Key Positives From The 3Q Results
Solutions revenue surged +79.0% YoY, driving company-wide revenue to JPY 2,636M (+27.1%). Even with growth investment front-loaded under plan, operating income held broadly flat at JPY 755M (-0.6%). Progress against full-year guidance stands at 96.2% for operating income and 97.3% for net income, ahead of the company's own trajectory. On a standalone 3Q basis, operating income returned to growth at JPY 269M (+15.6%).
- Solutions revenue of JPY 1,139M (+79.0% YoY) and segment income of JPY 321M (+141.3% YoY) mark the start of a meaningful earnings contribution
- Cumulative Tobila Phone Biz unit sales reached 8,588 and Cloud billed IDs 17,399, both quarterly record highs (company disclosure)
- Recurring revenue expanded to JPY 2,044M (+22.0% YoY); contract liabilities rose JPY 908M versus the prior year-end, evidencing a growing pipeline of prepaid future revenue
- Fixed-line revenue reached JPY 256M (+56.8% YoY), with standard bundling of nuisance-call blocking on Cable Plus Phone lifting subscriber numbers
- EBITDA progress against full-year guidance stands at 88.9%; profit ahead of initial-plan trajectory prompted the addition of a JPY 20 20th-anniversary commemorative dividend
Key Concerns From The 3Q Results
Cost growth outpaced revenue growth, with COGS up +44.3% and SG&A up +41.9%. Gross profit margin fell to 66.0% (70.1% a year earlier) and OPM to 28.6% (36.6%). 4Q will see a concentration of Nagoya head-office relocation costs plus hiring and development spend; management guides quarterly profit to come in below 3Q levels.
- Corporate expenses rose to JPY 590M (+42.2% YoY), with unallocated costs offsetting growth in aggregate segment income
- Mobile revenue fell to JPY 1,240M (-1.3% YoY) on deferred development projects and lower 280blocker revenue; full-year progress is only 71.0%
- Against full-year operating income guidance of JPY 785M, 9M cumulative is already JPY 755M, implying thin 4Q profit and high sensitivity to any variance in expense recognition
- Equity ratio declined to 45.6% (48.2% at prior year-end), with asset-side expansion running ahead, including a JPY 448M increase in investments and other assets
- Security segment income fell to JPY 1,024M (-1.6% YoY); the benefit from renewed pricing terms contributed only three months from 3Q
Focus Areas / Items To Monitor Going Forward
- Actual booked amounts for the 4Q investment concentration (Nagoya head-office relocation costs, hiring, new product development, corporate website overhaul) and the resulting full-year outturn.
- Timing at which sales expansion in cloud PBX from the capital and business alliance with Prodelight begins to show up in Cloud billed ID counts.
- The recovery scenario for mobile. Specifically, when deferred development projects are re-recognized, and the impact on pricing and volumes from government deliberations and requests, including potential free provision of nuisance-call countermeasure services.
- Expected 4Q operating income level and management's view on upside room versus the JPY 785M full-year plan
- Structure of agency commissions and hardware costs accompanying Solutions revenue growth, and the medium-term landing zone for gross margin
- Timing of earnings contribution from the Prodelight alliance and quantitative KPI targets (billed IDs, share of sales via agents)
- Breakdown of the drivers behind the YoY decline in mobile, and the full-year and next-year contribution from renewed carrier pricing terms
- Assessment of progress at the end of year two against Medium-Term Plan 2028 (revenue JPY 6B, operating income JPY 1.7B) and whether revision is warranted
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 2,636M | +27.1% |
| └ Recurring revenue | JPY 2,044M | +22.0% |
| └ Flow revenue | JPY 592M | +48.4% |
| Cost of Goods Sold | JPY 895M | +44.3% |
| Gross Profit | JPY 1,740M | +19.7% |
| SG&A | JPY 985M | +41.9% |
| Operating Income | JPY 755M | -0.6% |
| Total non-operating income | JPY 24M | +220.8% |
| Recurring Profit | JPY 771M | +1.0% |
| Quarterly Net Income | JPY 516M | +0.1% |
| EPS | JPY 50.57 | -0.3% |
| Depreciation and amortization | JPY 87M | +6.7% |
| Goodwill amortization | JPY 49M | ± 0.0% |
Gross profit margin was 66.0% (70.1% a year earlier, our estimate) and OPM 28.6% (36.6%, our estimate). The rise in non-operating income was driven mainly by JPY 12M of interest income and JPY 9M of interest on securities. On a standalone 3Q basis, revenue was JPY 962M (+37.0% YoY) and operating income JPY 269M (+15.6% YoY), delivering growth in both revenue and profit (company disclosure).
