Ubiquitous AI Corporation

Business Details

The company develops and sells self-developed device-embedded software, including embedded networking, security & real-time OS-related products, high-speed boot products, database products, and the voice code product Uni-Voice. Major customers include domestic and overseas automotive equipment manufacturers, industrial equipment manufacturers, consumer equipment manufacturers, and printing-related companies. Revenue is centered on royalty sales, with continuing revenue from existing customers forming the base. Note that from FY2026 (ending March 2026), following segment reorganization, this area is positioned as a business area within the "Software Business" segment.

Recent Overview

Revenue decreased 14.1% due to a significant decline in royalties from security & OS-related products

Revenue in the Software Products area for FY2026 (ending March 2026) was ¥773 million (down 14.1% year on year). Although revenue from the Uni-Voice product increased year on year, the main cause was a significant decrease in royalty sales from security & OS-related products. Note that, from this fiscal year, following segment reorganization, this area has been integrated into the "Software Business," and independent segment profit/loss is no longer disclosed. For the Software Business as a whole, the segment recorded a loss of ¥245 million (compared to a profit of ¥45 million in the prior period), due in part to the recording of ¥62 million in depreciation expenses related to software for sale.

Key Products

Growth Drivers

• Growth in royalty income accompanying the horizontal expansion of the high-speed boot product (QuickBoot) into other products (revenue is expected to increase in FY2027, ending March 2027)
• Promotion of sales expansion into security-related fields for automotive and IoT equipment (connectivity, security & OS-related products)
• Continued capture of government-related demand for the Uni-Voice voice code product
• Stable royalty income from database products from existing industrial equipment customers, among others
• Review of the product portfolio and strengthening of technology development and sales capabilities based on the Medium-Term Management Plan (2026-2028)

Risks

• Risk of fluctuation in royalty sales of security & OS-related products (a significant decline was experienced in FY2026, ending March 2026)
• Risk of fluctuation in demand for automotive and consumer equipment (changes in existing customers' development plans, etc.)
• Following segment reorganization (integration into the Software Business), it has become difficult to track the profit/loss of the Software Products area on a standalone basis
• Pressure on earnings from depreciation expenses related to software for sale recorded across the Software Business as a whole
• Risk of increased response costs due to stricter cybersecurity regulations in the IoT and automotive fields
• Risk of intensifying price competition due to entry by competitors

Business Details

The company imports and sells overseas software products, including BIOS, Bluetooth, software analysis and development efficiency tools, network management, and security verification tools, and provides technical support and contract development. Major customers are the planning, development, and design departments of major electronics and electrical equipment manufacturers. The main revenue sources are royalty and contract development sales to existing customers, and license sales to new customers. This area was integrated into the "Software Business" segment in the current fiscal year, but continues to be disclosed as an independent area for revenue breakdown purposes.

Recent Overview

Revenue decreased 3.2% year on year due to the drop-off of front-loaded recognition and the termination of a distributor agreement, among other factors

Revenue for the current fiscal year was ¥1,276 million (down 3.2% year on year). The main factors behind the decrease were the drop-off from license sales to existing customers for network management products having been recorded ahead of schedule in the prior period, the absence in the current period of middleware product sales that had occurred in the prior period, and the disappearance of sales due to the termination of a distributor agreement for an OSS inspection tool. Note that, from the current fiscal year, the segment classification has been integrated into the "Software Business," and standalone segment operating profit/loss is no longer disclosed.

Key Products

Growth Drivers

• Demand for BIOS products is expected to increase in FY2027 (ending March 2027) compared to the prior period
• Continuation of license sales and contract development to existing and new customers for security verification tools (beSTORM X, etc.)
• Stable royalty and contract development sales from existing customers for overseas products such as BIOS and Bluetooth
• Strengthening of the product lineup through inorganic growth (successive M&A) based on the Medium-Term Management Plan (FY2026-FY2028)

Risks

• Risk of loss of revenue due to termination of distributor agreements for products such as OSS inspection tools (the termination of the FossID distributor agreement has already materialized)
• Risk of revenue fluctuation due to changes in existing customers' development plans or the drop-off of front-loaded recognition (materialized in network management products)
• Risk of intensifying price competition due to entry by competitors (materialized in software analysis/development efficiency tools and security verification tools)
• Risk related to the renewal and maintenance of distributor agreements with overseas software manufacturers
• Risk of increased import costs due to exchange rate fluctuations (since the business is mainly based on importing and selling overseas products)
• Cost pressure within the area due to the expansion of operating losses across the Software Business as a whole (segment loss of ¥244 million in the current fiscal year)

Business Details

The main pillars are engineering services that undertake the design and development of various software, including embedded software, and license sales of the data content "YOMI" for automotive equipment. Major customers are electronics and electrical equipment manufacturers, mainly automotive equipment manufacturers. From the current fiscal year (FY2026, ending March 2026), this area has been integrated into the "Software Business" segment, and disclosure as an independent segment has been discontinued.

