Risk of falling short of plan and recovering investment in new AI businesses
First written in FY2016. 14 of 35 entries say "Materialised", first in FY2018-Q2. Latest entry: 2026-08-14.
Fronteo moved to the "Worse" side of this theme in 2018, 8 years before the typical company in this theme (2026).
The whole theme swung hardest in 2026: 4 of 9 companies on the "Worse" side.
2 other companies' latest entry also says "Worsened".
- 2026-08-14WorsenedEarnings
「On the other hand, operating income was an operating loss of ¥135,177 thousand due to growth investment, including the expansion of research personnel in anticipation of an increase in projects, compared with an operating loss of ¥118,460 thousand in the same period of the previous year.」
The operating loss in the life-science AI business, including AI drug discovery, widened due to growth investment in anticipation of an increase in projects. - FY2026MitigatedAnnual report
「Although operating income was affected by accelerated upfront investment in personnel for future growth and higher allocations of head-office costs accompanying the increase in revenue, the effect of higher revenue led to a substantial improvement from the previous fiscal year, resulting in an operating loss of ¥16,185 thousand, compared with an operating loss of ¥231,654 thousand in the previous fiscal year.」
Although the burden of upfront investment in life sciences AI continued, the operating loss narrowed substantially as revenue increased, reducing the investment recovery risk identified in prior years in terms of earnings. - FY2026-H1Progress in DDAIF validation coexisted with the burden of upfront investmentAnnual report
「These validation results show that the company's proprietary specialized AI, KIBIT, can systematically discover relationships between unknown drug target molecules and diseases from known literature, indicating the potential to substantially shorten the target discovery process, the most important process in drug discovery, and increase the probability of success in drug discovery." Total revenue for the life sciences AI business was ¥273.962 million, up 96.0% year on year. However, operating results included an operating loss of ¥216.109 million」
While commercialization of the AI new business progressed through the DDAIF target discovery validation and an increase in co-creation projects, the life sciences AI business reported an operating loss and continued to bear the burden of upfront investment. - FY2025Progress toward commercialization coexisted with impairment indicatorsAnnual report
「For the life sciences AI business as a whole, the company identified an impairment indicator because it has continued to report operating losses. However, no impairment loss was recognized because the undiscounted future cash flows generated by the AI drug discovery and AI medical device businesses exceed the carrying amount.」
While co-creation projects and approval procedures progressed in AI drug discovery and AI medical devices, impairment indicators were also identified across the life sciences AI business as a whole due to continuing operating losses. - FY2025-H1MitigatedAnnual report
「In terms of operating results, improved profitability due to the effects of cost structure improvements implemented in the previous fiscal year and increased recurring revenue in the business intelligence and economic security fields resulted in an operating profit of ¥56.720 million, compared with an operating loss of ¥90.331 million in the same period of the previous year.」
It was explained that, after the AI new business's investment recovery and failure-to-meet-plan risks had emerged in prior years as impairment losses and deficits, the AI solutions business turned to operating profitability during the current interim consolidated accounting period. - FY2024MaterialisedAnnual report
「In addition to recording an impairment loss of ¥98.660 million due to the decision to discontinue the future use of some internally used software in the legal tech AI business, the company recorded ¥85.757 million in restructuring costs aimed at optimizing its cost structure as an extraordinary loss.」
In connection with investment recovery and planning risks in the AI and legal-related businesses, impairment losses totaling ¥2,591.889 million arose at the U.S. and Taiwanese subsidiaries, on internally used software, and in the life sciences AI business. - FY2024-Q3MaterialisedAnnual report
「As the Taiwanese subsidiary is expected to continue reporting losses from operating activities, the company identified an impairment indicator, reduced the carrying amount to the recoverable amount, and recorded the reduction as an impairment loss.」
An impairment loss of ¥8.973 million was recorded on tools, fixtures and equipment because the Taiwanese subsidiary is expected to continue reporting operating losses. - FY2024-Q3MaterialisedAnnual report
「Following the decision to discontinue the future use of some internally used software in the legal tech AI business, the company identified an impairment indicator, reduced the carrying amount to the recoverable amount, and recorded the reduction as an extraordinary loss at the parent company.」
An impairment loss of ¥90.408 million was recorded on internally used software in the legal tech AI business that will no longer be used, with the recoverable amount valued at zero. The risks of investment recovery and failure to meet the AI business plan continued to emerge in the reported results. - FY2024-Q2MaterialisedAnnual report
「As the Taiwanese subsidiary is expected to continue reporting losses from operating activities, the company identified an impairment indicator, reduced the carrying amount to the recoverable amount, and recorded the reduction as an impairment loss. The recoverable amount was valued at zero because no future cash flows are expected.」
Due to the Taiwanese subsidiary's expected continuing operating losses, an impairment loss of ¥8.892 million was recognized on tools, fixtures and equipment. In addition, an impairment loss of ¥90.408 million was recorded on internally used software in the legal tech AI business. - FY2024-Q1MaterialisedAnnual report
