Techno Mathematical Co.,Ltd.
3787・Standard Market・Information & Communication
Business
Techno Mathematical Co.,Ltd. is built around its proprietary algorithm "DMNA" (Digital Media New Algorithm), based on mathematical methods, as its core technology, providing software IP and hardware IP licenses related to video, audio, and sound compression/decompression processing, as well as developing, manufacturing, and selling solution products that apply these technologies. Its main customers are electronics manufacturers and semiconductor manufacturers, and in recent years its customer base has expanded into high-value-added applications such as defense/space (lunar probes, satellites), aviation (flight simulators, aircraft communication systems), police, broadcasting, and disaster prevention. As a fabless manufacturer, the company holds no manufacturing facilities and adopts an asset-light business model centered on the development and licensing of intellectual property.
Business Model
In the Software License Business, the company licenses IP for embedded systems on a copy-royalty basis, while the Hardware License Business earns two-stage income consisting of initial license fees and mass-production royalties. The Solution Business conducts custom development and system product sales utilizing existing IP, with gross profit margin reaching an extremely high level of 92.5% in FY2026 (ending March 2026). The company maintains zero interest-bearing debt and a debt-free management structure with an equity ratio of 93.1%, funding all working capital from its own resources.
Company Strengths
DMNA is a proprietary algorithm that dramatically reduces computational load through mathematical techniques such as factorization, folding operations, and hierarchical processing, achieving roughly 1/10 the power consumption and 1/3 the circuit scale compared to competitors. The company has also developed DMNA-V2/V3, a proprietary standard offering more than double the compression ratio of H.265, and has a track record of adoption in the space and defense sectors, including securing licenses for lunar landers and satellites.
Gross profit margin for FY2026 (ending March 2026) was 92.5%. At fiscal year-end, cash and deposits stood at ¥855 million, interest-bearing debt was zero, and the equity ratio was 93.1%, maintaining an extremely healthy financial position. Under its asset-light model centered on IP licensing, capital expenditure for the period was limited to ¥1,091 thousand, reflecting high cash generation efficiency.
The company holds multiple mass-production licensing track records in the defense, space, and aviation fields, which have high entry barriers, including an H.265 encoder for lunar landers, 1/4 fixed-length compression technology for satellites, an image/audio encoder-decoder unit for flight simulators, and hands-free software for aircraft communication systems. It also has business relationships with major companies such as DENSO TEN (16.1% of sales) and FUJIFILM (12.2% of sales).
ENVALITH's Perspective
Performance Trend
Revenue effectively stagnated and declined for 4 consecutive periods, from ¥569 million in FY2022 → ¥599 million in FY2023 → ¥528 million in FY2024 → ¥417 million in FY2025, but sharply recovered to ¥685 million in FY2026, up 64.6% year on year, and operating profit also achieved a return to profitability of ¥45 million for the first time in 5 fiscal periods. The main drivers were a concentrated acquisition of solution projects for defense, police, broadcasting, and disaster prevention applications, and a reduction in SG&A expenses (from ¥663 million to ¥590 million). However, ordinary profit of ¥106 million includes a ¥53 million gain on sale of investment securities and an ¥11 million foreign exchange gain, meaning the core business's earning power remains limited. For FY2027 (ending March 2027), the company forecasts revenue of ¥705 million (up 2.8% year on year), ordinary profit of ¥34 million (down 68.0%), and net income of ¥31 million (down 64.0%), representing a significant expected profit decline, and there is considerable uncertainty regarding the sustainability of the performance recovery.
Growth Strategy
Concentration in specific markets such as defense, space, and automotive, along with expansion of the Solution Business and development of overseas customers
Transitioning from single-IP licensing to modular licensing sales that integrate multiple IPs, aiming to improve order unit prices and sales efficiency. In FY2026 (ending March 2026), the Software License Business recorded net sales of ¥287 million, building up a track record of mass-production license acquisitions for AAC-LC/HE-AAC, H.264, and others.
Continuing to secure custom projects such as development of video transmission encoders/decoders for defense equipment, sales of the LucidEye (Video Enhancement Device/App), field video transmission systems for police, and low-latency return systems for broadcasting stations. In FY2026 (ending March 2026), the Solution Business achieved net sales of ¥204 million. The forecast for FY2027 (ending March 2028) is ¥225 million (up 10.0% year on year).
Rolling out licensing sales focused on 4K technology, lossless technology, H.265, and smoothing technology for high-value-added applications such as lunar landers, satellites, and video doorphones. Net sales for FY2026 (ending March 2026) were ¥193 million. The forecast for FY2027 (ending March 2028) is ¥265 million (up 37.2% year on year), the highest growth rate among the segments.
In response to changes in the environment that make standalone IP business difficult, the company has set forth a policy of developing new IPs with market competitiveness, advancing solution business by leveraging system technologies, and continuing to promote the development of overseas customers. Disclosure of specific overseas projects remains limited.
Last updated: July 19, 2026