Performance By Business Segment
Security revenue rose on higher fixed-line subscriber numbers, but segment income declined on the YoY drop in mobile and higher costs. In Solutions, expansion in both Tobila Phone Biz and Cloud lifted 9M revenue above the full prior-year total, with margin improving to 28.2%.
Segment Performance Table
| Segment | Revenue | YoY | Segment Income | YoY | Margin |
|---|---|---|---|---|---|
| Security | JPY 1,497M | +4.1% | JPY 1,024M | -1.6% | 68.4% |
| Solutions | JPY 1,139M | +79.0% | JPY 321M | +141.3% | 28.2% |
| Adjustments (corporate expenses) | - | - | -JPY 590M | +42.2% | - |
| Total (Operating Income) | JPY 2,636M | +27.1% | JPY 755M | -0.6% | 28.6% |
(Revenue on an external-customer basis. Margins are our estimates)
- Tobila Phone Biz: 9M revenue of JPY 793M (+70.6% YoY). Sustained demand for customer-harassment countermeasures, plus the entry-level "Biz Lite" launched in February 2026 capturing small-business customers, lifted cumulative unit sales to 8,588.
- Tobila Phone Cloud: 9M revenue of JPY 346M (+101.8% YoY). Growth in direct enterprise deals contributed, alongside an expanded agent network including J:COM. Billed IDs reached 17,399, with the average monthly churn rate maintained below 1%.
- Security / fixed-line: 9M revenue of JPY 256M (+56.8% YoY). Free provision of nuisance-call blocking on JCOM's "Cable Plus Phone" continues to drive subscriber growth; progress against full-year guidance is 115.6%.
- Security / mobile: 9M revenue of JPY 1,240M (-1.3% YoY), reflecting deferred development projects and lower 280blocker revenue. The pricing revision under the "monthly users × unit price" model contributed only three months from 3Q.
- Security / other: 9M revenue was at 3.2% of the prior-year level (company disclosure). Full-year guidance also assumes contraction to 3.9% of the prior year.
Progress Versus Full-Year Guidance
Revenue progress of 78.3% is ahead of the initial plan trajectory on Solutions growth, while profit progress is high at 96.2% for operating income and 97.3% for net income. Management plans to book Nagoya head-office relocation costs, headcount expansion, sales-structure reinforcement and new product development in 4Q, and states it expects a broadly on-guidance outturn.
| Item | Value (9M cumulative) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 2,636M | JPY 3,366M | 78.3% |
| EBITDA | JPY 892M | JPY 1,003M | 88.9% |
| Operating Income | JPY 755M | JPY 785M | 96.2% |
| Recurring Profit | JPY 771M | JPY 796M | 96.9% |
| Net Income | JPY 516M | JPY 531M | 97.3% |
| Security revenue | JPY 1,497M | JPY 1,968M | 76.1% |
| Solutions revenue | JPY 1,139M | JPY 1,397M | 81.5% |
(Progress rates per company disclosure)
- In the prior year (FY10/2025), 4Q operating income of JPY 139M was below each of 1Q–3Q (JPY 233–267M), pointing to a tendency for costs to concentrate at year-end.
- Management explicitly guides that 4Q quarterly profit this year will also fall below 3Q (JPY 269M) due to the concentration of Nagoya head-office relocation costs and growth investment.
Changes To Guidance
No change to the full-year guidance announced on 10 December 2025 (revenue JPY 3,366M, operating income JPY 785M, recurring profit JPY 796M, net income JPY 531M). Despite high profit progress at 3Q, guidance is maintained on the assumption that planned 4Q investment is executed.
Commentary On Shareholder Returns
Dividend guidance was revised. The year-end dividend for FY10/2026 was raised from JPY 20.00 to JPY 40.00 per share (JPY 20.00 ordinary + JPY 20.00 20th-anniversary commemorative), an increase from JPY 21.30 actual in the prior year. Medium-Term Plan 2028 targets a payout ratio of around 35% with a floor of JPY 20 per share; management explains that surplus capacity was allocated to returns after securing funds needed for growth investment. On treasury stock, 162,400 shares were disposed of during 9M as restricted stock compensation and similar (total disposal value JPY 203,812k), reducing period-end treasury shares to 389,050.
