Will the shift from a hardware-heavy business to a software-led model advance in the first half?

First-quarter revenue was ¥112 million, down from ¥168 million in the same period a year earlier, a decline of 33.5%. The company explained that the decline was driven by the reversal of the strong progress in hardware package sales in the prior-year quarter, while software transactions, including government-related projects, increased. Revenue appears weak in absolute terms, but the first-half results will need to show how much the change in business mix contributed to profitability.

FY2026 full-year revenue comprised ¥846.293 million from hardware sales, ¥275.948 million from contract development, ¥44.181 million from software licences, ¥29.999 million from maintenance and support contracts, and ¥0.550 million from other sources. In the previous fiscal year, hardware sales were ¥237.407 million, contract development was ¥188.143 million, and software licences were ¥85.409 million. Thus, in FY2026, hardware became a substantially larger part of the mix while software licence revenue declined. The company's shift toward higher-margin software will first be tested by whether it can reverse this FY2026 mix.

The official first-quarter financial summary did not disclose revenue or gross margins by product or revenue source. Accordingly, an important question for the first-half results is whether revenue can be presented separately for software licences, contract development, software solutions, hardware packages, and maintenance and recurring use. Beyond simply stating that software transactions increased, the results should show first-half gross profit and gross margin, as well as the contribution to the full-year revenue forecast of ¥1,030 million.