Pacific Net Co.,Ltd.

Business Details

In addition to IT subscription (primarily mid- to long-term rental) of PCs, Wi-Fi, mobile devices, and other equipment used by corporations and government offices for their operations, the segment provides IT services such as operation and maintenance of IT environments, help desk, and cloud services. Subscription-type services account for the majority of revenue, forming a structure that steadily accumulates stable stock revenue. Against a backdrop of IT department staff shortages and increasing workloads, demand for LCM services incorporating BPO services is rising, making this the core segment underpinning the group's overall revenue base.

Recent Overview

Full-year revenue grew 22.4% and profit grew 6.4%, but Q4 profit temporarily declined due to upfront investment and special bonuses

For the full year of FY2026 (ending March 2026)—wait, FY2026 (ending May 2026)—segment revenue reached ¥7,161 million (up 22.4% year on year), and segment profit reached ¥732 million (up 6.4% year on year). The steady accumulation of long-term subscription stock revenue progressed stably, and the utilization rate of owned assets remained at a high level. On the other hand, in Q4, in addition to the absence of one-time revenue such as election-related projects and large-scale sales of subscription-terminated products seen in the prior-year period, an increase in depreciation expenses due to the advance buildup of subscription assets to ensure stable supply to customers, combined with the payment of special bonuses to employees, caused segment profit to temporarily decline by 58.0% year on year. As a subsequent event, in June 2026, an additional borrowing of ¥1,400 million was made as funds for PC procurement.

Key Products

Growth Drivers

• Continued expansion of demand for LCM subscriptions incorporating BPO services, driven by IT department staff shortages and increasing workloads
• Strengthening of a stable revenue base through steady accumulation of stock revenue from long-term subscriptions
• Increased subscription demand due to the need to level initial costs amid rising prices of new PCs (including the spread of AI PCs)
• Expansion of the addressable scope through the rollout of LCM services to AI infrastructure equipment such as AI servers, storage, and network equipment
• Improved productivity and expanded business scale through upfront investment in human capital, infrastructure, and DX (AI utilization, business automation, no-code tools)

Risks

• Impact on procurement of subscription assets and stable supply to customers due to supply delays or delivery delays from PC manufacturers
• Increased borrowings and rising financial leverage (consolidated equity ratio of 25.5%) associated with continued large-scale investment in subscription assets (rental assets)
• Risk of temporary decline in profitability due to advance recognition of depreciation expenses during demand periods (Q4 segment profit actually declined 58.0% year on year)
• Risk of demand slowdown after the peak of OS update demand (Windows 10 support end) (though expected to be mitigated by continued LCM service and BPO demand)
• Impact on profitability from increased subscription asset acquisition costs due to fluctuations (increases) in prices of PCs and other products