01 · THE RALLY Yappli sells the no-code mobile platform on which non-developers at retail-apparel chains, restaurant operators, sports teams, and a fast-growing internal-app cohort build, deploy, and operate native iOS and Android apps without engineering staff of their own. The load-bearing job the platform performs is not the build itself — it is the continuous operation: Apple and Google store-review handling, OS-update compatibility, push notifications, member-ID, point-card, and content management. Renewal economics arrive because the customer would otherwise spend ¥30-50M per year on internal mobile-platform headcount. Revenue compounds in two layers: a stock book of platform subscriptions which now contributes around eighty percent of total sales, and a flow book of professional services — creation support at contract signing and growth support thereafter — which generates the remaining twenty percent. Each new product released since 2024 (Yappli WebX, Yappli MiniApp, Yappli MobileOrder) sits on the same CRM, ID, and point-card layer underneath, which means cross-sell drops to the bottom line at very high contribution margin. The base structural margin lever is contract growth at sub-one-percent gross-revenue churn; the sub-managerial lever is the LTV-to-CAC ratio (Q1 FY26 6.6x, a record) and the average monthly subscription fee per logo (¥466k Q1 FY26, up 3.9% year-on-year); the peripheral lever is operational AI — a pilot AI build assistant rolled out in Q1 FY26 with the explicit goal of lifting professional-services gross margin. From a post-IPO trough of ¥585 on April 7, 2025 the share climbed through the May 14 Q1 FY25 disclosure, which paired modest results with the first-ever dividend declaration — ¥6 interim plus ¥7 final, ¥13 for the year at an 18.1% payout. That was the moment the market re-read Yappli as a capital-return-eligible SaaS rather than a perpetual-reinvestment story. The ascent extended through the August 13 Q2 FY25 print, where professional-services revenue began to inflect and the smartLP software acquisition rebranded as Yappli WebX, establishing the credible multi-product story. The share reached ¥1,263 on August 18, 2025 — a 116% move off the trough in four months. At the peak, enterprise value to forward operating profit sat at roughly 15x, the upper end of the Japanese SaaS profitable-mid-cap band and a price that extrapolated the +61.5% parent operating-profit growth of FY25 as a multi-year slope.

02 · THE REVERSAL On November 13, 2025 management did two things in a single disclosure. First, it upward-revised the FY25 operating-profit guide from ¥750M to ¥830M and raised the dividend forecast in tandem; read alone, the revision should have extended the climb. Second, the same release announced the acquisition of Choose Monster for ¥130M cash, of which ¥113M — 87% of the purchase price — was recognized as goodwill amortized over nine years, an annual ¥12.6M operating-profit drag starting in FY26 with no published comparison to the alternative of repurchasing ¥130M of Yappli stock at the then-prevailing valuation. Through autumn the multiple compressed from the peak band as the market re-priced execution risk on the multi-product pivot. On February 13, 2026 management published FY25 actuals: revenue ¥6,056M (+9.9% on a parent basis), operating profit ¥882M consolidated (parent ¥889M, +61.5%), net income ¥920M. The headline beat the November-raised guide. But the FY26 guide framed a slower year — revenue ¥6,800M (+12.3%), operating profit ¥1,000M (+13.3%), net income ¥930M (+1.0%) — and in the briefing management spelled out a structural point that would weigh on the multiple for six months: the carry-forward losses providing a tax-shield on net income would run out in FY26, after which FY27 net income would normalize to the operating-profit base. That comment, intended to be a clarifying disclosure, became the multiple-compression trigger. The market is forward-looking; investors began discounting an FY27 net-income optics drag despite no change in the underlying business. Through February and into spring the share retraced through the ¥800s to the ¥700s. The reversal carried two structural sources rather than one: a partly-justifiable multiple compression from the August peak as the FY26 guide implied a slower growth slope after FY25, and a partly-over-extended discount around the FY27 tax-shield narrative.

03 · WHERE WE STAND NOW The Q1 FY26 print landed on May 13, 2026. Revenue ¥1,707M (+19.1% year-on-year, the fastest top-line growth in three years), operating profit ¥396M (+77.6%), net income ¥390M (+75.1%). Operating margin 23.2% — an all-time high, 8.5 percentage points above the FY26 full-year guide of 14.7%. Gross-revenue churn (LTM) improved from 0.92% to 0.86%, ahead of management's prior "H2 FY26 improvement" guide by one-to-two quarters. The LTV-to-CAC ratio climbed to 6.6x, a record; management's own investment-discipline threshold is 5x for re-acceleration of ad-spend. Total product contracts rose to 958 across the four-product line, of which 939 are Yappli apps; cross-sell wins included Alpen and Dr. Martens on Yappli MiniApp, and Sarutahiko Coffee on the Yappli + WebX combination. Management paired the print with a second consecutive upward dividend revision (FY26 from ¥14 to ¥15, ¥7.5 interim plus ¥7.5 final, payout 20.6%) and the simultaneous appointment of four new executive officers (COO, CFO, CHRO, CoS) effective Q2 FY26 — the CFO appointment in particular is a tell that capital-allocation discipline will be more institutionalized. The H1 read suggests the FY26 guide of ¥1.0bn operating profit is conservative by 10-20%; an upward revision at Q2 (mid-August 2026) is a real probability. The share has eased back to ¥745 but remains 41% below the August 2025 peak. The implied multiple compression is roughly 6.5x of forward EV/EBIT below the peak band, of which roughly half is justifiable (the FY25 step was inflection-shaped rather than slope-shaped, and the FY26 guide reflects the deliberate ad-spend ramp) and roughly half is the over-discount: an FY26 guide that the Q1 print signals is conservative, a ¥1bn-plus net cash pile, a 37% return on equity, and a still-undefined capital-return policy beyond the ¥15 dividend. The next four quarters will resolve three things: whether Q2 FY26 operating margin holds at or above 18% once the planned ¥180M / quarter lead-generation ad-spend resumes; whether the FY26 results disclosure in February 2027 formalizes a total-return policy on top of the ¥15 dividend; and whether cohort-level churn disclosure separates the Marketing-cohort retention story from the HR / UNITE tailwind that has carried the headline number.