Headwaters Co.,Ltd: Transcript of the Briefing on Financial Results for the Second Quarter of the Fiscal Year Ending December 2026 (3) (FISCO)

The company described its business portfolio as covering a broad range of Japan's AI market, including consulting, products and solutions, FDE and data infrastructure. It said that its support for visualizing and converting into data the tacit know-how of skilled workers in the field is a distinctive strength that overseas companies cannot replicate.

Regarding the market environment, the company presented a forecast that Japan's generative AI market, currently valued at approximately ¥1.45 trillion, will expand to approximately ¥8 trillion by 2034, with a high annual average growth rate. Headwaters Co.,Ltd said it aims to achieve 150% year-on-year growth through organic growth alone, with the goal of gaining market share at a rate that exceeds the growth of the generative AI market.

As areas for restructuring in its core markets, the company cited the approximately ¥7 trillion system integration market, the approximately ¥2 trillion consulting market and the approximately ¥2 trillion SaaS market, noting that these existing markets have a combined value of more than ¥11 trillion. Taking the growth of the generative AI market into account, it expects a market worth approximately ¥15 trillion to ¥20 trillion to emerge by 2034, and said it aims to gain market share through proactive investment.

The company cited its alliance with Microsoft as a strength, explaining that it is positioned as a top partner in the DATA & AI field and that its engineers' awards and certification under Microsoft's highest-level partner program demonstrate its technical capabilities and collaborative framework. It also outlined a policy of expanding collaboration with a diverse range of companies, including Sony and NVIDIA, in addition to Microsoft. Finally, it indicated that a review of the first half of fiscal 2026 would be provided in a subsequent update.