3920.T

Overall Financial Performance: • Consolidated total revenue hit 2.404 billion yen, up 10% year-over-year, marking the second consecutive year of record-high revenue; standalone revenue grew 15% year-over-year. • Operating profit was 565 million yen, up 48% year-over-year (17% standalone growth), beating the revised management guidance at 103% of target. Operating margin reached 24%, far exceeding the information and communications industry average of 11%. • Net profit was 410 million yen, up 63% year-over-year, hitting 105% of the revised guidance target. • Gross profit margin increased 4 percentage points year-over-year driven by System Answer price hikes and higher revenue share, while SG&A ratio fell 2 percentage points, improving overall profitability. SG&A increased 7% year-over-year (10% standalone) primarily due to personnel investments including wage increases, new hires, and increased outsourcing. • The company maintains a healthy balance sheet with an equity ratio of 61%, supported by stable cash flow from recurring revenue.

Product & Customer Retention: • The core product System Answer achieved a 96% annual renewal rate, exceeding the 95% target, maintaining a high retention level. Q4 standalone renewal fell 5 percentage points year-over-year to 95% due to bidding outcomes, but still hit the target.

Operational Initiatives: • IBC Day 2025 private exhibition was held successfully in October 2025, featuring case seminars, solution showcases, and a demo of the new product ITOGUCHI, with strong attendance. • Human resources: 8 hires were completed against a 9-person target in 2025 (full target met including cross-period start dates); 6 unexpected departures led to a net headcount increase of 2, and turnover remains well below industry average. For 2026, 10 new hires (focused on technical and sales roles) are planned, plus expanded training and qualification support for product and technical skill building. • Sustainability: The company has transitioned all office electricity to renewable energy, implemented paperless operations and secure confidential document recycling, cutting 56 tons of CO2 from electricity and 59kg from paper use vs 2023 baseline. It also supports NPO AlonAlon to advance diversity and inclusion.

Shareholder Return: • The company follows a progressive dividend policy, with a planned full-year dividend of 12 yen per share (6 yen interim, 6 yen year-end) for 2025.

• Targets both record-high revenue and profit for the 2026 September fiscal year, driven by sales expansion of the high-margin core System Answer and growing security product sales. It expects overall margin growth to moderate slightly as lower-margin security products account for a larger share of revenue. • Plans to expand System Answer sales to small and medium-sized enterprises, responding to broad industry demand for easy-to-use network monitoring tools amid a persistent shortage of dedicated IT personnel. • Will strengthen security product sales to address growing demand driven by rising large-scale cyber attack damages, prioritizing delivery of optimal client countermeasures. • Plans a 10 yen year-over-year dividend increase to 22 yen per share for 2026 (11 yen interim, 11 yen year-end), maintaining a target payout ratio of 30% for stable, continuous shareholder returns. • The company will allocate operating cash and on-hand capital to shareholder returns and growth investments, and is currently evaluating M&A of IT infrastructure integration-focused system engineering firms to accelerate growth in the high-demand integration business. • Outlines targeted sales expansion in three high-growth vertical markets: 1) Education, leveraging network assessment inquiries from the NEXT GIGA school DX initiative to drive System Answer sales; 2) Local government, targeting network monitoring demand from expected traffic increases following direct cloud service access updates to LGWAN networks; 3) Manufacturing, co-developing a go-to-market framework with OT vendors to sell System Answer and security products addressing new security needs from OT-IT connectivity for manufacturing DX. • Positions new product ITOGUCHI as the next core product after System Answer, prioritizing customer base building in the cloud space. It will promote combined use of ITOGUCHI with existing client monitoring tools (both System Answer and third-party products) to drive upselling, cross-selling, and new client acquisition.

For the standalone business in the 2025 September fiscal year: 1. License Sales Segment (main segment): Revenue was 1.248 billion yen, up 21% year-over-year, driven by steady new client wins from competitor switching. This segment accounts for approximately 51.5% of total standalone revenue. 2. Other Product Sales Segment (focused on security products): Revenue was 530 million yen, up 35% year-over-year, driven by increased inquiry demand for security products. This segment accounts for approximately 21.9% of total standalone revenue. 3. Service Provision Segment: Revenue was 625 million yen, down 6% year-over-year, impacted by one cancellation from a large client due to budget cuts. This segment accounts for approximately 25.8% of total standalone revenue. Additionally, standalone recurring (stock) revenue totaled 1.54 billion yen, up 23% year-over-year, making up 64% of total standalone revenue (up 4 percentage points year-over-year).

• One large client cancellation in the service segment due to budget cuts led to a 6% year-over-year revenue decline for the segment. • Q4 System Answer renewal rate fell 5 percentage points year-over-year due to bidding outcomes, though it still met the 95% target. • Hiring fell slightly short of the 2025 full-year target within the fiscal period, and unexpected departures led to a smaller net headcount increase than planned. • Growing sales share of lower-margin security products is expected to moderate overall company margin growth in the 2026 fiscal year.

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