FFRI Security is expanding its services for government agencies, with its homegrown predictive defense technology, FFRI yarai, at the core of its business. Its prospects are being highlighted alongside the growth of Japan's cybersecurity market. The outlook for future revenue and profit, as well as its share valuation metrics, is also examined.
Japan's cybersecurity market is expected to continue expanding, growing from USD 2.27 billion in 2025 to USD 3.98 billion in 2030, with a compound annual growth rate of approximately 11.89%. Market expansion is being driven by the spread of remote work, the acceleration of digital transformation, and threats that continue to evolve daily. Against this backdrop, FFRI Security is positioned as a Japanese homegrown company with a competitive advantage based on predictive defense technology.
The company's core business is cybersecurity, centered on FFRI yarai. It features detection and defense functions that address unknown threats and also provides security-related services for national government agencies. In addition, the company operates a software development and testing business, benefiting from growing demand for system development accompanying digital transformation.
The expansion of services for government agencies is viewed as an important growth driver, and the company participates in K Program-related national policy projects through an affiliated company. The government is promoting a strategy to foster the cybersecurity industry and strengthen Japan's domestic industrial and technological base, and policy support benefiting companies with homegrown technologies such as FFRI is expected to provide a tailwind.
In terms of performance, revenue for the fiscal year ended March 2025 was ¥303.9 million, while operating profit reached a record high of ¥8.17 billion. For the fiscal year ending March 2026, revenue of ¥426 million and operating profit of ¥9.14 million are expected, and the company is said to be aiming to maintain a record-high profit for the 3rd consecutive period. Meanwhile, the shares have traded at elevated valuation levels, with a PER of 88.5x and a PBR of 22.02x. Investment risks include the sense that the shares are overvalued and intensified competition.