Data Applications Company, Limited

Business Details

Operated by Data Applications, Inc., this segment develops, sells, and maintains platform-type software products centered on data exchange middleware, and provides related services. The main customer is Fujitsu Limited (including the software-related business portion of ¥605 million in sales for the current period), and the company employs an indirect sales model via system integrators. The company is promoting a shift in its revenue model from one-time sales to subscription-based sales, and has unified to subscription-based sales starting from shipments on April 1, 2026.

Recent Overview

Due to segment reorganization, sales and profit of the Software Business alone decreased year on year, while MRR expanded to ¥89 million

Starting from FY2026 (ending March 2026), the segments were reorganized into three categories: "Software Business," "System Integration Business," and "AI-Related Business." Net sales for the Software Business alone were ¥2,426 million (down approximately 4% year on year), and segment profit was ¥214 million (down approximately 45% year on year). This was affected by a decrease in large-scale deals due to the transition from one-time sales to subscriptions, as well as adjustments to subsidiary revenue recognition standards. On the other hand, the recurring revenue ratio rose to 83.3%, and MRR expanded to ¥89 million (up from ¥76 million in the prior period). Sales have been unified to a subscription-based model starting from shipments on April 1, 2026.

Key Products

Growth Drivers

• Building a stable revenue base through the accumulation of MRR (MRR of ¥89 million in FY2026 (ending March 2026), with unification to subscription-based sales completed)
• Generating new cloud revenue through the full-scale rollout of ACMS Cloud (service launched November 28, 2025, with sales agent network development underway)
• Expansion of group-wide sales scale through consolidated synergies with DTC and Melon (group sales of ¥4,322 million, up 65.8% year on year)
• Favorable market tailwinds driven by accelerating corporate DX initiatives and growing demand for data utilization
• Promotion of three strategies under the new medium-term management plan (FY2026 (ending March 2026) to FY2028 (ending March 2028)): "expansion and development of business domains," "improvement of earnings stability," and "promotion of human capital management"
• Enhanced appeal to investors through a shift to a shareholder return policy targeting a 100% total payout ratio (full payout) and a DOE of 3.5% to 5.0%

Risks

• Risk of a temporary slowdown in growth during the transition period due to the discontinuation of one-time sales (April 2026), as disclosed by the company itself
• Risk of slower revenue accumulation due to delays in acquiring large-scale subscription deals
• Risk of divergence from earnings forecasts due to the reliance on a partner (indirect sales)-dependent model
• Risk of profit pressure due to continued goodwill amortization expenses (¥95 million in FY2026 (ending March 2026)) (DTC: ¥168 million, Melon: ¥222 million, each amortized equally over 7 years)
• Uncertainty regarding integration delays and potential goodwill impairment during the initial stages of PMI for DTC and Melon
• Constraints on development capacity and intensifying competition for hiring due to IT talent shortages
• Changes in financial soundness due to a decline in the equity ratio (from 77.3% to 68.4%) and an increase in interest-bearing debt (higher outstanding borrowings)