Dependence on Contract Development for Large Enterprises and the Risk of Revenue Concentration at Fiscal Year-End and Fiscal-Period Shifts
First written in FY2017. 12 of 33 entries say "Mitigated", first in FY2020-Q2. Latest entry: 2026-11-06.
MKSystem moved to the "Worse" side of this theme in 2017, 3 years before the typical company in this theme (2020).
The whole theme swung hardest in 2024: 4 of 14 companies on the "Worse" side.
2 other companies' latest entry also says "Mitigated".
- FY2027-H1MitigatedAnnual report
「Net sales exceeded the year-earlier period because sales recognition, which had previously tended to be concentrated in the fourth-quarter accounting period, was distributed to a certain extent into the second-quarter accounting period this year.」
Compared with the previous tendency for sales to be concentrated in the fourth quarter, a certain amount of revenue was recognized in the second quarter this year, partially easing the concentration of sales within the fiscal year. - 2026-08-05MaterialisedResults
「フロントシステムの受託開発においては、一部案件の立ち上がり及び売上計上時期が前年同四半期より後ろ倒しとなったことから、売上高は前年同四半期を下回りました。」
一部案件の立ち上がりと売上計上時期の後ろ倒しにより、CuBe事業の四半期売上高が前年同期を下回った。 - FY2026MaterialisedAnnual report
「Although the first quarter was affected by the occurrence of an unprofitable project, revenue was concentrated in the fourth quarter, when revenue recognition is weighted, and the business therefore recorded operating profit for the full fiscal year.」
The occurrence of loss-making projects and the concentration of revenue recognition in the fourth quarter indicate that reliance on commissioned development and fluctuations in the timing of revenue recognition during the fiscal year continue to materialize. - FY2026-H1MaterialisedAnnual report
「The company continues to record an operating loss for the current interim accounting period, partly because loss-making projects arose in the first quarter due to overruns in estimated labor hours. As profit tends to be weighted toward the second half, the company will strengthen its initiatives to achieve full-year profitability.」
Due to overruns in estimated labor hours and the concentration of profit in the second half, the CuBe business continued to post an operating loss for the interim period, and fluctuations based on the timing of revenue and profit recognition during the fiscal year materialized. - FY2025MitigatedAnnual report
「For the current consolidated fiscal year, orders received in the CuBe business totaled ¥873.354 million, or 137.3% of the previous fiscal year, and the order backlog was ¥365.061 million, or 101.4%.」
Orders received in commissioned development for large corporations and local governments were 137.3% of the previous fiscal year, and the order backlog was ¥365.061 million. Actual results support the statement that fluctuations caused by a shortage of projects and timing shifts eased during the fiscal year. - FY2024MitigatedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, while new development projects responding to corporate investment demand for system updates also accumulated at a level in line with typical years. In addition, during the third quarter of the current consolidated fiscal year, the company won orders for large development projects that will contribute to revenue from the next fiscal year onward.」
Maintenance revenue and new development projects accumulated at levels in line with typical years, and the company also won orders for large projects that will contribute from the next fiscal year onward, easing fluctuations caused by a shortage of projects and timing shifts during the fiscal year. - FY2024-Q3MitigatedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, while new development projects responding to corporate investment demand for system updates also accumulated at a level in line with typical years. In addition, during the third quarter of the current consolidated fiscal year, the company won orders for large development projects that will contribute to revenue from the next fiscal year onward.」
Maintenance revenue and new development projects accumulated at levels in line with typical years, and the company also won orders for large development projects that will contribute from the next fiscal year onward. Fluctuations caused by a shortage of projects and the timing of revenue recognition eased during the quarter. - FY2024-Q2MitigatedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, while new development projects responding to corporate investment demand for system updates also accumulated at a higher level than in typical years.」
Maintenance revenue and new development projects accumulated, resulting in a 24.1% year-on-year increase in CuBe business revenue. Although there is no indication that the underlying reliance on commissioned development has been eliminated, fluctuations caused by a shortage of projects eased during the quarter. - FY2024-Q1MitigatedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, while new development projects responding to corporate investment demand for system updates also accumulated at a higher level than in typical years.」
