Kinjiro Co.,Ltd.

Business Details

Provides integrated HRM solutions covering attendance management, human resource management, payroll management, and health management for mid-sized to large companies across a wide range of industries. Its flagship product, "Universal Kinjiro," is offered in both cloud and on-premise formats. Recurring revenue, centered on cloud license sales, accounts for 78.4% of HRM Business sales, forming a stable revenue base. The company also utilizes a partner sales channel, with Otsuka Corporation as its primary sales partner.

Recent Overview

The cloud business continued its strong growth, up 15.6% year on year, while profit declined 8.7% year on year due to increased costs.

In Q1 FY2026 (ending December 2026) (January to March), HRM Business sales increased 7.2% year on year to ¥1,303 million. Cloud license sales grew strongly, up 28.4% year on year to ¥901 million, driving the recurring revenue ratio up to 78.4% of HRM Business sales. Meanwhile, the on-premise business contracted 19.2% year on year to ¥238 million as customers continued switching to cloud contracts. Due mainly to an increase in cost of sales (from ¥412 million to ¥494 million year on year), segment profit decreased 8.7% year on year to ¥298 million. There has been no change to the full-year earnings forecast, and progress is considered to be in line with the plan.

Key Products

Growth Drivers

• Strong growth in cloud license sales (up 28.4% year on year in Q1 FY2026 (ending December 2026)), raising the recurring revenue ratio (78.4% of HRM Business sales)
• Expanding corporate demand for integrated management of personnel-related information, driven by the entrenchment of overtime work cap regulations, the spread of human capital management, and more sophisticated human capital disclosure
• Capturing corporate demand for advance investment in anticipation of amendments to the Labor Standards Act scheduled from FY2027 onward
• Creating cross-selling opportunities in the HR and payroll domains through "Universal Kinjiro HR Management" and "Universal Kinjiro Payroll Management"
• Expanding the target customer base through the release of "JOBEE," a new product for small and medium-sized enterprises
• Continued customer acquisition through utilization of the sales channel via Otsuka Corporation
• Strengthening the stable revenue base through the accumulation of recurring revenue supported by a low cancellation rate

Risks

• Gradual decline in operation and maintenance support sales as on-premise customers migrate to the cloud (down 15.7% year on year in Q1 FY2026 (ending December 2026))
• Ongoing capital expenditure burden from cloud service server capacity expansion and software development investment (depreciation expense increased from ¥204 million to ¥255 million year on year)
• Pressure on profit margins due to an increase in cost of sales (up 19.7% year on year)
• Risk of dependence on a specific partner due to reliance on Otsuka Corporation for sales
• Risk of costs arising from responding to revisions to labor standards-related legislation (expected to take effect from 2027 onward)
• Risk of security incidents or system failures in cloud services (operated on in-house facilities)
• Risk of increased non-operating expenses due to expanding foreign exchange losses (from ¥1 million to ¥7 million year on year)