Tsuji Hongo IT Consulting Co., Ltd. Q1 Earnings Preview

Key focus is whether the company can sustain new project accumulation via referral channels while maintaining SG&A discipline

February 13, 2026 at 16:30 GMT+9

Summary

FY09/2026, the first fiscal year as a listed company, marks a phase in which the company targets revenue and profit growth by combining stable earnings from existing engagements with incremental new project wins, building on the prior year's strong growth trajectory. For the upcoming Q1, the key battleground for investors will be reproducibility of order intake and utilization under the three-domain end-to-end model—specifically, the sustainability of momentum in Consulting and Operations engagements. On the profit front, the critical question is whether the company can absorb growth investments accompanied by headcount expansion while containing reversion risk on the OPM, which improved significantly in the prior year. Additionally, given the extraordinary losses and provisions related to the unauthorized access incident in the prior year, this is a phase where confirmation of recurrence prevention and normalization of risk-related costs will be essential.

Focus Areas For The Upcoming Quarter

Key Points & Focus	Implications
Revenue GrowthQ1 Revenue Progress Versus Full-Year Plan	Against the full-year revenue plan of JPY 2,913M, Q1 progress above ~22.0% would indicate tracking to plan, while above 25.0% would suggest upside potential.
ProfitabilityQ1 OPM YoY Change	Against the prior-year OPM of 15.1%, maintaining 14.0%+ in Q1 would confirm cost absorption capacity amid revenue growth; a drop below 13.0% would signal front-loading of growth investment burden.
Growth Investment / Fixed CostsPersonnel Cost Growth Pace And Productivity	The company plan assumes personnel costs of JPY 598M (+24.2% YoY). Even if fixed costs run ahead in Q1, a structure where gross profit growth absorbs the increase would validate medium-term scalability.
Orders / ChannelsProject Acquisition Via Partner Channels	The premise behind +37.2% full-year revenue growth hinges on expansion of external partner referrals. Confirmation of new project ramp-up in Q1 would suggest reduced H2-weighted risk.
Risk ManagementRecurrence Of Unauthorized Access-Related Costs And Provision Trends	The prior year recorded JPY 73M in extraordinary losses. If additional costs remain minimal in Q1 and provision drawdowns/additions stabilize, this would serve as a positive data point for earnings normalization and governance enhancement.
Capital EfficiencyROE Trajectory	Starting from prior-year ROE of 18.3%, sustained high ROE levels are in sight if profit growth tracks to plan. Simultaneous margin maintenance and working capital efficiency improvement would signal sustainability of capital efficiency.
Cash GenerationOperating CF's Correlation To Profit And Receivables Turnover	Prior-year operating CF was JPY 197M. If receivables growth continues to outpace profit growth in Q1, this warrants monitoring as growth-phase working capital burden; improvement in collections would signal rising earnings quality.

Key Discussion Points From The Prior Earnings (FY09/2025 Full-Year Results)

The prior full-year period saw Consulting and Outsourcing project acquisition serve as growth drivers, simultaneously delivering revenue scale expansion and significant margin improvement. For the current year, the plan calls for layering new project wins on top of stable recurring earnings from existing engagements while factoring in mean reversion from the high-growth base—making this a confirmation phase for transitioning from growth quantity to growth quality. Enhancement of risk management following the one-off losses from the unauthorized access incident is also expected to be a prerequisite for sustainable growth.

1. Reproducibility Of High Growth And Soundness Of The Project Portfolio

Prior Year:
Revenue of JPY 2,124M (+64.5% YoY), operating income of JPY 320M (+190.8% YoY)—delivering high growth with significant operating leverage
Current Year Verification:
Whether the dual drivers of churn containment on existing engagements and new project ramp-up are consistent with planned revenue of JPY 2,913M (+37.2%)
Key Metrics:
Q1 revenue progress versus full-year plan; confirmation that gross profit growth rate broadly keeps pace with revenue growth

