EM SYSTEMS CO.,LTD.

Business Details

This is the core business of EM Systems, which develops, sells, and maintains pharmacy-oriented systems (Pharmacy Dispensing System and Network System). In addition to delivering proprietary software installed on personal computers, the company also provides an ASP service that enables information sharing among group pharmacies and centralized management by headquarters. Against consolidated net sales of ¥5,039 million in Q1 FY2026 (ending December 2026), this segment accounted for ¥4,068 million in external sales, making it the largest segment. Consolidated subsidiaries such as Good Cycle System Co., Ltd. and Unique Software Research Co., Ltd. handle sales.

Recent Overview

Sales and profit declined sharply as concentrated demand for Online Eligibility Verification and Electronic Prescription systems ran its course

In Q1 FY2026 (ending December 2026), the Pharmacy Dispensing System Business recorded net sales of ¥4,068 million (down 25.8% year on year) and operating profit of ¥374 million (down 74.4% year on year), a significant decline in both revenue and profit. The main cause was that the concentrated demand associated with the installation of Online Eligibility Verification System-related optional software and Electronic Prescription systems has run its course. In addition, the shift of sales resources toward acquiring new customers from other vendors and toward value-added products, along with the suppression of promotion of replacements among existing customers, also contributed to the decline in sales. On the other hand, billing revenue reached ¥1,801 million, exceeding the ¥1,775 million recorded in the same period of the previous year, and stock-type recurring revenue continues to steadily accumulate.

Key Products

Growth Drivers

• Continued accumulation of billing revenue (ASP/stock-type recurring revenue) (¥1,801 million in Q1 FY2026 ending December 2026, up ¥26 million year on year)
• Development and provision of new value-added services leveraging advanced technologies including generative AI, in response to various fee schedule revisions
• Strategy to expand wallet share in the dispensing pharmacy field under the medium-term management plan for FY2025-FY2027 (expansion of management option features and price optimization)
• Faster decision-making through the introduction of the company system, along with strengthened inside sales and utilization of digital marketing
• Expansion of the mid- to long-term customer base through a strategic shift to prioritize allocation of sales resources toward acquiring new customers from other vendors
• Improved service quality and operational efficiency through the introduction of AI tools at call centers and AI utilization in internal operations

Risks

• The reactionary decline following the completion of temporary, policy-driven concentrated demand for the Online Eligibility Verification System and Electronic Prescription System became apparent in Q1 FY2026 (ending December 2026) (initial sales fell 44.8% year on year to ¥1,668 million)
• The possibility that the sales strategy shift to suppress promotion of replacement among existing customers will continue to depress sales and profit in the short term
• Since shifting focus to acquiring new customers from other vendors takes time to bear fruit, the timing of a sales recovery remains uncertain
• Risk that demand trends will be affected depending on the content of medical DX-related policy changes and fee schedule revisions
• The goodwill balance has increased to ¥2,340 million (on a consolidated basis, including ¥341 million in goodwill arising from the acquisition of Conduct Co., Ltd. in the Long-Term Care/Welfare System Business), warranting attention to future impairment risk
• Operating margin has fallen sharply from 26.6% in the same period of the previous year to 9.2%, revealing the heavy burden of fixed costs