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Financial results presentation7046TDSE Inc.Information and Communications, Services and Others

TDSE Materials for Briefing on First-Half Financial Results for the Fiscal Year Ending March 2027 and Progress Under the New Medium-Term Management Plan “SHIFT2028”

For the first half of the fiscal year ending March 2027, revenue and profit increased as the generative AI and AI agent businesses expanded, with both revenue and operating profit exceeding the year-earlier period. Under the new medium-term management plan “SHIFT2028,” the generative AI agent revenue ratio and recurring revenue ratio are progressing at levels above the full-year forecasts.

Worth reading
68In 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
85.8
Year-on-year increase in operating profit (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationFirst half of the fiscal year ending March 20278 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥1,628 million+15.0%
Operating profit¥79 million+85.8%
Ordinary income¥77 million
Net income¥51 million
Operating profit margin4.9 %
Results for the three months of the current quarter
First quarter
Net Sales
¥788 million
Operating profit margin
3.2 %
Second quarter
Net Sales
¥840 million
Operating profit margin
6.4 %
Full-year earnings forecast
Net Sales
¥3,200 million
Operating profit
¥130 million
Ordinary income
¥130 million
Net income for the current fiscal year
¥85 million
Operating profit margin
4 %
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 Sales51 %
Operating profit61 %
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
The plan is progressing smoothly and is on track to exceed the plan at the halfway point
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Prior-year profit levelApproximately ¥210 million
  • Profit from higher revenueApproximately ¥200 million
  • Strategic InvestmentApproximately ¥290 million
  • Product ProcurementApproximately ¥110 million
  • Lower costsApproximately ¥120 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • 9.4 % increase
    ComparisonSecond-half revenue as a percentage of first-half revenue, based on the average for the past 3 years
  • ComparisonThe expanded workforce is expected to become fully operational in the second half, raising profit margins
New initiatives
  • Launch of the on-premises AI agent platform TDSE AI Forge
  • Launch of Dify’s authorized reseller program and revamp of its licensing structure
  • Full-scale rollout of Quid Terminal
  • Certification as a Databricks Silver Tier Partner and joint business development
  • Plan to launch the generative AI implementation assessment as a service in the third quarter
  • Plan for DS Agent planning and initial validation, followed by pilot implementation in customer projects
Key KPIsA metric the company considers important as a management benchmark.
  • Generative AI agent revenue mix55 %
    Year on year against the same period last yearYear-on-year comparison: Not disclosed
  • Subscription revenue ratio24 %
    Year on year against the same period last yearIncreased from approximately 20%
  • Generative AI agent revenue¥8.9 100 million
  • Stock-based revenue¥3.9 100 million
  • Operating margin4.9 %
    Year on year against the same period last year1.9-point improvement
Medium-term management plan targets
  • TargetGenerative AI agent revenue mix
    Target fiscal yearFY2028
    Target value60%
  • TargetSubscription revenue ratio
    Target fiscal yearFY2028
    Target value30%
  • TargetRevenue
    Target fiscal yearFY2028
    Target value¥3.8 billion–¥4.3 billion
  • TargetOperating margin
    Target fiscal yearFY2028
    Target value8% or more (guideline)
Market Size / Share
  • CAGR of the AI agent market (FY2024→FY2029)86.8 %
  • CAGR of the generative AI market (FY2024→FY2029)38.1 %
  • Dify’s domestic market positionNo. 1 in Japan
Number of employees
Headcount: Not disclosed. Continued hiring and training of sales personnel and generative AI engineers
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredFirst half of the fiscal year ending March 2027
Net Sales¥1,628 million (YoY +15.0%)
Operating profit¥79 million (YoY +85.8%)
Ordinary income¥77 million
Net income¥51 million
Operating profit margin4.9 %
Results for the three months of the current quarterFirst quarter Net Sales ¥788 million / Operating profit margin 3.2 % / Second quarter Net Sales ¥840 million / Operating profit margin 6.4 %
Full-year earnings forecastNet Sales ¥3,200 million / Operating profit ¥130 million / Ordinary income ¥130 million / Net income for the current fiscal year ¥85 million / Operating profit margin 4 %
Progress against full-year forecastNet Sales 51 % / Operating profit 61 %
Self-assessment against the planThe plan is progressing smoothly and is on track to exceed the plan at the halfway point
Breakdown of Factors Affecting the ChangeFactors Prior-year profit level / Amount Approximately ¥210 million, Factors Profit from higher revenue / Amount Approximately ¥200 million, Factors Strategic Investment / Amount Approximately ¥290 million, Factors Product Procurement / Amount Approximately ¥110 million, Factors Lower costs / Amount Approximately ¥120 million
Key KPIsIndicator Generative AI agent revenue mix / Value 55 % / Year on year against the same period last year Year-on-year comparison: Not disclosed, Indicator Subscription revenue ratio / Value 24 % / Year on year against the same period last year Increased from approximately 20%, Indicator Generative AI agent revenue / Value ¥8.9 100 million / Year on year against the same period last year Not disclosed, Indicator Stock-based revenue / Value ¥3.9 100 million / Year on year against the same period last year Not disclosed, Indicator Operating margin / Value 4.9 % / Year on year against the same period last year 1.9-point improvement
Number of employeesHeadcount: Not disclosed. Continued hiring and training of sales personnel and generative AI engineers
Assumptions Underlying the Business OutlookComparison Second-half revenue as a percentage of first-half revenue, based on the average for the past 3 years / Value 9.4 % increase, Comparison The expanded workforce is expected to become fully operational in the second half, raising profit margins / Value Not disclosed
Medium-term management plan targetsTarget Generative AI agent revenue mix / Target fiscal year FY2028 / Target value 60%, Target Subscription revenue ratio / Target fiscal year FY2028 / Target value 30%, Target Revenue / Target fiscal year FY2028 / Target value ¥3.8 billion–¥4.3 billion, Target Operating margin / Target fiscal year FY2028 / Target value 8% or more (guideline)
Market Size / ShareIndicator CAGR of the AI agent market (FY2024→FY2029) / Value 86.8 %, Indicator CAGR of the generative AI market (FY2024→FY2029) / Value 38.1 %, Indicator Dify’s domestic market position / Value No. 1 in Japan
New initiativesLaunch of the on-premises AI agent platform TDSE AI Forge, Launch of Dify’s authorized reseller program and revamp of its licensing structure, Full-scale rollout of Quid Terminal, Certification as a Databricks Silver Tier Partner and joint business development, Plan to launch the generative AI implementation assessment as a service in the third quarter, Plan for DS Agent planning and initial validation, followed by pilot implementation in customer projects
Items this document does not state (13)
Gross Profit MarginSelling, general and administrative expensesSegment resultsUnit price and quantity metricsNumber of stores and locationsRisk amount incorporated into the outlookFinancial targetsAnnual DividendPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogKey points of the Q&A

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.

This was driven by growth in the generative AI agent business centered on Dify, an increase in generative AI projects from existing customers, expansion of Databricks projects, and higher recurring revenue from Dify licensing and maintenance. Operating profit margins are expected to improve in the second half as the expanded workforce, following upfront investment in personnel and the business platform during the first quarter, becomes fully operational.

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TDSE Materials for Briefing on First-Half Financial Results for the Fiscal Year Ending March 2027 and Progress Under the New Medium-Term Management Plan “SHIFT2028” | TDSE Inc. (7046) timely disclosure | Komori