FINDEX Inc. Q4 FY2025 earnings call

• Core Competitive Position
  • The company holds 82.6% penetration in Japanese university hospitals, the apex of the Japanese medical pyramid. Physician familiarity from university training drives natural organic expansion to other hospitals and clinics, with especially high adoption in ophthalmology clinics.
  • Flagship product Claio, a data management system that is part of most modern electronic medical record ecosystems, unifies management of all patient data formats (from high-volume CT/MRI scans to lightweight vital sign data), organizes specialty data (such as large-volume ophthalmology test data) along clinical workflow lines, and fills a unique product niche not covered by large general electronic medical record providers.
  • The company has 20+ years of experience handling sensitive, high-risk medical data, building unique capabilities in secure, efficient data management, medical system design aligned with evolving regulatory requirements, and clean, high-quality training data preparation for AI.
• Medical Data Platform Business Growth Strategy
  • Under the revised Next-Generation Medical Infrastructure Act, pseudonymization (which allows linking long-term sequential patient data without personal identification) is now permitted alongside full anonymization. Only 3 certified groups are approved to process this data under the law, and Findex provides specialized technical services including data cleansing, labeling, anonymization/pseudonymization for this ecosystem.
  • Most currently utilized real-world medical data in Japan is limited to low-value receipt/accounting (DPC) data; Findex focuses on full electronic medical record (EHR) data, which has 10x the data volume and 7-10x the economic value, with far more detailed longitudinal clinical information that is highly valuable for pharmaceutical drug discovery and medical research.
  • The business creates public value by shortening drug development timelines to lower drug prices, reduce overall national healthcare expenditure, and enable advanced research into effective treatments for aging populations. The company provides additional explanatory content on its public investor information site.
• AI + Medical Device Growth Strategy
  • The company has developed GAP (Gaze Analyzing Perimeter), an in-house head-mounted AI-powered medical device that captures fine eye movement (such as saccades and microsaccades) to diagnose retinal and oculomotor diseases. It has received official medical device approval, retails for approximately 4 million yen per unit (compared to 6-7 million yen for comparable imported devices), and is seeing rapid adoption due to its small size and portability.
  • Findex is co-developing technology with Kyoto University to detect mild cognitive impairment (MCI, the early stage of dementia) from eye movement, which would eliminate the need for expensive MRI testing for routine screening.
• Dividend and Shareholder Return Policy
  • The company raised its full-year end dividend by 5 yen, bringing the latest payout ratio to 44%. It has set a target payout ratio of 50% through 2030, with a lower bound DOE (dividend on equity) target of 8.5% to steadily increase dividend payments.
  • The company previously evaluated M&A as a growth path, but determined that high-synergy, balance sheet-friendly M&A opportunities are scarce. Existing new businesses (public services and medical data platform) are already on track for strong growth, so the company will return profit to shareholders while retaining a strong balance sheet to support future large investment opportunities if they arise. The company has never reported an annual loss in its history, maintains strong equity, and can use leverage for large investments when needed.
• Strategic Positioning
  • The company is transitioning from a medical IT/DX solutions provider to a full medical data platformer, building on its core existing business to unlock new value from medical data for public and industry use.

1. Medical Business: This is the core legacy segment offering traditional in-hospital medical systems including electronic medical record components. It has seen stable sequential revenue growth, with a 33.3% operating profit margin in 2025. 82.6% of Japanese university hospitals already use the company's medical systems, and 40% of all large-scale hospitals are customers. 2. Public Business: This segment provides digital document management for local government back-office operations, leveraging the company's 20 years of experience in paperless medical record digitization. It operates as a recurring monthly subscription (stock-type) business, grows steadily with expanding user counts, and generates consistent reliable profit at a high margin. 3. Healthtech Business: This new high-growth segment is expected to become the company's new cash cow, projected to see very strong expansion from 2025 to 2030. Overall, the company achieved 104.6% year-over-year revenue growth and 117.3% year-over-year operating profit growth for the latest fiscal period, with operating profit significantly exceeding initial guidance.

• The company sets a 2030 fiscal year target of 8.5 billion yen in total revenue and 3.2 billion yen in operating profit, to be achieved through stacked growth across all three existing business segments.
  • Medical business revenue is projected to stay stable as the core base, public business will grow steadily as a recurring profit driver, and healthtech business will be the primary source of high growth through 2030.
  • The company targets a 50% payout ratio for dividends through 2030, up from the current 44%, representing an upward revision to shareholder return guidance.
  • Management expects to achieve most of the 2030 targets by 2030, and is already planning longer-term strategic goals for 2040.

