Worth reading
46Recurring
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
605
¥ million (operating loss)Wording
Conditional
How definitive the wording is.Contents of this document
Financial Results PresentationFY ending August 2026, third quarter8 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales793 Millions of yen
Operating profit-605 Millions of yen
Ordinary income-605 Millions of yen
Net income¥-595 million net income attributable to owners of the parent
Selling, general and administrative expenses565 Millions of yen
Gross Profit Margin
Rate△5.0%
Operating profit margin
Rate△76.3%
Results for the three months of the current quarterRevenue of ¥793 million, cost of sales of ¥833 million, gross loss of ¥39 million, selling, general and administrative expenses of ¥565 million, operating loss of ¥605 million, ordinary loss of ¥605 million, and net loss attributable to owners of the parent of ¥595 million. Presented as a comparison with the second-quarter results.
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
- Issues Future earnings recovery / Summary of response The company aims to transition to an earnings structure that benefits from the gross margin of its outright-purchase model by progressing revenue recognition from Sovereign GaiXer shipments and customer acceptance from the fourth quarter onward.
- Issues Financial Soundness / Summary of response The company will maintain its equity ratio and cash and deposits ratio at high levels and secure financial stability through restrained hiring, fixed-cost reductions and the transfer of PGX to an installment-sales model.
- Issues Sales and supply structure / Summary of response The company is expanding to a multi-channel sales structure combining direct sales, distributors, application vendors and GaiXer Store. With 6 distributors under contract and 20 undergoing procedures, it expects a cumulative total of 30 companies for the current fiscal year.
- Issues Revenue contribution from subsidy projects / Summary of response Applications have been submitted by 10 educational and research institutions and 19 medical institutions, which are awaiting approval, but this does not mean that revenue has been secured at this point.
- Issues Change in the use of proceeds from stock acquisition rights / Summary of response Part of the funds intended for M&A and capital and business alliances was reallocated to Sovereign GaiXer product development, procurement and inventory, and sales-channel expansion, areas with a high likelihood of growth.
- Issues Deterioration in gross profit / Summary of response Cloud usage fees and outsourced labor costs previously recorded as selling, general and administrative expenses were reclassified to cost of sales as part of the proper classification of expenses. This does not reflect a deterioration in the underlying business.
- Issues Probability of achieving the 394-unit sales plan / Summary of response The company explained that its pipeline is building, with 8 companies having decided to purchase or implement, 6 sales partners, 20 companies undergoing contract procedures, 29 institutions applying for subsidies and 755 leads, among other indicators.
- Issues Decline in SaaS revenue / Summary of response The reasons were the allocation of sales resources primarily to Sovereign GaiXer and the expiration of contracts for certain projects.
- Issues Funding capacity while losses continue / Summary of response The company secured ¥390 million through warrant exercises and has smoothed cash outflows by reducing fixed costs and transferring PGX procurement to an installment arrangement.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
- Personnel expenses¥543 million (down ¥2 million from ¥545 million in the second quarter)
- Advertising expenses¥7 million (down ¥4 million from ¥11 million in the second quarter)
- Outsourcing costs¥62 million (up ¥31 million from ¥31 million in the second quarter)
- Project-Based ServicesRevenue up ¥34 million from the second quarter
- SaaSRevenue down ¥22 million from the second quarter
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
- Sovereign GaiXer sales target for the current fiscal year394 Units
- Lead generation target5,000 リード
- Active sales partner target30 companies
- Subsidy application target40 Engagements
- Target number of applications deployed20 bottles
- Target number of priority customers20 companies
New initiatives
- Evolving Sovereign GaiXer from a single-function AI tool into a common platform capable of supporting multiple applications
- Beginning development and testing of voice AI solutions using ElevenLabs' AI voice technology
- Registration of GaiXer on the ISMAP-LIU Cloud Service List
- Building a multi-channel sales structure combining direct sales, distributors, application vendors and GaiXer Store
- Sales activities incorporating subsidy programs
- Transferring some of the 135 ThinkStation PGX units to an installment-sales model
- Changing part of the use of proceeds from stock acquisition rights from M&A and capital and business alliances to investment in Sovereign GaiXer
Key KPIsA metric the company considers important as a management benchmark.
