Komori
Financial results presentation3692FFRI Security,Inc.Information and Communications, Services and Others

Supplementary Explanatory Materials for the First-Quarter Summary of Financial Results for the Fiscal Year Ending March 2027

First-quarter revenue increased 1.2% year on year, while operating profit declined 30.0%. Although the number of National Security Service projects increased, costs rose due to increased staffing and stepped-up hiring, resulting in a lower profit margin.

Worth reading
53Recurring
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
-79
Year-on-year change in operating profit (¥ million)
Wording
Conditional
How definitive the wording is.

Contents of this document

Supplementary materials to the earnings reportFirst quarter of the fiscal year ending March 202710 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥907 million+1.2%
Operating profit¥185 million-30.0%
Ordinary income¥173 million-33.5%
Net income¥121 million-37.9%
Gross Profit Margin67.2 %
Operating profit margin20.4 %
Selling, general and administrative expenses¥424 million+18.6%
Results for the three months of the current quarter
Net Sales
¥907 million
Operating profit
¥185 million
Ordinary income
¥173 million
Net income
¥121 million
Full-year earnings forecast
Net Sales
¥5,135 million
Operating profit
¥1,452 million
Ordinary income
¥1,509 million
Net income
¥1,133 million
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Progressing as planned
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Higher labor and personnel costs due to increased staffing and improved employee compensation
  • Higher recruitment expenses due to stepped-up hiring
  • Higher R&D expenses associated with enhancements to FFRI yarai
  • Higher other costs associated with increased staffing and stepped-up recruitment activities

The company identifies the factors but does not state the amount attributable to each one.

