Fuller, Inc.

Business Details

Fuller, Inc. is composed of the single segment of the Digital Partner Business. In its core Client Work operations (approximately 94% of net sales), the company provides business development consulting, system development, and UI/UX design as one integrated team, expanding its customer base mainly through direct transactions with major domestic companies. It also operates its proprietary app analytics service, "App Ape." Under a two-headquarters structure in Kashiwa City, Chiba Prefecture, and Niigata City, Niigata Prefecture, the company secures and develops creative talent, aiming for business growth amid rising DX demand.

Recent Overview

Due to lower utilization and higher costs, operating profit fell 77.6% year on year, while subsidy income supported ordinary profit

Net sales for the cumulative nine months of FY2026 (ending March 2026; July 2025-March 2026) were ¥1,428 million (down 0.5% year on year), essentially flat. However, cost of sales increased due to higher labor costs from active hiring of creative talent and increased AI tool usage expenses, causing the gross profit margin to decline to 34.9% (from 42.5% in the same period prior year). Selling, general and administrative expenses also increased to ¥456 million (up 7.7% year on year) due to higher personnel expenses, listing-related expenses, and IT tool costs, resulting in operating profit of only ¥42 million (down 77.6% year on year). On the other hand, ordinary profit was maintained at ¥89 million thanks to the recording of ¥57 million in the Niigata Prefecture Future Creation Industry Location Promotion Grant as non-operating income. As of the third quarter, utilization has been on a recovery trend due to the start of multiple new development projects. There is no change to the full-year earnings forecast.

Key Products

Growth Drivers

• Continued expansion of demand for DX and MX promotion among major domestic companies (the smartphone app-related market is a core area of DX)
• Market growth driven by generative AI adoption and DX progress, and increasing demand for high-quality apps with excellent UI/UX
• Expansion of order-taking capacity through active recruitment and development of creative talent (engineers, designers, data scientists, and directors)
• Recovery in utilization due to the start of multiple new development projects as of the third quarter, to be reflected in sales from the second half onward
• Expansion of sales channels through business collaboration with Yappli, Inc. and companies of the Dentsu Group
• Securing regional creative talent by leveraging the two-headquarters structure (Chiba and Niigata)

Risks

• Risk of temporary decline in utilization due to the winding-down of large-scale projects and delays in the start of new projects (materialized in the first half of FY2026 ending March 2026, with a recovery trend seen in the third quarter)
• Risk of elevated cost of sales and recruitment expenses due to continued active hiring of creative talent (gross profit margin declined from 42.5% to 34.9%)
• Risk of revenue concentration in specific clients/projects due to high dependence on Client Work (approximately 94% of net sales)
• Temporary cost burden from listing-related expenses, etc. (¥9 million in listing-related expenses recorded in the cumulative nine months of FY2026 ending March 2026)
• Decline in sales of custom analysis within the app analytics service (down 9.7% year on year) and reduced revenue contribution
• The Niigata Prefecture Future Creation Industry Location Promotion Grant (¥57 million) is expected to disappear as a supporting factor for ordinary profit, as no additional income from it will occur going forward