Maintenance revenue and new development projects accumulated, resulting in a 34.8% year-on-year increase in CuBe business revenue. There is no indication that the underlying reliance on commissioned development has been eliminated. - FY2023WorsenedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, but new development projects, whose timing depends on internal system reforms and corporate investment demand, did not accumulate to the same extent as in typical years.」
Maintenance revenue from large corporations and local governments accumulated, but new development projects did not accumulate to the same extent as in typical years, resulting in an 8.8% decline in CuBe business revenue from the previous fiscal year. Reliance on commissioned development and fluctuations based on project timing continue. - FY2023-Q3WorsenedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, but new development projects, whose timing depends on internal system reforms and corporate investment demand, did not accumulate to the same extent as in typical years.」
Although maintenance revenue accumulated, new development projects, whose timing depends on investment demand, did not accumulate to the same extent as in typical years, resulting in a 13.6% year-on-year decline in CuBe business revenue. Reliance on commissioned development for large corporations and local governments and fluctuations based on project timing continue. - FY2023-Q1RestatedAnnual report
「In commissioned development of front-end systems, maintenance revenue from large corporate and local-government customers steadily accumulated, while new development projects responding to corporate investment demand for system updates were also delivered at the same pace as in typical years.」
In commissioned development for large corporations and local governments, maintenance revenue steadily accumulated and new development projects were delivered at the same pace as in typical years. There is no indication that the structural timing of revenue recognition, including commissioned development, has been eliminated. - FY2022RestatedAnnual report
「In commissioned development of front-end systems, large corporate and local-government customers showed strong interest in investment to update systems for work-style reform, the promotion of telework and human resources system reform. The company strengthened its sales organization accordingly, which increased order-taking activity and resulted in the delivery of several large development projects, unusual in recent years, substantially increasing revenue.」
The company delivered several large commissioned development projects for large corporations and local governments, increasing revenue, but there is no indication that reliance on large commissioned development or the structural timing of revenue recognition has been eliminated. - FY2022-Q3RestatedAnnual report
「The CuBe business provides commissioned development of front-end systems customized for individual large companies to improve business-process efficiency for their human resources and general affairs departments, as well as cloud services for the convenience of small and medium-sized enterprises that leverage expertise accumulated through commissioned development for large companies.」
The company continues to operate a business structure centered on commissioned development for large corporations and cloud services for small and medium-sized enterprises that leverage this expertise. Although revenue increased substantially due to several large projects, there is no indication that reliance on commissioned development or the structural timing of revenue recognition has been eliminated. - FY2022-Q1WorsenedAnnual report
「As a result, revenue in the CuBe business was ¥85.724 million, down 1.7% year on year, gross profit was ¥17.910 million, up 19.8%, and operating loss was ¥31.762 million, compared with an operating loss of ¥25.698 million in the same quarter of the previous year.」
Although orders in the CuBe business increased substantially, revenue for the quarter declined 1.7% year on year and the operating loss widened from ¥25.698 million to ¥31.762 million. The risks associated with the timing of revenue recognition and earnings fluctuations in commissioned development continue to materialize. - FY2021MitigatedAnnual report
「As a result, revenue in the CuBe business was ¥550.459 million, down 12.4% from the previous fiscal year, gross profit was ¥194.983 million, up 3.9%, and operating loss was ¥5.788 million, compared with an operating loss of ¥46.263 million in the previous fiscal year. The CuBe business's operating loss includes ¥38.861 million in amortization of goodwill.」
Although revenue in the CuBe business declined, gross profit increased and the operating loss narrowed substantially from ¥46.263 million to ¥5.788 million. - FY2021-Q3Lower revenue and a narrower operating loss in the CuBe businessAnnual report
