AI data center business generates JPY 10.1B in revenue in its inaugural year, driving record-high operating income; BTC valuation losses the primary driver of net loss

Key Positives From The Results

The AI data center business posted revenue of JPY 10,120M and segment profit of JPY 173M in its first year of operation, propelling operating income to JPY 201M — an all-time high. The legacy AI UI business also grew +14.9% YoY on the back of management reforms, with the portfolio transformation now clearly bearing fruit.

• Revenue reached JPY 14,159M (+299.1% YoY on a non-consolidated basis) with operating income of JPY 200M, a new record. The AIDC entry contributed +JPY 399M in profit, serving as the primary driver
• The AI UI business grew +18.6% YoY excluding divested operations. All services expanded: pinpoint new graduate segment +23.3%, job search engine +18%, HR Ads Platform +30%
• AIDC business posted Q4 standalone revenue of JPY 5,495M (1.8x QoQ vs. Q3), demonstrating accelerating growth. Approximately 5,000 GPU-equivalent units sold, capturing an estimated ~12–13% share of major domestic data centers (company estimate)
• Divestiture of unprofitable businesses (travel and Rakuraku Renrakumou) delivered JPY +53M in exit-related operating income uplift. AI/operational reforms drove JPY +71M in cost reductions through productivity gains
• BPS improved from JPY 11.58 to JPY 85.32. Approximately JPY 3.69B raised through warrant exercises, bolstering net assets from JPY 310M to JPY 3,508M and significantly strengthening the balance sheet

Key Concerns From The Results

Crypto asset valuation losses of JPY 658M pushed recurring loss of JPY 496M and net loss of JPY 518M. Against a BTC acquisition cost of JPY 2.49B, the period-end valuation stood at approximately JPY 730M (self-held portion), leaving residual unrealized losses. BTC price swings remain a significant source of earnings volatility.

• Crypto asset valuation losses of JPY 658M booked in non-operating expenses flipped the operating profit into a recurring loss. Even on an adjusted basis, net income was a modest JPY 154M
• The AIDC business operates at a low gross margin (segment margin of 1.7%), limiting profit contribution relative to its revenue scale. Given the GPU server sales-driven business model, scope for gross margin improvement remains a key challenge
• Investing cash flow was negative JPY 3,665M, reflecting heavy investment. BTC acquisitions of JPY 2,491M and investment securities purchases of JPY 1,128M indicate continued front-loaded investment, with cash on hand at JPY 1,310M
• Balance sheet risk from crypto-related exposures is rising. Deposited crypto assets of JPY 3,373M, crypto lending receivables of JPY 882M, and self-held crypto assets of JPY 726M collectively account for 45% of total assets
• The 15th series of warrants (10,000,000 shares; exercise price JPY 787) remain unexercised, posing ongoing potential dilution risk

Focus Areas / Items To Monitor Going Forward

• Whether the AIDC business can achieve its next-fiscal-year revenue target of JPY 19,980M (+97%). Key factors include procurement status for SuperX servers equipped with Blackwell architecture and progress in developing distributor channels
• Achievability of the crypto finance business's next-fiscal-year revenue forecast of JPY 1,568M (vs. JPY 45M this period). Need to verify the pace of lending balance accumulation against the assumption of JPY 20B AUM at 12.5% annualized yield, and the validity of the BTC price assumption (JPY 11M)
• Exercise timing of the 15th series of warrants (exercise price JPY 787) and additional dilution. Impact on existing shareholders from the remaining 11,990,000 shares (14th + 15th series combined)

Key Financial Highlights

(Note) As this is the company's first consolidated financial statement, YoY comparisons are shown on a non-consolidated reference basis. Operating income swung to a profit from a non-consolidated loss of JPY -20M in the prior period. Crypto asset valuation losses of JPY 658M were the primary driver of the recurring loss and net loss.

Performance By Business Segment

Progress Versus Full-Year Guidance

Annualizing AIDC's Q4 revenue of JPY 5,495M (~JPY 22,000M) exceeds the next-fiscal-year target of JPY 19,980M, and combined with the crypto finance business coming to scale, plan achievability appears reasonably supported. However, crypto asset valuation swings introduce significant variance depending on BTC price movements.

• The AIDC business is in a growth ramp phase where quarterly revenue is accelerating, with business scale-up effects dominating over seasonal patterns
• The AI UI business's pinpoint (new graduate segment) tends to see revenue concentration in Q1 and Q4, aligned with peak hiring market activity

Next Fiscal Year Guidance

FY03/2027 guidance calls for revenue of JPY 25,552M (+80.5%) and operating income of JPY 1,142M (+471.0%). Full-year contribution from the AIDC business (JPY 19,980M) and the scaling of the crypto finance business (JPY 1,568M) are the twin growth engines. Adjusted recurring profit excluding crypto asset valuation gains/losses is projected at JPY 1,142M. Key assumptions include an average BTC price of JPY 11M, crypto AUM of JPY 20B, and an annualized yield of 12.5%.

• Revenue: JPY 25,552M (+80.5%)
• Operating Income: JPY 1,142M (+471.0%)
• Recurring Profit: JPY 1,494M (vs. recurring loss in prior period)
• Net Income: JPY 1,270M (vs. net loss in prior period)
• EPS: JPY 30.96 (vs. JPY -14.99 in prior period)

Commentary On Shareholder Returns

The annual dividend for FY03/2026 was JPY 0.00 (unchanged from the prior period). The FY03/2027 annual dividend is also forecast at JPY 0.00. No dividends have been paid, with the company continuing to prioritize growth investment.

Financial Position

In its first consolidated financial statement, total assets expanded to JPY 11,058M. Approximately JPY 3.69B raised through warrant exercises drove net assets from JPY 310M to JPY 3,508M, but crypto-related assets account for ~45% of total assets, creating a balance sheet structure directly exposed to BTC price fluctuations. Interest-bearing debt is a modest JPY 180M, with an equity ratio of 31.6%.

News Released Alongside The Earnings Announcement

Major Announcements During The Quarter

Large-Shareholding Filings / Material Proposals Over The Past Year

• Japan Asia Investment (co-holders: Dynamic Solution Group, Governance Partners): 30.50% → 33.04% (2026/03/27) — Pure investment; may engage in dialogue regarding management, business, financial, and capital policy matters, and may make material proposals
• SBI Securities: 11.25% → 4.05% (2026/04/30) — Securities business inventory; no material proposals