Segue Group Co., Ltd.

Business Details

The sole reporting segment of the Seguetech Group. The company operates import/sale of security products and IT infrastructure products (VAD business), system integration, in-house developed software (RevoWorks Series), Managed Security Service (MSS), and Overseas Business (Thailand). The business structure has a high proportion of sales to ministries/agencies and local governments, benefiting from digital government policy. It is composed of two divisions, the Solution Products business and the Solution Services business, with recurring (stock-type) revenue also expanding.

Recent Overview

Q1 net sales rose 91.8% year-on-year, with substantial increases in revenue and profit driven by the final-phase recording of the ultra-large GSS project and strong VAD performance

In the first quarter (January to March) of FY2026 (ending December 2026), the VAD business performed strongly, recording sales from the final-phase portion of an ultra-large GSS project and benefiting from robust sales of security products to ministries/agencies and critical infrastructure operators. In the in-house development business, the company delivered multiple large-scale RevoWorks projects to ministries and agencies, and recurring (stock-type) revenue from RevoWorks Cloud and MSS continued to grow. In System Integration, the impact of a low-margin project from the same period the previous year was resolved, leading to increases in both revenue and profit. Net sales reached ¥9,184 million (up 91.8% year-on-year) and operating profit reached ¥1,449 million (up 541.2% year-on-year), a substantial improvement. Following the public offering of new shares (4,600,000 shares) in February 2026, capital stock and capital surplus each increased by ¥1,137 million, improving the equity ratio to 30.8%. There is no change to the full-year earnings forecast (net sales of ¥30,000 million, operating profit of ¥2,300 million).

Key Products

Growth Drivers

• Expansion of IT investment by ministries/agencies and local governments driven by the promotion of digital government policy
• Continued receipt and delivery of ultra-large GSS (Government Solution Service) projects
• Continued high level of demand for corporate DX promotion and cybersecurity measures
• Accumulation of recurring (stock-type) services such as RevoWorks Cloud and MSS
• Expansion of in-house developed products and services such as RevoWorks Plus EDR and RiskLoom
• Capture of IT infrastructure projects for universities and public institutions in Thailand by First One Systems Co., Ltd.
• Strengthening of proposal and order-taking capabilities through the establishment of a nationwide cross-functional organizational structure

Risks

• Risk of margin compression in certain large-scale projects (System Integration business)
• Risk of period-to-period earnings volatility due to timing shifts in revenue recognition for government projects
• Increased working capital requirements due to sharp increases in inventory, accounts receivable, and advance payments associated with large-scale orders
• Risk of increased recruitment and training costs due to IT talent shortages
• Downside risk from developments in U.S. trade policy or a slowdown in overseas economies
• Need for continuous technology investment to respond to increasingly sophisticated and complex cyberattacks
• Risk of sluggish service performance due to the impact of AI at ISS Resolution Co., Ltd. (Overseas Business)