Tsuji Hongo IT Consulting Co., Ltd. 2Q Earnings Preview

Focus on progress toward the full-year DX Platform business revenue plan of +37% growth, and confirmation of margin improvement leveraging cybersecurity demand

PublishedMay 13, 2026 at 15:30 GMT+9

Summary

As a DX platform operator built on a strong network with Tsuji Hongo Tax & Consulting and ITOCHU Corporation, the company is approaching its 2Q results—the first meaningful earnings tracking period since listing. Against 1Q revenue of JPY 562M (19.3% of full-year plan), operating income of JPY 40M (9.5% of plan) indicates low profit progress, making the pace of recovery in 2Q pivotal to the feasibility of achieving full-year targets. Key indicators for assessing the quality of growth include order trends in high-value-added areas such as cybersecurity countermeasures and information security infrastructure rebuilding support, as well as progress on talent investment and office relocation utilizing IPO proceeds. As the company enters a phase of substantive engagement with the capital markets post-listing, we want to confirm the directional trajectory of the medium-term earnings structure.

Key Points for Next Quarter

Key Points & Focus	Implications
Revenue Growth1H cumulative revenue progress against full-year plan of JPY 2,913M	1Q progress of 19.3% is low relative to the +37.2% full-year growth plan. Confirmation of 2Q standalone revenue exceeding JPY 730M (our estimate: cumulative progress above 25%) would improve the probability of plan achievement
ProfitabilityQuarterly OPM trend	1Q OPM of 7.3% trails the full-year plan of 14.7%. Cost ratio and SG&A ratio improvement from 2Q onward is key to achieving the JPY 428M operating income target
Talent InvestmentHiring progress and consolidated headcount trend	The pace of increase from 121 consolidated employees (end of October 2025) and the allocation of IPO proceeds toward recruitment costs will determine growth sustainability
Security BusinessOrder flow and revenue mix from cybersecurity-related services	Ahead of the full-scale launch of the "Security Countermeasure Evaluation System" in FY2026, capturing corporate demand for security infrastructure buildup is key to medium-term growth
Capital EfficiencyProgress on IPO fund deployment and equity ratio trend	With an equity ratio of 73.1% (end of 1Q), financial headroom is ample. Focus on the balance between strategic investments such as office relocation and capital efficiency (ROE)
Unauthorized Access-RelatedMovement in the JPY 71M provision for unauthorized access-related losses	Whether the provision is reversed or further charges are recognized will impact net income through extraordinary items. Monitor for any disclosure of developments

Key Issues from Previous Results (FY09/2026 1Q)

The company listed on the TSE Standard Market in December 2025, and disclosed 1Q results as its first quarterly earnings since listing. While revenue of JPY 562M and operating income of JPY 40M secured profitability, profit progress stood at just 9.5% of the full-year plan. Operating as a single segment—"DX Platform Business"—across three domains of Consulting, Technology, and Operations, the focus is on whether accelerating cybersecurity demand can drive momentum from 2Q onward.

1. Progress Toward Full-Year Revenue Plan of JPY 2,913M

Prior Quarter:
1Q revenue of JPY 562M (19.3% of full-year plan). YoY comparison not disclosed (consolidated financials were not prepared for 1Q of the prior fiscal year)
This Quarter — Key Confirmation:
2Q standalone revenue level and 1H cumulative progress vs. full-year plan. Prior-year full-year revenue was approximately JPY 2,123M (our estimate: back-calculated from the +37.2% YoY growth implied in the plan), implying a quarterly average of ~JPY 530M. While 1Q actual of JPY 562M exceeded this, the current fiscal year requires an average of JPY 728M per quarter
Key Metric:
1H cumulative revenue achievement rate vs. full-year plan (prior-year 3Q cumulative of JPY 1,548M also serves as a reference)

2. OPM Improvement Trend and SG&A Control

Prior Quarter:
1Q OPM of 7.3% (operating income of JPY 40M / revenue of JPY 562M). Gross profit margin of 48.4% was weighed down by SG&A of JPY 231M (41.2% of revenue)
This Quarter — Key Confirmation:
SG&A growth rate from 2Q onward. If listing-related one-time expenses were concentrated in 1Q, there is room for margin improvement via lower SG&A ratios from 2Q. Narrowing the gap with the full-year OPM plan of 14.7% (prior-year actual: 15.1%) is critical
Key Metric:
2Q standalone OPM, QoQ change in SG&A

