ENVALITH
株式会社エムケイシステム logo

MKSystem Corporation

3910・Standard Market・Information & Communication

Official website
株式会社エムケイシステム logo
MKSystem Corporation3910

Business

MK System Co., Ltd. consists of two segments: the "Shalom Business," whose main customers are social insurance and labor consultant offices, labor insurance affairs associations, and general corporations; and the "CuBe Business," which develops contracted human resources and general affairs front-end systems for large enterprises and municipalities and operates the cloud service "GooooN" for small and medium-sized enterprises. Founded in 1989, the company listed on the Tokyo Stock Exchange in 2015 (currently the Standard Market). Its core Shalom Series supports procedural work such as social insurance, labor insurance, and payroll calculation via an ASP model, forming the basis of its stock-type (recurring) revenue. The group consists of the Company and its consolidated subsidiary, Business Net Corporation.

Business Model

In the Shalom Business, monthly ASP service fees for the Shalom Series (ASP service revenue of ¥2,264 million in FY2026 (ending March 2026)) form the core of stock (recurring) revenue. The company aims to increase per-customer revenue through upselling to higher-tier plans and cross-selling related services. The CuBe Business combines custom-development contract work for large enterprises and municipalities (flow revenue) with the cloud service "GooooN" for small and medium-sized enterprises (stock revenue). Capital expenditure is centered on in-house software development, with total capital expenditure of ¥204 million in FY2026 (ending March 2026).

Company Strengths

Of the ¥2,419 million in Shalom Business revenue for FY2026 (ending March 2026), ASP service revenue billed on a monthly basis accounted for ¥2,264 million, or 93.6% of the total. The stock-type revenue structure provides high revenue predictability, with revenue growing steadily by 2.0% year on year. The customer base built up over many years of providing services to labor and social security attorney offices and general corporations underpins this revenue.

After recording an operating loss of ¥348 million in FY2024 (ended March 2024), the company implemented cost reductions, reviewed outsourcing expenses, and curbed server and support costs. In FY2026 (ending March 2026), the company achieved operating profit of ¥248 million, with the operating margin recovering to 7.6%. The Shalom Business segment alone achieved an operating margin of 9.6%, realizing a high level of profitability compared to past years.

Since its founding in 1989, the company has continuously developed systems specialized in social insurance, labor insurance, and payroll calculation. It launched its ASP service in 2006, introduced a SaaS model in 2007, and achieved continuous product evolution, including the full release of "Shalom FOREVER" in August 2024. In September 2023, the company obtained ISMS certification (ISO27001), strengthening its information security framework.

ENVALITH's Perspective

In FY2026 (ending March 2026), operating profit came in at ¥247 million, significantly exceeding the initial forecast of ¥150 million by 65.3%. The effect of cost of sales and SG&A expense reduction materialized beyond expectations. For FY2027 (ending March 2027), operating profit is forecast at ¥270 million (up 8.9% year on year), continuing the profit growth trend, but revenue growth is expected to remain limited at 1.3%. Given the diminishing scope for further cost reductions, the company is judged to have entered a phase where a shift toward profit expansion driven by revenue growth will be required going forward.

The equity ratio as of the end of FY2026 (ending March 2026) improved to 39.6% (from 27.3% in the previous fiscal year), and long-term borrowings were significantly reduced from ¥539 million at the end of the previous fiscal year to ¥226 million. Financing cash flow was ¥-385 million, reflecting the prioritization of loan repayments. Short-term borrowings of ¥300 million remain outstanding, and the repayment burden is expected to continue into FY2027 (ending March 2027). Operating cash flow generation capacity is strong at ¥711 million, and repayment capacity itself is not a concern, but the balance with capacity for growth investment remains a challenge.

As an external factor, the expansion of demand for automation of electronic filing utilizing generative AI and RPA, along with the growing need to respond to legal amendments, represents a tailwind for the Shalom Business. On the other hand, the CuBe Business continues to face challenges regarding the stability of full-year profits, as revenue remains concentrated in the fourth quarter and the risk of loss-making projects persists. Amid the continuation of annual goodwill amortization of ¥39 million, the profit contribution from the CuBe Business may remain limited unless "GooooN" progresses toward stable recurring revenue generation.

Growth Strategy

Three-pronged strategy of advancing Shalom Series through AI utilization, expanding the GooooN market, and improving cost structure

Promoting the phased development of "AI Shalom" with the aim of automating and streamlining preliminary work in social insurance and labor consultant operations. Already announced at the Shakaihoshi Summit 2026 held on March 11, 2026. Aims to strengthen medium- to long-term competitiveness and enhance added value.

Actively promoting upselling to higher-tier plans and cross-selling of related products. ASP service sales grew steadily to ¥2,264 million (up 2.0% year on year). Opened the Security & AI Support Office in March 2026, implementing investments that enhance customer convenience.

Deploying diverse sales approaches leveraging the social insurance and labor consultant route and partnerships with partner companies. Aims to horizontally expand the know-how accumulated through contracted development into cloud services for small and medium-sized enterprises, improving the ratio of stock revenue.

Improved gross profit margin from 38.4% in the previous period to 45.2% through review of outsourced processing costs, IDC-related expenses, and outsourcing fees. The FY2026 (ending March 2026) operating margin of 7.6% is the highest level on record. For FY2027 (ending March 2027), the company targets operating profit of ¥270 million (margin of 8.2%), aiming to firmly establish this improved profit structure.

Last updated: July 19, 2026