Worth reading
38Recurring
0–100. This measures how worthwhile something is to read, not how good or bad the company is.Direction
Deterioration
Direction inferred from the company’s description.Scale
—
Displayed only when the document provides numerical figures.Wording
Conditional
How definitive the wording is.Contents of this document
Summary of Q&AFull fiscal year ended May 20268 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Operating profit marginConsolidated operating margin for the 31st fiscal year: Not disclosed. Almondo operating margin: 39.1%
Full-year earnings forecast
Fiscal year ending May 2027 (32nd fiscal year)
Operating profit
¥300 million
Operating profit margin
5.6 %
AI-related revenue
¥850 million
Dividend per share
¥22
What the company explained in this material
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
- Factors behind the decline in revenue and earnings in the 31st fiscal year and reform of the earnings structure
- Measures to achieve operating profit of ¥300 million and an operating margin of 5.6% in the 32nd fiscal year
- Reducing dependence on large projects and customer concentration
- The role of Almondo and the AI-related business
- Generating recurring revenue through TRAN-DX
- Improving Techwise and the gaming business
- The 20% operating margin target from the 35th fiscal year onward
- M&A and the growth investment policy
- Dividends and Share Repurchases
- Future IR activities
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Completion of the large spot project; insufficient offset through other projects and recurring revenue; dependence on specific customers and large projects; low-margin projects due to price competition; concentration in one-off projects and the fourth quarter
New initiatives
- Improving gross margins through selective order acceptance and appropriate pricing
- Expanding recurring revenue through maintenance, operations, additional improvements, usage fees, and other services provided through TRAN-DX
- Deploying Almondo's AI expertise across the group's businesses
- Expanding upstream consulting projects at Techwise
- Prioritizing profitability and quality in the gaming business and standardizing the production process
- Applying Skyarts' technology to non-gaming fields such as XR, education, and advertising
- Pursuing M&A with a view to investment capacity of more than ¥2 billion over 3 years
- Monthly monitoring of project gross margins, the unprofitable project ratio, and the recurring revenue ratio, among other indicators
Key KPIsA metric the company considers important as a management benchmark.
Project gross margin, unprofitable project ratio, recurring revenue ratio, personnel utilization rate, AI-related revenue, upstream projects, and PoC-to-production conversion rate were identified as management and monitoring indicators, but the figures are Not disclosedSegment results
Almondo
Net Sales
¥256 million
Operating profit
¥100 million
Operating profit margin
39.1 %
Medium-term management plan targets
32nd fiscal year
Operating profit
¥300 million
Operating profit margin
5.6 %
33rd fiscal year
Operating profit margin
10 %
34th fiscal year
Operating profit margin
12.9 %
35th fiscal year onward
Operating profit margin
20 %
Annual Dividend
32nd fiscal year
Annual Dividend
¥22 per share
Acquisition of treasury shares
No specific decision regarding share buybacks has been disclosed| Item | Details |
|---|---|
| Document type | Summary of Q&A |
| Fiscal Period Covered | Full fiscal year ended May 2026 |
| Operating profit margin | Consolidated operating margin for the 31st fiscal year: Not disclosed. Almondo operating margin: 39.1% |
| Full-year earnings forecast | Subject Fiscal year ending May 2027 (32nd fiscal year) / Operating profit ¥300 million / Operating profit margin 5.6 % / AI-related revenue ¥850 million / Dividend per share ¥22 |
| Segment results | Almondo Net Sales ¥256 million / Operating profit ¥100 million / Operating profit margin 39.1 % |
| Breakdown of Factors Affecting the Change | Completion of the large spot project; insufficient offset through other projects and recurring revenue; dependence on specific customers and large projects; low-margin projects due to price competition; concentration in one-off projects and the fourth quarter |
| Key KPIs | Project gross margin, unprofitable project ratio, recurring revenue ratio, personnel utilization rate, AI-related revenue, upstream projects, and PoC-to-production conversion rate were identified as management and monitoring indicators, but the figures are Not disclosed |
| Medium-term management plan targets | 32nd fiscal year Operating profit ¥300 million / Operating profit margin 5.6 % / 33rd fiscal year Operating profit margin 10 % / 34th fiscal year Operating profit margin 12.9 % / 35th fiscal year onward Operating profit margin 20 % |
| Annual Dividend | 32nd fiscal year Annual Dividend ¥22 per share / Interim Not disclosed / End of period Not disclosed |
| Acquisition of treasury shares | No specific decision regarding share buybacks has been disclosed |
| Key points of the Q&A | Factors behind the decline in revenue and earnings in the 31st fiscal year and reform of the earnings structure, Measures to achieve operating profit of ¥300 million and an operating margin of 5.6% in the 32nd fiscal year, Reducing dependence on large projects and customer concentration, The role of Almondo and the AI-related business, Generating recurring revenue through TRAN-DX, Improving Techwise and the gaming business, The 20% operating margin target from the 35th fiscal year onward, M&A and the growth investment policy, Dividends and Share Repurchases, Future IR activities |
| New initiatives | Improving gross margins through selective order acceptance and appropriate pricing, Expanding recurring revenue through maintenance, operations, additional improvements, usage fees, and other services provided through TRAN-DX, Deploying Almondo's AI expertise across the group's businesses, Expanding upstream consulting projects at Techwise, Prioritizing profitability and quality in the gaming business and standardizing the production process, Applying Skyarts' technology to non-gaming fields such as XR, education, and advertising, Pursuing M&A with a view to investment capacity of more than ¥2 billion over 3 years, Monthly monitoring of project gross margins, the unprofitable project ratio, and the recurring revenue ratio, among other indicators |
Items this document does not state (19)
Net SalesOperating profitOrdinary incomeNet incomeGross Profit MarginSelling, general and administrative expensesResults for the three months of the current quarterProgress against full-year forecastSelf-assessment against the planUnit price and quantity metricsNumber of stores and locationsNumber of employeesAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookFinancial targetsPayout ratioCapital 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 completion of the large spot project that had made a significant contribution to earnings in the previous fiscal year was the largest factor behind the decline in revenue and earnings. Other issues that became apparent included the inability to sufficiently offset the revenue decline through other projects and recurring revenue, dependence on specific customers and large projects, the inclusion of low-margin projects due to price competition, and an earnings structure concentrated in one-off projects and the fourth quarter.
How to read this page
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