3. IPO Proceeds Deployment and Growth Investment Progress

Prior Quarter:
Approximately JPY 588M raised through a public offering (260,000 shares × JPY 1,702 = JPY 442M) and overallotment (85,500 shares × JPY 1,702 = JPY 145M). Stated use of proceeds includes working capital for recruitment and office relocation
This Quarter — Key Confirmation:
Hiring results as of 2Q (increase in consolidated headcount) and office relocation progress. If fixed cost increases front-load, short-term margin compression is possible
Key Metric:
Consolidated headcount, changes in tangible fixed assets (capex related to office relocation)

4. Capture of Cybersecurity-Related Demand

Prior Quarter:
The earnings summary noted robust demand for "cybersecurity countermeasures" and support for rebuilding "information security frameworks." The company is pursuing support from both technical and organizational security perspectives
This Quarter — Key Confirmation:
Order trends for security-related projects and changes in revenue mix across the three domains (Consulting, Technology, Operations). A rising share of high-value-added Consulting would directly improve margins
Key Metric:
Changes in Technology domain revenue share (prior-year actual: 54.4%) and Consulting domain revenue share (12.3%)

5. Treatment of Provision for Unauthorized Access-Related Losses

Prior Quarter:
JPY 71M provision for unauthorized access-related losses recorded as a current liability (unchanged from prior fiscal year-end)
This Quarter — Key Confirmation:
Whether the provision is reversed or additional charges are recognized. Resolution would generate a reversal gain boosting net income, while the possibility of additional losses remains a risk factor
Key Metric:
Change in provision balance, recognition of related extraordinary gains/losses

Timely Disclosure & Industry Trends

2026/03/31
Notice Regarding Financial Results of Unlisted Parent Company, Etc. — Disclosure has already been made that Hongo Holdings no longer qualifies as a parent company following the listing; however, continued monitoring of the former parent's earnings disclosure is warranted from a governance perspective. Tsuji Hongo IT Consulting: Notice Regarding Financial Results of Unlisted Parent Company, Etc.
2026/03/31
Publication of Interview Report by Envalis — The publication of a detailed analytical report by an independent research firm is meaningful as a complement to analyst coverage for a small-cap stock on the Standard Market. Tsuji Hongo IT Consulting: Notice Regarding Publication of Interview Report by Envalis
2026/01/16
Results of Third-Party Allotment (Overallotment) — 85,500 shares (JPY 145M) issued to SBI Securities as allottee, with payment completed on January 21, 2026. Total shares outstanding expanded to 2,037,488, with proceeds earmarked for recruitment costs and office relocation. Notice Regarding Results of Third-Party Allotment
2025/12/19
Notice Regarding Change in Parent Company — Due to the public offering and secondary offering accompanying the listing, Hongo Holdings no longer qualifies as a parent company. The change in capital structure can be evaluated positively as enhancing governance independence. Notice Regarding Change in Parent Company

Previous Quarter Results (FY09/2026 1Q Actual)

Tsuji Hongo IT Consulting Inc. originated from the Tsuji Hongo Tax & Consulting firm and, leveraging its capital and business alliance with ITOCHU Corporation (since March 2024), operates a single-segment "DX Platform Business." Across three domains—Consulting, Technology, and Operations—the company provides one-stop back-office DX support for mid-tier and SME clients. Having listed on the TSE Standard Market in December 2025, the company's full-year plan targets revenue of JPY 2,913M (+37.2% YoY) and operating income of JPY 428M (+33.8% YoY). In 1Q, the first quarter post-listing, the company recorded revenue of JPY 562M and operating income of JPY 40M.

Item	Amount	YoY	vs. Guidance	Remarks
Revenue	JPY 562M	-	19.3% Achievement	YoY comparison unavailable as consolidated financials were not prepared for 1Q of the prior year
Operating Income	JPY 40M	-	9.5% Achievement	OPM 7.3% (full-year plan: 14.7%)
Recurring Profit	JPY 40M	-	9.5% Achievement	Non-operating items negligible (JPY -0M)
Net Income	JPY 26M	-	8.6% Achievement	Effective tax rate 36.1%
EPS	JPY 15.10	-	-	Diluted EPS JPY 14.33

Guidance Achievement Rate vs. Full-Year Plan: Revenue 19.3%, operating income 9.5% (no YoY comparison available; progress rate comparison not possible as consolidated financials were not prepared for 1Q of the prior year)