DIGITAL HEARTS HOLDINGS Co., Ltd.

Business Details

Provides Domestic Debugging Service (defect detection) for console games, mobile games, and other entertainment content, along with Global Service (Translation / LQA), Marketing Support, Game Development Support, customer support, and other global and other services. Aims to become the "Global Quality Partner for the Entertainment Industry" by leveraging its proprietary quality method DHQ and the game-specialized AI translation engine "ella." In November 2025, made HUWIZ SOLUTIONS INC. a subsidiary to expand its customer base in Europe and the US.

Recent Overview

Domestic debugging achieved double-digit revenue growth, but revenue declined 3.2% year on year due to deconsolidation from the sale of a subsidiary. Profit rose sharply, up 15.7%

In FY2026 (ending March 2026), the DH Group Business achieved double-digit revenue growth in domestic debugging, driven by strong demand triggered by the launch of the Nintendo Switch 2, resulting in a significant increase in segment profit to ¥2,246 million (up 15.7% year on year). On the other hand, the impact of deconsolidation from the sale of a subsidiary in the prior period (December 2024) was substantial, limiting revenue to ¥23,131 million (down 3.2% year on year). In the global domain, the company acquired HUWIZ SOLUTIONS INC. as a subsidiary in November 2025 at an acquisition cost of ¥2,062 million (including goodwill of ¥1,274 million, amortized equally over 10 years), aiming to expand its customer base in Europe and the US. The company also pursued solution expansion and geographic growth through the opening of a new base in Thailand and business alliances with companies in the US and Singapore.

Key Products

Growth Drivers

• Robust expansion of domestic debugging demand triggered by the launch of the Nintendo Switch 2 (achieved double-digit revenue growth in FY2026, ending March 2026)
• Acquisition of new projects through the full-scale rollout of the proprietary game-specialized AI translation engine "ella" for Translation / LQA solutions
• Enhanced English-language debugging capacity and expanded customer base in Europe and the US through the subsidiarization of HUWIZ SOLUTIONS INC. (November 2025)
• Geographic expansion and solution enhancement through the opening of a new base in Thailand, a capital and business alliance with a US company, and a strategic business alliance with a Singaporean company
• Expanding demand for Translation / LQA and marketing amid an increasing number of simultaneous worldwide game title releases
• Enhanced service added value and sustained high market share through promotion of the proprietary quality method DHQ
• Talent empowerment and operational efficiency through the introduction of the AI-collaborative operations platform "HumanOps OS"

Risks

• Downward pressure on revenue from deconsolidation of a subsidiary sold in the prior period (materializing in FY2026, ending March 2026)
• Risk of irregular debugging demand due to fluctuations in the domestic game market (dependence on game title release schedules)
• Risk of impairment of goodwill (¥1,274 million, amortized over 10 years) arising from the acquisition of HUWIZ SOLUTIONS INC.
• Foreign exchange fluctuation risk and risk of intensified competition with global peers in overseas business expansion
• Risk of rising costs to secure and train testing personnel (increased fixed costs from procuring large volumes of testing equipment and building order-handling capacity for the Nintendo Switch 2)
• Impact of accounting policy changes from changes in depreciation method (declining-balance to straight-line) and useful life (3 years to 5 years) (the profit-boosting effect in the current period is temporary)

Business Details

Provides QA Solutions—including system testing, security testing, and ERP implementation support—primarily for enterprise systems, as well as IT Services such as SOC operations and system maintenance and operation support. The core subsidiary is AGEST, Inc. Amid significant changes in the business environment driven by the spread of AI, the company is leveraging its proprietary AI testing tool "TFACT" and SBOM management tool "SBOM Archi" to build a new revenue model not dependent on engineer headcount.

Recent Overview

Revenue and profit declined due to a contraction in contract development and a temporary decline in security monitoring. Withdrew plans for a spin-off listing.

In FY2026 (ending March 2026), the AGEST Group Business posted revenue of ¥15,995 million (down 1.0% year on year) and operating profit of ¥381 million (down 22.1% year on year). Contract development contracted amid the spread of AI, and license renewal revenue in security monitoring also declined temporarily due to price increases on products from certain vendors. On the other hand, the core system testing business achieved revenue growth. In addition, the company withdrew its plan—under preparation since May 2023—for a spin-off listing of AGEST, Inc., citing uncertainty in the stock market. It has launched TFACT and SBOM Archi and begun building a new revenue model suited to the AI era.

Key Products

Growth Drivers

• Continued expansion of demand for outsourcing testing processes amid the worsening shortage of domestic IT talent
• Sustained revenue growth driven by steady acquisition of new projects in the core system testing business
• Building a new revenue model not dependent on engineer headcount through the enhanced rollout of the AI testing tool TFACT and SBOM Archi
• Addressing consulting needs for optimal AI utilization in the early days of AI development, and strengthening engineer reskilling
• Enhanced added value and acquisition of new projects through shift-left, high-value-added QA solutions

Risks

• Risk of continued contraction in contract development projects amid the spread of AI
• Risk that the temporary decline in security monitoring revenue within IT Services and Others becomes prolonged
• Risk of declining operating profit margin due to contraction in the highly profitable security monitoring business
• Intensifying competition in the QA solutions market from numerous SIs and contract development companies
• Risk of difficulty in hiring highly skilled engineers and rising costs to secure talent
• Risk that market penetration of TFACT and SBOM Archi is slower than expected