Key Positives From The Results
First quarterly earnings since the December 2025 listing on the TSE Standard Market. Revenue of JPY 562M marked a new Q1 record, up +13% YoY, driven by both the Consulting and Technology domains. Operating income met the internal Q1 budget, and excluding listing-related costs, top-line growth momentum remains intact.
- Revenue of JPY 562M (+13% YoY), a record high for any Q1. Technology domain led the way at JPY 331M (+20.7% YoY)
- Client count reached 661 companies (+14% YoY), with 566 referrals from professional service firms (+29% YoY), indicating an expanding sales base. Full-scale rollout of "withDX" contributed
- IPO primary offering (JPY 442M) boosted the equity ratio from 60.4% to 73.1%; interest-bearing debt was reduced by JPY 74M, strengthening the balance sheet
- The JPY 71M provision for losses related to unauthorized access was carried over from the prior period, with no additional charges booked — suggesting the issue may be moving toward resolution
Key Concerns From The Results
Operating income of JPY 40M fell -53% YoY, essentially halving. While listing-related costs of JPY 29M and recruiting/training expenses of JPY 9M were largely one-off in nature, Q1 progress against full-year operating income guidance of JPY 428M stands at just 9.5% — necessitating a strong recovery over the remaining three quarters.
- OPM declined to 7.3% (vs. 17.6% in Q1 of the prior year). Listing costs are temporary, but rising personnel expenses could become a structural headwind
- EBITDA of JPY 51M (-48% YoY). Goodwill amortization of JPY 7M/quarter continues to weigh
- Operations domain flat YoY at JPY 140M, still absorbing the impact of a large staffing contract (JPY 41M in prior-year Q1) that expired
- Q1 net income of JPY 26M represents just 8.6% progress against the full-year target of JPY 302M. The bar is high for achieving the +78.8% YoY earnings growth plan
- Annual dividend forecast remains at JPY 0. While management prioritizes growth investment, the timeline for introducing a shareholder return policy remains unclear
Focus Areas / Items To Monitor Going Forward
- Progress on the withDX portal system slated for launch in March 2026, and the pace of expansion in affiliated firms (currently ~80 firms). The pivot to a platform-based revenue model is pivotal for medium- to long-term growth
- Sustainability of the uptrend in cybersecurity engagements and outlook for increasing revenue mix in this area. Clarifying cybersecurity's role as a revenue driver within the Technology domain is critical
- Confirmation of full-year impact from listing-related expenses (JPY 29M booked in Q1) and the degree of SG&A normalization from Q2 onward. Achieving the full-year operating income target of JPY 428M requires an average quarterly operating income of JPY 129M over the remaining three quarters
- Assessment of the 9.5% Q1 progress rate against the full-year operating income target of JPY 428M, and the scenario for profit recovery over the remaining three quarters
- Full-year total outlook for listing-related expenses (whether additional costs will be incurred from Q2 onward) beyond the JPY 29M booked in Q1
- Details on the withDX platform revenue model (pricing structure, revenue per affiliated firm)
- Specific headcount targets for the hiring plan and full-year budget for recruiting/training expenses
- Pipeline status for successor projects to replace the large staffing contract in the Operations business
- Plans for quantitative disclosure of security business revenue and engagement volume
- Tangible deal origination track record and current-year plans from collaboration with the ITOCHU Group
- Progress on deployment of IPO proceeds (allocation toward hiring costs and office relocation)
- Outlook for the JPY 71M provision for unauthorized access-related losses (potential reversal or additional charges)
- Earnings contribution from Colony Interactive, the EC development subsidiary
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 562M | +13.0% |
| Gross Profit | JPY 272M | - |
| Gross Profit Margin | 48.4% | - |
| Operating Income | JPY 40M | -53.0% |
| Operating Income Margin | 7.3% | - |
| Recurring Profit | JPY 40M | -53.0% |
| Quarterly Net Income | JPY 26M | -56.0% |
| EPS | JPY 15.10 | - |
| Diluted EPS | JPY 14.33 | - |
| EBITDA | JPY 51M | -48.0% |
| Comprehensive Income | JPY 26M | - |
YoY comparisons are based on management figures from the supplementary earnings materials. The earnings summary (tanshin) does not state YoY change rates as consolidated financial statements for the prior-year Q1 were not prepared. EBITDA = Operating Income + depreciation of JPY 2.7M + goodwill amortization of JPY 7.634M (company disclosure).