2. Margin Sustainability And SG&A Absorption Capacity

Prior Year:
Gross profit of JPY 1,132M, SG&A of JPY 811M, OPM of 15.1% (+6.6pp YoY)
Current Year Verification:
Early signals on achievability of the company's planned OPM of ~14.7% while executing growth investments
Key Metrics:
Maintaining Q1 OPM at 14.0%+, YoY change in SG&A ratio, any downside deviation in gross profit margin

3. Normalization Of Unauthorized Access Impact And Positioning Of Security Investment

Prior Year:
Recorded extraordinary losses of JPY 2M for unauthorized access-related costs and JPY 71M for unauthorized access-related loss provisions, totaling approximately JPY 73M (JPY 73,678 thousand)
Current Year Verification:
Containment of additional loss occurrence, normalization of risk costs through implementation of recurrence prevention, minimization of impact on client trust
Key Metrics:
Extraordinary gains/losses activity, changes in provision balances, narrowing of the gap between operating income and net income attributable to owners of parent company

4. Financial Soundness And Growth Investment Capacity

Prior Year:
Total assets of JPY 1,672M, net assets of JPY 1,009M, equity ratio of 60.4%, cash and cash equivalents of JPY 940M
Current Year Verification:
Whether the balance between cash position and debt levels can be maintained while executing headcount expansion and organizational reinforcement
Key Metrics:
Whether cash equivalents decline at an excessive pace on a quarterly basis; consistency between long-term borrowing reduction trajectory and growth investment

5. Cash Generation And Working Capital Management As Measures Of Earnings Quality

Prior Year:
Operating CF of JPY 197M, accounts receivable and contract assets increased to JPY 278M at period-end
Current Year Verification:
Whether operating CF can be built up steadily through optimizing collection and billing processes while tolerating receivables growth accompanying business expansion
Key Metrics:
Whether operating CF keeps pace with profit growth; confirmation that receivables growth rate does not persistently exceed revenue growth rate

Major Announcements During The Current Period

2026/01/16
Notice Regarding Results of Third-Party Allotment - A phase of crystallizing post-IPO capital policy. The balance between dilution and use of proceeds is the focal point for investment decisions. Notice Regarding Results of Third-Party Allotment, Posted: 2026/01/16 18:30 [Timely Disclosure] - Minkabu
2025/12/19
Notice Regarding Financial Information in Connection with Listing on the TSE Standard Market - Presented FY09/2026 guidance (revenue JPY 2,913M, operating income JPY 428M, etc.). Baseline disclosure for gauging the achievability of first-year targets. 476A Tsuji Hongo IT Consulting Inc. | IR Information
2025/12/19
Notice Regarding Change of Parent Company - A topic with potential implications for governance and capital relationships. A phase where the impact on medium- to long-term strategic alignment and management independence should be assessed. 476A Tsuji Hongo IT Consulting Inc. | IR Information

Prior Quarter Results (FY09/2025 Q4 Actuals)

A phase in which the company advanced differentiation as a DX platform business providing end-to-end Consulting, IT implementation/development, and accounting/labor BPO services to mid-tier and SME clients, leveraging referral channels from accounting firms, financial institutions, and vendors. The prior year delivered strong revenue growth alongside significant OPM improvement through gross margin expansion and SG&A absorption, marking a turning point in earnings quality. However, extraordinary losses of JPY 73M arising from an unauthorized access incident at a consolidated subsidiary made risk management enhancement a key theme for the coming year.

Account	Value	YoY	Vs. Company Plan	Additional Information
Revenue	JPY 2,124M	+64.5%	-	Driven by Consulting and Outsourcing project acquisition progress
Operating Income	JPY 320M	+190.8%	-	Margin improvement via gross profit expansion and SG&A absorption
Recurring Profit	JPY 324M	+196.2%	-	Limited non-operating impact
Net Income	JPY 169M	+115.8%	-	Recorded JPY 73M in extraordinary losses (unauthorized access-related)
EPS	JPY 100.17	+95.3%	-	Calculated reflecting stock split effect from beginning of period

[Progress Versus Full-Year Guidance: 100.0% (Prior year: 100.0%)]