ENVALITH
株式会社エルテス logo

Eltes Co., Ltd.

3967・Growth Market・Information & Communication

Official website
株式会社エルテス logo
Eltes Co., Ltd.3967

Business

Eltes Co., Ltd. operates under the mission of "Creating a safe digital society and continuing to advance Japan." The group is composed of 15 companies in total, comprising the company itself, 12 subsidiaries, and 2 affiliated companies. It operates four segments: ① the Digital Risk Business, addressing SNS-related reputational crises and internal misconduct; ② the AI Security Business, promoting DX in the security industry; ③ the DX Promotion Business, targeting local governments and corporations; and ④ the Smart City Business, focused on real estate digitalization and regional revitalization. Its main customers are enterprise companies such as major manufacturers and financial institutions, as well as local governments. The company listed on the Tokyo Stock Exchange Mothers market (now Growth Market) in 2016. Consolidated net sales for FY2026 (ending February 2026) were ¥8,958 million.

Business Model

The core Digital Risk Business builds up highly recurring revenue centered on Internal Risk Intelligence Service (IRI Business) (user-ID-based billing) and Social Risk Intelligence Service (SR Business) (continuous monitoring contracts). The AI Security Business combines labor-intensive revenue from Security Guard Service with platform revenue from DX products. The DX Promotion Business handles SES / Lab-type Development Hybrid DX Support and SaaS provision for local governments, while the Smart City Business is responsible for revenue from real estate sales and management.

Company Strengths

In the Digital Risk Business for FY2026 (ending March 2026, fiscal year ending in February), revenue was ¥2,745 million against segment profit of ¥992 million, achieving a profit margin of approximately 36.1%. The number of user IDs for Internal Risk Intelligence measures expanded to 310,000 IDs, with enterprise deployment averaging 4,500 IDs per project progressing. The stock-type revenue model underpins the high profit margin.

The company launched its social risk consulting service in 2007 and began offering monitoring services in 2011, accumulating approximately 20 years of risk detection know-how and case study expertise regarding SNS and web content. Its track record of capital and business alliances with Dentsu, SOMPO Risk Management, and LAC also underpins its first-mover advantage.

In the DX Promotion Business, the company has provided its resident service digitalization app "DX-Pand" and its LINE-based "Smart Public Lab" to a combined total of 146 local governments. The accumulated track record of implementing DX services for local governments serves as a foundation for business expansion, buoyed by the social trend of administrative digitalization.

ENVALITH's Perspective

For the cumulative Q1 of FY2027 (ending March 2027), net sales were ¥2,110 million (up 11.5% year on year), operating profit was ¥65 million (up 46.5% year on year), and ordinary profit was ¥56 million (up 74.7% year on year), showing a steady recovery at the operating and ordinary profit levels. On the other hand, due to the recognition of a ¥119 million loss on sale of subsidiary shares (one-off), quarterly net loss attributable to owners of the parent came to ¥68 million, falling into the red from net income of ¥8 million in the same quarter of the previous year. Achieving the full-year net income forecast of ¥100 million will require the realization of gains on sale from the remaining two carve-out subsidiaries, and progress on this front warrants close attention.

The Digital Security segment posted cumulative Q1 net sales of ¥688 million (down 0.2% year on year) and segment profit of ¥215 million (down 18.8% year on year), representing a decline in both revenue and profit year on year. This was due to the expiration of some ongoing contracts in the SR Business and IRI Business, as well as upfront investment (development and personnel reinforcement) in the AI Governance domain, which weighed on profit. While inquiries regarding new services are expected to contribute to performance from Q2 onward, the decline in profit margin during this upfront investment phase should be recognized as a short-term headwind.

At the end of Q1, total assets stood at ¥6,068 million (down ¥1,065 million from the end of the previous fiscal year), and total liabilities were significantly reduced to ¥4,274 million (down ¥981 million). The equity ratio improved from 25.5% at the end of the previous fiscal year to 29.2%. This was mainly due to a decrease in long-term borrowings (down ¥467 million), reflecting the financial effects of the structural reforms taking hold. However, retained earnings remained at ¥-1,052 million, with accumulated deficits continuing, and the absolute level of net assets (¥1,794 million) remains low, meaning the fragility of the financial base continues to warrant close monitoring.

Growth Strategy

Positioning digital security as the core business, upgrading the earnings structure through a new AI Governance business and portfolio reorganization

Expanding adoption of internal threat detection services using log profiling, primarily among major manufacturers and financial institutions. The April 2026 media announcement of the new AI Governance service raised social awareness and is accelerating expansion to enterprise customers. Q1 cumulative sales reached ¥688 million with profit of ¥215 million, though the profit margin is declining year-on-year due to the upfront investment phase.

Promoting the AI Governance service as a new business, supporting measures against confidential information learning risks and hallucination when using generative AI. A business strategy press conference held in April 2026 has led to a steady increase in inquiries. Upfront investment in development and staffing is underway, with earnings contribution expected from Q2 onward.

Completed the sale of JAPANDX and JDX Solutions in April 2026, improving the earnings structure of the Peripheral Business and Other segment (from ¥-59 million in the same quarter of the previous year to +¥17 million in the current period). The gain on sale from the remaining two companies scheduled for carve-out is expected to exceed the loss on the current sale (approximately ¥119 million), making this a key initiative toward achieving the full-year net income target of ¥100 million.

Achieved Q1 cumulative sales of ¥544 million (up 11.4% year-on-year) through the accumulation of Concierge Service usage leveraging the security order-matching platform "AIKorder" and increased orders from major companies. Continuing to build out locations to expand coverage areas, driving DX transformation in the security industry.

Last updated: July 17, 2026