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Presentation materials for financial results4434Serverworks Co.,Ltd.Information and Communications, Services and Others

Financial Results Presentation for the Second Quarter (Interim Period) of the Fiscal Year Ending February 2027

In the first half of the fiscal year ending February 2027, consolidated revenue and profit substantially exceeded the same period of the previous year, driven by the weaker yen and G-gen's partner fund, among other factors. In light of the strong progress, the full-year forecasts for revenue, operating profit, ordinary profit and net income were revised upward.

Worth reading
79Important
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
32
Year-on-year change in consolidated net sales (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Presentation materials for financial resultsSecond quarter (interim period) of the fiscal year ending February 202713 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥24,731 million+32.0%
Operating profit¥924 million+922.0%
Ordinary income¥991 million+718.5%
Net income¥806 million
Gross Profit Margin10.6%
Operating profit margin3.7%
Selling, general and administrative expenses¥4,592 million
Results for the three months of the current quarter
Consolidated revenue
¥12,798 million
Gross profit
¥1,394 million
Operating profit
¥526 million
Ordinary income
¥599 million
Interim net income attributable to owners of the parent
¥481 million
Full-year earnings forecast
Net Sales
¥51,995 million
Gross profit
¥5,438 million
Operating profit
¥1,665 million
Ordinary income
¥1,852 million
Profit attributable to owners of the parent
¥1,538 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 Sales47.6%
Gross profit48.1%
Operating profit55.5%
Ordinary income53.5%
Interim net income attributable to owners of the parent52.4%
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Expected to finish well above the consolidated earnings forecast
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. The main factors behind the substantial increase in operating profit were the effect of the weaker yen, the partner fund and the resolution of unprofitable projects.
  2. The decline in non-consolidated operating profit was due to increased selling, general and administrative expenses from upfront investment in hiring, the renewal of core business systems and the use of generative AI.
  3. Partner funds may recur, but the amount and timing vary by fiscal year, and no definitive outlook can be disclosed.
  4. The company forecasts a decline in profit in the second half from the first half, reflecting one-time expenses, personnel expenses and strategic pricing proposals, but expects profit to increase from the second half of the previous year.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Year-on-year change in operating profit+¥834 million
Resale+¥5,521 million
Cloud Integration+¥306 million
MSP+¥162 million
Other sales+¥5 million
Labor Costs+¥204 million
Manufacturing expenses+¥183 million
Cost of sales+¥5,995 million
Selling, general and administrative expenses+¥183 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Exchange Rate Used for Resale RevenueApproximately ¥160.48 per US dollar
Previously Used Exchange RateApproximately ¥150.22 per US dollar
Second-half operating profitExpected to be approximately ¥741 million
New initiatives
  • Certified as a Select partner in Anthropic's Claude Partner Network Services Track
  • Considering renewal of the strategic collaboration agreement (SCA) with AWS
  • Integrated managed security service in collaboration with CrowdStrike scheduled to launch in November 2026
  • Ragate株式会社 begins offering the AX Sprint Program
  • Plans to establish an overseas subsidiary in Thailand
  • Strategic investment in account acquisition and generative AI
Key KPIsA metric the company considers important as a management benchmark.
  • Number of AWS accounts8,545 units
  • ARPU20.6 K USD
  • AWS spending
  • Stock revenue ratio94.4%
  • LTV
    Year on year against the same period last yearTemporarily decreased due to the impact of a major cancellation
Unit price and quantity metricsThese figures show sales broken down by price and volume.
Number of projects1,496 projects
Average project value¥329 thousand
Number of customers147 companies
Average number of projects per customer2.03 projects per company
Number of AWS accounts8,545 AWS accounts
ARPU20.6 K USD
Segment results
Single cloud business segment. Actual profit by segment is not disclosed. Revenue is presented by product and service for cloud integration, resale and MSP.
Medium-term management plan targets
FY28 sales¥56,092 million
FY28 Gross Profit¥6,358 million
FY28 operating profit¥1,659 million
FY28 Ordinary Income¥1,729 million
Number of employees
Consolidated556 people (end of August 2026)
Standalone395 people (end of August 2026)
Hiring planMid-career hiring plan revised upward from 69 to 85 people; 53 have joined or accepted offers; progress rate 62.4%
Annual Dividend
Annual¥30
Interim¥15
End of period¥15 (announced; to be considered in light of future performance)
Payout ratio
Consolidated payout ratio of approximately 20–30% as a guideline. Total payout ratio of approximately 25–50% as a guideline, with a DOE floor of 1.0% as a guideline.
Acquisition of treasury shares
Opportunistic purchases to be considered. Purchases of approximately ¥1.1 billion were carried out in the fiscal year ended February 2026.
Contents of this document
ItemDetails
Document typePresentation materials for financial results
Fiscal Period CoveredSecond quarter (interim period) of the fiscal year ending February 2027