- Sales partners (under contract)6 companies
- Sales partners (contract negotiations in progress)20 companies
- Number of subsidy applications29 applications/institutions
- Implemented applications10 bottles
- Leads generated through events755 Engagements
- Companies that have decided to purchase or implement8 companies
Segment results
- Project-Based ServicesNet Sales394 Millions of yen
- ResaleNet Sales142 Millions of yen
- Managed servicesNet Sales55 Millions of yen
- SaaSNet Sales195 Millions of yen
- Sovereign AINet Sales5 Millions of yen
Financial targets
Reported actual figures of a shareholders' equity ratio of 78.8% and a cash and deposits ratio of 58.4%. Financial targets: Not disclosed.Number of employees
Number of Employees327 people at the end of the third quarter of the fiscal year ending August 2026
Changes during the period and hiring planThe number of new graduates hired was 15 in 2026, with hiring scheduled to be restrained from the fourth quarter onward in 2026 and thereafter. The company explained that headcount is entering a gradual decline.
| Item | Details |
|---|---|
| Document type | Financial Results Presentation |
| Fiscal Period Covered | FY ending August 2026, third quarter |
| Net Sales | 793 Millions of yen |
| Operating profit | -605 Millions of yen |
| Ordinary income | -605 Millions of yen |
| Net income | ¥-595 million (net income attributable to owners of the parent) |
| Gross Profit Margin | Rate △5.0% / Year-on-year change Not disclosed |
| Operating profit margin | Rate △76.3% / Year-on-year change Not disclosed |
| Selling, general and administrative expenses | 565 Millions of yen |
| Results for the three months of the current quarter | Revenue of ¥793 million, cost of sales of ¥833 million, gross loss of ¥39 million, selling, general and administrative expenses of ¥565 million, operating loss of ¥605 million, ordinary loss of ¥605 million, and net loss attributable to owners of the parent of ¥595 million. Presented as a comparison with the second-quarter results. |
| Segment results | Category Project-Based Services / Net Sales 394 Millions of yen / Year on year against the same period last year Not disclosed, Category Resale / Net Sales 142 Millions of yen / Year on year against the same period last year Not disclosed, Category Managed services / Net Sales 55 Millions of yen / Year on year against the same period last year Not disclosed, Category SaaS / Net Sales 195 Millions of yen / Year on year against the same period last year Not disclosed, Category Sovereign AI / Net Sales 5 Millions of yen / Year on year against the same period last year Not disclosed |
| Breakdown of Factors Affecting the Change | Factors Personnel expenses / Amount ¥543 million (down ¥2 million from ¥545 million in the second quarter), Factors Advertising expenses / Amount ¥7 million (down ¥4 million from ¥11 million in the second quarter), Factors Outsourcing costs / Amount ¥62 million (up ¥31 million from ¥31 million in the second quarter), Factors Project-Based Services / Amount Revenue up ¥34 million from the second quarter, Factors SaaS / Amount Revenue down ¥22 million from the second quarter |
| Key KPIs | Indicator name Sales partners (under contract) / Value 6 companies / Year on year against the same period last year Not disclosed, Indicator name Sales partners (contract negotiations in progress) / Value 20 companies / Year on year against the same period last year Not disclosed, Indicator name Number of subsidy applications / Value 29 applications/institutions / Year on year against the same period last year Not disclosed, Indicator name Implemented applications / Value 10 bottles / Year on year against the same period last year Not disclosed, Indicator name Leads generated through events / Value 755 Engagements / Year on year against the same period last year Not disclosed, Indicator name Companies that have decided to purchase or implement / Value 8 companies / Year on year against the same period last year Not disclosed |
| Number of employees | Number of Employees 327 people (at the end of the third quarter of the fiscal year ending August 2026) / Changes during the period and hiring plan The number of new graduates hired was 15 in 2026, with hiring scheduled to be restrained from the fourth quarter onward in 2026 and thereafter. The company explained that headcount is entering a gradual decline. |