Recent Overview

Revenue decreased 6.1% year on year due to a decrease in contract development and a contraction in YOMI license sales

Revenue in the Software Services area for FY2026 (ending March 2026) was ¥944 million (down 6.1% year on year). In addition to a decrease in contract development due to the impact of changes in existing customers' development plans, among other factors, "YOMI" license sales for automotive equipment also decreased. In addition, from the current fiscal year, this area has been integrated into the "Software Business," and disclosure as an independent segment has been discontinued. For the integrated Software Business as a whole, a segment loss of ¥245 million was recorded (compared to a profit of ¥45 million in the prior period), due in part to the recording of ¥62 million in depreciation expenses related to software for sale.

Key Products

Growth Drivers

• Revenue from contract development is expected to trend in line with the prior period in FY2027 (ending March 2027), and revenue is expected to increase slightly
• A stable revenue base built up through the accumulation of various contract development projects from existing customers
• Royalty-type license income from the data content "YOMI" for automotive equipment
• Promotion of structural reforms, including review of the product portfolio, strengthening of technology development and sales capabilities, and optimization of the human resource portfolio, under the Medium-Term Management Plan (FY2026-FY2028)

Risks

• Risk of fluctuation in contract development revenue due to changes or delays in existing customers' development plans (materialized in FY2026, ending March 2026)
• Risk of fluctuation in YOMI license sales linked to demand trends in the automotive equipment market (decreased in FY2026, ending March 2026)
• Following integration into the Software Business, losses for the business as a whole have expanded (-¥245 million), making cost management and profitability improvement an urgent priority
• Materialization of PMI failure risk, as the full amount of goodwill (¥137 million) related to Grape System Co., Ltd. was impaired, reflecting the disappearance of the excess earning power assumed at the time of acquisition
• Continuing governance risk, as investigation-related costs (¥24 million) for external law firms and others, associated with the establishment of an internal investigation committee, were recorded as non-operating expenses
• Risk of delayed profitability improvement due to difficulty in negotiating contract development unit prices and price revisions against a backdrop of rising wages and other costs

Business Details

The company imports and sells overseas software, including statistical and numerical data analysis software, image analysis software, and chemical databases, and provides technical support. Major customers are educational institutions such as universities and technical colleges, government-affiliated research institutions, and the R&D and research departments of general companies. In FY2026 (ending March 2026), this segment remained the only one within the group to maintain an operating profit, functioning as a pillar of earnings.

Recent Overview

Revenue increased due to higher sales of chemical databases and image analysis software to general companies, but operating profit decreased 15.9% year on year

Revenue for FY2026 (ending March 2026) increased year on year to ¥932 million (up 1.8%). The main factor was an increase in sales of chemical databases and image analysis software to general companies. On the other hand, segment operating profit decreased to ¥44 million (down 15.9% year on year). While this remains the only segment within the group to maintain a profit, profitability is on a declining trend. Note that no goodwill impairment loss was recorded in the Analysis Software Business in the current period.

Key Products

Growth Drivers

• Increased sales of chemical databases and image analysis software to general companies
• Continuing demand from educational institutions (universities and technical colleges) and government-affiliated research institutions
• Forming an earnings base as the only stably profitable segment within the group
• Revenue growth outlook premised on solid trends in packaged software sales under the Medium-Term Management Plan (FY2026-FY2028)

Risks

• Since the business model is based on importing and selling overseas software, exchange rate fluctuation risk may affect earnings
• Risk related to the renewal and termination of distributor agreements (other segments have seen cases of distributor agreement termination for OSS inspection tools)
• Risk that demand from educational and research institutions, being dependent on budget cycles, will continue to be concentrated in the second half
• Risk of competitors switching to direct sales or alternative distributors for similar software
• Risk of further deterioration in profitability, as operating profit declined 15.9% year on year in FY2026 (ending March 2026)