ENVALITH
株式会社ソフトウェア・サービス logo

Software Service, Inc.

3733・Standard Market・Information & Communication

Official website
株式会社ソフトウェア・サービス logo
Software Service, Inc.3733

Business

Software Service Co., Ltd., founded in 1969, is a company specializing in medical information systems. Its core offerings are the Electronic Medical Record System / Ordering System (e-karte® / NEWTONS2), alongside departmental subsystems, a community-based integrated care system (CareMill®), and a medical imaging management system (SeavoPACS®), among others. Its principal customers are healthcare institutions such as general hospitals, psychiatric hospitals, and dispensing pharmacies, and it operates nationwide through its head office (Osaka), Tokyo branch office, and a nationwide branch network. As of October 2025, the number of facilities using its systems reached 1,000. The corporate group comprises the company itself and two subsidiaries, and it operates under a single segment, the Medical Information Systems Business.

Business Model

The company adopts a vertically integrated model that completes everything from system development to sales, installation, and maintenance within its own group. Revenue is composed of Software (¥11,845 million), Hardware (¥19,129 million), Maintenance Services (¥10,083 million), and Other (¥1,240 million). Maintenance Services represent recurring subscription-type stock revenue delivered via an online network, and this revenue structure accumulates steadily as the number of installed facilities expands. The company adheres to a debt-free management policy, funding all capital needs—including capital expenditures and M&A—from its own resources.

Company Strengths

Since its founding in 1969, the company has consistently maintained a specialization strategy focused on the health, medical, and long-term care fields. As of October 2025, the number of installed facilities reached 1,000 (an increase of 74 facilities year-on-year). The medical business knowledge, product quality, and customer relationships accumulated through long-term specialized operations form a barrier to entry.

Maintenance Services revenue for FY2025 (ending October 2025) was ¥10,083 million (up 9.9% year-on-year). This is recurring revenue that accumulates each period in line with the expansion of the number of installed facilities, forming a stable revenue base that is less susceptible to economic fluctuations. The ordinary profit margin reached the medium-term target of 20% or higher in FY2025 (ending October 2025), achieving an ordinary profit margin of 20.0%.

The order backlog at the end of FY2025 (ending October 2025) was ¥15,824 million (up 36.9% year-on-year), comprising ¥5,135 million in software, ¥10,351 million in hardware, and ¥337 million in other items. Order intake also remained at a high level of ¥36,494 million (up 19.5% year-on-year), securing a substantial portion of revenue recognition for the following period and beyond.

ENVALITH's Perspective

In the first half of FY2026 (ending March 2026), the company achieved a substantial revenue increase to ¥24,334 million (up 20.8% year on year), while operating profit declined to ¥4,180 million (down 2.2% year on year), marking a shift to lower profit. The main causes were increased procurement costs due to surging semiconductor prices such as memory, and the hardware sales mix exceeding expectations in server replacement projects. Gross profit was ¥5,729 million (versus ¥5,716 million in the same period of the prior year), essentially flat, while the cost of sales ratio deteriorated from 71.5% to 76.5%. The external factor of semiconductor market conditions is pressuring profit margins, and a recovery in margins is expected once the hardware ratio normalizes.

The full-year consolidated earnings forecast remains unchanged, with revenue of ¥44,338 million (up 4.8% year on year), operating profit of ¥8,795 million (up 4.8% year on year), and net income for the period of ¥5,982 million (down 2.1% year on year). The first-half operating profit progress rate was 47.5% (versus 50.9% in the same period of the prior year), a somewhat low level, requiring margin improvement in the second half. The ¥240 million in employee dormitory demolition costs recorded as extraordinary loss was concentrated in the first half, so the impact on second-half net income is limited. The high level of the order backlog (¥20,156 million) supports second-half revenue expectations.

In March 2026, the company acquired 300,000 treasury shares (¥3,544 million) via ToSTNeT-3, expanding the treasury share balance to ¥4,968 million at the end of the first half. The average number of shares outstanding during the period decreased to 5,167,078 shares (versus 5,232,674 shares in the same period of the prior year), and net income per share for the first half was ¥532.75 (versus ¥569.81 in the same period of the prior year), affected by the decline in net income, though this will contribute to future improvement in earnings per share. The annual dividend forecast is maintained at ¥170 (up from ¥160 in the prior fiscal year), reflecting a policy of continued dividend increases, and the proactive shareholder-return stance combined with the share buyback is viewed favorably. Meanwhile, the equity ratio remains at a high level of 79.7%.

Growth Strategy

Pursuing sustainable growth through three pillars: realization of medical DX, expansion of stock-type (recurring) revenue, and strengthening profitability

Against the backdrop of the government-led establishment of a nationwide medical information platform, standardization of electronic medical record information, and DX initiatives tied to the revision of medical service fees, the company is actively capturing demand for new installations and replacements. Order intake for the first half of FY2026 (ending October 2026) remained at a high level of ¥23,133 million (up 30.8% year on year), indicating steady progress in capturing this demand.

Demand for additional DX-related systems from existing users has remained solid, with Maintenance Services revenue continuing stable growth at ¥5,517 million (up 12.3% year on year). The company aims to strengthen its stock-type revenue base, whereby maintenance revenue expands automatically as the number of installed facilities accumulates.

In anticipation of future headcount growth, the company is rebuilding its employee dormitory in Osaka into an office building. Demolition costs of ¥240 million were already recorded as an extraordinary loss in the first half of FY2026 (ending October 2026). By developing the foundation for securing and training talent, the company aims to address the shortage of specialized personnel, which represents a constraint on business expansion.

Last updated: July 17, 2026