Hi-CRATES CO.,LTD.

Business Details

An integrated development-and-sales company centered on an AI/Voice electronic medical record integrated system for dental clinics, offering an AI/Voice series lineup including periodontal precision examination and sub-chart products. Its customers are dental clinics nationwide, with a sales support structure built primarily in western Japan. Since its founding, the company has upheld its "Three No-Cost Software Principle" (free system support, maintenance, and version upgrades), earning a high customer retention rate. The majority of revenue comes from system sales, and payment collection via leasing companies reduces trade receivable risk.

Recent Overview

In the interim period of FY2026 (ending September 2026), both revenue and operating profit reached record highs

For the cumulative second quarter of FY2026 (ending September 2026) (October 2025 to March 2026), revenue was ¥1,279 million (up 3.4% year on year), operating profit was ¥379 million (up 10.0%), ordinary profit was ¥424 million (up 3.3%), and interim net income was ¥281 million (up 1.4%), further exceeding the upward revision announced on February 13 and achieving a record-high profit level. Cost of sales was ¥270 million, a slight decrease from ¥272 million in the same period of the prior year, resulting in an improved gross margin. On the other hand, the company recorded a valuation loss on investment securities of ¥37 million as a non-operating expense. The full-year earnings forecast remains unchanged at revenue of ¥2,484 million, ordinary profit of ¥662 million, and net income of ¥451 million, with the company aiming to achieve record profits for the third consecutive year.

Key Products

Growth Drivers

• Expanding demand for dental DX driven by the government's "proactive preventive care" policy (growing importance of periodontal disease severity prevention and oral function management)
• Increased sales from the expanded rollout of the three AI/Voice series products (Revo.11, Periodontal Precision Examination, and Sub-Chart)
• Demand stimulation from the strengthening of "preventive dentistry, home-visit care, and medical-dental collaboration" under the major FY2026 (Reiwa 8) medical fee schedule revision
• Response to the establishment of a medical information platform, supporting the construction of medical information infrastructure (electronic prescription management services, electronic medical record information sharing services)
• Expansion of capital investment demand at dental clinics accompanying the launch of the universal dental checkup system
• Strengthening of the recurring stock-type revenue base through expansion of monthly usage fee income
• Expansion of home-visit care support functions in response to the needs of dental clinics shifting their management approach "from treatment to prevention, and from outpatient to home-visit care"
• Acquisition of new customers through active product promotion at the Kinki Dental Show (April) and Tokyo Dental Show (November)

Risks

• The number of customers has been declining year by year (from 3,142 as of end-September 2021 to 2,974 as of end-September 2025), and the decrease in the number of dental clinics itself poses a medium- to long-term market contraction risk
• The risk of a rebound decline in revenue dependent on subsidy demand, due to the termination of the dental DX support software subsidy (scheduled for 2026)
• The risk that, depending on the content of the medical fee schedule revision, the management environment for dental clinics could deteriorate, reducing appetite for capital investment
• The risk of profitability pressure from continued increases in personnel expenses and advertising expenses (interim selling, general and administrative expenses were ¥629 million, up ¥10 million year on year)
• The risk that regional concentration centered on western Japan could delay nationwide expansion, leading to lost growth opportunities
• The risk that valuation losses on investment securities (¥37 million recorded in the current interim period) and other fair value fluctuations of held securities could affect ordinary profit
• Trade receivables increased from ¥175 million at the end of the previous fiscal year to ¥286 million, requiring attention to the collection status of trade receivables