growth rate of 63.6%, a churn rate of 0.57%, and a 75.5% share of electronic rental applications.」

「ITANDI business Through cost-effective investment in the SaaS business, the Group achieved high growth, including ARR※5 growth of 61.4% and a churn rate of 0.44%, while maintaining profitability.」

「■Establish a marketplace through which real-time property information is distributed, making it infrastructure used every day by every real estate company ■Become the most trusted core operating system for real estate companies and secure the No. 1 market share in each SaaS field, including areas other than electronic applications」

「The Group currently derives substantial revenue from its real estate investment business, known as the RENOSY iBuyer business, which continues to expand rapidly. Over the medium term, however, the Group believes it needs to strengthen SaaS (Software as a Service) businesses capable of generating stable revenue.」

「神居秒算 (a real estate platform for the Chinese-speaking market) has primarily 2 revenue sources: recurring revenue and flow-based revenue. Recurring revenue includes system usage fees paid by real estate operators for listing properties on the platform. These are generally fixed monthly fees, enabling the Group to generate stable revenue. 神居秒算 also offers direct lead generation, through which investors contact Japanese real estate operators directly, and indirect lead generation, in which NeoX China and NeoX Japan provide consulting services between the parties. In the latter case, when a transaction is concluded, the Group receives consulting fees from the real estate operator, calculated as a certain percentage of the transaction fee, generating flow-based revenue.」

「In addition, to transition the RENOSY integrated real estate brand business to a business structure that balances growth and stability, we clearly set out a strategy, beginning in the first quarter of the current fiscal year, to invest in SaaS businesses, including a real estate transaction platform, the separation of rental management operations, and the external sale of internally developed technology, based on the flow-based i buyer business, and to systematically increase the proportion of stock businesses to establish a stable business foundation and continue further growth.」