「As a result, revenue in the CuBe business was ¥348.863 million, down 23.8% year on year, gross profit was ¥102.135 million, down 13.8%, and operating loss was ¥44.761 million, compared with an operating loss of ¥60.711 million in the same quarter of the previous year. The CuBe business's operating loss includes ¥29.146 million in amortization of goodwill.」
Revenue in the CuBe business fell 23.8% year on year and gross profit fell 13.8%, while the operating loss narrowed from ¥60.711 million to ¥44.761 million. The operating loss nevertheless continues. - FY2021-Q2WorsenedAnnual report
「As a result, revenue in the CuBe business was ¥215.788 million, down 31.1% year on year, gross profit was ¥57.894 million, down 31.5%, and operating loss was ¥37.685 million, compared with an operating loss of ¥35.908 million in the same quarter of the previous year. The CuBe business's operating loss includes ¥19.430 million in amortization of goodwill.」
Due to delays in business discussions and implementation work associated with the spread of COVID-19, revenue and gross profit in the CuBe business declined, and the operating loss widened from ¥35.908 million in the same quarter of the previous year to ¥37.685 million. - FY2021-Q1MaterialisedAnnual report
「In commissioned development of front-end systems in particular, discussions with customers and implementation work were delayed as the personnel and decision-makers at customer companies and local governments shifted to working from home or became busier amid the spread of COVID-19.」
Discussions and implementation work in the CuBe business's commissioned development operations were in fact delayed because personnel and decision-makers at companies and local governments shifted to working from home or became busier. - FY2020MitigatedAnnual report
「As a result, revenue in the CuBe business was ¥608.774 million, up 7.5% from the previous fiscal year, gross profit was ¥180.502 million, up 4.1%, and operating loss was ¥49.721 million, compared with an operating loss of ¥64.821 million in the previous fiscal year.」
Revenue in the CuBe business increased 7.5%, and the operating loss narrowed from ¥64.821 million to ¥49.721 million. However, the operating loss continues. - FY2020-Q3MitigatedAnnual report
「As a result, revenue in the CuBe business was ¥457.737 million, up 25.1% year on year, gross profit was ¥118.525 million, up 22.1%, and operating loss was ¥60.711 million, compared with an operating loss of ¥94.853 million in the same quarter of the previous year. The CuBe business's operating loss includes ¥29.146 million in amortization of goodwill.」
Revenue in the CuBe business increased 25.1% year on year and gross profit increased 22.1%, while the operating loss narrowed from ¥94.853 million to ¥60.711 million. However, the operating loss continues. - FY2020-Q2MitigatedAnnual report
「As a result, revenue in the CuBe business was ¥313.174 million, up 33.0% year on year, gross profit was ¥84.516 million, up 65.9%, and operating loss was ¥35.908 million, compared with an operating loss of ¥79.401 million in the same quarter of the previous year. The CuBe business's operating loss includes ¥19.430 million in amortization of goodwill.」
Revenue in the CuBe business increased 33.0% year on year and gross profit increased 65.9%, while the operating loss narrowed from ¥79.401 million to ¥35.908 million. However, the operating loss continues. - FY2020-Q1Reduction in the CuBe business's quarterly lossAnnual report
「As a result, revenue in the CuBe business was ¥87.916 million, up 33.7% year on year, gross profit was ¥15.460 million, up 138.4%, and operating loss was ¥46.695 million, compared with an operating loss of ¥61.547 million in the same quarter of the previous year. The CuBe business's operating loss includes ¥9.715 million in amortization of goodwill.」
Revenue in the CuBe business increased 33.7%, and the operating loss narrowed from ¥61.547 million in the same quarter of the previous year to ¥46.695 million. However, the quarterly operating loss continues. - FY2019WorsenedAnnual report
「As a result, revenue in the CuBe business was ¥566.520 million, down 2.1% from the previous fiscal year, gross profit was ¥173.420 million, down 28.6%, and operating loss was ¥64.821 million, compared with an operating loss of ¥0.710 million in the previous fiscal year.」
Due to fewer deliveries of commissioned development projects for large corporations and deteriorating margins, revenue in the CuBe business fell 2.1% and gross profit fell 28.6%, while the operating loss widened to ¥64.821 million. - FY2019-Q3WorsenedAnnual report
「As a result, revenue in the CuBe business was ¥365.964 million, down 5.4% year on year, gross profit was ¥97.025 million, down 38.5%, and operating loss was ¥94.853 million, compared with an operating loss of ¥31.886 million in the same quarter of the previous year.」
