Nextware Ltd.
4814・Standard Market・Information & Communication
Business
NextWare Co., Ltd. operates two businesses: an IT solutions business (Solutions Business) built on AI, cloud, and security, and an opera production and digital content business (Entertainment Business) run by its consolidated subsidiary, OSK Nippon Kagekidan Co., Ltd. In the Solutions Business, in addition to IT system consulting, design, development, and operation/maintenance, the company is driving a shift into next-generation AI fields such as Facial Recognition & Foot Traffic Analysis Solution, Next-Generation AI-Based Equipment Anomaly Prediction Service, Autonomous Drone Inspection Solution, and the Disaster Prevention & Infrastructure Maintenance Platform AI Solution. Its main customers are companies in the manufacturing, distribution/retail, construction, and public infrastructure sectors. The Entertainment Business aims to expand its brand through domestic and international performances and digital content distribution. The company listed on the Osaka Securities Exchange (now the Tokyo Stock Exchange Standard Market) in 2000.
Business Model
The Solutions Business generates its primary revenue from IT system contract development and operation/maintenance contracts with client companies, while providing added value through the sale and implementation support of proprietary AI solutions such as Facial Recognition & Foot Traffic Analysis Solution, equipment anomaly prediction, and drone inspection. The Entertainment Business derives revenue from ticket sales for self-produced performances, Corporate Revue Shows contracts, digital content distribution, and the acquisition of sponsor companies through the shareholder benefit program. Funding needs are primarily covered by internal funds, with low reliance on external borrowing.
Company Strengths
The company hired and is developing 30 new graduate engineers who joined in April 2025 as next-generation AI talent, and recorded R&D expenses of ¥82,885 thousand. It advanced the technical groundwork for commercialization, including favorable results from a demonstration test of an autonomous drone inspection solution in underground tunnel spaces. R&D is being continued across five fields, including facial recognition, equipment anomaly prediction, and AI governance.
The equity ratio remained at a high level of 72.6% as of the end of FY2026 (ending March 2026). The outstanding balance of long-term borrowings is extremely small, and cash outflow from financing activities was limited to ¥1 million. Even after recording extraordinary losses, net assets of ¥760 million were secured, and it has been confirmed that this reflects a revaluation of assets that did not involve any new cash outflow.
The OSK Nihon Kagekidan (OSK Japan Revue Company), which marked its 100th anniversary in 2022, appeared in the 2023 NHK morning drama series "Boogie Woogie," performed at events related to the 2025 Osaka-Kansai Expo, and gave performances in Manchester, England. The annual securities report notes that the shareholder benefit program introduced in August 2024 is contributing to the acquisition of new customers and sponsoring companies.
ENVALITH's Perspective
Performance Trend
Net sales contracted from ¥2,919 million in FY2022 (ended March 2022) to ¥2,820 million in FY2024 (ended March 2024), then recovered to ¥3,010 million in FY2025 (ended March 2025), before declining again to ¥2,875 million in FY2026 (ending March 2026). Operating loss expanded to a record ¥282 million in FY2026 (ending March 2026). The primary external factor was the rapid contraction of demand for conventional system development as corporate IT investment shifted toward cloud and next-generation AI domains. In addition, in the Entertainment Business, an increase in appearances at events related to the Osaka-Kansai Expo led to a decrease in the number of highly profitable self-produced performances, causing ticket sales to fall below the same period of the prior year. Due to the recognition of ¥186 million in extraordinary losses (¥124 million in valuation losses on investment securities and ¥62 million in impairment losses), net loss for the period reached ¥462 million, and net assets declined from ¥1,222 million to ¥760 million.
Growth Strategy
Business structure transformation centered on next-generation AI utilization and migration to a cloud-based, stock-type revenue model
Personnel development is being carried out for 30 new-graduate engineers who joined in April 2025, while recruitment activities are being promoted for engineers scheduled to join in April 2026. Research and development expenses related to the creation of next-generation AI solutions are being recorded, and development standardization and skill asset accumulation through the application of agentic AI development processes are being advanced.
Demand is expanding for the service as a means of supporting the transfer of internal operational knowledge, against a backdrop of an aging skilled workforce and personnel shortages. The company aims to capture strong latent demand by advancing the solution toward a support-oriented system through the expansion of functions incorporating next-generation AI technology.
Against the backdrop of deteriorating domestic public infrastructure (infrastructure crisis), favorable results were obtained in technical demonstration testing in dark, confined underground tunnel spaces. Technical validation toward commercialization is progressing, and the company continues to promote commercialization as a key investment focus area.
The company is promoting a shift from the conventional flow-type revenue model centered on contract development to a cloud-based business model, aiming to establish stable stock-type cash flow. While reviewing its business portfolio, the company is thoroughly implementing investment and management practices that emphasize profitability and capital efficiency.
Building on the growing recognition of the OSK Nippon Kagekidan (OSK Japan Revue), the company aims to expand regional performances and acquire new customer segments through overseas performances (in the UK, Manchester, etc.). It is promoting revenue diversification away from dependence on ticket revenue by strengthening Corporate Revue Shows and enhancing secondary use of content. In FY2026 (ending March 2026), the segment fell into a loss of ¥72 million, and re-establishing a stable revenue base remains a challenge.
Last updated: July 19, 2026