| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥166.5B | ¥147.2B | +13.2% |
| Operating Income / Operating Profit | ¥72.6B | ¥60.9B | +19.4% |
| Ordinary Income | ¥74.8B | ¥62.1B | +20.5% |
| Net Income / Net Profit | ¥32.1B | ¥38.0B | -15.5% |
| ROE | 10.7% | 14.0% | - |
For the full year ended March 2026, Revenue was ¥166.5B (YoY +¥19.4B +13.2%), Operating Income was ¥72.6B (YoY +¥11.8B +19.4%), Ordinary Income was ¥74.8B (YoY +¥12.7B +20.5%), and Net Income attributable to owners of the parent was ¥32.1B (YoY -¥5.9B -15.5%). Although the company finished with higher revenue and operating profit, a special loss of ¥8.5B from impairment on marketable securities reduced the bottom-line profit. The two core segments both achieved double-digit growth: the Architectural Systems Business recorded Revenue of ¥80.3B (+16.3%) and the Survey & Civil Engineering Systems Business recorded ¥78.6B (+9.7%). Operating margin remained at a high level of 43.6% (up +0.5pt from 43.1% a year earlier). Improvement in gross margin to 81.8% (up +2.6pt from 79.2%) and disciplined SG&A at 38.2% of sales (up +0.4pt from 37.8%) produced operating leverage.
[Revenue] Top line reached ¥166.5B, up +13.2% YoY. By segment, the Architectural Systems Business was largest with ¥80.3B (48.2% of total, +16.3% YoY), supported by accumulation of maintenance contracts and expanding BIM demand. The Survey & Civil Engineering Systems Business reported ¥78.6B (47.2% of total, +9.7% YoY), benefiting from resilient public investment and regulatory-compliance demand. The IT Solutions Business, while small, showed high growth with ¥7.6B (4.6% of total, +18.0% YoY), driven by increased demand for web applications and hosting services. The Investment Business recorded an operating loss of ¥0.04B. Advances received increased to ¥29.5B (YoY +¥2.6B), strengthening the subscription and maintenance revenue stock base. Although regional sales detail was not disclosed, most revenue is derived from product sales and maintenance for the domestic construction and surveying markets.
[Profitability] Cost of sales remained ¥30.3B (cost ratio 18.2%), leaving Gross Profit at ¥136.2B (gross margin 81.8%, +2.6pt YoY). SG&A was controlled at ¥63.5B (SG&A ratio 38.2%, +0.4pt YoY), enabling Operating Income of ¥72.6B (operating margin 43.6%, +0.5pt YoY). After adding non-operating income of ¥2.2B (interest income ¥1.3B, dividend income ¥0.6B, etc.) and subtracting non-operating expenses of ¥0.8B, Ordinary Income reached ¥74.8B (+20.5% YoY). Special gains were ¥1.6B (gain on sale of marketable securities) and special losses were ¥8.5B (impairment on marketable securities), resulting in Profit Before Tax of ¥68.0B. After deducting income taxes of ¥24.9B (effective tax rate 36.6%), Net Income was ¥32.1B (-15.5% YoY). A temporary investment valuation loss pulled down the final profit, but core operating profitability expanded steadily; the result is higher revenue and profit at the operating and ordinary income levels, with a bottom-line decline driven by a one-off item.
The Architectural Systems Business posted Operating Income of ¥31.8B (YoY +26.3%), with an operating margin of 39.6% (up +3.2pt), reflecting significant margin improvement. Increased new license sales and sustained maintenance renewal rates contributed, and improved SG&A efficiency lifted margins. The Survey & Civil Engineering Systems Business generated Operating Income of ¥36.9B (YoY +7.4%), with a margin of 47.0% (down -1.0pt), making the largest contribution to company profits. Public and private surveying DX projects remained solid, but competitive pressures and increased development investment slightly compressed margins. The IT Solutions Business achieved Operating Income of ¥5.8B (YoY +20.1%) with a margin of 76.4% (up +1.2pt), maintaining very high profitability driven by improved billing rates on system development projects and scale effects in hosting services. The Investment Business recorded an operating loss of ¥0.04B; investments in domestic and international construction-tech startups continue but have not contributed positive operating profit.
