| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥28.6B | ¥27.3B | +4.8% |
| Operating Income | ¥0.2B | ¥0.3B | -50.2% |
| Ordinary Income | ¥0.2B | ¥0.3B | -49.4% |
| Net Income | ¥-0.3B | ¥0.1B | -92.4% |
| ROE | -0.9% | 0.1% | - |
For FY2026 Q2 (six months ended June 2026), consolidated Revenue increased to ¥28.6B (YoY +¥1.3B, +4.8%), while Operating Income halved to ¥0.2B (YoY -¥0.2B, -50.2%) and Ordinary Income narrowed to ¥0.2B (YoY -¥0.2B, -49.4%). Net Income attributable to owners of the parent fell into the red at ¥-0.3B (versus a profit of ¥0.1B in the prior-year period). Aggressive investment in human capital increased headcount by 40 YoY; SG&A reached ¥9.0B, accounting for 31.4% of sales, which was the main drag on earnings. Backlog rose sharply to ¥28.7B (YoY +33.5%), driven particularly by the IT Solutions Business (+62.9%) with four orders for fire/emergency communications command systems; however, work in process accumulated to ¥6.8B and Operating Cash Flow recorded a substantial outflow of ¥-6.1B. Short-term borrowings increased by ¥3.5B to fund working capital.
[Revenue] Revenue of ¥28.6B grew +4.8% YoY. By segment, the IT Solutions Business led with ¥17.6B (+7.9%), with GIS solutions up 49% YoY and supported by four new orders for fire/emergency communications command systems. The IT Infrastructure Business delivered ¥4.7B (+10.0%), achieving double-digit growth on steady orders for IT environment build-outs linked to public-sector DX initiatives. Conversely, the IT Services Business declined to ¥6.6B (-4.1%) as third-party maintenance services underperformed due to sales resource constraints. Companywide backlog rose significantly to ¥28.7B (+33.5%), with IT Solutions at ¥17.3B (+62.9%), strengthening the earnings base for subsequent periods.
[Profit and Loss] Gross profit was ¥9.2B, maintaining a gross margin of 32.0%, but SG&A increased to a high level of ¥9.0B (31.4% of sales), reducing Operating Income to ¥0.2B. The main drivers of higher SG&A were increased personnel costs from 40 additional employees and a delay in revenue contribution timing due to on-the-job training (OJT) assignments for new graduates. The Operating Income Margin declined to 0.6% (1.2% in the prior year). Non-operating gains/losses were minimal, resulting in Ordinary Income of ¥0.2B. Due to special losses including fixed asset disposal losses, profit before tax was ¥-0.2B; after recording corporate taxes of ¥0.5B, Net Income attributable to owners of the parent fell to a loss of ¥-0.3B. The tax burden coefficient was an abnormal -1.492, suggesting that tax effect adjustments such as reassessment of the recoverability of deferred tax assets likely weighed on net income.
One-off factors included fixed asset disposal losses and a non-recurring increase in tax burden due to tax effect accounting adjustments. The gap between Ordinary Income of ¥0.2B and Net Income of ¥-0.3B is large, indicating that temporary tax and accounting items depressed net income.
Conclusion: Higher Revenue but lower earnings. While sales growth was maintained, aggressive investment in human capital and tax adjustments significantly reduced profits.
IT Solutions Business: Revenue ¥17.6B (+7.9%), Operating Income ¥0.1B (turned to profit from ¥-0.3B in the prior year). This core business accounts for 61.5% of total sales. Revenue and earnings improved on strong orders for GIS solutions and fire/emergency communications command systems. Backlog rose sharply to ¥17.3B (+62.9%), establishing a base for future earnings. Although the Operating Income Margin remains low at 0.5%, it improved from the prior-year loss.
IT Infrastructure Business: Revenue ¥4.7B (+10.0%), Operating Income ¥0.3B (-13.6%). Accounts for 16.4% of sales. Achieved higher sales on public-sector DX-related projects, but margins declined due to upfront investments. Operating Income Margin was 6.6% (7.6% in the prior year). Backlog ¥6.9B (+4.4%).
IT Services Business: Revenue ¥6.6B (-4.1%), Operating Income ¥0.2B (-71.1%). Accounts for 23.2% of sales. Recorded lower sales and earnings due to sales resource constraints in third-party maintenance services. Operating Income Margin fell sharply to 2.3% (10.6% in the prior year). Backlog ¥4.5B (+0.1%).
Contribution to overall performance: The core IT Solutions Business returned to profitability and led top-line growth, but margin deterioration in the IT Services Business weighed on consolidated Operating Income. The margin gap across segments widened, with the IT Services Business dropping from 10.6% to 2.3%.
