NEOJAPAN Inc.
3921・Prime Market・Information & Communication
Business
NEOJAPAN Co., Ltd. is an IT company founded in 1992 and headquartered in Yokohama City. The company consists of three segments: the Software Business (approximately 71% of sales composition), which provides the groupware/no-code business application creation tool "AppSuite" and business chat tool "ChatLuck" centered on its flagship product "desknet's NEO," available in both cloud and on-premise formats; the System Development Services Business (approximately 24%), which offers SI services through its subsidiary Pro-SPIRE; and the Overseas Business (approximately 1%), covering expansion into four ASEAN countries. Its main customers are domestic private companies, government agencies, and municipalities, with cumulative sales reaching 5.26 million users (as of the end of January 2025). The company is listed on the Prime Market of the Tokyo Stock Exchange.
Business Model
In the Software Business, cloud services (monthly/annual subscription) account for roughly 66% of segment sales, with a subscription-based (stock-type) business that steadily accumulates stable MRR serving as the earnings foundation. This is supplemented by on-premise license sales, support services, and customization. The September 2024 price revision and introduction of set plans strengthened both unit prices and cross-selling of products simultaneously. The System Development Services Business complements this with flow-type revenue from System Engineering Services.
Company Strengths
The monthly average churn rate for desknet's NEO Cloud stood at an extremely low 0.45% (FY2026, ended January 2026). Even five months after the September 2024 price revision, the churn rate held at 0.36% excluding the impact of a single large customer's migration, maintaining the previous level. This track record underscores the stability of recurring subscription revenue, demonstrating that the benefits of the price revision have been captured without impairing customer retention.
The ordinary income margin for FY2026 (ended January 2026) was 28.2% (versus 20.8% in the prior period). By leveraging internally accumulated technical capabilities for in-house development, the company secured a high gross margin, while advertising expenses declined by ¥331,061 thousand year on year, driving an 11.2% reduction in SG&A expenses. As a result, operating profit increased 50.5% year on year to ¥1,951,178 thousand.
The company ranked first in the groupware/business chat category of the "Local Government IT System Satisfaction Survey 2024-2025," with its "reliability" score rated more than 5 points above the category average. It has also built a track record of capturing demand for cloud adoption among government and municipal bodies, including the launch of an evacuation planning system for Yokohama City's "YOKOHAMA Hack!" initiative and the provision of an ISMAP-compliant option.
ENVALITH's Perspective
Performance Trend
Revenue over the past five fiscal years grew from ¥5,920 million (FY2022) to ¥8,230 million (FY2026), an average annual growth rate of 8.6%. For the cumulative first quarter of FY2027 (ending January 2027), revenue was ¥2,077 million (up 4.1% year on year), operating profit was ¥684 million (up 6.2%), ordinary profit was ¥713 million (up 9.0%), and quarterly net income attributable to owners of the parent was ¥488 million (up 9.0%). Cost of sales decreased by ¥51 million year on year, improving the gross margin, while SG&A expenses increased by ¥93 million. In terms of the market environment, the rising trend in IT investment served as a tailwind. There was no revision to the full-year forecast (revenue of ¥8,619 million, operating profit of ¥2,680 million). The equity ratio improved to 73.0% (from 69.9% at the end of the previous fiscal year), indicating a solid financial base.
Growth Strategy
Deepening the shift to cloud, expanding AI product offerings, and capturing public-sector demand to become Japan's No. 1 provider and reach a cumulative 10 million users by 2030
The company is strengthening its appeal for the combined set plan of desknet's NEO Cloud and AppSuite Cloud, aiming to steadily build up MRR by increasing the number of users per company (currently 87 users) and maintaining a low average monthly churn rate (0.21%). The version upgrade scheduled for release in May 2026 is also expected to contribute to customer retention and new customer acquisition.
The company is pursuing multiple avenues for AI-related revenue opportunities, including promoting sales and adoption support for "neoAI Chat for desknet's," expanding the AI agent service "LiveX AI," entering the retail media market through a three-party business alliance with ZETA Inc. and LIVEX AI Inc., and integrating a generative AI-powered full-text search system with Brains Technology Inc.
AppSuite Cloud continued its high growth trajectory, up 36.2% year on year on a cumulative basis in the first quarter of FY2027 (ending January 2027). By raising the AppSuite adoption rate among desknet's NEO Cloud users (currently approximately 21%), the company aims to increase revenue per customer and diversify the revenue base of the Software Business.
Thanks to the renewal of management structures at the Philippine and Thai subsidiaries, an increase in sales personnel, and strengthened cooperation among ASEAN subsidiaries, cumulative Overseas Business revenue in the first quarter of FY2027 (ending January 2027) grew 16.5% year on year, accelerating growth. However, segment loss widened to ¥24 million, and moving beyond the phase of upfront investment remains an ongoing challenge.
Last updated: July 17, 2026