• The primary top-of-mind risk is that a new, extremely low-cost, superior product could enter the market and displace Findex's offerings; management notes that AI-enabled development could hypothetically enable this outcome, which is not impossible.
  • However, management believes that deep understanding of medical clinical workflows, regulatory requirements, and data security needs, which Findex has built over 20+ years of operation, is far more important than raw coding ability, and that the company is well-positioned to compete against any new entrant including large tech companies offering free systems.
  • Other risks including regulatory changes, talent shortages, and competitive entry are all recognized and monitored by management.

Q: Is Findex's strength in having repeatable, scalable business that does not depend on specific medical institutions or environments, and can it continue to expand horizontally?

A: The answer is definitively yes. Findex has already completed partnerships with nearly all system integrators across Japan, so its products can be used by any specialty at any medical institution. The company now offers a free end-to-end cloud system that supports all medical document use cases from small clinics to large hospitals, enabling full horizontal expansion across the entire Japanese medical sector.

Q: What is the biggest management risk you focus on as you pursue growth, with regard to regulatory change, talent issues, or competitive environment?

A: All of these are recognized as risks to monitor. The most material concrete risk is the possibility that a superior product could emerge at an extremely low price that outcompetes Findex's offerings, which is a non-zero possibility amid rapid AI development. However, the company's deep decades-long experience and understanding of the core nature of medical care gives it a strong advantage to overcome this risk, and management believes Findex could successfully compete even against a large company offering free medical systems.

Q: What is Findex's competitive advantage compared to existing players like JMDC and MDV in medical data utilization, and how will you monetize this business?

A: Existing players have historically only operated in lower-value segments of the medical data market, with very little large-scale utilization of full high-density electronic medical record data. Because handling full EHR data requires deep technical expertise and compliance with strict security regulations under the Next-Generation Medical Infrastructure Act, mass utilization has not been possible previously. The changing regulatory environment now enables safe mass utilization of EHR data, and Findex's unique existing capabilities in secure medical data management put it in a strong position. Monetization comes from the high value that clients place on Findex's consulting and technical processing services, which will grow steadily as demand for high-quality EHR data increases.

Q: Are there competitors in the public sector document management space, and how does Findex compete?

A: Yes, there are existing providers, with segmentation between large and small local government clients. Findex has grown successfully because it leverages its decades of experience building extremely secure, user-friendly systems for the medical sector (where information leakage or loss is completely unacceptable), and applies this same expertise to the public sector. This has earned Findex strong market recognition for high quality despite being a relative new entrant to the sector.

Q: Will you prioritize expansion to large-scale hospitals beyond national/public university-affiliated medical schools, and what concerns or challenges does this expansion bring?

A: Findex is already prioritizing this expansion, and user numbers are growing. 40% of all large-scale hospitals are already Findex customers. Findex's products are specifically designed to enable efficient care at acute-phase hospitals that require surgery, inpatient care, and advanced treatments, so there remains substantial room for further growth in this segment.

Q: JMDC announced a partnership with Fujitsu and other software services to acquire electronic medical record data. Does this threaten the high value of Findex's data, and is there market segmentation between Findex and JMDC such as Findex serving high-value drug segments and JMDC serving chronic disease drugs?

A: The JMDC/Fujitsu partnership only covers DPC data, which is not full electronic medical record data, and is comparable to receipt/accounting data, same as what JMDC already handles. There is a clear difference in data density, data type, end users, and use cases between DPC data and full EHR data, so the high value of Findex's data remains unchanged, and natural segmentation exists between the two offerings.

Q: Is the medical data business revenue model per-job contract, or do you also expect subscription or revenue share models?

A: Revenue is split between revenue under the Next-Generation Medical Infrastructure Act and other revenue. Under the act, Findex earns revenue from multiple distinct services including data collection, processing, classification, and usage environment buildout for pharmaceutical companies and other clients, with revenue generated per project/service. This is the current core revenue model for the business.

Q: (From a shareholder) I will continue to support Findex as it builds quality medical information services.

A: Thank you for your support. While stock price has been volatile amid the post-SaaS shock environment as of February 16, 2026, Findex's business has high public benefit and is growing on a solid, stable foundation. We appreciate your continued support.

Q: What is the long-term corporate vision and target size, and what role does this new growth strategy play in that vision?

A: Findex's core identity remains a DX company supporting clinical care at medical sites. Going forward, the new growth drivers are the medical data platform business, which advances medical and scientific progress through electronic medical record utilization, and builds an AI-enabled healthy society, aligned with the company's new positioning as a medical data platformer.