Profitability: ROE -0.7% (1.1% in the prior year), Operating Income Margin 0.6% (1.2% in the prior year), EBIT margin 0.6%, EBITDA margin 1.4%, Gross Margin 32.0% (32.3% in the prior year)
Cash quality: OCF/Net Income 24.34x (interpret with caution due to negative denominator; actual OCF outflow is ¥-6.1B), FCF ¥-6.9B, Cash Conversion (OCF/EBITDA) -15.03x, Accrual Ratio 11.1%
Investment efficiency: Capex/Depreciation 0.86x, ROIC -0.3%, Total Asset Turnover 0.543x
Financial soundness: Equity Ratio 58.6% (68.2% in the prior year), Current Ratio 277.3%, Quick Ratio 255.1%, Cash and deposits ¥23.2B (Cash/Short-term liabilities 5.46x)
Efficiency: DSO 133 days, DIO 128 days, CCC 193 days (all at warning levels)
Operating Cash Flow (OCF): ¥-6.1B (worsened from ¥-0.3B in the prior year). Although the OCF/Net Income ratio is 24.34x against Net Income of ¥-0.3B, the negative denominator implies a substantial OCF outflow in reality. The main driver of OCF deterioration was a ¥5.5B increase in inventories (work in process doubled from ¥3.7B to ¥6.8B) and maintained accounts receivable levels, increasing working capital by ¥5.8B. With backlog expansion, WIP for items such as fire/emergency communications command systems piled up, front-loading cash outflows.
Investing Cash Flow: ¥-0.8B. Primarily ¥0.2B in purchases of property, plant and equipment; includes investment cash outflow related to the January 2026 consolidation of Systems Service Co., Ltd., though the specific amount is unknown. Capex of ¥0.2B is roughly on par with depreciation of ¥0.2B, with Capex/Depreciation at 0.86x, indicating this is not a growth investment phase.
Financing Cash Flow: ¥+4.2B. Mainly due to a ¥3.5B increase in short-term borrowings (from ¥0.7B to ¥4.2B), reflecting reliance on short-term funding to secure working capital. No dividend payments were recorded.
FCF: ¥-6.9B (Operating CF ¥-6.1B minus Capex ¥0.2B). The large OCF outflow has eroded investment capacity.
Cash generation assessment: Needs monitoring. The structure relies on short-term borrowings amid negative OCF and negative FCF. While cash and deposits of ¥23.2B provide a certain level of liquidity, continued cash outflows are a risk unless working capital management improves.
There is a ¥0.5B gap between Ordinary Income of ¥0.2B and Net Income of ¥-0.3B. With profit before taxes at ¥-0.2B and corporate taxes of ¥0.5B, the tax burden coefficient is -1.492 (effective tax rate 276.2%). This is presumed to be a one-off impact from tax effect accounting adjustments, such as reassessment of the recoverability of deferred tax assets.
Non-operating gains/losses are minimal, and while there were special losses such as fixed asset disposal losses, the amounts are limited. Up to the Ordinary Income level, one-off factors are few, but tax treatments significantly depressed Net Income.
The Accrual Ratio is a relatively high 11.1%, with OCF far below Net Income, indicating weak cash backing to earnings. Cash Conversion (OCF/EBITDA) deteriorated to -15.03x, implying low earnings quality. DSO of 133 days and DIO of 128 days indicate issues in receivables and inventory management, with delays in AR collection and WIP liquidation. As the 100% WIP ratio warning indicates, nearly all inventories are stuck as WIP.
Quality of earnings assessment: Although Net Income is distorted by a one-off tax effect adjustment, negative OCF and worsening working capital are structural issues, raising concerns about earnings sustainability and cash backing.
Full-year guidance remains unchanged: Revenue ¥70.0B (YoY +9.0%), Operating Income ¥7.0B (+19.9%), Ordinary Income ¥7.0B (+19.7%), Net Income attributable to owners of the parent ¥4.5B (+16.6%), EPS ¥45.23, and dividend ¥25.
Progress at the end of Q2: Revenue 40.9% (-9.1pt vs. the 50% standard), Operating Income 2.3% (-47.7pt), Ordinary Income 2.9% (-47.1pt), and Net Income -5.6% (-55.6pt), showing significant delays.