[Profitability] ROE 10.7%, Operating Margin 43.6% (up +2.3pt from 41.3% prior year), Gross Margin 81.8% (up +2.6pt), reflecting a high-profit software business model. Non-operating income accounted for only 1.3% of Revenue, indicating most Ordinary Income was generated from core operations. [Cash Quality] Operating Cash Flow (OCF) of ¥60.9B is 1.9x Net Income of ¥32.1B, indicating excellent cash conversion of earnings. From operating cash inflow subtotal of ¥80.3B, after tax payments of ¥21.3B and increases in advances received of ¥2.6B and other working capital movements, OCF was secured. OCF/EBITDA ratio was 0.80x (OCF ¥60.9B ÷ EBITDA ¥76.1B), slightly below benchmark mainly due to higher in-period tax burden; core cash generation remains strong. [Investment Efficiency] Capital expenditures were ¥2.9B and depreciation ¥3.5B, reflecting an asset-light model; most outflows in investing activities related to acquisition of marketable securities of ¥46.1B. Total asset turnover was 0.45x (Revenue ¥166.5B ÷ Total Assets ¥368.2B), low due to a cash-heavy balance sheet, but ROA was 8.7% (Ordinary Income ¥74.8B ÷ Total Assets ¥368.2B), a healthy level. [Financial Soundness] Equity Ratio 81.7%, Cash and Deposits ¥240.8B (65.4% of Total Assets), and Current Ratio 400.4% demonstrate extremely strong financial position. Interest-bearing debt is zero, net cash of ¥240.8B is held, and financial risk is minimal.
Operating Cash Flow was ¥60.9B (YoY +¥4.4B +7.7%), starting from Profit Before Tax of ¥68.0B, adding back non-cash items such as Depreciation ¥3.5B and provisions ±¥1.0B, with working capital movements including increases in advances received +¥2.6B and increases in accrued expenses/taxes +¥3.1B contributing positively, while tax payments of ¥21.3B and increases in trade receivables ¥0.3B reduced cash. Investing Cash Flow was -¥43.3B, primarily due to acquisition of marketable securities totaling ¥46.1B, partially offset by proceeds from disposals of ¥2.0B, indicating active excess-cash management. Capital expenditures were restrained at ¥2.9B; including intangible asset acquisitions of ¥1.3B, total investment was ¥4.2B. Financing Cash Flow was -¥14.5B, representing full dividend payments; there were no share buybacks or debt repayments. Free Cash Flow was positive at ¥17.6B (OCF ¥60.9B + Investing CF -¥43.3B), allowing dividend payments of ¥14.5B while increasing cash balances. Cash and deposits rose to ¥240.8B (prior year ¥211.7B, +¥29.1B); due to time deposits placement of ¥34.0B, cash and cash equivalents on a cash-equivalents basis increased slightly to ¥21.5B (prior year ¥21.2B, +¥0.3B).
Recurring earnings are centered on Operating Income of ¥72.6B; non-operating income of ¥2.2B (interest income ¥1.3B, dividend income ¥0.6B, etc.) is minor at 1.3% of Revenue. One-off items included Special Gains ¥1.6B (gain on sale of marketable securities) and Special Losses ¥8.5B (impairment on marketable securities), which together reduced Profit Before Tax by net ¥6.8B. Operating Cash Flow of ¥60.9B significantly exceeded Net Income of ¥32.1B, producing an accrual ratio of -0.45 (OCF excess) and indicating high earnings quality. Comprehensive Income was ¥44.2B (Net Income ¥32.1B + Other Comprehensive Income ¥1.1B), with changes in valuation differences on available-for-sale securities creating the divergence between Net Income and Comprehensive Income. The gap between Ordinary Income ¥74.8B and Net Income ¥32.1B is mainly due to net special items of ¥6.8B and tax burden of ¥24.9B; core profitability remains at a high level.
