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Financial results presentation3967Eltes Co.,Ltd.Information and Communications, Services and Others

Fiscal Year Ending February 2027 First-Quarter Financial Results Briefing Materials

In Q1 of the fiscal year ending February 2027, consolidated net sales increased 11.5% year on year and operating profit rose 46.5%, with both reaching record highs for a first quarter. However, net income attributable to owners of the parent was a loss of ¥68 million due to the recognition of losses on the sale of subsidiaries. The full-year forecast remains unchanged.

Worth reading
77Important
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
46.5
Year-on-year change in operating profit (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationFirst quarter of the fiscal year ending February 202712 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥2,110 million+11.5%
Operating profit¥65 million+46.5%
Ordinary income¥56 million+74.0%
Net income¥-68 million
Gross Profit Margin34.3%
Operating profit margin3.1%
Selling, general and administrative expenses¥659 million
Results for the three months of the current quarterNet sales: ¥2,110 million; operating profit: ¥65 million; ordinary profit: ¥56 million; net income attributable to owners of the parent: ▲¥68 million
Full-year earnings forecast
Net Sales
¥8,500 million
Operating profit
¥460 million
Net income
¥100 million
Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。
Net Sales24.8%
Operating profit14.2%
Digital security net sales23.7%
Digital security operating profit22.6%
Physical security net sales22.7%
Physical security operating profit8.7%
Peripheral businesses and other operations net sales28.2%
Peripheral businesses and other operations operating profit22.1%
Corporate Expenses27.0%
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Net sales and operating profit are off to a strong start, exceeding the plan. Physical security is progressing steadily against the full-year plan.
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Questions Can the capital policy be implemented despite the many uncertainties, including the carve-outs and the accumulation of operating cash flow? / Answer The remaining 2 subsidiaries are expected to be sold at prices above expectations. Digital security is expected to generate stable cash flow, while debt reduction and a decline in amortization of goodwill are also expected to progress.
  2. Questions Should the company demonstrate its growth potential? / Answer The company aims to enhance shareholder value by accelerating investment of resources in its core businesses and combining profit growth with its capital policy and the elimination of the discount.
  3. Questions Does growth investment focused on OPEX imply declining profit from the next fiscal year onward? / Answer There is no plan for declining profit. The company assumes year-on-year increases in operating profit and ordinary profit in every fiscal year from the fiscal year ending February 2027 through the fiscal year ending February 2029.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Exclusion of DX promotion operating profit from consolidation▲¥71 million
  • Consolidated operating profit excluding the former DX promotion business area¥59 million
  • Operating profit from peripheral businesses and other operations¥6 million
  • Difference in costs incurred this fiscal year, including office relocation expenses and upfront investment in AI governance
  • Extraordinary loss on the sale of subsidiaries▲¥119 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Operating cash flow for the fiscal year ending February 20274.5 Hundreds of millions of yen
  • Expected reduction in interest-bearing debt through the fiscal year ending February 202920 Approximately ¥100 million
  • Equity ratio at the end of February 202735% or more
  • Total payout ratio for the fiscal year ending February 2029Approximately 40%
New initiatives
  • Carve-outs including JAPANDX and efforts to sell the remaining 2 subsidiaries
  • Announcement of IRI's new services, the Insider Misconduct Assessment Service and Insider Misconduct Hotline
  • Policy to strengthen shareholder returns over the next 3 years
  • Policy to suspend new share issuance through the fiscal year ending February 2029
  • Consideration of share repurchases and cancellations, as well as the partial cancellation of stock acquisition rights
  • Upfront investment in AI governance services
Key KPIsA metric the company considers important as a management benchmark.
  • IRI MRR¥82 million
    Year on year against the same period last year+¥5 million
  • Digital security ARR24.8 Hundreds of millions of yen
  • Number of IDs covered by the insider threat detection service28.3 10,000 IDs
    Year on year against the same period last yearDecreased
  • Cumulative number of clients in the AI governance field2 companies
  • Individual investors4,516 People
  • eNPS-74.1 Points
Segment results
Digital Security
Net Sales
¥688 million
Year on year against the same period last year▲¥1 million
Operating profit
¥215 million
Year on year against the same period last year-¥49 million
Physical Security
Net Sales
¥544 million
Year on year against the same period last year+¥55 million
Operating profit
¥6 million
Year on year against the same period last year▲¥1 million
Peripheral businesses and other
Net Sales
¥901 million
Year on year against the same period last year+¥155 million
Operating profit
¥16 million
Year on year against the same period last year+¥75 million
Corporate expenses (general and administrative)
¥172 million
Year on year against the same period last year+¥3 million
Medium-term management plan targets
Target fiscal yearFiscal year ending February 2029
Operating profit margin12% or more
Operating profit¥900 million
Equity ratio40% or more
Individual investors10,000 or more
Number of IDs covered by IRI analysis450,000 IDs
Financial targets
Operating profit margin
Target12% or more
Actual results3.1%
Equity ratio
Target40% or more
Actual results29.2%
Market Size / Share
Achieved the leading market share in the UEBA managed monitoring services market in FY2024
Payout ratio
Total payout ratio of approximately 40% (assumption for the fiscal year ending February 2029)
Acquisition of treasury shares
Buyback limitConsidering share repurchases and cancellations
PeriodThree-year management plan period
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredFirst quarter of the fiscal year ending February 2027
Net Sales¥2,110 million (YoY +11.5%)