Against a backdrop of fewer deliveries of large commissioned development projects and development costs exceeding expectations, revenue and gross profit in the CuBe business declined, and the operating loss widened from ¥31.886 million in the same quarter of the previous year to ¥94.853 million. - FY2019-Q2WorsenedAnnual report
「During the second quarter of the current consolidated cumulative period, revenue declined because fewer large commissioned development projects were delivered than in the same quarter of the previous year. In addition, some large projects incurred development costs above expectations and failed to secure sufficient profit, causing a substantial deterioration in margins in the commissioned development business. As a result, revenue in the CuBe business was ¥235.458 million, down 12.1% year on year, gross profit was ¥50.941 million, down 43.0%, and operating loss was ¥79.401 million, compared with an operating loss of ¥15.676 million in the same quarter of the previous year.」
In addition to fewer deliveries of large commissioned development projects, margins deteriorated because development costs exceeded expectations, and the CuBe business's operating loss widened from ¥15.676 million in the same quarter of the previous year to ¥79.401 million. - FY2019-Q1MaterialisedAnnual report
「During the first quarter of the current consolidated cumulative period, revenue declined year on year because no large commissioned development projects were delivered. At the same time, the company continued developing large projects for Jinzai CuBe, which systemizes various personnel-related business processes, including target management, and Shugyo CuBe, which supports time and attendance management, both scheduled for delivery in the future, while steadily delivering modification projects and other work. As a result, revenue in the CuBe business was ¥65.773 million, down 16.8% year on year, gross profit was ¥6.436 million, down 71.5%, and operating loss was ¥61.547 million, compared with an operating loss of ¥47.825 million in the same quarter of the previous year.」
Because no large commissioned development projects were delivered, revenue in the CuBe business fell 16.8% year on year and the operating loss widened to ¥61.547 million. The risk of deliveries being concentrated around the fiscal year-end and other periods has materialized. - FY2018MaterialisedAnnual report
「As a result, revenue in the CuBe business was ¥578.850 million, up 43.1% year on year, gross profit was ¥242.721 million, up 34.2%, and operating loss was ¥3.282 million, compared with operating profit of ¥72.342 million in the previous fiscal year.」
Although revenue in the CuBe business increased, it posted an operating loss of ¥3.282 million, compared with operating profit, due to the concentration of large projects in the second half and investment in cloud service development. - FY2018-Q3MaterialisedAnnual report
「As a result, revenue in the CuBe business was ¥386.662 million, up 134.9% year on year, gross profit was ¥157.665 million, up 164.8%, and operating loss was ¥31.886 million, compared with operating profit of ¥8.914 million in the same quarter of the previous year. The CuBe business's operating loss includes ¥29.146 million in amortization of goodwill.」
The CuBe business, which was affected by the timing of deliveries for large projects and upfront investments for cloud services, posted an operating loss of ¥31.886 million, compared with operating profit in the same quarter of the previous year. - FY2018-Q1MaterialisedAnnual report
「As a result, revenue in the CuBe business was ¥79.018 million, gross profit was ¥22.555 million, and operating loss was ¥47.825 million. The CuBe business's operating loss includes ¥9.715 million in amortization of goodwill. In the CuBe business, deliveries of commissioned development systems tend to be weighted toward the end of the fiscal year. In the first quarter of the current consolidated cumulative period in particular, no large projects were delivered, and the company also made proactive upfront investments as described above, resulting in a quarterly operating loss. All of these items, however, had been factored into the original plan.」
The CuBe business recorded a quarterly operating loss of ¥47.825 million due to the absence of deliveries for large projects and the concentration of commissioned development deliveries at the end of the fiscal year. - FY2017First statedAnnual report
「In the CuBe business, commissioned development for large corporations accounts for most revenue. Given the timing of customers' budget execution and development periods, deliveries and revenue recognition tend to be concentrated at the end of the fiscal year, in March.」
The company disclosed the concentration of revenue in commissioned development for large corporations and the concentration of deliveries and revenue recognition at fiscal year-end due to customer budgets and development periods as new risks.