Q3: Has the recovery in the number of contracts truly taken hold?

Q1 revenue was ¥7,615 million and operating profit was ¥400 million, compared with standalone Q2 revenue of ¥7,983 million and operating profit of ¥675 million. Quarter on quarter, revenue increased 4.8% and operating profit increased 68.8%, indicating that the recovery in earnings is leading the recovery overall. However, first-half revenue was ¥15,599 million, down 5.1% year on year, while operating profit was ¥1,076 million, down 27.1%. The improvement in a single quarter alone makes it difficult to conclude that a full-year recovery has taken hold.

The basic indicators for sales activity have also not yet fully recovered. The number of sales staff at the end of May 2026 was 2,227, down 11.7% year on year and down 38 from the end of the previous quarter. First-half new contracts totaled 102,026, prospective insurance customers totaled 63,778, and contract transfer agreements totaled 8,495, all down year on year. Meanwhile, contracts in force increased 10.7% to 2,087,027, and customers with contracts in force increased 9.0% to 776,505, indicating that the existing contract base is expanding.

The company explained that the monthly number of households attracted through Yamada Denki had increased to 3,000 and that case referrals from major partner companies resumed in June. It also stated that new contracts had recently recovered to more than 50,000, compared with a quarterly average of approximately 57,000 in the previous fiscal year. The company is targeting approximately 60,000 new contracts in each quarter of the second half, or 120,000 in total. It will therefore be necessary to determine whether standalone Q3 new contracts can approach approximately 60,000 or whether the recovery is merely temporary.

In Q3, we will examine not only the number of contracts but also whether the recovery was driven by sales staff numbers, prospective customers, or customer acquisition through partner companies. In particular, it will be important to see whether sales staff turn to a net increase from 2,227, whether monthly customer acquisition remains at 3,000 households, and whether contract transfer agreements reaccelerate from 8,495. If earnings recover only temporarily without improvement in these KPIs, the likelihood of achieving the full-year forecast should still be viewed as uncertain.