ODK Solutions Company,Ltd.

Business Details

The Group serves educational institutions, securities firms, and general business corporations as its main customers, operating an information processing outsourcing business comprised of three services: system operation (92.8% of sales composition), system development and maintenance (6.0%), and machine sales (1.2%). Education-related operations centered on the university entrance examination portal 'UCARO®' constitute the largest revenue source, and the Group also engages in securities operations, medical-related services, and human resource development support businesses. Operations are conducted domestically only, managed as a single segment.

Recent Overview

Sales and operating profit reached record highs, but impairment losses caused net profit to decline significantly

In FY2026 (ending March 2026), the company achieved net sales of ¥6,657 million (up 2.9% year-on-year, a record high) and operating profit of ¥606 million (up 17.6% year-on-year). Growth was driven by NINJAPAN's sales contribution, price optimization in education operations, and WITH-X®-related development projects in securities operations. Meanwhile, the company recorded an impairment loss of ¥219 million on goodwill and intangible fixed assets, along with a loss of ¥48 million from disposal of software in progress, resulting in total extraordinary losses of ¥268 million. As a result, profit attributable to owners of parent was limited to ¥139 million (down 47.0% year-on-year). Machine sales fell sharply to ¥77 million (down 59.4% year-on-year) due to the loss of medical system-related sales. For FY2027 (ending March 2027), the company forecasts net sales of ¥7,000 million, operating profit of ¥460 million (down 24.2% year-on-year), and net profit of ¥300 million (up 115.1% year-on-year).

Key Products

Growth Drivers

• Continued increase in sales from price optimization in education operations for existing university entrance examination operations
• Continued contribution to system operation sales from the consolidation of NINJAPAN Co., Ltd. as a subsidiary
• Expansion of WITH-X®-related development projects in securities operations
• New revenue creation in the human resource development support business through the release of iStudy® AI Platform
• Entry into the strategic HR AI SaaS market through the launch of CABUILD® HR Series
• Promotion of data business centered on Apdemy® and expansion into financial education and HR data integration, among other areas
• Growth of the information services market backed by continued expansion of DX and AI investment demand
• Promotion of M&A and alliances under the 'ODK Group expansion' policy in the medium-term management plan for FY2026 (ending March 2026) through FY2028 (ending March 2028)

Risks

• Risk of mid- to long-term market contraction in education operations due to the declining 18-year-old population
• Risk of additional impairment losses on goodwill and intangible fixed assets (an impairment loss of ¥219 million was recorded in the current period)
• Risk of declining profit margins due to increased sales promotion expenses and R&D expenses for new services (CABUILD®, iStudy® AI Platform, etc.) (advertising expenses of ¥136 million and R&D expenses of ¥69 million, both increased year-on-year)
• Risk of profitability deterioration, with the FY2027 (ending March 2027) forecast projecting a significant decline in operating profit to ¥460 million (down 24.2% year-on-year)
• Delayed improvement in capital efficiency due to the decline in ROE to 2.2% and continued PBR below 1x
• Risk of rising development and operation costs due to chronic labor shortages (miscellaneous wages of ¥175 million, up 44% year-on-year)
• Risk of declining revenue in the machine sales and system development segments due to the continued impact of the loss of medical-related services
• Risk of curtailed client IT investment due to macroeconomic uncertainty stemming from US trade policy, Middle East tensions, and other factors