Internetworking and Broadband Consulting Co.,Ltd.

Business Details

Centered on license sales and support of the proprietary IT system performance monitoring software "System Answer Series," the company also develops network consulting, cloud and security services, and merchandise sales. It serves a wide range of industries including public sector, education, healthcare, finance, manufacturing, and distribution, and operates nationwide through three channels: indirect sales, direct sales, and high-touch sales. It is characterized by a recurring-revenue business foundation with a 96% license renewal rate. Full-year earnings forecast for FY2026 (ending September 2026) is net sales of ¥2,700 million and operating profit of ¥630 million (both expected to set new record highs).

Recent Overview

License sales grew strongly, up 9.6% year on year, but higher expenses led to a decline in interim profit

In the first half of FY2026 (ending September 2026, October 2025 to March 2026), net sales increased to ¥1,092 million (up 1.8% year on year). License sales in the core business rose 9.6% year on year, exceeding the plan, driven by a high contract renewal rate among existing customers and new contract acquisitions. On the other hand, selling, general and administrative expenses increased to ¥626 million (up from ¥603 million in the same period of the prior year), resulting in a decline in operating profit to ¥229 million (down 9.0% year on year). Service revenue fell 11.8% year on year due to the postponement of large-scale network projects to the second half. The full-year earnings forecast was revised upward from the previous announcement, with operating profit raised by ¥20 million to ¥630 million (up 11.5% year on year), and a new record profit is expected. The interim dividend was significantly increased to ¥11 per share (compared to ¥6 in the same period of the prior year).

Key Products

Growth Drivers

• Stability of the recurring-revenue business foundation, maintaining a 96% license renewal rate
• Expansion of license sales driven by new user acquisition, mainly among municipalities and manufacturers (up 9.6% year on year in the first half of FY2026, ending September 2026)
• Continued expansion of demand for the security assessment service (IBC-SAS) against the backdrop of growing needs for cyberattack countermeasures
• Expansion into the multi-cloud operations support domain through the new service "ITOGUCHI," launched in October 2025
• Strengthening of the revenue structure through the price revision of System Answer G3 (implemented in 2025)
• Utilization of nationwide sales capabilities through indirect sales channels via partner companies
• Capturing demand in the growth areas of DX, AI, and security

Risks

• Risk of profit pressure due to increased selling, general and administrative expenses (¥626 million in the first half of FY2026, ending September 2026)
• Decline in first-half service revenue due to the postponement of large-scale network projects and similar items to the second half (down 11.8% year on year in the first half of FY2026, ending September 2026)
• Risk of revenue concentration in Fujitsu Network Solutions Limited (10.0% of net sales in FY2025, ended September 2025)
• Uncertainty in the external environment, including geopolitical risk, exchange rate fluctuations, and unstable energy prices
• Risk of increased expenses due to rising costs of securing and developing IT personnel
• Risk of rising interest rates associated with the continued holding of ¥800 million in short-term borrowings (interest expense: ¥4 million in the first half of FY2026, ending September 2026)