FLIGHT SOLUTIONS Inc.

Business Details

Provides system consulting, system development and maintenance, and system development support utilizing cloud services such as Google Workspace to business companies, mainly in the logistics and financial sectors. It is the only segment among the three to record an operating profit, functioning as the revenue base offsetting losses in the Payment Solutions/EC Solutions Business, but the current period saw a decrease in both revenue and profit due to the rebound from a large-scale project in the prior period.

Recent Overview

Revenue decreased 19.7% and operating profit decreased 39.8% due to the rebound from a large-scale system development project in the prior period

In FY2026 (ending March 2026), due to the rebound from a large-scale system development project recorded as revenue in the prior fiscal year, revenue was ¥932 million (down 19.7% year on year) and operating profit was ¥87 million (down 39.8% year on year), representing a significant decrease in both revenue and profit. The breakdown of revenue was ¥264 million for goods transferred at a point in time and ¥667 million for goods transferred over a period of time. The segment continues to serve as the sole profitable segment among the three, offsetting the company-wide loss.

Key Products

Growth Drivers

• Ongoing demand for development and maintenance of core systems at logistics and financial business companies
• Additional orders from existing customers amid expanding demand for DX promotion support
• Expansion of system development support utilizing cloud services such as Google Workspace
• In the next fiscal year (FY2027, ending March 2027), the SI Solutions Business plans to focus on system development for existing customers, DX promotion support, and cloud service utilization support

Risks

• Risk of project interruptions due to customer circumstances and rebound from large-scale projects (this actually occurred in the current period and was the main cause of the 19.7% year-on-year decrease in revenue)
• A revenue structure with high dependence on specific large-scale projects, making the risk of revenue erosion after project completion likely to materialize
• Material doubt about the company-wide going concern assumption (operating loss of ¥276 million recorded) may indirectly affect business operations and talent acquisition
• Operating margin declined from 12.4% in the prior period to 9.3% in the current period, indicating risk of deteriorating profitability due to increased fixed cost burden and rising outsourcing costs

Business Details

Develops, sells, and provides operational maintenance for the electronic payment solution "Incredist" series, the Android-based touch payment solution "Tapion" series, payment solutions for unmanned automatic checkout machines, and the identity verification solution using My Number cards "myVerifist." This is the largest segment, accounting for approximately 65% of total company revenue of ¥2,927 million. Development investment has been front-loaded, resulting in an operating loss, but the loss narrowed compared to the prior period. In the next fiscal year, delivery of the large-scale "Incredist Premium III" project and expanded sales of the in-house operated payment center service are expected.

Recent Overview

Loss continued due to another delay in a large-scale project, but the loss narrowed by ¥60 million year on year

In FY2026 (ending March 2026), revenue was ¥1,915 million (up 7.6% year on year) and the operating loss was ¥41 million (compared to an operating loss of ¥101 million in the prior period). The large-scale "Incredist Premium III" project, originally scheduled for delivery by the end of the current period, was again delayed to the first quarter of FY2027 (ending March 2027), which weighed on results, but revenue increased due to focused development and proposal activities across solutions. In the next fiscal year, delivery of multiple large-scale projects, including this one, is expected, and the company forecasts company-wide revenue of ¥5,030 million and a return to profitability with operating profit of ¥380 million.

Key Products

Growth Drivers

• Multiple large-scale "Incredist Premium III" projects are expected to be delivered in FY2027 (ending March 2027), serving as a key driver of next period's revenue
• Plans to expand corporate project acquisitions for the Tapion series and increase recurring revenue such as fee income
• Building a recurring revenue base through development and sales expansion of the in-house operated Flight Payment Center service
• Sales expansion of the domestically manufactured new models "Incredist Premium III" and "Incredist Trinity"
• Sales expansion of payment terminals for unmanned automatic checkout machines
• Expanding demand for public personal authentication driven by cashless payments and My Number card utilization

Risks

• Risk of another delay in the large-scale "Incredist Premium III" project (delays have occurred for two consecutive periods, with the possibility of unmet plans due to customer circumstances)
• Risk of continued operating losses due to front-loaded development costs (operating loss of ¥41 million and depreciation and amortization of ¥224 million in the current period, both at high levels)
• Concerns over cash flow due to a sharp decline in cash and cash equivalents (from ¥453 million at the end of the prior period to ¥221 million at the end of the current period); negotiations for additional financing are underway with financial institutions
• Continuation of circumstances raising material doubt about the going concern assumption
• Risk of revenue concentration among major customers (SoftBank Corp., GMO Financial Gate, Inc., etc.)
• Inventory risk associated with a sharp increase in inventories (merchandise) (from ¥71 million at the end of the prior period to ¥418 million at the end of the current period)

Business Details

The main business consists of sales of the B2B e-commerce site construction package "EC-Rider B2B II," as well as consulting, system development, and maintenance related to the implementation of this package. During the current fiscal year, the company focused on proposal activities for "EC-Rider B2B II," but this segment accounted for only ¥79 million (approximately 2.7% of the total) of the company's total revenue of ¥2,927 million, making it the smallest segment, with operating losses continuing due to front-loaded development investment and proposal activities.

Recent Overview

Despite focused proposal activities, revenue decreased 34.7% year on year, though the loss narrowed

In FY2026 (ending March 2026), the company recorded an operating loss due to focused proposal activities for "EC-Rider B2B II." Revenue was ¥79 million (down 34.7% year on year), a significant decrease, but the operating loss narrowed to ¥29 million (compared to an operating loss of ¥48 million in the prior period). No impairment loss was recorded in the current period, unlike the ¥47 million impairment loss recorded in the prior period. In the next fiscal year (FY2027, ending March 2027), the company plans to focus on expanding sales of "EC-Rider B2B II" and the new service "EC-Rider Primo."

Key Products

Growth Drivers

• Order acquisition in the next fiscal year and beyond through accumulated proposal activities for "EC-Rider B2B II"
• Diversification of revenue sources through sales expansion of the new service "EC-Rider Primo" (cart-ASP type)
• Increasing opportunities to acquire new customers amid the expansion of the B2B e-commerce market

Risks

• Continuation of operating losses due to front-loaded development and proposal activities (operating loss of ¥29 million in the current period, marking three consecutive periods of losses)
• Revenue declined significantly by 34.7% year on year to ¥79 million, with the likelihood of short-term revenue recovery uncertain
• Extremely small scale, accounting for only about 2.7% of company-wide revenue, resulting in low fixed cost absorption capacity
• An impairment loss of ¥47 million was recorded in the prior period, indicating a history of declining asset profitability
• "EC-Rider Primo" is a new service planned for sales expansion in the next period, with the risk that market penetration may take time