CTS Co., Ltd.
4345・Prime Market・Services
Business
CTS Co., Ltd. takes its company name from "Construction Total Support service," and is a company that supports the digitalization of construction sites, primarily serving civil engineering and construction companies. In its core DDS Business (Digital Data Service Business), the company offers the "Site Assist Package (SAP)," which integrates Cloud Storage Service, Cloud Video Service, communication networks, and other elements. In its SMS Business (Surveying & Measurement System Business), it operates rental and sales of the One-Man Surveying System (Rental), which utilizes GNSS and other technologies. Since its founding in the Surveying & Measurement Business in 1972, the company has built a nationwide network of 32 branches over half a century and is listed on the Tokyo Stock Exchange Prime Market. It operates as a specialist company addressing the social challenges of productivity improvement and DX in the construction industry.
Business Model
The core DDS Business has adopted a recurring revenue model centered on cloud service subscriptions and ICT equipment rentals, achieving a segment profit margin of 32.0% (FY2026, ending March 2026). The SMS Business also centers on the rental of surveying and measurement equipment, complemented by sales. Most rental assets are procured through leasing, which restrains initial investment, while the shift from site-based transactions to corporate contracts (BtoB) is being advanced, creating a structure that enhances order stability and profitability.
Company Strengths
In FY2026 (ending March 2026), DDS Business net sales stood at ¥7,510 million, maintaining a high segment profit margin of 32.0%. The company continues to promote SAP awareness expansion and new customer acquisition through proprietary seminars and exhibition activities at its 32 branches nationwide, and the combination of geographic coverage and a highly profitable business forms a competitive advantage that is difficult for competitors to replicate in a short period.
Subscription revenue centered on Cloud Storage Service and Cloud Video Service has expanded, and site-based transactions are increasingly being converted into corporate contracts (BtoB conversion). While maintaining a repeat rate of 70.0%, the structure of accumulating recurring billing-based revenue has enabled the company to achieve five consecutive fiscal years of increased revenue and profit, from FY2022 (ending March 2022) through FY2026 (ending March 2026), in both net sales and operating profit.
The Surveying Equipment Management Center, established in April 2021, aims for world-class management standards and achieves differentiation in the maintenance and management of increasingly sophisticated and diversified surveying equipment. It functions as proprietary infrastructure that underpins the rental competitiveness of the SMS Business (Surveying & Measurement System Business), with the SMS Business segment profit margin reaching 19.4% in FY2026 (ending March 2026).
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), the company achieved net sales of ¥12,747 million (up 7.8% year on year), operating profit of ¥3,369 million (up 9.5%), and profit attributable to owners of parent of ¥2,686 million (up 22.7%), marking five consecutive fiscal years of revenue and profit growth. Growth was led by the DDS Business (net sales of ¥7,510 million, up 8.9% year on year) and the SMS Business (net sales of ¥3,870 million, up 10.4%), while only the Other segment struggled, with net sales of ¥1,367 million (down 3.7%) and segment profit of ¥214 million (down 22.6%). Regarding market conditions, steady public investment under the national resilience plan and firm private-sector investment provided tailwinds, while flat construction project volumes—stemming from soaring material prices and labor shortages—constrained the ceiling for growth. Selling, general and administrative expenses increased to ¥3,179 million (up 6.0% year on year) due to higher personnel costs and increased marketing expenses, but this was absorbed by growth in gross profit (¥6,548 million, up 7.8%), securing an operating margin of 26.4% (an improvement of 0.4pt from 26.0% in the previous fiscal year).
Growth Strategy
Transformation into a specialized construction ICT company through SAP and promotion of the new medium-term plan (FY2027–FY2029, ending March)
SAP, which integrates Cloud Storage Service, Cloud Video Service, Communication Service, Multi-function Display and other offerings, is being rolled out to approximately 2,600 local general contractors and approximately 100 wide-area general contractors nationwide. SAP sales in FY2026 (ending March 2026) were ¥2,795 million. Under the new medium-term plan, the target is ¥5.5 billion in FY2029 (ending March 2029) (+96% versus FY2026 (ending March 2026)). Key measures include expanding nationwide seminars and promoting a shift toward BtoB transactions.
Advancing SAP content sophistication through AI implementation at File Force Inc. (an equity-method affiliate that turned profitable in FY2026 (ending March 2026)). The company is also exploring deeper collaboration with firms possessing unique or specialized technologies, as well as new partnerships and investments, to expand SAP's functionality and improve quality.
Entering the government/public sector market starting with the replacement and expansion of simplified river monitoring cameras, and expanding horizontally from river management departments into roads, tourism, and other areas. The aim is to diversify the customer base beyond the construction market and reduce the risk of over-reliance on the construction industry.
Utilizing the customer base built through the DDS Business to conduct efficient sales activities centered on rental of the One-Man Surveying System (Rental). SMS Business sales in FY2026 (ending March 2026) were strong at ¥3,870 million (up 10.4% year on year), but the forecast for the next fiscal year is ¥3,750 million (down 3.1% year on year), reflecting an expected temporary adjustment. The company will continue to differentiate itself through its world-class surveying equipment management center.
The new medium-term management plan explicitly states continuation of a "progressive dividend" policy as its financial policy. The annual dividend is planned to increase from ¥29 in FY2026 (ending March 2026) to ¥30 in FY2027 (ending March 2027) (payout ratio of 45.5%). As a subsequent event, the company resolved to acquire treasury shares up to a limit of 500,000 shares and ¥500 million (from May to December 2026), advancing improved capital efficiency and agile capital policy.
Last updated: July 19, 2026