Performance By Business Segment
| Domain | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Technology | JPY 331M | +20.7% | - | - | - |
| Operations | JPY 140M | +0.0% | - | - | - |
| Consulting | JPY 91M | +7.0% | - | - | - |
| Company Total | JPY 562M | +13.0% | JPY 40M | -53.0% | 7.3% |
- Technology Domain: +20.7% YoY (JPY 274M → JPY 331M). Driven by higher software sales volumes and a growing pipeline of cybersecurity-related inquiries and engagements
- Consulting Domain: +7.0% YoY (JPY 85M → JPY 91M). Growth in business transformation and regulatory compliance consulting engagements
- Operations Domain: +0.0% YoY (JPY 140M → JPY 140M). Impacted by the expiration of a large staffing contract (JPY 41M in prior-year Q1). While accounting/payroll outsourcing volumes partially compensated, upside growth potential remains limited
Progress Versus Full-Year Guidance
Q1 revenue progress of 19.3% trails the straight-line run rate of 25%, but is broadly in line with the prior year when Q1 revenue of JPY 499M represented 23.5% of full-year revenue of JPY 2,124M. Operating income progress, however, stands at just 9.5%, primarily due to JPY 29M in listing-related costs. Assuming expense normalization from Q2 onward, there is room to achieve the full-year plan, though the structural impact of rising personnel costs warrants close monitoring.
| Item | Value (Q1 Cumulative) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 562M | JPY 2,913M | 19.3% |
| Operating Income | JPY 40M | JPY 428M | 9.5% |
| Recurring Profit | JPY 40M | JPY 428M | 9.5% |
| Net Income | JPY 26M | JPY 302M | 8.6% |
- The company has a September fiscal year-end, and Q4 (July–September) is presumed to see a concentration of corporate IT investment and DX-related projects. The prior fiscal year also exhibited a second-half-weighted earnings trajectory, suggesting the low Q1 progress rate may partly reflect structural seasonality
Changes To Guidance
No change from the guidance announced on December 19, 2025. Full-year targets maintained: revenue JPY 2,913M (+37.2% YoY), operating income JPY 428M (+33.8% YoY), and net income JPY 302M (+78.8% YoY).
Commentary On Shareholder Returns
The FY09/2026 dividend forecast remains at JPY 0 per share (JPY 0 in the prior year as well). Management continues to prioritize retaining earnings for growth investments (talent acquisition, revenue base diversification). No plans for a shareholder benefit program have been disclosed.
Financial Position
The IPO primary offering lifted the equity ratio to 73.1%, and progress on repaying interest-bearing debt has resulted in a sound financial base. The company is effectively in a net cash position, providing ample capacity for growth investments.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Deposits | JPY 1,303M | +38.6% vs. prior FY-end |
| Total Assets | JPY 2,022M | +20.9% vs. prior FY-end |
| Total Current Assets | JPY 1,613M | +26.5% vs. prior FY-end |
| Total Non-Current Assets | JPY 408M | +2.9% vs. prior FY-end |
| └ Goodwill | JPY 258M | -2.9% vs. prior FY-end (amortization in progress) |
| Total Interest-Bearing Debt | JPY 120M | -38.4% vs. prior FY-end |
| └ Current Portion of Long-Term Borrowings | JPY 52M | - |
| └ Long-Term Borrowings | JPY 67M | - |
| Net Assets | JPY 1,478M | +46.4% vs. prior FY-end |
| Equity Ratio | 73.1% | +12.7pt vs. prior FY-end |
| EBITDA | JPY 51M | Operating income + depreciation + goodwill amortization |
News Released Alongside The Earnings Announcement
None
Major Announcements During The Quarter
- 2025/12/19Listed on the TSE Standard Market. Issued 260,000 new shares at a public offering price of JPY 1,850 Tsuji Hongo IT Consulting Inc. — Notice of Listing on the TSE Standard Market
- 2026/01/21Completed payment for a third-party allotment associated with the over-allotment option (85,500 shares at JPY 1,702 per share, allotted to SBI Securities). Proceeds of JPY 145M are earmarked for talent acquisition costs and office relocation (per the material subsequent events section of the earnings summary)
Large-Shareholding Filings / Material Proposals Over The Past Year
Hongo Holdings Inc. is the largest shareholder, holding 62.24% of total shares outstanding as of the securities registration statement filing date, and has indicated its intention to maintain its stake following the IPO secondary offering. ITOCHU Corporation held 26.7% of voting rights as of end-September 2024 and is classified as an "other affiliated company."
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