Background to the large deviation from the standard progress rate: Many customers close their fiscal year in March, creating seasonality with sales concentrated at the end of Q3 (end of March). Therefore, sluggish progress in the first half is typical. The company maintains its full-year outlook, incorporating a substantial earnings recovery in the second half. The backlog of ¥28.7B (+33.5%) underpins second-half earnings. However, the Operating Income progress rate of 2.3% is extremely low even considering seasonality; to achieve full-year Operating Income of ¥7.0B, the company must record more than ¥6.8B in the second half (34x the first half), which presupposes the ability to restrain SG&A and improve working capital.
No forecast revisions have been made.
Dividend policy: No interim dividend for Q2; a year-end lump-sum dividend of ¥25.00 is planned. The full-year dividend of ¥25 is unchanged from the previous year, continuing the progressive dividend policy. The Payout Ratio is mechanically -1021.5% (distorted due to negative net income), but the company expects full-year Net Income of ¥4.5B and total dividends of ¥2.5B, implying a full-year Payout Ratio of 55.3%.
Dividend sustainability: With Q2-end Net Income at ¥-0.3B, there is no dividend capacity on an interim basis, but cash and deposits of ¥23.2B provide a certain level of liquidity; assuming a recovery in the second half, dividend continuity is feasible. However, with FCF at ¥-6.9B, if OCF does not improve, dividends would rely on drawing down cash or additional borrowing. Management indicates its commitment to maintaining dividends, extending the progressive dividend policy through the FY2028 medium-term plan.
Share repurchases: Not disclosed. Total returns are via dividends only, executed on a Payout Ratio basis.
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[Positioning within the industry] (Reference information; company analysis)
Profitability: Operating Income Margin 0.6% (below the company’s past five-year average; FY2026 is temporarily lower due to upfront human capital investment) Efficiency: ROE -0.7% (deteriorated from historical 1.1%, mainly due to tax effect adjustments and net loss) Growth: Revenue growth rate +4.8% (steady growth versus the past five-year trend)
Note: Industry: Information & Communications; comparison period: past five fiscal years of the company; source: company aggregation
Cross-industry benchmark data are not available; the evaluation is based on comparison with the company’s historical results. While Operating Income Margin and ROE are below historical levels, Revenue growth remains solid.
Working capital management risk (quantified: CCC 193 days, WIP ¥6.8B): With backlog expansion, WIP accumulation and delays in AR collection drove a substantial OCF outflow of ¥-6.1B. DSO of 133 days and DIO of 128 days indicate a marked deterioration in working capital efficiency. If orders expand further, cash pressure may persist. The 100% WIP ratio underscores the urgent need for fundamental inventory management improvements.
Profitability pressure risk (quantified: Operating Income Margin 0.6%, SG&A ratio 31.4%): Aggressive human capital investment increased headcount by 40; SG&A of ¥9.0B accounts for 31.4% of sales and pressures Operating Income. At an Operating Income Margin of 0.6%, the company is highly vulnerable; weak sales or project margin deterioration could immediately lead to losses. To record ¥6.8B in Operating Income in the second half, SG&A control and gross margin improvement are essential.
Short-term debt dependence risk (quantified: short-term borrowings +¥3.5B, short-term liabilities ratio 66%): Short-term borrowings surged from ¥0.7B to ¥4.2B to secure working capital, pushing the short-term liabilities ratio to a high 66%. Debt/EBITDA is 15.9x, indicating low debt tolerance and raising the risk that worsening refinancing conditions or rising interest rates could increase financial costs. Without OCF improvement, continued reliance on short-term debt will undermine financial soundness.
Sharp increase in backlog and likelihood of second-half earnings recovery: Backlog of ¥28.7B (+33.5%), particularly ¥17.3B (+62.9%) in the IT Solutions Business, draws attention as a sales base for the second half and beyond. Large projects such as four fire/emergency communications command systems are expected to be recognized by the end of Q3. Considering seasonality due to customers’ March fiscal year-ends, there is potential for significant second-half top- and bottom-line improvement. However, with an Operating Income progress rate of 2.3%, achieving the full-year target of ¥7.0B requires more than ¥6.8B in the second half, testing the execution capabilities in SG&A control and project profitability management.
Need to improve working capital and cash flow: With OCF at ¥-6.1B and FCF at ¥-6.9B, cash generation is notably weak, primarily due to the accumulation of ¥6.8B in WIP. If WIP is recognized as sales in the second half and AR are collected, working capital should contract and OCF should improve substantially; however, delays in collection or re-accumulation of WIP on new projects would prolong reliance on short-term borrowings and weaken financial soundness. OCF trends are key to dividend sustainability and capacity for growth investments.
