Broadleaf (3673) Q2 2026 earnings summary

Executive summary

• First-half revenue rose 9.8% year-over-year to ¥10,781 million, exceeding initial plans by 3.7%, driven by strong cloud services growth, robust customer IT investment, and steady cloud migration progress.

• Operating profit surged 91.5% year-over-year to ¥1,477 million, surpassing initial plans by 34.3%, with profit before tax up 132.1% and net profit attributable to owners up 140.3% to ¥1,001 million.

• Cloud migration in the mobility sector, increased sales to non-mobility customers, and ongoing digital transformation demand contributed to growth.

• The company accelerated cloud software adoption, increased marketplace users, invested in Physical AI R&D, and optimized costs through generative AI and IT infrastructure enhancements.

• Price revisions for packaged software support fees are scheduled for September 2026 to offset rising costs.

Financial highlights

• 2Q FY2026 revenue: ¥10,781 million (up 9.8% YoY); operating profit: ¥1,477 million (up 91.5% YoY); net profit attributable to owners: ¥1,001 million (up 140.3% YoY).

• Cloud services revenue increased 29.7% YoY, while packaged system sales fell 15.3% and hardware/other sales dropped 11.1%.

• Gross profit margin improved to 68.6% from 64.9% YoY, with gross profit at ¥7,392 million, up from ¥6,371 million YoY.

• Recurring revenue reached ¥8,051 million, up 14.3% YoY, with a recurring revenue ratio of 74.7%.

• Free cash flow turned positive at ¥803 million, while cash and cash equivalents at period-end were ¥3,761 million, down ¥361 million from the previous year-end.

Outlook and guidance

• Full-year revenue forecast revised upward to ¥23,800 million (up 14.3% YoY); operating profit forecast: ¥4,800 million (up 132.7% YoY); profit attributable to owners: ¥3,200 million.

• Cloud migration among large and mid-sized customers expected to continue, with no significant risks to the migration plan identified.

• Price increases for support fees expected to contribute ¥160 million in FY2026.

• Transition to cloud software expected to continue, with stable packaged software and PC demand in non-mobility sectors.