KANDA TSUSHINKI CO., LTD.

Business Details

This segment engages in the design, proposal, and construction of network infrastructure, the development and sale of proprietary branded package software, system development for general corporations and social welfare organizations, and hardware/software support services. Leveraging 24/7/365 support as a key strength, the segment is driving a business structure transformation from the legacy PBX market toward cloud services and usage-fee-based businesses. It is the core segment, accounting for approximately 91.9% of consolidated group revenue.

Recent Overview

Despite a 2.0% year-on-year decline in revenue, operating income rose sharply by 20.9%, reflecting a significant improvement in profitability

In FY2026 (ending March 2026), revenue declined to ¥6,226 million (down 2.0% year on year) due to a low order backlog at the start of the period. On the other hand, operating income rose sharply to ¥540 million (up 20.9% year on year), supported by continued pass-through of material price increases to sales prices and a significant reduction in general administrative expenses following the sharp decrease in head office building relocation and rebuilding costs. Orders received recovered to ¥6,462 million (up 11.9% year on year), laying the groundwork for a recovery in revenue in subsequent periods.

Key Products

Growth Drivers

• Steady growth in usage fee revenue, led by the Kanda Hikari fiber-optic line service, and expansion of the service menu including enhanced security offerings
• Formation of a foundation for order and sales expansion through proactive sales activities and technology R&D for Multi-Gateway
• Strengthened service delivery via cloud PBX and response to customers' shift toward cloud needs
• Diversification of the business portfolio through expansion of various network construction works and commercialization of video-related solutions
• Continued improvement in engineer capability and profitability through human capital investment, including higher compensation levels and internal/external training
• Recovery in orders received, up 11.9% year on year, expected to contribute to revenue in the next fiscal period

Risks

• Continued erosion of existing maintenance fee revenue due to the shift from on-premises to cloud in the legacy PBX market
• Cost increases from rising material prices and labor costs, and incomplete pass-through of these costs to sales prices
• Risk that new businesses such as Multi-Gateway will require a certain period of time before contributing meaningfully to results
• Downward pressure on profit margins from increased SG&A expenses, including human capital investment and training costs
• Risk of revenue fluctuation due to timing gaps in order receipt, as the level of order backlog at the start of the period directly affects revenue progress