Science Arts, Inc.

Business Details

Provides the cloud-based SaaS "Buddycom" targeting frontline workers in retail stores, transportation infrastructure, and other on-site settings. Features voice calls, video streaming, speech-to-text conversion, simultaneous translation, and location sharing, and can be used simply by installing an app on a smartphone or tablet. While securing stable revenue through subscription-based billing, the company also sells accessories. The business is deployed nationwide through agencies such as SoftBank, Ricoh, and NTT DOCOMO Business, and constitutes substantially all of the company's revenue as a single reportable segment.

Recent Overview

Number of contracted companies expanded to 1,828 and ARR to ¥1,265 million; operating profit surged 166% year on year

During the cumulative first three quarters of FY2026 (ending August 2026), through enhanced marketing, initiatives targeting priority industries, and strengthened agency sales capabilities, the number of contracted companies increased by 266 from the end of the prior fiscal year to 1,828, and ARR increased by ¥197 million from the end of the prior fiscal year to ¥1,265 million. Segment revenue reached ¥1,564 million (up 35.0% year on year), and segment profit rose sharply to ¥149 million (up 166.1% year on year). On the other hand, it should be noted that operating profit for the cumulative third quarter was reduced by ¥31 million due to a shortened useful life of fixed assets (a change in accounting estimate) associated with the relocation of the head office. The full-year earnings forecast has been revised upward to revenue of ¥2,130 million and operating profit of ¥220 million.

Key Products

Growth Drivers

• Continued increase in the number of contracted companies (ARR expanded approximately 4.3-fold, from ¥296 million at the end of FY2021 (ending August 2021) to ¥1,265 million at the end of Q3 FY2026 (ending August 2026))
• Revenue accumulation effect from the subscription-based business model (high customer retention rate)
• Acceleration of new customer acquisition, including in the SMB segment, through enhanced marketing and strengthened agency sales capabilities
• Potential for ARPU improvement through expanded functionality such as AI features (BuddycomAI), video streaming, and simultaneous translation
• Expanding DX demand among frontline workers (estimated domestic potential market size of approximately ¥190 billion) and tailwinds from the spread of 5G and wearable devices
• Nationwide expansion capability through agency networks with major telecom and IT companies such as SoftBank, Ricoh, and NTT DOCOMO Business

Risks

• Revenue dependence on specific agencies (SoftBank alone accounted for 38.8% of revenue in FY2025, ending August 2025)
• Intensifying competition due to entry into the communication tools market and enhanced functionality by competitors
• Risk of expanding costs due to continued increases in advertising expenses and personnel costs aimed at raising awareness in the frontline worker market
• Rising procurement costs (due to yen depreciation, etc.) and inventory management risk in accessory sales
• System failure and security risks related to stable operation of cloud services
• Temporary costs such as those associated with head office relocation (an increase of ¥31 million in depreciation expense due to a change in accounting estimate) pressuring profit