Safie Inc.

Business Details

Under the vision of "Creating the future from video," the company develops and provides the cloud-recording video platform "Safie." It generates revenue through two pillars for corporate customers across a broad range of industries, including retail, food service, construction, logistics, manufacturing, infrastructure, public sector, and healthcare: camera equipment sales (spot revenue) and subscriptions to cloud recording and AI analysis services (recurring revenue). Leveraging a sales partner network built through capital and business alliances with NTT, Canon, the SECOM group, and others, the company held an approximately 55.3% share of the cloud monitoring/recording service market in 2024 on a units-in-operation basis.

Recent Overview

Q1 FY2026 net sales up 20.9%, operating profit turned positive; ARR reached ¥14,996 million and billed cameras reached 370 thousand units

For the first quarter of FY2026 (ending December 2026, covering January to March 2026), net sales were ¥5,107 million (up 20.9% year on year), and operating profit turned positive at ¥105 million (compared with an operating loss of ¥20 million in the same quarter of the prior year). ARR stood at ¥14,996 million as of the end of March 2026 (up 21.5% year on year), and the number of billed cameras reached 370 thousand units (up 20.9% year on year), with key KPIs expanding steadily. Non-operating income included a gain of ¥97 million from investment partnership operations, bringing ordinary profit to ¥201 million. As a subsequent event, on April 28, 2026, the subsidiary Safie Field Works Inc. resolved to make Laska Corporation, a telecommunications infrastructure construction company, a wholly owned subsidiary, thereby strengthening its construction capabilities and establishing an integrated, end-to-end service structure. There has been no change to the full-year earnings forecast (net sales of ¥23,215 million and adjusted operating profit of ¥450–650 million).

Key Products

Growth Drivers

• Expansion of the recurring revenue base through continued growth in ARR (¥14,996 million as of end of March 2026, up 21.5% year on year) and an increasing number of billed cameras (370 thousand units, up 20.9% year on year)
• Simultaneous expansion of spot revenue and recurring revenue through increased multi-unit, multi-site deployments among enterprise customers
• Entry into the existing (on-premises) camera market (estimated at approximately 9 million units by 2028) via Safie Trail Station AI
• Increased revenue per customer through mass production and deployment of industry-specific AI solutions (such as AI-App) built on the Safie AI Studio platform
• Efficient expansion of the customer base by leveraging the sales partner network of NTT, Canon, the SECOM group, and others
• Establishment of an integrated construction-and-maintenance system through Safie Field Works' full acquisition of Laska Corporation, strengthening capability to handle large-scale projects
• Entry into the security market through advancement of AI security solution trials via Safie Security and collaboration with Central Security Patrols
• The growing role of video data combined with AI solutions as social infrastructure, driven by rising demand for physical AI

Risks

• Risk of fluctuations in operating profit due to upfront costs for new customer acquisition and new product development (Q1 FY2026 turned profitable, but the full-year forecast range for adjusted operating profit is ¥450–650 million)
• Risk of information leakage and security incidents associated with handling large volumes of personal information and video data
• Risk of intensifying competition due to new entrants and technological innovation by competitors (increasing new entrants amid the expanding cloud camera and AI analysis market)
• Given the nature of the recurring revenue model, the impact of a rise in churn rate on revenue (company-wide average monthly churn rate of 0.8%)
• A quarterly net income structure that depends partly on one-time special gains such as NEDO subsidies (¥107 million in subsidy income and ¥97 million in impairment loss recorded in Q1 FY2026)
• Integration risks and amortization burden of goodwill and intangible assets associated with M&A activities such as the full acquisition of Laska Corporation
• Foreign exchange fluctuation and overseas business operation risks associated with global expansion (including the Thai subsidiary)
• While demand is expanding against the backdrop of the declining birthrate, aging population, and shrinking labor force, there is a risk of existing solutions becoming obsolete due to the rapid evolution of AI technology