「Following the decision to discontinue the future use of some internally used software in the legal tech AI business, the company recognized an impairment indicator and recorded an impairment loss of ¥90.408 million as an extraordinary loss.」
In connection with the AI business's failure to meet its plan and the risk of recovering its investment, an impairment loss of ¥90.408 million actually arose on internally used software that will no longer be used. - FY2023MaterialisedAnnual report
「Adoption by pharmaceutical companies also progressed steadily for KIBIT Mekiki, which automatically classifies specialized medical and healthcare information, and KIBIT Amanogawa, an AI system for searching academic papers. However, with few large projects added, revenue fell 42.2% year on year to ¥451.768 million.」
Although product adoption progressed in the AI new business, life sciences AI revenue fell 42.2% year on year due to a lack of large projects, and the risks related to the plan and investment recovery continued to emerge in the reported results. - FY2023-Q3MaterialisedAnnual report
「In life sciences AI, the Druggable Target 1000 joint project with Axcelead, Inc. was completed and generated revenue. Adoption by pharmaceutical companies also progressed steadily for KIBIT Mekiki, which automatically classifies specialized medical and healthcare information, and KIBIT Amanogawa, an AI system for searching academic papers. However, with few large projects added, revenue fell 40.7% year on year to ¥343.661 million.」
While the joint drug discovery project was completed and monetized and product adoption progressed, revenue fell 40.7% year on year due to a lack of large life sciences AI projects, bringing the risks related to the AI new business plan and investment recovery into the reported results. - FY2023-Q2MitigatedAnnual report
「In life sciences AI, the Druggable Target 1000 joint project with Axcelead, Inc. was completed, generating revenue.」
The AI new business generated revenue after completing the joint drug discovery project with Axcelead. This showed progress toward recovering the initial investment and commercializing the business. - FY2023-Q1MitigatedAnnual report
「The project was completed during the cumulative first quarter of the current consolidated fiscal year, earlier than initially expected, with improvements in the drug discovery application's functionality contributing to the early completion. The company has begun considering the next stage.」
The Druggable Target 1000 project in AI drug discovery was completed earlier than initially expected, and the company moved on to consideration of the next stage. This is tangible progress indicating a reduction in the risks of the AI new business falling short of plan and failing to recover its investment. - FY2022-Q3MitigatedAnnual report
「In business intelligence, results fell short of expectations and revenue was below the year-earlier level. However, growth in life sciences AI offset this decline, with revenue reaching ¥1,505.261 million, up 4.3% year on year, and remaining solid. Operating income was ¥320.739 million, compared with an operating loss of ¥2.139 million in the same period of the previous year, due to higher revenue and cost optimization.」
Although weakness in business intelligence remained in the AI new business, growth in life sciences AI and cost optimization produced higher revenue and an operating profit, further reducing the risk of a slowdown in growth that emerged in the previous year. - FY2022-Q2MitigatedAnnual report
「In the life sciences AI field, revenue increased year on year due to milestone fees received as clinical trials for the conversational AI program supporting dementia diagnosis progressed smoothly in the Medical Device area, and steady adoption of the Amanogawa AI literature search system by pharmaceutical companies in the Medical Intelligence area. Commercialization also progressed steadily as a new core business.」
The AI new business showed progress toward commercialization and monetization through the receipt of milestone fees as clinical trials advanced and the rollout of Amanogawa. - FY2022-Q1MitigatedAnnual report
「The business intelligence field remained at the expected level in the first quarter.」
It explained that, despite the shortfall in the AI Solutions business growth rate identified in the previous fiscal year, the business intelligence field remained at the expected level in the first quarter. - FY2021MitigatedAnnual report
「The Group further accelerated its portfolio transformation toward an AI-centered business model, which it began pursuing in the previous fiscal year. As a result of actively expanding and developing business areas across the fields in which it offers AI solutions and promoting joint development with business partners, it achieved a substantial increase in profit for the fiscal year.」
In response to the shortfall in the AI business growth rate that became evident in the previous fiscal year, the Group expanded its business areas and pursued joint development with partners, and explained that it achieved a substantial increase in profit for the fiscal year. - FY2021-Q3MitigatedAnnual report
「In the life sciences AI field, partnerships with several major companies accelerated, and commercialization steadily progressed as a core business of the Company. The acquisition of milestone fees from major projects made a significant contribution to the year-on-year increase in revenue.」
For the new AI business, partnerships with several major companies, the acquisition of milestone fees, and revenue growth were indicated, confirming an improvement from the risk of below-target growth that became evident in the previous fiscal year. - FY2021-Q2MitigatedAnnual report
「The number of companies adopting AI products steadily increased to 237, or 1.2 times the year-earlier level. Operating loss was ¥121.848 million, compared with an operating loss of ¥148.966 million in the same period of the previous year, but remained within the expected range.」
Against the shortfall in the AI business growth rate that became evident in the previous fiscal year, the number of adopting companies increased and the operating loss narrowed from the same period of the previous year. The AI Solutions business was described as remaining within the expected range. - FY2021-Q1MitigatedAnnual report
