7361.T

• Corporate Mission & Positioning

  • The company operates under the mission "All Technology for HUMAN", positioning itself as a solution integrator focused on solving client management challenges centered on IT and DX, aiming to become a next-generation management consulting firm that creates answers by combining human and technological capabilities.
  • The company holds a unique market position between large consulting firms (which lack on-the-ground implementation capability) and lower-tier IT vendors (which cannot address full enterprise management challenges), filling the gap by providing end-to-end support from strategy to implementation.

• Organizational Strategy

  • Three group subsidiaries have merged to integrate specialized expertise and customer bases, improving operational efficiency in the strategic domain business, accelerating scale expansion and business structure transformation, aligned with the 2nd Stage mid-term strategy that targets the SMB market as the highest priority.

• Business Structure & Competitive Advantages

  • The company operates two business segments: SES (stable revenue base centered on on-site engineer dispatching) and Strategic Domain (full-spectrum management problem solving including M&A advisory, consulting, contracted development, and maintenance/operation).
  • Core competitive advantage is the combination of on-the-ground implementation capability (cultivated in the SES business) and consulting-led problem-solving capability, enabling the delivery of end-to-end solutions from upstream strategy to on-the-ground implementation that avoid being purely theoretical.
  • The Strategic Domain business has built a one-stop structure from M&A advisory/management consulting through development to maintenance/operation, with cross-group sharing of customers, knowledge and human resources to maximize synergy.
  • The SES business serves as the core of implementation capability, with over 8,400 total engineers operating in FY2025 September term across 354 clients in diverse industries, supporting the group's overall technical foundation via knowledge sharing and assignment to high-value-added projects.

• Market & Growth Strategy for SMB DX

  • SMB (small and medium-sized enterprises) is defined as the highest priority target market: SMBs account for the vast majority of Japanese companies, have significant untapped DX growth potential (approximately 50% of companies with under 100 employees have not started DX initiatives, with particularly low adoption in manufacturing, retail, distribution and services), and the primary barrier to DX for SMBs is structural human resource shortages that the company is positioned to solve.
  • The company addresses the common SMB problem of siloed, fragmented DX (individual SaaS tools per department that prevent enterprise-wide optimization) via the HCH Platform (BaaS), which modularizes group capabilities to deliver custom combinations of DX functions (accounting, contract management, SFA, AI analytics, etc.) as customized, low-barrier DX packages for individual SMBs.
  • Go-to-market strategy leverages cross-group shared customer access to enable broad coverage, with the common platform enabling smooth end-to-end support from introduction through maintenance/expansion to drive effective cross-selling, balancing new customer growth with deeper existing customer relationships and increasing group-wide added value.
  • Two client success cases are highlighted: end-to-end support for accounting finance DX at a TSE Standard listed company, and full upstream-to-vendor-selection accompaniment for accounting DX at Nihon Shokuhin Kako Co., Ltd., both demonstrating the company's full end-to-end support capability.

• Human Capital & M&A Strategy

  • Human capital is the core source of competitiveness: the company integrates recruitment, internal development (of consultants and project managers capable of identifying and proposing solutions for management challenges to ensure consistent quality across the group), and partner collaboration to share knowledge and deliver rapid value, creating a virtuous cycle that accumulates project success experience and improves BaaS platform capabilities.
  • Organic growth is paired with active M&A: M&A is used to acquire external growth drivers, with acquired knowledge and human capital integrated into the HCH Platform to accelerate growth in both business and market scope, increase presence in the SMB market, and drive rapid sustainable growth, balancing internal deepening and external expansion to maximize corporate value.

• Growth Roadmap

  • 1st Stage: Completed, focused on growth via deepening relationships with existing customers.
  • Current 2nd Stage (through FY2027 September term): Focused on new customer growth centered on SMB DX consulting, accelerating high value-added growth in the Strategic Domain business on top of the stable SES revenue base.
  • Future 3rd Stage: Will target expansion into the enterprise segment and overseas market entry.

• Financial & Shareholder Return Strategy

  • The company maintains a financial policy of optimizing capital structure to keep equity ratio below 40% for four consecutive quarters; as of the end of 1Q FY2026 September term, equity ratio is 36.4%, which is considered appropriate.
  • The company has approved an increase in annual dividend per share to 44 yen for FY2026 September term, bringing total payout ratio to 31.2%, aligned with the company's policy of maintaining total payout ratio above 30%.

• Full-year FY2026 September term guidance is maintained at 10.0 billion yen in total revenue and 1.02 billion yen in EBITDA. The plan targets maintaining operating profit at the prior year level while investing in mid-to-long term profit expansion to accelerate revenue growth centered on the Strategic Domain business. M&A-related costs are not included in the current full-year earnings forecast.
• 1Q FY2026 September term results came in above the initial quarterly budget for all line items: revenue progress against full-year plan is 22.4% and operating profit progress is 17.1%. The lower operating profit progress is intentional, driven by planned upfront investment for growth strategy, and full-year results remain on track to meet targets, with a strong start to the fiscal year.
• Mid-term target: For the 2nd Stage ending FY2027 September term, the company targets 12.0 billion yen in total revenue, building on the FY2025 September term base of 8.9 billion yen revenue and 28% ROE, increasing the proportion of revenue from the Strategic Domain to lift profit levels and capital efficiency on an ongoing basis.
• Long-term target: For FY2030 September term, the company targets EPS of 1,000 yen and ROE above 30%, achieving balanced growth in both scale and profitability.
• SES business full-year headcount is expected to see slight net growth, in line with the current quarterly trend.

1. Strategic Domain Business: Revenue grew 31.0% year-over-year, driven in part by the acquisition of HCFA. This segment is the company's mid-to-long term growth engine, and its strong growth reflects steady progress on the company's business structure transformation. 2. SES Business: - Headcount decreased 1.2% year-over-year but increased 0.6% quarter-over-quarter, with full-year slight growth expected. - Average contract unit price increased 2.9% year-over-year and 0.3% quarter-over-quarter, driven by a shift to more upstream project work and contract price optimization efforts. For the full 2025 September term, average monthly active SES headcount was 705 person-months (above the prior year), with an average contract unit price of 6.67 million yen, up year-over-year. Consolidated total revenue for the quarter was 2.24 billion yen (up 11.6% year-over-year), EBITDA was 190 million yen, operating profit was 130 million yen (down 36.9% year-over-year), and gross margin was 28.3% for the quarter.

• No material downside risks to full-year performance have materialized as of the end of the first quarter. The year-over-year decrease in operating profit and EBITDA is entirely due to planned strategic investment (R&D, personnel expenses for growth, UI/UX improvements for BaaS projects) and the scheduled completion of a large-scale project at ACF in the prior year, which was already incorporated into the company's initial plan. There are no unplanned negative deviations from forecast.
• The only noted structural market challenge is the widespread human resource shortage for DX initiatives among SMBs, which is a market gap the company's business model is designed to address, not a material risk to the company's performance.

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