ENVALITH
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WITZ Corporation

4440・Standard Market・Information & Communication

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WITZ Corporation4440

Business

Vits Co., Ltd. was established in 1997 and is a Nagoya-based company specializing in embedded software. Its core business is the Software Business (net sales of ¥3,983 million), centered on Contract Control Software Development & SES for the automotive and industrial equipment sectors. The company also operates the Sensing Business (¥862 million), in which its subsidiary Tesco Co., Ltd. manufactures, sells, and maintains X-ray Transmission & CT Equipment, and the Other business (¥12 million), in which its subsidiary Reserve Mart Co., Ltd. provides a Cloud-based Facility Reservation System for local governments. These three segments make up the company's overall structure. Major customers include Aisin Software, Lasertec, SC Automotive Engineering, Toyota Motor Corporation, and other manufacturers of automotive and semiconductor inspection equipment. Leveraging strengths in functional safety, cybersecurity, AI Safety, and simulation technology, the company provides foundational technology aimed at realizing Society 5.0. It is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

Main revenue consists of labor-compensation-type sales from SES (Software Engineering Services) and contract control software development. In addition, the company is expanding the proportion of IP and product revenue through functional safety and security consulting, sales of proprietary products such as the digital twin platform "SF Twin" and traffic simulation "WARXSS", and the provision of AI safety guidelines. In the Sensing Business, the company generates revenue from the manufacturing, sales, and maintenance services of X-ray CT equipment, while in the Other business, it builds up stock-type revenue from usage fees for the facility reservation system, forming a multi-layered revenue structure.

Company Strengths

Obtained Japan's first IEC 61508 SIL-3 software development process certification in 2010, and the world's first ISO 26262 ASIL-D certification in 2012. Also holds a track record of compliance with the cybersecurity standard IEC 62443. These certifications and track record serve as a barrier to entry for winning high-value-added projects from automotive and industrial equipment manufacturers.

As of the end of FY2025 (ending August 2025), order backlog totaled ¥1,260 million on a company-wide basis, including ¥811 million in the Software Business (up 196.2% from the previous fiscal year-end) and ¥426 million in the Sensing Business. Orders received also remained at a high level, with company-wide orders of ¥4,924 million (up 127.0% year on year), providing high visibility into sales recognition for subsequent periods.

The company has executed M&A every fiscal period: acquisition of Scudetto Software in 2022; establishment of Crystalite and acquisition of Eager in 2023; acquisition of Tesco in 2024 (launch of the Sensing Business); and acquisition of Reserve Mart in 2025. Net sales for FY2025 (ending August 2025) reached ¥4,857 million, approximately 2.2 times the ¥2,199 million recorded in FY2021 (ending August 2021). As a subsequent event, the company has also resolved to make Ag Control System a subsidiary (March 2026).

ENVALITH's Perspective

Cumulative sales for the first three quarters of FY2026 (ending August 2026) of ¥4,297 million represent a progress rate of 76.1% against the full-year forecast of ¥5,650 million, while operating profit of ¥586 million represents a progress rate of 92.6% against the full-year forecast of ¥633 million. Progress on the profit side is at an extremely high level, but the company itself has explicitly indicated the risk that the impact of the cancellation of EV-related projects, driven by U.S. trade policy, will become apparent from the fourth quarter onward, making it necessary to closely assess the likelihood of achieving the (revised) full-year forecast.

Cumulative sales for the first three quarters in the Sensing Business were ¥615 million (down 25.4% year on year), with segment profit of ¥32 million (down 59.7% year on year), representing a significant decline in both revenue and profit. This is attributed mainly to a delay in recording sales from large-scale projects due to delivery date adjustments with clients, but given the highly seasonal nature of the business (concentrated in September and March), the scope for recovery in the fourth quarter and the outlook for the full-year result need to be evaluated carefully. It should also be noted that, as an external factor, trends in capital investment in the manufacturing industry can affect order intake in the Sensing Business.

Selling, general and administrative expenses have been pushed up by increased costs including advisory fees related to the acquisition of Company AG, costs related to expanding head office floor space, the newly established officer bonus scheme, and an increase in employee salary levels, resulting in cumulative SG&A expenses for the first three quarters of FY2026 (ending August 2026) of ¥1,125 million (up 27.9% year on year), a growth rate that significantly exceeds the sales growth rate (16.7%). The "Other" segment, which includes Company AG and Company RM, is recording a loss of ¥16 million, and the early profitability of the newly acquired subsidiaries will be key to improving profit margins going forward.

Growth Strategy

Building a next-generation revenue base through technology integration in SDV, AI safety, and non-destructive inspection, together with monetization of intellectual property

Promoting segment integration and technology convergence aimed at supporting Software Defined Vehicle (SDV) development. Aiming to expand orders in AI Safety Consulting, which safely embeds AI into autonomous systems, as well as in the functional safety and security fields. In the cumulative third quarter of FY2026 (ending March 2026)*, sales in simulator technology, virtual space technology, security, and safety have trended favorably, confirming the effectiveness of the strategy.

Nurturing AG (agricultural laser and GPS-based Machine Control Equipment), which became a consolidated subsidiary in March 2026, and the existing RM (Cloud-based Facility Reservation System) as part of the "Other" segment. AG's off-peak season runs from May to August, and full-scale profit contribution is expected from the fourth quarter onward. Currently, a segment loss (¥16 million) is being recorded due to the impact of one-time costs (such as advisory fees).

Aiming to improve gross profit margin through continuous revision of order prices and enhanced selection of high-margin projects. In the cumulative third quarter of FY2026 (ending March 2026), the segment profit margin of the Software Business reached 15.1%, achieving margin improvement even amid headwinds from rising personnel and outsourcing costs.

Continuing R&D investment by utilizing subsidy income related to the national Program for Supporting R&D by Growth-Oriented SMEs (Go-Tech Program). Subsidy income for the cumulative third quarter of FY2026 (ending March 2026) increased to ¥14 million (up 49% year on year), functioning as a supplementary factor to ordinary profit.

Last updated: July 17, 2026