Hammock Inc.

Business Details

The company develops and sells proprietary software across three areas: Network Solutions (IT asset management and security via the AssetView series), Sales DX Solutions (sales support via Hot Profile / Hot Approach), and AI Data Entry Solutions (data entry efficiency via DX OCR / WOZE). It serves a broad range of customers from private companies to government agencies, and has established a stable earnings structure centered on recurring revenue. Otsuka Corporation is a major sales channel, accounting for approximately 11.5% of net sales.

Recent Overview

Top-line growth driven by strong Network Solutions performance, while AI Data Entry sales declined amid a transition period

For the full year of FY2026 (ending March 2026), the company achieved higher sales and profit, with net sales of ¥4,889 million (up 3.9% year on year) and operating income of ¥834 million (up 5.5%). Network Solutions cloud ARR served as the growth driver, rising 32.4% year on year to ¥1,531 million, while AI Data Entry Solutions sales fell to 82.4% of the prior-period level amid the transition from on-premise to cloud and a decline in WOZE processing volume. Due to the recognition of extraordinary gains (totaling ¥178 million from gains on sale and redemption of investment securities), net income rose 10.9% year on year to ¥685 million. For FY2027 (ending March 2027), the company forecasts net sales of ¥5,287 million (+8.1%) and operating income of ¥883 million (+5.9%), but expects net income to decline 14.6% to ¥585 million due to the drop-off of extraordinary gains.

Key Products

Growth Drivers

• Expanding demand for cloud-based IT asset management amid the entrenchment of telework and rising ransomware damage (AssetView cloud ARR up 32.4% year on year to ¥1,531 million)
• Growing need for enhanced security governance amid the spread of generative AI (addition of a ChatGPT transmission log capture feature) and the launch of an MDR service integrated with the EDR product SentinelOne
• Continued expansion of DX investment including among small and medium-sized enterprises (the CX/digital marketing market is projected to reach ¥152.3 billion in FY2028)
• A bottoming-out of the decline in OEM-provided sales within Sales DX Solutions and a return to a growth trajectory driven by upselling to existing customers (ARR excluding OEM up 10.3% year on year)
• Rebuilding of the earnings base in the AI Data Entry segment through expansion of the cloud service (DX OCR)
• A stable, stock-type revenue base supported by low churn rates (0.35% for Network, 0.77% for Sales DX)

Risks

• Rising cost of sales due to increased software depreciation expense (¥625 million in the current period, up 37.2% year on year), which is pressuring gross margin
• Decline in WOZE usage-based processing volume in the AI Data Entry Solutions business, along with a sales decrease (down 17.6% year on year) during the transition period from on-premise to cloud
• In FY2027 (ending March 2027), net income is expected to decrease 14.6% year on year to ¥585 million due to the drop-off of extraordinary gains (gains on sale and redemption of investment securities)
• Risk of sales concentration with Otsuka Corporation (a key customer accounting for ¥560 million, or approximately 11.5%, of total net sales in the current period)
• Decline in OEM-provided sales within Sales DX Solutions (99.6% of prior-period sales in the current period) and uncertainty over the return to a growth trajectory
• Limited room for margin improvement amid continued increases in labor costs, outsourcing costs, and communication expenses