SOLITON SYSTEMS K.K.
3040・Prime Market・Information & Communication
Business
Soliton Systems K.K. is an independent IT security company established in 1979. It develops in-house information leakage prevention, authentication, access control, telework security, and cybersecurity products, with government agencies, local municipalities, critical infrastructure, financial institutions, healthcare, and educational institutions as its main customers. IT Security Business accounts for approximately 94% of consolidated net sales of ¥19,762 million, with the remainder comprising the Video Communication Business (video transmission for public safety) and Eco New Business Development (analog edge AI, etc.). The company holds the No. 1 domestic share in authentication appliances with "NetAttest EPS" and offers the multi-factor authentication cloud service "Soliton OneGate," and is listed on the Prime Market of the Tokyo Stock Exchange. The group consists of the company, five consolidated subsidiaries, and one other affiliated company.
Business Model
The company does not rely on contract development or import resale, instead developing proprietary standard products and offering them both as on-premises product sales and as cloud services (SaaS). In FY2025 (ending December 2025), goods and product sales were ¥7,321 million (up 8.3% year on year), and cloud service sales were ¥2,652 million (up 14.0% year on year), with the high-margin cloud ratio continuing to expand. The company also combines network integration and operational services, capturing customers' ongoing security investment. The gross margin improved to 46.7% (from 44.6% in the same period of the previous year), with the rising ratio of proprietary products and services directly contributing to improved profitability.
Company Strengths
The authentication appliance "NetAttest EPS" has earned high acclaim across industries and company sizes regardless of sector or scale since its release in 2002, and holds the No.1 domestic market share. "SmartOn ID," a multi-factor authentication solution for Windows terminals, has maintained the top market share for 21 consecutive years. Continuous development and release of new versions of core products has solidly maintained the customer base.
The gross profit margin for FY2025 (ending December 2025) improved to 46.7% (44.6% in the same period of the previous year). Sales of the cloud service "Soliton OneGate" continued to grow strongly, reaching ¥2,652 million (up 14.0% year on year). The rising proportion of proprietary products and cloud services has driven the improvement in gross margin, and the operating margin improved significantly to 14.4% (11.0% in the same period of the previous year).
At the end of FY2025 (ending December 2025), the equity ratio stood at 50.5%, and the interest coverage ratio was 4,157.0 times, maintaining a virtually debt-free management structure. Of total assets of ¥26,228 million, current assets accounted for ¥23,954 million, and financial income also expanded, including interest income of ¥45 million earned through the utilization of surplus funds in securities and time deposits.
ENVALITH's Perspective
Performance Trend
Sales over the past five fiscal years grew at a moderate pace, from ¥17,389 million (FY2021) to ¥19,762 million (FY2025). In Q1 of FY2026 (ending December 2026), sales rose to ¥5,165 million (up 12.7% year-on-year), operating profit rose to ¥908 million (up 53.2% year-on-year), and quarterly net income attributable to owners of the parent rose to ¥685 million (up 71.1% year-on-year), marking a substantial profit increase. Gross margin improved to 48.8% (from 45.9% in the same period last year), and operating margin rose to 17.6% (from 12.9%). Externally, progress in the second phase of the municipal resilience initiative and the second phase of the GIGA School Program, along with sustained high levels of cybersecurity investment, provided a tailwind. Interest income from fund management also increased to ¥26 million (from ¥1 million in the same period last year), with the changing interest rate environment boosting ordinary income. The full-year forecast (sales of ¥21,200 million, operating profit of ¥3,150 million) remains unchanged, but the Q1 progress rate was high.
Growth Strategy
Aiming for sustainable corporate value enhancement through three pillars: cloud service expansion, overseas development, and advanced technology development
Capturing customers' cloud migration demand centered on cloud services such as "Soliton OneGate." Cloud service revenue in the first quarter of FY2026 (ending December 2026) expanded steadily to ¥707 million (up 9.4% year on year), while contract liabilities of ¥9,073 million demonstrate the robustness of recurring revenue.
NetAttest EPS and Soliton OneGate have been adopted as core products in "IIJ Network Authentication Solution with Soliton," launched by IIJ. A collaborative solution for web filtering services with NEC has also been announced. Sales channels and product adoption are expanding through collaboration with domestic vendors.
The remote driving core technology development team has been integrated into the Video Communication Business to advance commercialization. A large order was secured in the public safety field in the first quarter of FY2026 (ending December 2026). Demonstration trials with private bus companies and local governments are also underway. However, segment loss expanded to ¥60 million, and profitability remains a future challenge.
Development of the Analog Edge AI Chip has entered its final stage, and prototype manufacturing is proceeding through repeated design verification and revision. Current revenue comes solely from Human Sensor Products at ¥47 million (down 5.0% year on year), with a segment loss of ¥55 million, as the upfront investment phase continues. The timing of monetization remains unclear.
The company sold its wholly owned subsidiary Sound-FinTech Co., Ltd., judging that business synergies with it were limited, recording a special gain of ¥63 million. Management resources are being concentrated on the core IT Security business, contributing to improved profitability.
Last updated: July 17, 2026