| Assumptions Underlying the Business Outlook | Item Sovereign GaiXer sales target for the current fiscal year / Value 394 Units, Item Lead generation target / Value 5,000 リード, Item Active sales partner target / Value 30 companies, Item Subsidy application target / Value 40 Engagements, Item Target number of applications deployed / Value 20 bottles, Item Target number of priority customers / Value 20 companies |
| Financial targets | Reported actual figures of a shareholders' equity ratio of 78.8% and a cash and deposits ratio of 58.4%. Financial targets: Not disclosed. |
| Key points of the Q&A | Issues Future earnings recovery / Summary of response The company aims to transition to an earnings structure that benefits from the gross margin of its outright-purchase model by progressing revenue recognition from Sovereign GaiXer shipments and customer acceptance from the fourth quarter onward., Issues Financial Soundness / Summary of response The company will maintain its equity ratio and cash and deposits ratio at high levels and secure financial stability through restrained hiring, fixed-cost reductions and the transfer of PGX to an installment-sales model., Issues Sales and supply structure / Summary of response The company is expanding to a multi-channel sales structure combining direct sales, distributors, application vendors and GaiXer Store. With 6 distributors under contract and 20 undergoing procedures, it expects a cumulative total of 30 companies for the current fiscal year., Issues Revenue contribution from subsidy projects / Summary of response Applications have been submitted by 10 educational and research institutions and 19 medical institutions, which are awaiting approval, but this does not mean that revenue has been secured at this point., Issues Change in the use of proceeds from stock acquisition rights / Summary of response Part of the funds intended for M&A and capital and business alliances was reallocated to Sovereign GaiXer product development, procurement and inventory, and sales-channel expansion, areas with a high likelihood of growth., Issues Deterioration in gross profit / Summary of response Cloud usage fees and outsourced labor costs previously recorded as selling, general and administrative expenses were reclassified to cost of sales as part of the proper classification of expenses. This does not reflect a deterioration in the underlying business., Issues Probability of achieving the 394-unit sales plan / Summary of response The company explained that its pipeline is building, with 8 companies having decided to purchase or implement, 6 sales partners, 20 companies undergoing contract procedures, 29 institutions applying for subsidies and 755 leads, among other indicators., Issues Decline in SaaS revenue / Summary of response The reasons were the allocation of sales resources primarily to Sovereign GaiXer and the expiration of contracts for certain projects., Issues Funding capacity while losses continue / Summary of response The company secured ¥390 million through warrant exercises and has smoothed cash outflows by reducing fixed costs and transferring PGX procurement to an installment arrangement. |
| New initiatives | Evolving Sovereign GaiXer from a single-function AI tool into a common platform capable of supporting multiple applications, Beginning development and testing of voice AI solutions using ElevenLabs' AI voice technology, Registration of GaiXer on the ISMAP-LIU Cloud Service List, Building a multi-channel sales structure combining direct sales, distributors, application vendors and GaiXer Store, Sales activities incorporating subsidy programs, Transferring some of the 135 ThinkStation PGX units to an installment-sales model, Changing part of the use of proceeds from stock acquisition rights from M&A and capital and business alliances to investment in Sovereign GaiXer |
Items this document does not state (13)
Full-year earnings forecastProgress against full-year forecastSelf-assessment against the planUnit price and quantity metricsNumber of stores and locationsRisk amount incorporated into the outlookMedium-term management plan targetsAnnual 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 continued investing in product development and its supply structure for the commercialization of Sovereign GaiXer, while also reducing fixed costs and reviewing expense classifications. It explained that the deterioration in gross profit was mainly due to the reclassification of cloud usage fees and outsourced labor costs from selling, general and administrative expenses to cost of sales.
How to read this page
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