A return to profitability in FY2027 depends on recovering to 45,000 monthly subscribers

Revenue increased 4.4% year on year to ¥5,175 million in FY2026, but monthly subscribers stood at only 35,710 at year-end, which the company described as an 11.2% decline from the same point a year earlier. Monthly subscribers had stood at 40,000 at the end of FY2025, so the subscriber base contracted even as revenue increased. Revenue grew because the annual average number of subscribers and average spending per subscriber increased, making the lack of a recovery in year-end subscribers the first key issue for the next earnings release.

For FY2027, the company expects 45,000 monthly subscribers at year-end, revenue of ¥5,690 million and operating profit of ¥51 million. The target of 45,000 represents an increase of 9,290 subscribers, or approximately 26.0%, from the 35,710 recorded at the end of FY2026. Revenue is also projected to increase by ¥515 million, or 9.9%, so it will be necessary to assess from Q1 whether subscriber recovery translates into actual revenue growth rather than merely serving as an upfront investment.

The quality of subscriber acquisition is mixed. In FY2026, stepped-up advertising in the autumn produced the highest quarterly number of new monthly subscriber registrations on record in the second quarter, but short-term acquisition efficiency fell below expectations. Re-registration by former subscribers after the launch of self-select also fell short of expectations, leading the company to reduce advertising in the spring. Among existing subscribers, the monthly retention rate for loyal users remains high at above 94%, so the next release should focus not on retention but on whether the combination of new registrations, re-registrations and cancellations has improved.

The company previously described an operating model that recovered customer acquisition costs within 2.5 months, but its FY2026 disclosures did not provide current CAC or payback-period figures. Even if the next earnings release confirms a net increase from 35,710 subscribers, assessing the sustainability of the 45,000 target will require disclosure of advertising expenses, registrations by channel, the re-registration ratio and the CAC payback period. In particular, if Q1-end subscribers are below 35,710, the risk will increase that the assumptions behind ¥5,690 million in revenue and ¥51 million in operating profit will be pushed back further.