Core Concept Technologies Inc.

Business Details

With the purpose of "contributing to the sustainable development of industry through technology and human capability," the company operates two services: DX Support and IT Talent Procurement Support. In DX Support, the company leverages its proprietary methodology "CCT-DX Method" and DX development platform "Orizuru" to provide end-to-end support from concept planning to in-house implementation for manufacturing, construction, and logistics companies. In IT Talent Procurement Support, the company utilizes its extensive business partner network of small and medium-sized IT companies, "Ohgi" (business partner network), to respond swiftly to customers' IT talent demand. The company has a stable revenue base, with approximately 90% of sales derived from repeat orders from existing customers.

Recent Overview

Net sales and operating profit trended solidly, but quarterly net profit fell 66.4% year on year due to a ¥297 million loss related to a trust-type stock option scheme

In Q1 of FY2026 (ending December 2026), net sales were ¥5,438 million (up 7.9% year on year) and operating profit was ¥599 million (up 0.1% year on year), showing generally solid performance in sales and operating profit. However, due to a change in the issuance method of the 3rd series of stock acquisition rights (from a stock-option-issuance type to a share-issuance type), the company recorded a ¥296 million loss related to trust-type stock options as an extraordinary loss. Since this loss is not tax-deductible, the effective tax rate rose, causing quarterly net profit to decline sharply to ¥139 million (down 66.4% year on year). On the financial front, net assets decreased by ¥520 million from the end of the previous fiscal year due to ¥352 million in treasury stock purchases and ¥308 million in dividend payments, among other factors, and the equity ratio declined to 54.6% (from 59.1% at the end of the previous fiscal year). The full-year earnings forecast (net sales of ¥23,000 million, operating profit of ¥2,430 million) remains unchanged.

Key Products

Growth Drivers

• Accelerating company-wide DX investment by large enterprises, centered on manufacturing, construction, and logistics industries (the DX market is projected to expand from ¥5.6 trillion in FY2024 to ¥10.3 trillion in FY2030)
• Competitive advantage in IT talent procurement through utilization of the "Ohgi" network amid tight supply-demand conditions caused by IT engineer shortages
• Stable revenue base with an approximately 90% repeat rate among existing customers, and strengthened upselling/cross-selling to existing customers
• Deep on-site expertise in manufacturing and construction, supporting an approximately 60% ratio of prime contractor projects, combined with accumulated AI and 3D technology
• Expanded lead generation through increased sales activity following organizational restructuring and strengthened relationships with partner companies
• Continued double-digit growth in DX Support (+12.3% year on year), which together with IT Talent Procurement Support (+3.9% year on year) drives stable sales expansion as twin growth pillars

Risks

• Rising recruitment costs and personnel expenses due to worsening IT engineer shortages (SG&A expenses increased 10.9% year on year)
• Impact of US trade policy (tariff measures) on IT investment, primarily among domestic manufacturers (judged to be limited in the current period, but outlook remains uncertain)
• Risk of unprofitable or loss-making projects arising from an increase in large-scale projects, and challenges in managing project profitability
• High ratio of outsourcing costs to sales, making securing and quality control of business partners a prerequisite for business continuity
• Significant decline in net profit and rise in effective tax rate due to an extraordinary loss (¥296 million recorded in Q1) related to a change in the trust-type stock option issuance method
• Narrowing financial buffer, with the equity ratio declining to 54.6% due to treasury stock purchases and dividend payments, and short-term borrowings increasing by ¥420 million