ENVALITH
株式会社No.1 logo

No.1 Co.,Ltd

3562・Standard Market・Wholesale Trade

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株式会社No.1 logo
No.1 Co.,Ltd3562

Business

No.1 Co., Ltd. is an IT solutions company for small and medium-sized enterprises, established in 1989 and listed on the Tokyo Stock Exchange in 2017. Operating as a group of 10 companies including 6 consolidated subsidiaries, it engages in diversified operations ranging from the planning, development, manufacturing, and sales of Information Security Equipment (UTM, Security Switches, NAS Servers, etc.), to the sales and maintenance of OA-Related Products such as MFPs and business phones, business consulting (No.1 Business Support), and SES Business & System Development. Its main customers are small and micro enterprises, and through a manufacturing and wholesale system via Alexon Co., Ltd., the company has established an integrated structure within the group covering planning, design, manufacturing, and sales. For FY2026 (ending March 2026)...

Business Model

The core of revenue is sales of proprietary planned products and OA-related products (sales of ¥11,141 million in FY2026 (ending February 2026)), with a sales format via leasing companies that reduces credit risk while lowering the adoption barrier for customers. MFPs generate stock revenue through counter service fees, and "No.1 Business Support" (5,070 contracts held, average unit price ¥12,400) complements this with stable subscription-type revenue. The stock sales ratio is expanding to 15.8% (+1.3pt year-on-year). Indirect sales through the sales agency and franchise network also support the revenue base.

Company Strengths

In July 2020, the company made Alexon Co., Ltd. a subsidiary, establishing a manufacturing-wholesale system that completes planning, design, manufacturing, and sales of UTM, security switches, NAS servers, and other products within the group. In February 2025, the company newly released a NAS server equipped with closip Co., Ltd.'s patented technology "LTE over IP®", expanding the product lineup. The ability to offer multi-layered defense solutions for small and medium-sized enterprises under its own brand serves as a differentiating factor.

Since its launch in September 2020, "No.1 Business Support" has grown to 5,070 contracts held (up 347 year-on-year) and an average customer unit price of ¥12,400 (up ¥1,500 year-on-year) as of the end of FY2026 (ending February 2026). The stock revenue ratio has risen to 15.8% (up 1.3pt year-on-year), forming, together with MFP counter service fees, a stable revenue base that is less susceptible to economic fluctuations.

The company brought multiple companies into the group within FY2026 (ending February 2026) alone, including I.T. Engineering Co., Ltd. in April 2024, OZ MODE Co., Ltd. (SES Business & System Development) in June 2024, and S.I.T Co., Ltd. (expansion into the Tohoku region) in October 2024. Net sales for FY2026 (ending February 2026) reached ¥17,529 million, up 23.4% year-on-year, with the expansion of the consolidated scope through M&A driving sales growth.

ENVALITH's Perspective

For Q1 of FY2027 (ending February 2027) (March–May 2026), net sales were ¥4,743 million (up 25.8% YoY), maintaining high growth. However, ordinary income was ¥147 million (down 33.3% YoY) and quarterly net income attributable to owners of the parent was ¥26 million (down 38.6% YoY), representing a significant profit decline. The main causes were the absence of the ¥75 million insurance cancellation refund (a one-time non-operating gain) recorded in the same period of the prior year, a sharp increase in interest expenses (from ¥4 million to ¥22 million), and a ¥13 million loss on anonymous partnership (tokumei kumiai) investment. The widening gap between sales growth and profit growth warrants close scrutiny of the quality and sustainability of earnings.

The full-year forecast sets ambitious targets of net sales of ¥21,200 million (up 20.9% YoY), operating income of ¥1,650 million (up 24.0% YoY), and net income of ¥1,000 million (up 40.1% YoY), and these forecasts remain unrevised. Q1 sales progress against the full-year target stood at 22.4%, generally on track, but operating income progress was only 10.7%. Selling, general and administrative expenses expanded sharply by 43.0% YoY (from ¥1,582 million to ¥2,261 million), and whether the company can absorb these costs and recover profitability in the latter half of the fiscal year will be the focal point of evaluation.

Goodwill balance stood at ¥3,046 million (¥3,167 million at the end of the previous fiscal year), accounting for 22.3% of total assets of ¥13,644 million. Goodwill amortization for Q1 surged to ¥126 million (versus ¥47 million in the same period of the prior year), indicating a growing financial burden from accumulated M&A activity. In addition, short-term borrowings increased to ¥1,899 million (from ¥1,509 million at the end of the previous fiscal year) and long-term borrowings rose to ¥3,345 million (from ¥2,867 million), expanding interest-bearing debt, with interest expenses also on an upward trend. The equity ratio declined to 30.2% (from 31.2% at the end of the previous fiscal year), making the maintenance of financial soundness a key challenge.

Growth Strategy

Toward the final year of Evolution2027, the company is advancing three pillars: M&A, expansion of information security equipment, and strengthening of recurring revenue.

Sales of mainstay information security equipment progressed smoothly in the first quarter as well. The company continued expanding sales of jointly developed products with Alexon Co., Ltd., and launching new products such as the remote access system "CA1000" (sales commenced March 2026). Cross-selling to the customer base of regional subsidiaries is also progressing steadily, and information security revenue expansion continues to grow across the group as a whole.

The company is focusing on increasing the number of contracts held while maintaining an upward trend in average customer unit price through basic fee revisions and expanded options. It is accelerating cross-selling of corporate mobile phone and energy-related products in collaboration with I-Station Co., Ltd., and is also promoting the creation of recurring revenue businesses at newly acquired group subsidiaries. Efforts to stabilize the revenue structure are ongoing.

During the first quarter under review, Gloria Corporation was newly added to the scope of consolidation (due to increased materiality). Meanwhile, No.1 Digital Solutions Co., Ltd. was dissolved through absorption-type merger effective March 1, 2026. The company is accelerating synergy creation with subsidiaries acquired through M&A, and expansion into untapped areas such as local governments, education, and regional customers is progressing. Goodwill balance of ¥3,046 million and increasing interest-bearing debt remain financial challenges.

The Group Growth Strategy Promotion Headquarters is strengthening business portfolio management and formulating and promoting human resource development plans. The company is implementing human capital management measures such as raising salaries for younger employees and expanding scholarship repayment support programs. SG&A expenses expanded sharply, up 43.0% year-on-year, and while the company is in an investment phase, thorough cost management remains a challenge.

Last updated: July 17, 2026