Open House Q3 FY2026: Operating Profit Up 18%, Guidance and Dividend Raised
Revenue
¥1.0T
+8.9%
Full-year forecast
¥1.5T
Operating Profit
¥121.0B
+18.3%
Full-year forecast
¥180.0B
Net Income
¥81.3B
+15.1%
Full-year forecast
¥118.5B
Operating Margin
11.8%
Open House's nine-month revenue grew 8.9% to ¥1.02 trillion, operating profit jumped 18.3% to ¥120.9 billion, and net profit rose 15.1% to ¥81.3 billion. All segments were profitable, led by a swing in condominiums. The company raised annual guidance and boosted its dividend by ¥27 to ¥205.
Earnings Highlights
Open House delivered higher revenue and profit for the cumulative third quarter of fiscal 2026 (October 2025 to June 2026). Revenue reached ¥1,023,402 million (up 8.9% year on year), while operating profit climbed 18.3% to ¥120,959 million. Ordinary profit rose 18.1% to ¥116,068 million, and net profit attributable to owners of parent increased 15.1% to ¥81,260 million. The strong sales contract pipeline and the turnaround of the condominium business from an operating loss to a profit drove the improvement.
Profitability also strengthened: the gross margin widened from 18.4% to 19.5% (a 1.1-percentage-point increase), and the operating margin improved from 10.9% to 11.8%. The condominium business swung from a year-earlier operating loss of ¥280 million to a profit of ¥7,566 million, ensuring all segments were in the black.
Segment Performance
Single-Family Homes benefited from robust urban demand, with revenue up 8.7% to ¥563,006 million and operating profit up 10.5% to ¥61,840 million. It remains the core segment, contributing about 55% of total revenue.
Condominiums saw a dramatic turnaround: revenue surged 123.3% to ¥42,415 million, and the business posted an operating profit of ¥7,566 million, compared with a loss of ¥280 million a year ago. Better project selection and price optimization paid off.
Income Properties delivered steady growth, driven by investment demand for rental apartments and office buildings. Revenue increased 8.6% to ¥154,057 million, and operating profit grew 12.1% to ¥16,370 million.
Other operations, which include U.S. real estate sales to wealthy Japanese clients, recorded a 3.2% revenue increase to ¥113,862 million but a marginal 1.0% decline in operating profit to ¥13,380 million, partly due to currency swings.
Presance (formerly Presance Corporation) focused on investment and family condominiums in the Kansai and Chukyo regions. Revenue was nearly flat at ¥150,047 million (down 0.3%), but operating profit rose 13.8% to ¥20,759 million on improved margins.
| Segment | Revenue | Share | Op. Profit | Op. Margin |
|---|---|---|---|---|
| Single-Family Homes | ¥563.0B | 55% | ¥61.8B | 11.0% |
| Condominiums | ¥42.4B | 4% | ¥7.6B | 17.8% |
| Income Properties | ¥154.1B | 15% | ¥16.4B | 10.6% |
| Other | ¥113.9B | 11% | ¥13.4B | 11.8% |
| Presance | ¥150.0B | 15% | ¥20.8B | 13.8% |
Full-Year Outlook
Open House raised its consolidated forecasts for fiscal 2026. Revenue is now expected at ¥1,500,000 million (up ¥30 billion from the previous forecast, a 12.2% increase year on year). Operating profit is lifted by ¥10 billion to ¥180,000 million (up 23.3%), ordinary profit by ¥10 billion to ¥170,000 million (up 21.9%), and net profit by ¥5.5 billion to ¥118,500 million (up 17.7%). The upgrade reflects stronger-than-expected sales in single-family homes and income properties, as well as early profit contribution from condominiums.
The company also raised its year-end dividend forecast from ¥100 to ¥105, bringing the annual dividend to ¥205 (versus ¥178 in fiscal 2025). Together with the ¥100 interim payment already made, this marks a ¥27 increase in annual payout.
Financial Position and Capital Policy
Total assets at the end of the third quarter stood at ¥1,529,908 million, up ¥117.9 billion from the fiscal 2025 year-end, mainly due to a ¥137,970 million increase in inventories for sale and development. Cash and deposits fell by ¥55,492 million as funds were allocated to land purchases. Interest-bearing debt (short- and long-term borrowings) rose by a combined ¥82,867 million, pushing total liabilities to ¥941,357 million. The equity ratio edged up 0.3 percentage points to 38.4%.
While cash flow statements were not disclosed, the higher leverage is evident. On the shareholder return front, Open House repurchased ¥19,473 million of its own shares and canceled ¥21,980 million in treasury stock during the period, aiming to boost per-share metrics and improve capital efficiency.
Risks and Challenges
The earnings report does not flag any specific material risks, but the following external factors warrant attention based on the business mix:
- Real estate market swings: Demand for single-family homes, condominiums, and income properties is sensitive to economic conditions and interest rate trends, posing risks of price declines or sales slowdowns.
- Interest rate risk: Rising rates could increase interest expenses as the company's debt load grows.
- Competition for land: Intensifying competition for prime urban plots may inflate acquisition costs and squeeze margins.
- Currency risk: The Other segment's exposure to U.S. real estate means yen-dollar fluctuations can affect earnings.
While current performance is robust, changes in the financial environment need to be monitored for their impact on future growth.
Analyst take
The condominium business's swing to profit this quarter is a definitive sign of improved earnings quality. Having all segments in the black suggests a more balanced portfolio. However, the rapid build-up of inventories and rising debt dependence call for caution; in a rate-hiking scenario, higher interest costs could eat into profits. The proactive shareholder returns (buybacks and cancellations) are commendable, but it remains to be seen whether the emphasis on capital efficiency is well balanced with sustained growth investment – we'll watch Q4 free cash flow. The single-family brand remains strong, but urban land acquisition costs will likely dictate future margins. Delivering on the full-year plan hinges on a concentrated fourth-quarter handover schedule.