Full-year guidance had projected Revenue ¥166.4B, Operating Income ¥69.0B, Ordinary Income ¥71.0B, and Net Income ¥45.4B. Actual results were Revenue ¥166.5B (vs. guidance +0.1%), Operating Income ¥72.6B (vs. guidance +5.2%), Ordinary Income ¥74.8B (vs. guidance +5.4%), and Net Income ¥32.1B (vs. guidance -29.3%). Revenue, Operating Income, and Ordinary Income exceeded guidance, but a special loss of ¥8.5B on marketable securities led to substantial shortfall in Net Income. Advances received of ¥29.5B correspond to 17.7% of Revenue and support revenue recognition in subsequent periods. The planned year-end dividend of ¥73 was paid as planned; actual EPS was ¥208.63 versus forecast EPS ¥219.54 (achievement rate 95.0%), impacted by the special loss.
A year-end dividend of ¥73 was paid, resulting in an annual dividend of ¥73 (same as prior year). Payout Ratio is 34.5% (total dividends ¥14.5B ÷ Net Income ¥32.1B), an appropriate level. No share buybacks were conducted, and Total Return Ratio equals the payout ratio at 34.5%. With Free Cash Flow of ¥17.6B versus dividend payments of ¥14.5B, FCF coverage is 1.21x, indicating high dividend sustainability. Ample retained earnings and liquidity—Cash and Deposits ¥240.8B and Retained Earnings ¥262.6B—support continued stable dividends.
Marketable Securities Valuation Loss Risk: A valuation loss of ¥8.5B was recorded this period, reducing Net Income. Marketable securities balance of ¥46.9B (12.7% of Total Assets) may experience significant valuation swings due to market conditions or investee performance. Volatility in one-off gains/losses could continue to impair predictability of Net Income.
Cyclicality in Construction & Survey Markets: The Architectural and Survey & Civil Engineering Systems Businesses, which account for the majority of revenue, are sensitive to housing starts and public investment trends. Economic downturns or public budget cuts could slow new license sales. Advances received of ¥29.5B provide a buffer in maintenance revenues, but prolonged decline in new orders could impair medium-term revenue growth.
Technological & Competitive Risk: Continuous development investment is required to respond to changing technology trends such as BIM/CIM and construction DX. Entry by competitors or overseas vendors could intensify price competition and jeopardize maintenance of the high operating margin of 43.6%. Absolute SG&A increased to ¥63.5B (YoY +¥7.9B), and inflationary pressure on personnel and development costs could compress margins over the medium term.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 43.6% | 8.1% (3.6%–16.0%) | +35.5pt |
| Net Profit Margin | 19.3% | 5.8% (1.2%–11.6%) | +13.4pt |
Within the IT & Communications industry, both operating margin and net profit margin rank at the top, with the software and maintenance stock revenue model delivering exceptional profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 13.2% | 10.1% (1.7%–20.2%) | +3.1pt |
Revenue growth exceeds the industry median by 3.1pt, placing the company among the higher-growth firms within the sector.
※ Source: Company compilation
Strengthening of a high-profit stock model: Operating Margin 43.6% and Gross Margin 81.8% maintain top-tier industry profitability, and Advances Received ¥29.5B support revenue stability. Accumulation of maintenance and subscription revenue underpins ongoing operating leverage and margin improvement.
Robust financial position and dividend stability: Cash and Deposits ¥240.8B (65.4% of Total Assets), Equity Ratio 81.7%, and Free Cash Flow ¥17.6B constitute a very healthy financial structure; Payout Ratio 34.5% is sustainable. Dividend payments of ¥14.5B are comfortably covered by FCF, and the company can continue to build retained earnings.
Attention to volatility from one-off items: A valuation loss of ¥8.5B on marketable securities reduced Net Income, but Ordinary Income grew +20.5%, indicating strong core business performance. Valuation movements on marketable securities balance ¥46.9B may remain a source of volatility for Net Income, and distinguishing core business trends from investment-related gains/losses is important.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the firm based on public financial statements. Investment decisions are your own responsibility; consult a professional if necessary.