Encourage Technologies Co., Ltd.
3682・Standard Market・Information & Communication
Business
Encourage Technology is a packaged software specialist founded in 2002. Its core products are the privileged ID management product "ESS AdminONE" and the audit trail management product "ESS REC 6", supporting the safe and stable operation of IT systems. Its customer base centers on large enterprises and government agencies, primarily in the financial sector, and it has built a sales network with NTT DATA as its main distributor. Starting from license sales, the company provides a consistent lineup extending to Maintenance Support Service, Cloud Service, Consulting Service, and SIO On-site Service. In April 2024, it established the purpose of "creating a society where everyone can use IT with peace of mind," and is pursuing business expansion under its long-term vision "VISION2030" toward 2030. The company had 124 employees as of the end of March 2026.
Business Model
A structure in which license sales serve as the revenue starting point for Consulting Service, Maintenance Support Service, and Cloud Service. Maintenance Support Service (57.3% of net sales) achieved a 96% renewal rate, forming stable recurring revenue. Cloud Service is growing rapidly, up 39.7% year on year. The company aims to expand SaaS-type revenue through "ESS AdminONE Cloud," launching in April 2026. It maintains a 71% equity ratio with no external borrowing, and follows a financially self-reliant model that covers investments and dividends through operating cash flow.
Company Strengths
In FY2026 (ending March 2026), the company achieved a 96% renewal rate for its Maintenance Support Service. Maintenance Support Service revenue reached ¥1,480 million (up 3.2% year on year), continuing stable growth and functioning as a long-term revenue base following license sales. The combination of a short cycle of approximately one month from order confirmation to revenue recognition and the high renewal rate enhances the predictability of earnings.
Since its founding in 2002, the company has developed in-house products such as ESS REC (2004) and ESS AdminONE (2021), and obtained ISO9001 (2011) and ISO/IEC 27001 and ISO/IEC 27017 (2025) certifications. In FY2026 (ending March 2026), total research and development expenses and functional enhancement costs reached ¥254 million, with continuous product enhancement achieved through the successive releases of ESS REC 6 V6.2 and ESS AdminONE Cloud, among others.
Under the agency agreement concluded with NTT DATA in 2007, which is automatically renewed, revenue generated through NTT DATA in FY2026 (ending March 2026) amounted to ¥509 million (19.7% of total revenue). The company has secured sales channels to large enterprises and financial institutions through major system integrators, forming a structural sales foundation that complements its own sales capabilities.
ENVALITH's Perspective
Performance Trend
For FY2026 (ending March 2026), revenue was ¥2,585 million (up 3.3% year on year), operating profit was ¥303 million (up 1.7%), ordinary profit was ¥316 million (up 4.1%), and net income was ¥213 million (down 3.4%). The decline in net income was due to an increase in corporate taxes and other items (from ¥83 million in the previous period to ¥103 million in the current period), and the underlying business performance shows an improving trend. Revenue over the past five fiscal periods progressed from ¥2,069 million to ¥2,120 million, ¥2,498 million, ¥2,502 million, and ¥2,585 million, reflecting a gradual expansion trend. Operating profit peaked at ¥348 million in FY2022, fell to ¥243 million in FY2023, and has since remained stable in the range of ¥290 million to ¥303 million from FY2024 onward. As for the external environment, domestic software investment is planned to expand 7.8% year on year in fiscal 2025, and steady demand for security is underpinning earnings. For FY2027 (ending March 2027), revenue is forecast at ¥2,800 million (+8.3%) and operating profit at ¥320 million (+5.6%).
Growth Strategy
Toward FY2030, the company is advancing cloud transition, human capital strengthening, and license revenue recovery during the investment phase (through FY2027 (ending March 2027))
To respond to a shift in customer preference toward cloud solutions, the company began development of "ESS AdminONE Cloud" outside the initial fiscal-year plan, and began offering it from April 2026. The launch of the cloud version resolves a factor behind lost large-scale deals and aims to restore license revenue. Cloud Service revenue continued its high growth trajectory, increasing 39.7% year on year in FY2026 (ending March 2026).
From FY2027 (ending March 2027), the company will begin selling the latest versions of its flagship products, driving upselling to existing customers and acquisition of new customers. It is committed to high-quality product development through quality standards set from the design stage and a multi-stage verification process. The company aims to generate new sales opportunities by focusing sales resources on and strengthening touchpoints with existing customers.
While planning a 6% wage increase in FY2027 (ending March 2027), the company will secure funding for the wage increase by reducing outsourced personnel by 18, from 71 as of the end of March 2026 to 53 as of the end of March 2027. It hired 9 new graduates (an increase of 3 from the previous fiscal year) and is strengthening its human resource base by transferring the skills of external personnel in-house. It also continues to cultivate next-generation leaders and strengthen its management structure.
Following two consecutive fiscal years of falling short of the license plan, the company is focusing on securing deals from leads generated through marketing activities. In February 2026, it held its first standalone offline event, "SmartIT Forum 2026," which attracted approximately 250 attendees. It is also strengthening collaboration with agents and reinforcing personnel to improve deal identification and negotiation capabilities.
Last updated: July 19, 2026