New initiatives
  • Step up hiring of new graduates and experienced security engineers
  • Strengthen collaboration with strategic sales partners and expand OEM sales
  • Focus on K Program projects and projects related to cyber security
  • Support NICT's demonstration project for security software for government devices
  • Shift Shine Tech's personnel to the cyber security business
  • Recruit and develop advanced security personnel at N.F. Laboratories
Key KPIsA metric the company considers important as a management benchmark.
  • Total number of licenses in the FFRI yarai series615,600 Licensing
  • Consolidated number of employees255 people
  • Number of licenses contracted for government agencies233,876 Licensing
  • Number of licenses contracted for other industries and individuals304,533 Licensing
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Total number of licenses in the FFRI yarai series615,600 Licensing
  • Revenue from the FFRI yarai series¥216,192 thousand
  • Unit price of FFRI yarai¥1,246
  • Unit price of FFRI yarai Home and Business Edition¥1,289
Segment results
  • Security Products
    Net Sales
    Fiscal year ending March 2026, 1Q 434 / Fiscal year ending March 2027, 1Q 436 / yoy_pct 0.5
    Gross profit
    Fiscal year ending March 2026, 1Q 384 / Fiscal year ending March 2027, 1Q 376
    Gross Profit Margin
    Fiscal year ending March 2026, 1Q 88.6 / Fiscal year ending March 2027, 1Q 86.2
  • National Security Service
    Net Sales
    Fiscal year ending March 2026, 1Q 229 / Fiscal year ending March 2027, 1Q 301
    Gross profit
    Fiscal year ending March 2026, 1Q 133 / Fiscal year ending March 2027, 1Q 165
    Gross Profit Margin
    Fiscal year ending March 2026, 1Q 58.1 / Fiscal year ending March 2027, 1Q 55
  • Other Security Services
    Net Sales
    Fiscal year ending March 2026, 1Q 134 / Fiscal year ending March 2027, 1Q 84
    Gross profit
    Fiscal year ending March 2026, 1Q 83 / Fiscal year ending March 2027, 1Q 45
    Gross Profit Margin
    Fiscal year ending March 2026, 1Q 62.4 / Fiscal year ending March 2027, 1Q 54.6
  • Software Development and Testing business
    Net Sales
    Fiscal year ending March 2026, 1Q 98 / Fiscal year ending March 2027, 1Q 84 / yoy_pct -14.3
Medium-term management plan targets
Period CoveredFiscal years ending March 2027 to March 2029
Net Sales
Fiscal year ending March 2027¥5,135 million
Fiscal year ending March 2028¥6,069 million
Fiscal year ending March 2029¥7,029 million
Operating profit
Fiscal year ending March 2027¥1,452 million
Fiscal year ending March 2028¥1,730 million
Fiscal year ending March 2029¥1,951 million
Ordinary income
Fiscal year ending March 2027¥1,509 million
Fiscal year ending March 2028¥1,788 million
Fiscal year ending March 2029¥2,009 million
Net income
Fiscal year ending March 2027¥1,133 million
Fiscal year ending March 2028¥1,339 million
Fiscal year ending March 2029¥1,492 million
Number of employees
Number of Employees255 people
Hiring planStep up hiring of security engineers
Annual Dividend
Annual dividend per share¥18
Payout ratio
12.6 %
Contents of this document
ItemDetails
Document typeSupplementary materials to the earnings report
Fiscal Period CoveredFirst quarter of the fiscal year ending March 2027
Net Sales¥907 million (YoY +1.2%)
Operating profit¥185 million (YoY -30.0%)
Ordinary income¥173 million (YoY -33.5%)
Net income¥121 million (YoY -37.9%)
Gross Profit Margin67.2 %
Operating profit margin20.4 %
Selling, general and administrative expenses¥424 million (YoY +18.6%)
Results for the three months of the current quarterNet Sales ¥907 million / Operating profit ¥185 million / Ordinary income ¥173 million / Net income ¥121 million
Full-year earnings forecastNet Sales ¥5,135 million / Operating profit ¥1,452 million / Ordinary income ¥1,509 million / Net income ¥1,133 million
Self-assessment against the planProgressing as planned
Segment resultsSegment Security Products / Net Sales Fiscal year ending March 2026, 1Q 434 / Fiscal year ending March 2027, 1Q 436 / yoy_pct 0.5 / Gross profit Fiscal year ending March 2026, 1Q 384 / Fiscal year ending March 2027, 1Q 376 / Gross Profit Margin Fiscal year ending March 2026, 1Q 88.6 / Fiscal year ending March 2027, 1Q 86.2, Segment National Security Service / Net Sales Fiscal year ending March 2026, 1Q 229 / Fiscal year ending March 2027, 1Q 301 / Gross profit Fiscal year ending March 2026, 1Q 133 / Fiscal year ending March 2027, 1Q 165 / Gross Profit Margin Fiscal year ending March 2026, 1Q 58.1 / Fiscal year ending March 2027, 1Q 55, Segment Other Security Services / Net Sales Fiscal year ending March 2026, 1Q 134 / Fiscal year ending March 2027, 1Q 84 / Gross profit Fiscal year ending March 2026, 1Q 83 / Fiscal year ending March 2027, 1Q 45 / Gross Profit Margin Fiscal year ending March 2026, 1Q 62.4 / Fiscal year ending March 2027, 1Q 54.6, Segment Software Development and Testing business / Net Sales Fiscal year ending March 2026, 1Q 98 / Fiscal year ending March 2027, 1Q 84 / yoy_pct -14.3 / Profit Not disclosed
Breakdown of Factors Affecting the ChangeFactors Higher labor and personnel costs due to increased staffing and improved employee compensation / Amount Not disclosed, Factors Higher recruitment expenses due to stepped-up hiring / Amount Not disclosed, Factors Higher R&D expenses associated with enhancements to FFRI yarai / Amount Not disclosed, Factors Higher other costs associated with increased staffing and stepped-up recruitment activities / Amount Not disclosed
Key KPIsIndicator name Total number of licenses in the FFRI yarai series / Value 615,600 Licensing / Year on year against the same period last year Not disclosed, Indicator name Consolidated number of employees / Value 255 people / Year on year against the same period last year Not disclosed, Indicator name Number of licenses contracted for government agencies / Value 233,876 Licensing / Year on year against the same period last year Not disclosed, Indicator name Number of licenses contracted for other industries and individuals / Value 304,533 Licensing / Year on year against the same period last year Not disclosed
Unit price and quantity metricsIndicator name Total number of licenses in the FFRI yarai series / Value 615,600 Licensing, Indicator name Revenue from the FFRI yarai series / Value ¥216,192 thousand, Indicator name Unit price of FFRI yarai / Value ¥1,246, Indicator name Unit price of FFRI yarai Home and Business Edition / Value ¥1,289
Number of employeesNumber of Employees 255 people / Change during the period Not disclosed / Hiring plan Step up hiring of security engineers
Medium-term management plan targetsPeriod Covered Fiscal years ending March 2027 to March 2029 / Net Sales Fiscal year ending March 2027 ¥5,135 million / Fiscal year ending March 2028 ¥6,069 million / Fiscal year ending March 2029 ¥7,029 million / Operating profit Fiscal year ending March 2027 ¥1,452 million / Fiscal year ending March 2028 ¥1,730 million / Fiscal year ending March 2029 ¥1,951 million / Ordinary income Fiscal year ending March 2027 ¥1,509 million / Fiscal year ending March 2028 ¥1,788 million / Fiscal year ending March 2029 ¥2,009 million / Net income Fiscal year ending March 2027 ¥1,133 million / Fiscal year ending March 2028 ¥1,339 million / Fiscal year ending March 2029 ¥1,492 million
Annual DividendAnnual dividend per share ¥18 / Interim and Year-End Breakdown Not disclosed
Payout ratio12.6 %
New initiativesStep up hiring of new graduates and experienced security engineers, Strengthen collaboration with strategic sales partners and expand OEM sales, Focus on K Program projects and projects related to cyber security, Support NICT's demonstration project for security software for government devices, Shift Shine Tech's personnel to the cyber security business, Recruit and develop advanced security personnel at N.F. Laboratories
Items this document does not state (10)
Progress against full-year forecastNumber of stores and locationsAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookFinancial targetsAcquisition of treasury sharesCapital expendituresOrders received and order backlogMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

National Security Service expanded as the number of projects under the Economic Security Important Technology Development Program (K Program) increased, while costs rose due to increased staffing, stepped-up hiring and higher research and development expenses. The increased proportion of R&D projects requiring the exclusion of profit was also cited as a factor behind the lower profit margin.

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Supplementary Explanatory Materials for the First-Quarter Summary of Financial Results for the Fiscal Year Ending March 2027 | FFRI Security,Inc. (3692) timely disclosure | Komori