4733.T

Core Operational Quality Improvements

• Security: Oikaze Cloud uses a PaaS-based permission-separated architecture on Microsoft Azure that structurally blocks ransomware infections; zero ransomware breach incidents have been recorded to date. OBC earned ISMAP certification, Japan's highest government cloud security standard, opening access to the public sector/government market.
• AI (AI Transformation / AX) Strategy: Builds on OBC's established core system reliability to add AI-powered value. Approximately 20 AI assistant functions are already embedded into Oikaze series products to improve usability, and standalone AI agents that integrate with external systems to boost back-office productivity have been launched. OBC plans to launch AI Cowork within the calendar year. Current AI agent offerings include new lease accounting identification cloud and consolidated accounting support cloud for large listed enterprise groups.
• Human Capital Strategy: OBC has prioritized health-focused management, earning selection as a 2026 Health Management Stock and consecutive 2-year certification as a Health Management Excellent Corporation (White 500). Employee turnover stayed below 2% in the 2026 fiscal year, leading to very high staff retention.
• External Recognition: OBC has retained the number 1 ranking in customer satisfaction and partner satisfaction for its core offerings. The Oikaze series has reached a cumulative 820,000 installations across domestic Japanese enterprises.

5 Core Growth Strategies for the 2027 March Fiscal Year

• 1. Oikaze 11 Series Up to Cloud: Accelerate cloud migration for existing on-premise Oikaze 11 users, focusing initially on 40,000 of the 110,000 total eligible systems.
• 2. Oikaze V ERP Cloud Expansion: Drive adoption by leveraging demand for new lease accounting standard compliance, expanding low-code/no-code API integration capabilities to support custom middle-market business requirements.
• 3. Peripheral Business Digitalization with Oikaze Cloud Edge: Expand offerings for peripheral workflow digitalization, including invoice issuance/receipt digitalization compliant with the Peppol standard, paired with deep integration between core Oikaze Cloud and Edge solutions to support compliance with frequent regulatory updates.
• 4. Expansion via Specialist Channels: Build an ecosystem leveraging professional partners including certified public accountants, social insurance labor consultants, consultants, financial institutions, and BPaaS providers. The ASOS professional partner program already has approximately 1,500 member firms.
• 5. AI and Security Enhancement: Continue expanding AI assistant capabilities for core workflows (auto-journaling, handwritten receipt OCR, natural language search, translation), develop new AI agents for talent management, and maintain the industry-leading structural ransomware protection of Oikaze Cloud.

• Revenue Guidance for FY2027 (ending March 2027): Total revenue guidance implies mid-single digit overall top-line growth, with segment-level growth as follows: Solutions revenue is projected to reach 39.9 billion yen, up 24.6% YoY; Related Products revenue is projected to decline 300 million yen YoY to 4.471 billion yen, due to the lapsing of FY2026's one-time IaaS pricing revision gain; Services revenue is projected to decline 10% YoY to ~13.1 billion yen, driven by ongoing on-premise maintenance attrition from cloud migration.
• Profit Guidance for FY2027: Gross margin is expected to hold steady at FY2026 levels. Selling, general and administrative (SG&A) expenses are projected to increase 2.18 billion yen YoY to reflect planned headcount growth and increased advertising investment. Operating profit is targeted at 26.5 billion yen, which would expand operating margin above FY2026 levels. Net income is projected to increase 1.2 billion yen YoY to 19.35 billion yen.
• Dividend Guidance: Full-year dividend per share is projected at 130 yen, a 17%+ increase from FY2026's 111 yen, with the interim dividend increased 7 yen to 65 yen. OBC commits to maintain long-term stable shareholder returns.
• Financial Income Guidance: The 500 billion yen long-term fixed deposit position established in Q4 FY2026 is expected to generate approximately 500 million yen in annual interest income going forward.

Total company revenue for the 2026 March full year was 51.4 billion yen, hitting an all-time high with 9.4% year-over-year (YoY) growth. Operating profit was 23.58 billion yen, an all-time high with 8.4% YoY growth, for an operating margin of 45.9%.

1. Solutions Segment: Total revenue 32.043 billion yen, contributing 62.3% of total revenue.
   • Cloud Solutions: Revenue 31.351 billion yen, 20.8% YoY growth, contributing 61% of total revenue. Growth was driven by solid performance of small-business focused Oikaze i Cloud and accelerating growth of middle-market/large-cap focused Oikaze V ERP Cloud and Oikaze Cloud DX Suite. Cloud ARPU (average revenue per user) hit 579 thousand yen, up 1.8x over 4 years, driven by a shift to higher-priced products and larger customer deals.
   • On-premise Solutions: Revenue declined sharply YoY following the end of new on-premise product shipments in February 2025; performance matched original budget expectations.
2. Related Products Segment: Revenue 4.766 billion yen, 13.7% YoY growth, contributing 9.3% of total revenue. Growth was driven by expanding sales of Oikaze-linked third-party solutions and a one-time impact from IaaS pricing plan revisions in the first half.
3. Services Segment: Total revenue 14.591 billion yen, 3.5% YoY decline, contributing 28.4% of total revenue.
   • On-premise Maintenance: Revenue declined 4.5% YoY due to ongoing on-premise to cloud migration by existing customers.
   • Other Services (including installation guidance): Revenue 2.826 billion yen, 1.2% YoY growth.

Key recurring revenue metrics: Annual Recurring Revenue (ARR) reached 45.7 billion yen, up 12.6% YoY; recurring revenue accounts for 83.9% of total revenue, up from prior years. Unearned revenue balance hit 35.8 billion yen, up 2.2 billion yen YoY, and contract renewal rate stays stable at over 99% on a value-weighted basis.

No material operational failures or new material risks were explicitly discussed in the call. The only implied risk highlighted is ongoing natural attrition of on-premise maintenance revenue as customers migrate to cloud solutions, which is fully incorporated into management's planning and guidance.

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