Software Service, Inc.
3733・Standard Market・Information & Communication
Medical Information Systems Business
A single-segment business providing integrated development, sales, and maintenance of electronic medical records and related systems for medical institutions
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales (Q2 cumulative) | ¥24,334 million | ¥20,145 million | ↑ |
| Operating profit (Q2 cumulative) | ¥4,180 million | ¥4,274 million | ↓ |
| Ordinary profit (Q2 cumulative) | ¥4,223 million | ¥4,291 million | ↓ |
| Interim net income attributable to owners of parent (Q2 cumulative) | ¥2,752 million | ¥2,981 million | ↓ |
| Order backlog (end of Q2) | ¥20,156 million | End of Q1: ¥18,627 million | ↑ |
| Equity ratio | 79.7% | 80.3% (end of FY2025, ending October 2025) | ↓ |
| Hardware purchases (Q2 cumulative) | ¥10,810 million | Up 46.3% year on year | ↑ |
| Operating cash flow (Q2 cumulative) | ¥6,644 million | ¥4,965 million | ↑ |
| Interim net income per share | ¥532.75 | ¥569.81 | ↓ |
Business Details
The company handles the development, sales, installation, and maintenance of medical information systems, including the Electronic Medical Record System / Ordering System, on an integrated in-house basis. Its customers are medical institutions such as hospitals and clinics, and it has built a nationwide sales and maintenance structure through its head office, Tokyo branch office, and various branches. Revenue is composed of four categories—software, hardware, Maintenance Services, and other—and the company is strategically pursuing expansion of Maintenance Services, which generates stock-type (recurring) revenue.
Recent Overview
Net sales rose sharply by 20.8% year on year, but profit declined due to higher hardware costs and an extraordinary loss
In the second quarter (interim period) of FY2026 (ending October 2026), net sales rose substantially by 20.8% year on year to ¥24,334 million. On the other hand, in addition to rising procurement costs driven by soaring semiconductor prices such as memory, the proportion of hardware sales—including server replacement projects—rose above expectations within installation projects, causing cost of sales to swell to ¥18,605 million (versus ¥14,429 million in the prior-year period). As a result, operating profit declined to ¥4,180 million (down 2.2% year on year). Furthermore, the company recorded an extraordinary loss of ¥240 million related to demolition costs associated with the rebuilding of an employee dormitory (in Osaka), and net income attributable to owners of parent for the interim period came to ¥2,752 million (down 7.7% year on year). The order backlog remained at a high level of ¥20,156 million at the end of Q2 (up 43.9% year on year). There has been no change to the full-year earnings forecast (net sales of ¥44,338 million, operating profit of ¥8,795 million). Additionally, in March 2026, the company acquired 300,000 treasury shares (¥3,544 million) via ToSTNeT-3.
Key Products
Growth Drivers
- Expanding demand driven by government-led promotion of medical DX (establishment of a nationwide medical information platform, standardization of electronic medical record information, and DX-related revisions to medical service fees)
- Ongoing occurrence of replacement demand for existing systems
- Steady trend in demand for additional DX-related systems from existing users
- Expectations of a more stable foundation for hospital management through improved treatment of medical workers and responses to rising prices under the FY2026 revision of medical service fees
- Expansion of stock-type recurring revenue from Maintenance Services (stable revenue growth as the cumulative number of installed facilities increases)
- Improved visibility of future sales due to the order backlog remaining at a high level (¥20,156 million at end of Q2, up 43.9% year on year)
Risks
- Increased hardware procurement costs and rising cost ratio due to soaring semiconductor material prices (materialized in the current interim period)
- Risk of profit margin fluctuation due to the hardware sales composition ratio exceeding expectations
- Risk of sales and profit fluctuation due to timing shifts in project go-live dates (shifts between quarters)
- Risk of customer investment restraint due to shortages of medical personnel and difficult hospital management conditions
- Intensifying competition in the medical information systems market (new entrants and offensives by existing competitors)
- Risk of cyberattacks targeting medical institutions and the occurrence of security incidents
- Constraints on the development, installation, and maintenance structure due to delays in securing and developing human resources
- Temporary cost burden associated with the rebuilding of an employee dormitory (scheduled for completion at the end of April 2027) (demolition costs of ¥240 million already recorded as an extraordinary loss in the current interim period)
- Deterioration of the parts procurement environment due to heightened trade policy and geopolitical risks, particularly centered on the United States
Last updated: January 26, 2026