A changing business structure in which cloud growth offsets declining package software revenue

Full-year FY2026 revenue was ¥2,902 million, comprising ¥1,667 million from cloud services and ¥1,235 million from package software. Cloud services increased 22.5% from ¥1,360 million in the previous fiscal year, expanding to approximately 57% of company-wide revenue. Package software, meanwhile, declined 12.1% from ¥1,405 million. The company’s revenue growth is therefore becoming increasingly dependent on the shift to the cloud and growth in new cloud deployments.

Within package software, X-point generated ¥185 million, down 23.6% year on year, while AgileWorks generated ¥1,049 million, down 9.7%. In FY2026-H1, X-point revenue was ¥97 million, down 23.4% from the same interim period of the previous year, and AgileWorks revenue was ¥492 million, down 19.7%, while cloud services revenue rose 28.2% to ¥815 million. Cloud services revenue was ¥635 million in the same interim period of the previous year, making it clear from the interim period onward that cloud growth was offsetting the decline in package software.

For FY2027-H1, the key question is how much cloud services revenue will grow from the ¥815 million recorded in the same interim period of the previous year. Growth of at least 20% would be broadly consistent with the 22.5% increase recorded for FY2026 as a whole. For package software, it will be important to see whether revenue can exceed the ¥590 million recorded in the same interim period of the previous year. If it cannot, growth in the cloud may not prevent a slowdown in overall product expansion.

In the latest FY2027-Q1 results, company-wide revenue rose 13.4% year on year to ¥788 million. The company attributed the increase to higher AgileWorks revenue and a shift from X-point to cloud services. However, the latest earnings summary mainly discloses company-wide results and does not provide quarterly revenue or new customer deployment figures for cloud services, X-point or AgileWorks. The next results should therefore be reviewed for product-level revenue, new customer deployments and the status of cloud migration among existing X-point customers.