Will IoT revenue and profit growth continue in FY2027-Q1?

In FY2026, the IoT business generated revenue of ¥1,024 million, up 20.6% year on year, and segment profit of ¥277 million, compared with ¥57 million in the previous year. Its segment profit margin improved substantially to approximately 27.1%, from around 6.7% in FY2025. On a consolidated basis, FY2026 revenue was ¥1,304 million and operating profit was ¥49 million, representing a return to profitability from the ¥167 million operating loss recorded in the previous year.

Looking at quarterly progress, the IoT business generated revenue of ¥565 million in FY2026-H1, up 96.5% year on year, and segment profit of ¥157 million, compared with a ¥38 million loss in the same period of the previous year. For the nine months ended FY2026-Q3, revenue increased 24.7% year on year to ¥738.218 million, while segment profit rose to ¥188.080 million, extending the trend of revenue and profit growth. Profit accumulated from the first half through the nine-month period, making the first point to confirm in FY2027-Q1 whether this momentum continues, with consolidated revenue and operating profit exceeding the ¥386 million and ¥31 million, respectively, recorded in the year-earlier quarter.

The substance of the growth lies not only in steady sales of D-Drive and Work Mate, but also in the company’s efforts to strengthen cooperation with partner companies such as ORIX Auto and various systems companies, expanding its sales structure and the number of customer deployments. At the end of FY2026, the company disclosed IoT orders of ¥1,284.772 million and an order backlog of ¥610.675 million. Orders were up 13.6% year on year, while the order backlog increased 74.1%. In the next earnings release, it will be important to confirm whether the backlog is converting into recognized revenue and whether the company continues to disclose order and backlog figures.

At present, however, the company has not disclosed revenue by D-Drive and Work Mate, the number of customer deployments, or the amount of cloud service fees. IoT revenue increased from ¥849 million in FY2025 to ¥1,024 million in FY2026, while segment profit expanded from ¥57 million to ¥277 million, but it remains difficult to determine whether the improvement in profit was driven by a temporary large-scale deployment or a change in the sales mix, or by growth in recurring usage fees. In FY2027-Q1, important items will include whether three-month IoT revenue and profit, deployment and order trends for D-Drive and Work Mate, and a breakdown of cloud revenue are disclosed.