Financial Position
The company maintains a near debt-free structure, with cash and deposits of JPY 4,301M against interest-bearing debt of only JPY 58M in long-term borrowings. Total liabilities increased on the build-up in contract liabilities, but this underpins future recurring revenue; the effective net cash position remains substantial.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and deposits | JPY 4,301M | +15.1% vs. prior year-end |
| Securities | JPY 100M | -50.6% vs. prior year-end |
| Merchandise and finished goods | JPY 235M | +500.6% vs. prior year-end; Tobila Phone Biz devices, etc. |
| Investments and other assets | JPY 1,093M | +69.5% vs. prior year-end; includes acquisition of Prodelight shares |
| Total Assets | JPY 6,737M | +25.2% vs. prior year-end |
| Contract liabilities | JPY 3,124M | +41.0% vs. prior year-end |
| Interest-Bearing Debt | JPY 58M | - |
| └ Long-term borrowings | JPY 58M | -39.2% vs. prior year-end |
| Shareholders' Equity | JPY 3,070M | +18.3% vs. prior year-end |
| EBITDA | JPY 892M | Company disclosure (operating income + depreciation + goodwill amortization) |
Disclosures Released Alongside The Earnings Announcement
- 2026/09/10Year-end dividend revised upward from JPY 20.00 to JPY 40.00 per share (JPY 20 ordinary + JPY 20 20th-anniversary commemorative), with management emphasizing enhanced returns after securing growth investment funds (Notice of Revision to Dividend Guidance (20th-Anniversary Commemorative Dividend); noted in the earnings release as published the same day)
- 2026/09/10Published 3Q FY10/2026 earnings presentation, disclosing the 4Q investment plan, full-year outturn outlook, and responses to anticipated questions (FY10/2026 Third Quarter Earnings Presentation)
Major Announcements During The Quarter
- 2026/06/25"Fraud Countermeasures by NTT Townpage," the National Police Agency-endorsed app developed in partnership with NTT Townpage, surpassed 1M cumulative downloads roughly 100 days after launch National Police Agency-Endorsed App "Fraud Countermeasures by NTT Townpage" Surpasses 1M Cumulative Downloads
- 2026/07/14Acquired 100,000 shares (5.948% of voting rights) in Prodelight, which operates the cloud PBX "INNOVERA," under a capital and business alliance. A core initiative to accelerate Cloud sales Notice Regarding Capital and Business Alliance with Prodelight
- 2026/07/29Signed a sales agency agreement with J:COM for "Tobila Phone Cloud," expanding the agent network following SKI, Crops and No.1 Tobila Systems Signs Sales Agency Agreement with J:COM for "Tobila Phone Cloud"
- 2026/07/30Began offering its nuisance-information database externally via Web API, creating a new revenue opportunity through broader delivery formats and customer types Tobila Systems Launches "Nuisance Information Database Web API" for Real-Time Matching of Nuisance Phone Numbers and More
- 2026/09/03Signed a sales agency agreement with NTT East for "Sagitore," leveraging corporate and municipal channels to expand sales Tobila Systems Signs Sales Agency Agreement with NTT East for "Sagitore"
Large-Shareholding Filings / Material Proposals Over The Past Year
- Smoak Capital Management, LLC and others: new 5.02% (2025/12/02) – pure investment
- Smoak Capital Management, LLC and others: 5.02% → 6.33% (2025/12/17, amended 2025/12/18) – pure investment
- Smoak Capital Management, LLC and others: 6.33% → 7.34% (2026/02/04) – pure investment
- Atsushi Akeda (President and Representative Director): 44.28% → 43.17% (2026/03/03, amended 2026/03/12) – stable holding for the purpose of management participation as founder and representative director
- Atsushi Akeda (President and Representative Director): 43.17% → 43.17% (2026/09/04) – change relating to a material agreement such as a pledge agreement; no change in holding purpose or ratio
- (For reference) Company's new 5.94% shareholding report on Prodelight shares (filed 2026/07/22) – to build a cooperative relationship under the capital and business alliance and enhance corporate value
- Shareholder proposals / material proposal actions: none applicable; the agenda for the 19th Annual General Meeting (held 2026/01/28) comprised only three items including director elections
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