Digital Arts Inc.
2326・Prime Market・Information & Communication
Security Business
A single business segment centered on domestic Web security and email security
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales (full year) | ¥10,835 million | ¥9,982 million | ↑ |
| Operating profit (full year) | ¥4,791 million | ¥4,558 million | ↑ |
| Ordinary profit (full year) | ¥4,840 million | ¥4,562 million | ↑ |
| Profit attributable to owners of parent (full year) | ¥3,427 million | ¥3,183 million | ↑ |
| Order value (full year) | ¥16,604 million | ¥10,570 million | ↑ |
| Operating margin | 44.2% | 45.7% | ↓ |
| Earnings per share | ¥253.57 | ¥232.79 | ↑ |
| Corporate market net sales | ¥5,176 million | ¥4,783 million | ↑ |
| Corporate market order value | ¥5,564 million | ¥5,016 million | ↑ |
| Public sector market net sales | ¥5,256 million | ¥4,788 million | ↑ |
| Public sector market order value | ¥10,639 million | ¥5,146 million | ↑ |
| Household market net sales | ¥402 million | ¥410 million | ↓ |
| Household market order value | ¥400 million | ¥408 million | ↓ |
| Cash flow from operating activities | ¥8,381 million | ¥2,817 million | ↑ |
| Cash and cash equivalents at end of period | ¥23,083 million | ¥17,952 million | ↑ |
| Advances received (period-end balance) | ¥7,800 million | ¥4,082 million | ↑ |
Business Details
A Japanese comprehensive security manufacturer providing Web security (i-FILTER), email security (m-FILTER), zero trust security (Z-FILTER), and other solutions to corporate, public-sector, and household customers. Centered on its proprietary "White Operation" technology, the company offers both software and cloud services. As of the end of March 2026, it has a user base of approximately 15 million people. The company operates across three markets—corporate, public sector, and household—and is promoting market share expansion in the public-sector market with the second phase of the GIGA School Program as a key initiative.
Recent Overview
Order value expanded sharply, up 57.1% year on year to ¥16,604 million, significantly strengthening the recurring revenue base
For the full fiscal year ending March 2026, the company achieved net sales of ¥10,835 million (up 8.5% year on year) and operating profit of ¥4,791 million (up 5.1% year on year). Public-sector order value expanded sharply to ¥10,639 million, up 106.7% year on year, driven by a large volume of orders for the second phase of the GIGA School Program. Because the order mix was centered on cloud service-related products, growth in net sales was limited due to the effects of revenue recognition; however, advances received increased by ¥3,717 million to ¥7,800 million, forming a stable revenue base for subsequent periods. The new product Z-FILTER began official sales in November 2025, and orders are accumulating with monetization expected in the next fiscal year. For the fiscal year ending March 2027, the company forecasts net sales of ¥12,000 million (up 10.8% year on year) and operating profit of ¥5,400 million (up 12.7% year on year).
Key Products
Growth Drivers
- Continued expansion of demand for security countermeasure products due to the frequent occurrence of ransomware attacks, targeted attacks, and information-stealing malware, along with heightened risk of generative AI misuse
- Accumulation of order backlog for cloud service-related products and stable revenue recognition in subsequent periods due to the large volume of orders received for the second phase of the GIGA School Program (public-sector order value up 106.7% year on year)
- Entry into the corporate zero trust security market and establishment of a medium- to long-term growth foundation through the launch of the new product Z-FILTER (November 2025)
- Expansion of market share across the public-sector market as a whole through strengthened support for next-generation school administration DX projects and municipal security reinforcement projects
- Capturing demand for generative AI usage management through i-FILTER's AI chat filter function and strengthening competitiveness in the corporate market
- Expanded deployment of the "White Operation" model to the household market, leveraging a user base of approximately 15 million people
- Achieving both growth investment and profitability through productivity improvement and cost control via advanced and more efficient operations utilizing AI
Risks
- Suppression of short-term net sales growth due to the timing of revenue recognition for cloud service-related products (divergence between order value and net sales)
- Risk of a rebound decline in public-sector market order value once orders for large-scale public projects such as the second phase of the GIGA School Program have run their course
- Decline in operating margin (from 45.7% in the prior period to 44.2% in the current period) due to continued personnel investment in line with the medium-term management plan (increase in cost of sales and selling, general and administrative expenses)
- Risk of sales concentration among major sales agents (Daiwabo Information System: ¥3,618 million; SB C&S: ¥1,942 million), with the top two companies accounting for approximately 51% of net sales
- Intensifying price competition with competitors' products and market entry by domestic and overseas security vendors
- Risk of delayed monetization of "i-Filter 10" in the household market (monetization was not achieved in the fiscal year under review)
- Decline in the equity ratio (from 76.6% in the prior period to 66.1% in the current period) due to a sharp increase in advances received and total assets accompanying the large volume of orders for the second phase of the GIGA School Program
Last updated: June 25, 2026