Operating profit¥65 million (YoY +46.5%)
Ordinary income¥56 million (YoY +74.0%)
Net income¥-68 million
Gross Profit Margin34.3%
Operating profit margin3.1%
Selling, general and administrative expenses¥659 million
Results for the three months of the current quarterNet sales: ¥2,110 million; operating profit: ¥65 million; ordinary profit: ¥56 million; net income attributable to owners of the parent: ▲¥68 million
Full-year earnings forecastNet Sales ¥8,500 million / Operating profit ¥460 million / Net income ¥100 million
Progress against full-year forecastNet Sales 24.8% / Operating profit 14.2% / Net income Not disclosed / Digital security net sales 23.7% / Digital security operating profit 22.6% / Physical security net sales 22.7% / Physical security operating profit 8.7% / Peripheral businesses and other operations net sales 28.2% / Peripheral businesses and other operations operating profit 22.1% / Corporate Expenses 27.0%
Self-assessment against the planNet sales and operating profit are off to a strong start, exceeding the plan. Physical security is progressing steadily against the full-year plan.
Segment resultsDigital Security Net Sales ¥688 million / Operating profit ¥215 million / Physical Security Net Sales ¥544 million / Operating profit ¥6 million / Peripheral businesses and other Net Sales ¥901 million / Operating profit ¥16 million / Corporate expenses (general and administrative) ¥172 million
Breakdown of Factors Affecting the ChangeFactors Exclusion of DX promotion operating profit from consolidation / Amount ▲¥71 million, Factors Consolidated operating profit excluding the former DX promotion business area / Amount ¥59 million, Factors Operating profit from peripheral businesses and other operations / Amount ¥6 million, Factors Difference in costs incurred this fiscal year, including office relocation expenses and upfront investment in AI governance / Amount Not disclosed, Factors Extraordinary loss on the sale of subsidiaries / Amount ▲¥119 million
Key KPIsIndicator name IRI MRR / Value ¥82 million / Year on year against the same period last year +¥5 million, Indicator name Digital security ARR / Value 24.8 Hundreds of millions of yen / Year on year against the same period last year Not disclosed, Indicator name Number of IDs covered by the insider threat detection service / Value 28.3 10,000 IDs / Year on year against the same period last year Decreased, Indicator name Cumulative number of clients in the AI governance field / Value 2 companies / Year on year against the same period last year Not disclosed, Indicator name Individual investors / Value 4,516 People / Year on year against the same period last year Not disclosed, Indicator name eNPS / Value -74.1 Points / Year on year against the same period last year Not disclosed
Assumptions Underlying the Business OutlookItem Operating cash flow for the fiscal year ending February 2027 / Value 4.5 Hundreds of millions of yen, Item Expected reduction in interest-bearing debt through the fiscal year ending February 2029 / Value 20 Approximately ¥100 million, Item Equity ratio at the end of February 2027 / Value 35% or more, Item Total payout ratio for the fiscal year ending February 2029 / Value Approximately 40%
Medium-term management plan targetsTarget fiscal year Fiscal year ending February 2029 / Operating profit margin 12% or more / Operating profit ¥900 million / Equity ratio 40% or more / Individual investors 10,000 or more / Number of IDs covered by IRI analysis 450,000 IDs
Financial targetsOperating profit margin Target 12% or more / Actual results 3.1% / Equity ratio Target 40% or more / Actual results 29.2%
Payout ratioTotal payout ratio of approximately 40% (assumption for the fiscal year ending February 2029)
Acquisition of treasury sharesBuyback limit Considering share repurchases and cancellations / Number of Shares Not disclosed / Period Three-year management plan period
Market Size / ShareAchieved the leading market share in the UEBA managed monitoring services market in FY2024
Key points of the Q&AQuestions Can the capital policy be implemented despite the many uncertainties, including the carve-outs and the accumulation of operating cash flow? / Answer The remaining 2 subsidiaries are expected to be sold at prices above expectations. Digital security is expected to generate stable cash flow, while debt reduction and a decline in amortization of goodwill are also expected to progress., Questions Should the company demonstrate its growth potential? / Answer The company aims to enhance shareholder value by accelerating investment of resources in its core businesses and combining profit growth with its capital policy and the elimination of the discount., Questions Does growth investment focused on OPEX imply declining profit from the next fiscal year onward? / Answer There is no plan for declining profit. The company assumes year-on-year increases in operating profit and ordinary profit in every fiscal year from the fiscal year ending February 2027 through the fiscal year ending February 2029.
New initiativesCarve-outs including JAPANDX and efforts to sell the remaining 2 subsidiaries, Announcement of IRI's new services, the Insider Misconduct Assessment Service and Insider Misconduct Hotline, Policy to strengthen shareholder returns over the next 3 years, Policy to suspend new share issuance through the fiscal year ending February 2029, Consideration of share repurchases and cancellations, as well as the partial cancellation of stock acquisition rights, Upfront investment in AI governance services
Items this document does not state (7)
Unit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookAnnual DividendCapital expendituresOrders received and order backlog

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.

The carve-out of businesses including JAPANDX caused some businesses that had been loss-making in the previous first quarter to be excluded from the consolidated results, boosting operating profit. Net income fell into the red following the recognition of a ¥119 million loss on the sale of subsidiaries, but the company expects gains on the sale of the remaining 2 subsidiaries to exceed extraordinary losses.

How to read this page

This is not the documentKomori reads the disclosure the company filed and writes this summary. Figures are as stated by the company and are not audited.
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Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Fiscal Year Ending February 2027 First-Quarter Financial Results Briefing Materials | Eltes Co.,Ltd. (3967) timely disclosure | Komori