■Performance Trends in Tech Matrix ＜3762＞

3. Financial Status and Management Indicators

Looking at the financial situation at the end of the interim period ending 2025/3, total assets were 94256 million yen, an increase of 8500 million yen from the end of the previous fiscal year. Current assets increased by 8731 million yen, combined with advance payments and prepaid maintenance fees due to the strong order acceptance situation and the accumulation of subscription contracts over 1 year. As for non-current assets, investments that are accounted for using the equity method decreased by 302 million yen, and tangible fixed assets decreased by 300 million yen.

The total debt was 66149 million yen, an increase of 7436 million yen from the end of the previous fiscal year. While contract debt increased by 9693 million yen due to the accumulation of subscription contracts, unpaid corporate income tax etc. decreased by 341 million yen and interest-bearing debt by 260 million yen, respectively. Total capital increased by 1064 million yen to 28107 million yen. The main reason was an increase of 946 million yen in retained earnings.

Looking at management indicators, the equity ratio attributable to parent company owners fell 1.3 points from the end of the previous fiscal year to 24.1%, which is due to contract liabilities recorded as future sales expanding at a pace that exceeds the increase in equity capital during this period. Since contract debt is regarded as a leading indicator of sales in companies that develop stock type businesses, this trend is positively evaluated. Cash on hand has accumulated to a record high of 27.5 billion yen, and since the interest-bearing debt ratio is also at a low level of 1.8%, it is judged that financial details are in a healthy state. The company has indicated that it intends to invest not only shareholder returns but also investment costs in new businesses, M&A and capital and business alliances for further growth, etc. for abundant use of cash on hand, and in fact, in 2024/11, it acquired all shares of Firmus, which is a major Malaysian cybersecurity operator, for 145 millionMYR (5075 million yen in 1MYR = 35 yen conversion).

■Future outlook

Strong demand continued in the second half, and the results for the fiscal year ended 2025/3, which were revised upward, left room for improvement

1. Earnings forecast for the fiscal year ending March 31, 2025

Consolidated financial results for the fiscal year ending 2025/3 were revised upward from the initial plan for the fiscal year ending 2025/3:64,400 million yen, up 20.8% from the previous fiscal year in terms of sales revenue; 7000 million yen, up 19.7% in operating income; 6700 million yen, up 14.4% in profit before income taxes; and net income attributable to owners of the parent company, up 15.8% from the original plan. Sales revenue increased by 5400 million yen in the information infrastructure business, where strong demand continues, and the application service business and medical system business left their initial plans unchanged. Also, operating income was increased by 700 million yen in the information infrastructure business, and the application service business was reduced by 200 million yen due to increased investment in the education sector, etc. Looking at the second half of the fiscal year alone, sales revenue increased 17% compared to the same period last year, and operating profit increased at a pace of 11%, but there is a strong conservative impression even when considering the increase in investment in the education sector and the recording of temporary M&A expenses by Firmus, and it seems that the plan is based on risk factors such as exchange rate trends and uncertainty about the future of the economy, and we see a high possibility that the plan will go ahead with the plan if there are no major changes in the market environment. Note, the impact of Firmus, which became a subsidiary in 2024/11, on consolidated financial results was not factored into the plan. It seems to be an additional factor of about 1 billion yen in terms of sales revenue, but it is expected that there will be a slight negative contribution in operating income due to M&A expenses and amortization of intangible assets, etc.

(1) Information infrastructure business

The information infrastructure business is expected to increase 29.7% from the previous fiscal year in sales revenue to 45,400 million yen, and operating profit to 5140 million yen, up 29.4% from the same period. As cyber attacks become more sophisticated and sophisticated, companies and government offices are constantly seeking the latest security countermeasure products, and demand for operation and monitoring services is also growing. Therefore, it is expected that inquiries to the company, which can provide a wide variety of one-stop security countermeasure solutions, will continue to increase in the future. There are also plenty of outstanding orders, and it is expected that the trend of increasing sales and profit by 2 digits will continue in the future.

(2) Application service business

The application services business is expected to increase 12.1% from the previous fiscal year in sales revenue to 9200 million yen, and operating income to increase 29.3% to 410 million yen. Sales revenue increased in all fields, operating profit also increased in the CRM, SE, and business solution fields, and as recruitment to public schools spreads in the education field, strengthening human resources to advance implementation has become an urgent issue, and it is expected that losses will be on par with the previous fiscal year due to the accumulation of costs.

In the CRM field, service lineups are being strengthened through collaboration with Mobilus, a company related to applying the equity method, and further growth is expected. Specifically, 4 new products (FastNavigation, FastVoice, FastBot, FastText) developed by Mobils to enhance digital communication between customers and companies were added to the FastSeries product group in 2024/6. It is a service that contributes to improving contact center work efficiency and customer satisfaction by utilizing generative AI, and it is expected that introduction will expand, including existing customers. Furthermore, we are continuing joint research on solutions utilizing generative AI technology with Mobilus, and it is planned to release them one by one.

As for the SE field, in addition to working to accumulate subscription charges centered on test tools for automotive embedded software development, where demand continues to be strong, services are also being developed to allow people to use development support tools more effectively. In the same service, data collected from development support tools is analyzed to extract processes that are bottlenecks, and it is a service that supports progress management and performance improvement of test processes in general.

In the business solutions field, they are struggling to obtain orders in the second quarter, and operating profit for the second half is expected to struggle. Also, it was announced that Alexia Fintech began providing the power transaction risk management service “ARECCIA (R) PRS” as SaaS in 2024/10. The risk management system for financial institutions that the company has cultivated over many years was transferred to the electric power trading field. Major electric power companies use systems made overseas, but due to high implementation and operation costs, similar services have hardly spread to retail electric operators. However, there is a large potential need to manage the risk of fluctuations in electricity transaction prices, and many inquiries have been received since the company announced it. The service is being developed by dividing it into 4 functions, and this time, 2 functions (generation of power forward curves, price calculation for power option transactions) have been released. The remaining 2 functions (power transaction position management, power transaction risk analysis) are scheduled to be released during the 2026/3 fiscal year, and it seems that full-scale introduction will proceed after all functions are ready. For Alexia Fintech, there is a possibility that entering a new market will lead to business scale expansion, and future trends are attracting attention.

In the field of education, recruitment has been decided by multiple municipalities (for public schools) in addition to advanced private schools, and preparations are underway for the start of operation in the spring of 2025. However, in the case of public schools, introduction is progressing at the local government level, so once recruitment is decided, manpower related to introduction is also required, and currently they are busy dealing with it. If these issues are resolved, it is expected that introduction to public schools will expand further.

(3) Medical systems business

Sales revenue from the medical systems business was 9800 million yen, down 2.9% from the previous fiscal year, and operating profit was 1450 million yen, down 7.0% from the same period, leaving the initial plan unchanged. The cloud shift of the old PSP's on-premise products is a factor in the decline in sales. On the profit side, in addition to sales reduction factors, an increase in labor costs and development costs to strengthen development with an eye on future business expansion is a factor in profit decline. The company anticipates that the peak increase in amortization expenses due to investment will be in the 2026/3 fiscal year, and it is expected that the medical system business will shift to a profit growth phase after the 2027/3 fiscal year.

(Author: FISCO Visiting Analyst Joe Sato)