「In the business intelligence field, the adoption of KIBIT products progressed in the manufacturing sector and other sectors in addition to the financial sector. As a result, the first quarter of the consolidated fiscal year was generally in line with expectations.」
Against the shortfall in the AI new business growth rate that became evident in the previous fiscal year, the business intelligence field remained generally in line with expectations in the first quarter. - FY2020MaterialisedAnnual report
「Although the number of companies adopting AI products rose to 218, up 1.2 times year on year, the growth rate was below expectations.」
Although the number of companies adopting the new AI business increased, the full-year growth rate was below expectations, confirming that the plan was not achieved for the consolidated fiscal year. - FY2020-Q3MaterialisedAnnual report
「Although the growth rate of the AI Solutions business in the third quarter was below expectations, we believe this will not affect the medium- to long-term outlook.」
In relation to the risk of new AI businesses failing to meet their plans or recover investment, it was specifically stated that the growth rate in the third quarter was below expectations. - FY2020-Q2RestatedAnnual report
「There were no newly arising business or other risks during the cumulative consolidated period for the second quarter. Nor were there any material changes to the business or other risks described in the securities report for the previous fiscal year.」
It was stated that there had been no new developments or significant changes in the risk of new AI businesses failing to meet their plans or recover investment. - FY2019MaterialisedAnnual report
「For the carrying amount of software in the business intelligence division that was no longer expected to be used, the recoverable amount was calculated with value in use set at zero, and the reduction was recorded as an impairment loss under extraordinary losses.」
An impairment loss of ¥8.919 million was incurred on software in the business intelligence field of the AI Solutions business that was no longer expected to be used. - FY2019-Q3MaterialisedAnnual report
「An impairment loss was recorded on fixed assets held in the business intelligence field of the “AI Solutions” segment that were no longer expected to be used in the future. The impairment loss amounted to ¥8.919 million.」
An impairment loss of ¥8.919 million was incurred on fixed assets in the business intelligence field of AI Solutions that were no longer expected to be used in the future. - FY2019-Q2RestatedAnnual report
「There were no newly arising business or other risks during the cumulative consolidated period for the second quarter. Nor were there any material changes to the business or other risks described in the securities report for the previous fiscal year.」
It was stated that there had been no new developments or significant changes in the risk of new AI businesses failing to meet their plans or recover investment. - FY2018MaterialisedAnnual report
「For assets in the healthcare division that were no longer expected to be used in the future, their carrying amounts were reduced to their recoverable amounts due to declining profitability, and the reduction was recorded as an impairment loss under extraordinary losses.」
An impairment loss of ¥73.160 million was incurred in the healthcare division, comprising ¥34.600 million for tools, equipment and fixtures and ¥38.560 million for software. - FY2018-Q3MaterialisedAnnual report
「An impairment loss was recorded on fixed assets held in the healthcare field of the “Japan (AI)” segment that were no longer expected to be used in the future. The impairment loss amounted to ¥73.160 million.」
An impairment loss of ¥73.160 million was incurred on fixed assets in the AI and healthcare fields that were no longer expected to be used in the future. - FY2018-Q2MaterialisedAnnual report
「An impairment loss was recorded on fixed assets held in the healthcare field of the “Japan (AI)” segment that were no longer expected to be used in the future. The impairment loss amounted to ¥34.6 million.」
An impairment loss of ¥34.6 million was actually incurred on fixed assets in the AI and healthcare fields that were no longer expected to be used in the future. - FY2018-Q1RestatedAnnual report
「There were no newly arising business or other risks during the cumulative consolidated period for the first quarter. Nor were there any material changes to the business or other risks described in the securities report for the previous fiscal year.」
It explained that there had been no new developments or significant changes in the risk of new AI businesses failing to meet their plans or recover investment. - FY2017-Q3RestatedAnnual report
「There were no newly arising business or other risks during the cumulative consolidated period for the third quarter. Nor were there any material changes to the business or other risks described in the securities report for the previous fiscal year.」
It explained that there had been no new developments or significant changes in the risk of new AI businesses failing to meet their plans or recover investment. - FY2017-Q2RestatedAnnual report
「No new business or other risks arose during the six months ended 30 September. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」
It explained that there had been no new developments or significant changes in the risk of new AI businesses failing to meet their plans or recover investment. - FY2017-Q1RestatedAnnual report
「There have been no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」
It explained that there had been no significant changes in the risk of new AI businesses failing to meet their plans or recover investment. - FY2016First statedAnnual report
「It is difficult to reliably predict the impact of these businesses. Unexpected changes may prevent the Group from achieving its original business plans or from producing the expected results, and it may fail to generate sufficient returns commensurate with its upfront investment.」
The possibility that the AI information analysis business may fail to meet its business plan or generate returns commensurate with its upfront investment was disclosed as a key risk.