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

Notice of the Release of the Video and Transcript of the Results Briefing for the Second Quarter of the Fiscal Year Ending February 2027

In the first half, revenue and operating profit exceeded the year-earlier period, with operating profit reaching ¥135 million. In light of the strong progress, the full-year operating profit forecast has been revised upward to ¥480 million and the net profit forecast to ¥180 million.

Worth reading
55In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Improvement
Direction inferred from the company’s description.
Scale
135
¥ million (consolidated operating profit for the first half, up 46.6% year on year)
Wording
Avoiding a definitive answer
How definitive the wording is.

Contents of this document

Summary of Q&AFiscal year ending February 2027, second quarter9 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥4,453 million+8.1%
Operating profit¥135 million+46.6%
Ordinary income¥120 million+115.0%
Net income¥-19 million
Results for the three months of the current quarter
Operating profit
¥70 million
Full-year earnings forecast
Net Sales
¥8,500 million
Operating profit
¥480 million
Ordinary income
¥390 million
Net income
¥180 million
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
The Digital Security and Physical Security businesses are performing ahead of plan
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Questions Is Company X's corporate data plan expensive? / Answer The contract is worth several million yen per month, but this represents necessary costs. Direct contracting also has benefits, including an improved contribution margin.
  2. Questions What is the company's position in the security industry? / Answer The company has established a unique position specializing in insider risk detection.
  3. Questions Did IRI's limited-time discounts affect operating profit? / Answer The discounts were not large enough to materially impair segment operating profit. Upfront investment in the AI field affected profit.
  4. Questions What is the rate at which companies using the discounts become recurring customers? / Answer Based on past PoC results, the conversion rate to full implementation is approximately 40%.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Steady growth in Digital Security, a large security DX project in Physical Security, demand for insider threat detection driven by the spread of generative AI and other factors, and structural reform. Gains on the sale of securities and cancellation of stock acquisition rights totaled ¥63 million, while the JDX carve-out resulted in a ¥119 million extraordinary loss.
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
The company has estimated its tax burden and future gains on disposals conservatively. Specific figures for foreign exchange rates, raw material prices and other items are not disclosed.
New initiatives
  • Obtaining post data through a direct partnership agreement with Company X
  • Upfront investment in the AI governance field
  • Rebranding the security DX service as My Guard Pro
  • Carve-out of low-profit and non-core businesses
  • Cancellation and expiration of stock acquisition rights equivalent to 860,000 shares
  • Expansion of the shareholder benefits program
Key KPIsA metric the company considers important as a management benchmark.
  • ARR¥25 100 million
  • Number of analysis IDs for the insider threat detection service29.3 10,000 IDs
  • Security company network700 companies or more
  • Conversion rate from PoC to full contract and full implementation4 approximately 10%
Segment results
  • Digital Security business
    Net Sales¥1,400 million (YoY +3.3%)
    Profit¥419 million
  • Physical Security business
    Net Sales¥1,259 million (YoY +20.6%)
    Profit¥54 million (YoY +190.3%)
  • Peripheral businesses and other
    Net Sales¥1,839 million (YoY +3.2%)
    Profit¥-1 million
Medium-term management plan targets
Target fiscal yearPeriod covered by the three-year management plan
Operating profit margin12% or more
Operating profit¥900 million or more
Equity ratio40% or more
Comparison with actual resultsThe equity ratio was 32.9%. The number of IRI IDs, the number of clients and the equity ratio improved.
Financial targets
Equity ratio
Target40% or more
Actual results32.9%
Contents of this document
ItemDetails
Document typeSummary of Q&A
Fiscal Period CoveredFiscal year ending February 2027, second quarter
Net Sales¥4,453 million (YoY +8.1%)
Operating profit¥135 million (YoY +46.6%)
Ordinary income¥120 million (YoY +115.0%)
Net income¥-19 million
Results for the three months of the current quarterOperating profit ¥70 million
Full-year earnings forecastNet Sales ¥8,500 million / Operating profit ¥480 million / Ordinary income ¥390 million / Net income ¥180 million
Self-assessment against the planThe Digital Security and Physical Security businesses are performing ahead of plan
Segment resultsSegment Digital Security business / Net Sales ¥1,400 million (YoY +3.3%) / Profit ¥419 million, Segment Physical Security business / Net Sales ¥1,259 million (YoY +20.6%) / Profit ¥54 million (YoY +190.3%), Segment Peripheral businesses and other / Net Sales ¥1,839 million (YoY +3.2%) / Profit ¥-1 million
Breakdown of Factors Affecting the ChangeSteady growth in Digital Security, a large security DX project in Physical Security, demand for insider threat detection driven by the spread of generative AI and other factors, and structural reform. Gains on the sale of securities and cancellation of stock acquisition rights totaled ¥63 million, while the JDX carve-out resulted in a ¥119 million extraordinary loss.
Key KPIsIndicator ARR / Value ¥25 100 million / Year on year against the same period last year Not disclosed, Indicator Number of analysis IDs for the insider threat detection service / Value 29.3 10,000 IDs / Year on year against the same period last year Not disclosed, Indicator Security company network / Value 700 companies or more / Year on year against the same period last year Not disclosed, Indicator Conversion rate from PoC to full contract and full implementation / Value 4 approximately 10% / Year on year against the same period last year Not disclosed
Assumptions Underlying the Business OutlookThe company has estimated its tax burden and future gains on disposals conservatively. Specific figures for foreign exchange rates, raw material prices and other items are not disclosed.
Medium-term management plan targetsTarget fiscal year Period covered by the three-year management plan / Operating profit margin 12% or more / Operating profit ¥900 million or more / Equity ratio 40% or more / Comparison with actual results The equity ratio was 32.9%. The number of IRI IDs, the number of clients and the equity ratio improved.
Financial targetsEquity ratio Target 40% or more / Actual results 32.9%
Key points of the Q&AQuestions Is Company X's corporate data plan expensive? / Answer The contract is worth several million yen per month, but this represents necessary costs. Direct contracting also has benefits, including an improved contribution margin., Questions What is the company's position in the security industry? / Answer The company has established a unique position specializing in insider risk detection., Questions Did IRI's limited-time discounts affect operating profit? / Answer The discounts were not large enough to materially impair segment operating profit. Upfront investment in the AI field affected profit., Questions What is the rate at which companies using the discounts become recurring customers? / Answer Based on past PoC results, the conversion rate to full implementation is approximately 40%.
New initiativesObtaining post data through a direct partnership agreement with Company X, Upfront investment in the AI governance field, Rebranding the security DX service as My Guard Pro, Carve-out of low-profit and non-core businesses, Cancellation and expiration of stock acquisition rights equivalent to 860,000 shares, Expansion of the shareholder benefits program
Items this document does not state (14)
Gross Profit MarginOperating profit marginSelling, general and administrative expensesProgress against full-year forecastUnit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookAnnual DividendPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogMarket Size / Share

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 company cited performance by the Digital Security and Physical Security businesses exceeding plan, the acquisition of a large security DX project in Physical Security, and progress in structural reform and the reduction of interest-bearing debt.

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.
Weight is not a verdictIt measures how much this changes what the company had already told the market. It is not a view on the shares.
Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Notice of the Release of the Video and Transcript of the Results Briefing for the Second Quarter of the Fiscal Year Ending February 2027 | Eltes Co.,Ltd. (3967) timely disclosure | Komori