Monetization of the medium-term growth strategy and investment in human capital: Under Medium-Term Plan 2028, the company targets Revenue of ¥10.0B and ROE of 15%, promoting M&A in the Tokyo metropolitan area and focused investment in growth areas. While increasing headcount by 40 and strengthening new graduate hiring are short-term earnings headwinds, management plans to optimize revenue contribution timing via revised OJT assignments. Attention will focus on integration effects from the first M&A deal (consolidation of Systems Service Co., Ltd.) and whether investment in human capital enhances profitability over the medium to long term.
This report is an automatically generated earnings analysis produced by AI integrating XBRL earnings release data and the PDF results briefing. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by our firm based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as needed.
AI analysis of the PDF results briefing
In FY2026 Q2 (six months), ACMOS Inc. recorded Revenue of ¥2,861 million (YoY +4.8%), while Operating Income halved to ¥16 million (-50.2%) and Net Income attributable to owners of the parent turned to a loss of ▲25百万円. Backlog in the IT Solutions Business rose 62.9% YoY to ¥1,731 million, supported by four orders for fire/emergency communications command systems. The IT Infrastructure Business was also steady on public-sector DX projects. Meanwhile, the IT Services Business saw sluggish sales due to sales resource constraints in third-party maintenance services. Aggressive investment in human capital increased headcount by 40 YoY; the company is working to optimize the timing of revenue contribution by revising new graduates’ OJT assignments. OCF was ▲608百万円, mainly due to increased inventories (▲495百万円), worsening liquidity. To drive top-line expansion, the company is pursuing M&A in the Tokyo metropolitan area and, in January 2026, consolidated Systems Service Co., Ltd. Full-year guidance calls for Revenue of ¥7,000 million, Operating Income of ¥700 million, and a target ROE of 13.0%. Under Medium-Term Plan 2028, the company targets Revenue of ¥10.0B and ROE of 15%+.
Backlog in the IT Solutions Business surged 62.9% from the prior-year quarter-end to ¥1,731 million, with four orders for fire/emergency communications command systems. The IT Infrastructure Business maintained solid orders for public-sector DX projects, with backlog up 4.4% to ¥692 million. Aggressive investment in human capital increased headcount by 40 YoY, and the company is revising new graduates’ OJT assignments to optimize revenue contribution timing. On January 29, 2026, the company consolidated Systems Service Co., Ltd., strengthening its presence in SI and software development in the Tokyo metropolitan area. The Medium-Term Plan 2028 was extended by one year, with targets for FY2028 of Revenue ¥10.0B, Ordinary Income ¥1.0B, and ROE 15%+.
The company forecasts full-year Revenue of ¥7,000 million (YoY +9.0%), Operating Income of ¥700 million (+19.9%), and Net Income attributable to owners of the parent of ¥450 million (+16.6%). Considering seasonality with more sales recognized in the second half, the company expects an earnings recovery toward the end of March. It will continue concentrated investments in growth areas—fire/disaster prevention and networks—and pursue M&A in the Tokyo metropolitan area to drive top-line expansion. Optimizing the timing of contributions from human capital investments and improving working capital management are keys to second-half recovery.
Management maintains its full-year outlook assuming a second-half recovery and plans to keep the dividend at ¥25. Under Medium-Term Plan 2028, the company will expand its challenges across three areas—Business × Members × Value—and aims for ROE of 15%+ and a market capitalization of ¥10.0B in FY2028, promoting management that is conscious of capital costs and stock price. The company will continue investing aggressively in human capital and focusing investments in growth areas to balance top-line expansion with improved profitability. It will extend the period for implementing progressive dividends through FY2028 and continue shareholder returns.
The company is concentrating investments and strengthening its organization in growth areas (fire/disaster prevention and networks). It is promoting M&A in the Tokyo metropolitan area to acquire companies in maintenance and growth areas (consolidated Systems Service in January 2026). To optimize the timing of revenue contribution from new graduate hires, the company has revised the simultaneous OJT assignments and shifted to phased placements. It continues aggressive investment in human capital, increasing headcount by 40 YoY and building a medium- to long-term growth foundation. Under Medium-Term Plan 2028, the company will drive KPI maximization and leadership development through the Wing System (small-team profitability management).
Cautious IT investment, particularly in manufacturing, has led to plan revisions and requests for staff adjustments, affecting orders and sales. In the IT Services Business, sales resource constraints in third-party maintenance services have slowed new customer acquisition and limited sales growth. Increased inventories (▲495百万円) and a decrease in accrued expenses and other current liabilities (▲195百万円) led to a large negative OCF. Short-term borrowings have surged by +350百万円 YoY (+466.7%), increasing reliance on short-term funding. Abnormally higher corporate taxes (YoY +18百万円; tax burden coefficient -1.492) significantly worsened Net Income.
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