Net Sales¥24,731 million (YoY +32.0%)
Operating profit¥924 million (YoY +922.0%)
Ordinary income¥991 million (YoY +718.5%)
Net income¥806 million
Gross Profit Margin10.6%
Operating profit margin3.7%
Selling, general and administrative expenses¥4,592 million
Results for the three months of the current quarterConsolidated revenue ¥12,798 million / Gross profit ¥1,394 million / Operating profit ¥526 million / Ordinary income ¥599 million / Interim net income attributable to owners of the parent ¥481 million
Full-year earnings forecastNet Sales ¥51,995 million / Gross profit ¥5,438 million / Operating profit ¥1,665 million / Ordinary income ¥1,852 million / Profit attributable to owners of the parent ¥1,538 million
Progress against full-year forecastNet Sales 47.6% / Gross profit 48.1% / Operating profit 55.5% / Ordinary income 53.5% / Interim net income attributable to owners of the parent 52.4%
Self-assessment against the planExpected to finish well above the consolidated earnings forecast
Segment resultsSingle cloud business segment. Actual profit by segment is not disclosed. Revenue is presented by product and service for cloud integration, resale and MSP.
Breakdown of Factors Affecting the ChangeYear-on-year change in operating profit +¥834 million / Resale +¥5,521 million / Cloud Integration +¥306 million / MSP +¥162 million / Other sales +¥5 million / Labor Costs +¥204 million / Manufacturing expenses +¥183 million / Cost of sales +¥5,995 million / Selling, general and administrative expenses +¥183 million
Key KPIsIndicator name Number of AWS accounts / Value 8,545 units / Year on year against the same period last year Not disclosed, Indicator name ARPU / Value 20.6 K USD / Year on year against the same period last year Not disclosed, Indicator name AWS spending / Value Not disclosed / Year on year against the same period last year Not disclosed, Indicator name Stock revenue ratio / Value 94.4% / Year on year against the same period last year Not disclosed, Indicator name LTV / Value Not disclosed / Year on year against the same period last year Temporarily decreased due to the impact of a major cancellation
Unit price and quantity metricsNumber of projects 1,496 projects / Average project value ¥329 thousand / Number of customers 147 companies / Average number of projects per customer 2.03 projects per company / Number of AWS accounts 8,545 AWS accounts / ARPU 20.6 K USD
Number of employeesConsolidated 556 people (end of August 2026) / Standalone 395 people (end of August 2026) / Hiring plan Mid-career hiring plan revised upward from 69 to 85 people; 53 have joined or accepted offers; progress rate 62.4%
Assumptions Underlying the Business OutlookExchange Rate Used for Resale Revenue Approximately ¥160.48 per US dollar / Previously Used Exchange Rate Approximately ¥150.22 per US dollar / Second-half operating profit Expected to be approximately ¥741 million
Medium-term management plan targetsFY28 sales ¥56,092 million / FY28 Gross Profit ¥6,358 million / FY28 operating profit ¥1,659 million / FY28 Ordinary Income ¥1,729 million
Annual DividendAnnual ¥30 / Interim ¥15 / End of period ¥15 (announced; to be considered in light of future performance)
Payout ratioConsolidated payout ratio of approximately 20–30% as a guideline. Total payout ratio of approximately 25–50% as a guideline, with a DOE floor of 1.0% as a guideline.
Acquisition of treasury sharesOpportunistic purchases to be considered. Purchases of approximately ¥1.1 billion were carried out in the fiscal year ended February 2026.
Key points of the Q&AThe main factors behind the substantial increase in operating profit were the effect of the weaker yen, the partner fund and the resolution of unprofitable projects., The decline in non-consolidated operating profit was due to increased selling, general and administrative expenses from upfront investment in hiring, the renewal of core business systems and the use of generative AI., Partner funds may recur, but the amount and timing vary by fiscal year, and no definitive outlook can be disclosed., The company forecasts a decline in profit in the second half from the first half, reflecting one-time expenses, personnel expenses and strategic pricing proposals, but expects profit to increase from the second half of the previous year.
New initiativesCertified as a Select partner in Anthropic's Claude Partner Network Services Track, Considering renewal of the strategic collaboration agreement (SCA) with AWS, Integrated managed security service in collaboration with CrowdStrike scheduled to launch in November 2026, Ragate株式会社 begins offering the AX Sprint Program, Plans to establish an overseas subsidiary in Thailand, Strategic investment in account acquisition and generative AI
Items this document does not state (6)
Number of stores and locationsRisk amount incorporated into the outlookFinancial targetsCapital 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.

Gross profit and operating profit increased due to higher resale revenue resulting from the weaker yen, growth in cloud integration and MSP, G-gen's partner fund, and the resolution of the impact of unprofitable projects. On a non-consolidated basis, however, selling, general and administrative expenses increased due to upfront investment in the growth platform, including hiring, the renewal of core business systems and company-wide use of generative AI.

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Financial Results Presentation for the Second Quarter (Interim Period) of the Fiscal Year Ending February 2027 | Serverworks Co.,Ltd. (4434) timely disclosure | Komori