3924.T

Company Overview & Core Strengths

• Land Computer is a Japanese IT services firm with 580 consolidated employees, 460 million yen in capital, and 13.7 billion yen in full-year prior period revenue, with two consolidated subsidiaries: Infree (SAP consulting specialist) and Technigate (strong in HR/payroll accounting packages).
• Core strengths include 50+ years of consecutive profitable operation, a strong customer base anchored by long-term partnerships with major vendors and end users, deep industry expertise built from educational sector origins, and a skilled workforce holding an average of 4.38 professional certifications per employee, plus a 30-firm core partner network.

Mid-term VISION2025 Strategic Priorities

• Continue pursuing M&A to complement organic growth; the company has already completed two acquisitions under current leadership. A joint holding company merger with Toho System Science is scheduled to launch April 1, 2026.
• Strengthen collaboration with existing business partners, and continue advancing DX business focused on building lean, capable organizations through employee training.
• Prioritize talent development for both internal employees and partner staff using layered education programs and structured certification pathways, while continuing to grow the legacy core system integration business.

Generative AI Initiatives

• Already implemented internal practices to boost development efficiency, including enabling pair programming with generative AI, and building the internal Rand Task Collaborator tool built on ChatGPT.
• Leverages Salesforce Einstein AI for the company's growing Salesforce practice, which includes 190 dedicated staff across the company and its partners, to accelerate development work.
• Launched external customer proposals starting in H2 2025, including a September 2025 sponsored event with Salesforce that attracted 43 customers and resulted in multiple new orders. Management will continue to prioritize AI-enabled system modernization.

Legacy System Modernization (Modernai Promotion Office)

• Established a dedicated internal Modernai Promotion Office to capture growing demand from large enterprises updating legacy core systems built around the year 2000.
• The team focuses on cloud migration, existing system efficiency improvements, and reconstruction with new technologies, working alongside major Japanese IT vendors and end users to expand the company's footprint in the modernization market.

Merger with Toho System Science

• Toho System Science is a Prime Market-listed firm spun out of Toho Life Insurance with deep domain expertise in financial IT; both companies were founded in 1971.
• The combined holding company, named Toranvia, has set a medium-term target of growing combined revenue from over 30 billion yen to 50 billion yen, pursuing quantitative expansion first followed by quality improvement, and targeting cross-company synergies in talent development, sales expansion, and operational scale.

Shareholder Return

• Maintains a policy of 50%+ payout ratio, which is matched by Toho System Science. The 2026 March fiscal year full-year payout is set at 54.6%, with a total planned dividend of 38 yen per share (interim + final), maintaining a track record of no dividend cuts and consistent incremental increases. Introduced a new shareholder benefit offering 2,000 yen in QUO cards to holders of 100+ shares, plus an additional special benefit for eligible shareholders tied to the merger.

• Full-year 2026 March fiscal year guidance is maintained at the original planned level, with revenue targeted at 14.5 billion yen, operating profit at 1.86 billion yen, and net income at 1.25 billion yen, representing a sharp V-shaped recovery from the prior year which was impacted by a large unprofitable project.
• No new unprofitable projects have occurred in the first half, and management expects that strengthened sales efforts will drive a second-half revenue recovery to hit the full-year target. VISION2025, the company's current mid-term plan, remains on track: the first year of the plan beat its 12.4 billion yen revenue target by hitting 13.7 billion yen, and the company is targeting 14.5 billion yen for the final year of the plan as originally scheduled.

1. System Integration Service: This core segment contributes over 40% of total revenue to the financial sector, with banking growing significantly year-over-year. No major structural changes to industry revenue composition compared to the prior year period, maintaining broad exposure to industrial, distribution, public, and healthcare sectors. 2. Package-based SI Service: HR/payroll and accounting package lines grew year-over-year, but overall segment revenue turned negative due to the lumpy timing of large projects across Salesforce and SAP lines. Management expects the segment to grow in the second half. 3. Infrastructure Solution Service: Overall segment revenue declined significantly, driven by a sharp contraction in the network business that was very strong in the prior year period. The cloud sub-segment delivered steady growth, and management will prioritize growing cloud-focused revenue going forward. Interim ordinary profit was 683 million yen, 92 million yen below the original plan, driven primarily by 70+ million yen in unmet revenue targets; higher-than-planned investment in sales training and new hire payroll also weighed on profits.

• Lower-than-expected first-half revenue was driven by the completion of large prior-period projects and weaker-than-planned new order intake, which resulted in lower-than-planned profit. The network infrastructure business saw a sharp year-over-year contraction after a strong prior year, driving the overall first-half revenue decline.
• Customer IT investment spending tends to contract sharply during broader economic downturns, which has negatively impacted Land Computer's revenue during past market corrections including the 1990 bubble burst, 2000 dot-com bust, and 2008 Global Financial Crisis.
• A slight increase in accounts payable was attributed to intentional moderation of partner payments in response to lower first-half revenue.

No formal question-and-answer section was included in the provided transcript.