Tobila Systems Inc.

Business Details

Built on a proprietary nuisance information database, the segment offers three services targeting mobile, fixed-line, and other use cases. Embedded in the option packs of the three major carriers—KDDI, SoftBank, and NTT Docomo—the segment has established a stable revenue base through a usage-based billing model linked to subscriber counts. The segment profit margin remains high at approximately 68%, and the business serves as the core of company-wide earnings. In the first half of FY2026 (ending October 2026), revenue increased 2.5% year on year, maintaining a solid trajectory.

Recent Overview

Revenue grew steadily, but segment profit declined 5.0% year on year due to increased costs

In the first half of FY2026 (ending October 2026), Security Business revenue was ¥995 million (up 2.5% year on year), maintaining a solid trend. On the other hand, segment profit was ¥679 million (down 5.0% year on year), and the profit margin declined to 68.3%. Notable new developments include the start of database provision to NTT Town Page's 'Fraud Countermeasures' app in March 2026 and the integration of functionality into KDDI's 'Ponta Pass' iOS app in April 2026. Pricing terms were also raised upon renewal of contracts with certain telecom carriers.

Key Products

Growth Drivers

• Growing social demand amid worsening special fraud damage (total nationwide damage in 2025 exceeded ¥3,257 million, the worst level on record)
• Government request for telecom carriers to strengthen nuisance call/SMS countermeasures and promote free provision, based on the 'Comprehensive Countermeasures to Protect the Public from Fraud 2.0' (April 2025)
• Expansion of contracts driven by the start of free provision of 'Nuisance Call Block' for JCOM's Cable Plus Phone (January 2026)
• Expanded service touchpoints from the integration of the 'Nuisance Message/Call Block' function into KDDI's 'Ponta Pass' iOS app (April 2026)
• Start of database provision to NTT Town Page's 'Fraud Countermeasures by NTT Town Page' (an app recommended and certified by the National Police Agency) (March 2026)
• Expansion of nuisance information database recipients (rollout to financial institutions and external operators, etc.)
• Improved unit pricing from upward revision of pricing terms upon renewal of contracts with certain telecom carriers

Risks

• Dependence on a business model embedded in telecom carriers' option contracts (customer concentration risk: KDDI, SoftBank, and NTT Docomo together account for approximately 59% of revenue)
• Impact on the revenue model from telecom carriers' push to offer nuisance call countermeasure services free of charge
• Increasing costs for database updates and technical responses due to the diversification and sophistication of special fraud tactics (e.g., misuse of video calls and messaging apps)
• Risk of slowing subscriber growth as the mobile service matures (flow revenue declined sharply, down 45.4% year on year)
• Downward trend in segment profit margin (from 73.7% in the prior first half to 68.3% in the current first half) and profit pressure from rising company-wide costs
• Continued dependence on a single business model due to delays in launching new and adjacent businesses

Business Details

This segment provides products and services to corporate clients aimed at improving the efficiency and digital transformation (DX) of office telephony operations. Its flagship products are the cloud PBX service 'Tobila Phone Cloud' and the call management solution 'Tobila Phone Biz.' Leveraging the company's proprietary nuisance information database, these offerings include nuisance call blocking and customer harassment countermeasure functions, improving both efficiency and safety in telephony operations. Positioned as a strategic growth area under Priority Initiatives ① and ② of the Medium-Term Management Plan 2028, the company is actively expanding its distribution partner network and strengthening its direct sales structure.

Recent Overview

Revenue up 69% and segment profit up 134%, with growth accelerating

For the cumulative second quarter (first half) of FY2026 (ending October 2026), revenue was ¥680 million (up 69.0% year on year) and segment profit was ¥191 million (up 133.9% year on year), achieving substantial growth in both revenue and profit. For 'Tobila Phone Cloud,' the number of contracted IDs expanded through the addition of automated SMS sending functionality and the use of referrals via distribution partners. For 'Tobila Phone Biz,' unit sales progressed steadily amid demand for customer harassment countermeasures, with 'Tobila Phone Biz Lite,' launched in February 2026, also contributing to expanded sales. Stock revenue reached ¥364 million (up 67% year on year) and flow revenue reached ¥315 million (up 71% year on year), with both revenue categories maintaining high growth.

Key Products

Growth Drivers

• Growing demand for Tobila Phone Biz as a customer harassment countermeasure product
• Expansion of contracted IDs for Tobila Phone Cloud through referrals via distribution partners
• Market expansion driven by the new small-business plan 'Tobila Phone Biz Lite,' launched in February 2026
• Enhanced added value of Tobila Phone Cloud through functional expansion such as automated SMS sending
• Active allocation of management resources as Priority Initiatives ① and ② under the Medium-Term Management Plan 2028
• Social tailwind from the government's 'Comprehensive Countermeasures to Protect the Public from Fraud 2.0,' which strengthens countermeasures against nuisance calls and SMS

Risks

• High proportion of flow revenue (recognized in a lump sum upon product delivery/acceptance), creating risk of quarterly revenue volatility (flow revenue of ¥315 million and stock revenue of ¥364 million in the first half of FY2026 ending October 2026)
• High dependence on distribution partners, meaning deteriorating partner relationships or weakened partner sales capabilities could affect performance
• Risk of intensified competition with rivals in the cloud PBX market
• Risk that rising costs from human capital investment and expanded hiring could pressure profit margins (company-wide costs rose 42.2% year on year to ¥384 million)
• Risk of rising administrative costs associated with organizational and operational expansion during the high-growth phase