Declining Number of Dental Clinics and Lower Customer Appetite for Investment

「There are 65,579 dental clinics in operation nationwide that are customers of the Company (JAHIS: Japan Association of Healthcare Information Systems Industry, as of 30 September 2025), but the number of clinics has been declining year after year.」

「The situation is extremely serious, with a sharp increase in the number of dentists who have supported community healthcare for many years going out of business because they cannot keep pace with the rapid advancement of healthcare DX, and an increasing number of regions where dental healthcare services are disrupted.」

「There are 66,536 dental clinics in operation nationwide that are customers of the Company (JAHIS: Japan Association of Healthcare Information Systems Industry, as of 30 September 2024), but the number of clinics has been declining year after year. The main factors are the retirement of dentists aged 60–69, the largest age group among dentists, as well as younger generations turning away from the dental profession.」

「The aging of dentists and shortage of successors for clinics continue, while the further inflation and higher energy prices caused by the sharp depreciation of the yen have delayed the recovery in business conditions, resulting in continued reluctance among dental clinics to replace systems and an increase in clinics closing or discontinuing operations.」

「Meanwhile, the dental industry is facing the advancing aging of dentists and a shortage of successors for clinics. In addition, the number of clinics that are refraining from replacing systems or are closing or discontinuing operations because their business conditions, which deteriorated severely during the COVID-19 pandemic, have been slow to recover continues to increase. The reversal of the rush demand in the previous fiscal year for the introduction of online eligibility verification and other systems also had a significant impact on results for the cumulative first quarter.」

「The difficult environment continues, as dental clinic management is under pressure from higher prices and raw material costs and declining patient visits, while more clinics are refraining from replacing systems or are closing or discontinuing operations.」

「During the period, the number of customers declined by 85 due to retirements resulting from clinic closures and discontinuations, among other factors, including the impact of COVID-19, while 61 new customers were acquired.」

「As dentists also perform oral surgery, clinics have had to limit the number of patients visiting them as a measure against the risk of COVID-19 infection, while concerns about infection have reduced patients’ willingness to seek treatment. Combined with the decline in patient visits and higher expenses due to inflation, this has placed dental clinic management under pressure, with some clinics refraining from replacing systems and others closing or discontinuing operations.」

「Because dentists also perform oral surgery, patients concerned about the risk of infection with the novel coronavirus have become less willing to visit clinics. The resulting decline in patient visits has placed pressure on dental clinic operations, with some clinics deferring system replacements or closing, while rising prices for dental materials and other supplies have also increased the need for greater efficiency in dental clinic operations.」

「There were 68,129 dental clinics operated nationwide by our dental-clinic customers (JAHIS, the Japan Association of Healthcare Information Systems Industry, as of 30 September 2021), but the number of clinics has declined each year.」

「The number of dental clinics that are our customers is expected to continue declining. Competition in the operation of dental clinics is also expected to intensify as Japan's population declines.」