ALPHA SYSTEMS INC.
4719・Prime Market・Information & Communication
Business
Alpha Systems Inc. is an independent software development company founded in 1972. Centered on three domains—Communication System Development (nodes, mobile networks, network management), Open System Development (public sector, distribution/services, finance, information & communications), and Embedded System Development (automotive, measurement/control equipment)—the company provides contract development services to a broad range of clients including government agencies, telecom carriers, financial institutions, and manufacturers. The Software Development Related Business accounts for over 96% of net sales, with NTT Data (17.7% of net sales) and Fujitsu (10.7%) as major clients. Headquartered in Nakahara-ku, Kawasaki City, with six offices nationwide, the company is listed on the Prime Market of the Tokyo Stock Exchange.
Business Model
The core model involves receiving lump-sum orders for software development from client companies and delivering projects through a development structure centered on in-house (proper) employees. With a cost of sales ratio of 76.8% and an SG&A ratio of 11.0%, the company secures an operating margin of 12.1%. The order backlog structure carries forward into the following fiscal year's revenue, and the order backlog at the end of FY2026 (ending March 2026) reached ¥10,638 million (up 16.5% year on year). As a complementary business, the company also sells self-developed products and services, cultivating new revenue sources.
Company Strengths
Starting from telecommunications software development in 1972, the company has expanded its business domain into public sector, finance, distribution, and embedded systems. In FY2026 (ending March 2026), Open System Development sales reached ¥29,843 million, accounting for over 73% of the total, forming a diversified portfolio that avoids excessive dependence on any single field. The company has obtained quality and security certifications such as ISO9001 and ISO27001 company-wide, and has accumulated a track record in large-scale system development.
At the end of FY2026 (ending March 2026), net assets stood at ¥45,334 million, with an equity ratio of 85.2%, maintaining an extremely sound financial structure. The company held cash and cash equivalents of ¥20,074 million, and the current ratio reached 444.8%. While continuing debt-free management, the company paid a dividend of ¥135 per share under a target dividend payout ratio of 50%, achieving both shareholder returns and financial soundness simultaneously.
The company explicitly states as a management policy a development structure centered on regular (proper) employees, suppressing dependence on outsourcing. It has introduced a talent management system to work on skill management and engagement improvement, while the Human Resources Development Department and the Development Promotion Department collaborate to promote the acquisition of advanced technologies. This structure supports the acquisition of customer trust and the continuous accumulation of technical know-how, forming an organizational asset that is difficult for competitors to imitate in a short period.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), the company achieved revenue of ¥40,722 million (up 5.8% year on year), operating profit of ¥4,945 million (up 11.8%), and net income of ¥3,750 million (up 16.8%), marking the fifth consecutive year of revenue and profit growth, with all three metrics reaching new record highs. As an external factor, the widening gap between supply and demand for IT talent pushed up software development unit prices, boosting both revenue and profit. Within Open System Development, the financial sector (+31.7%), information and communications sector (+18.8%), and Embedded System Development (+18.6%) served as the main drivers, while Communication System Development saw a slight decline (-0.8%). Cash flow from operating activities came to ¥3,026 million, an increase of ¥1,458 million year on year, reflecting improved cash conversion of earnings. For FY2027 (ending March 2027), the company forecasts revenue of ¥42,500 million and operating profit of ¥5,100 million, representing continued growth, but expects net income to decline to ¥3,650 million.
Growth Strategy
Pursuing sustainable growth through three pillars: utilization of AI technology, expansion of development infrastructure, and aggressive expansion into growth fields
Advancing consideration of development processes premised on AI technology, while promoting the application of AI technology to internal company processes. In the information and communication field, sales related to research and development including AI have increased (up 18.8% year on year), with results beginning to emerge both in terms of improved development efficiency through AI utilization and the acquisition of new demand.
The finance field (payment relay systems and financial cloud infrastructure) continued its high growth, with net sales of ¥5,738 million for the current period (up 31.7% year on year) and orders received of ¥5,950 million (up 33.2% year on year). Orders received in the information and communications field expanded rapidly, up 44.7% year on year. Forecasts for the next fiscal period continue to anticipate high growth, with ¥6,800 million (+18.5%) in finance and ¥4,400 million (+8.0%) in information and communications.
Policy is to allocate internal retained earnings to enhancing development centers to improve the development environment, as well as to enhancing in-house networks and development equipment to improve development efficiency. Acquisition of tangible fixed assets in the current period amounted to ¥897 million (a significant increase from ¥170 million in the previous period), and net book value of buildings increased to ¥4,414 million (from ¥3,782 million in the previous period), indicating that capital investment is now moving into full swing.
Policy is to maintain stable and continuous profit returns through dividends, with a target payout ratio of 50%. The annual dividend for FY2026 (ending March 2026) is ¥135 per share (payout ratio of 50.5%), and the forecast for FY2027 (ending March 2027) is ¥140 (payout ratio of 53.8%), continuing the trend of dividend increases. The year-end dividend was raised from the initially planned ¥65 to ¥75, clearly demonstrating the company's stance on shareholder returns.
Last updated: July 19, 2026