Tera Technology, Inc.
483A・Standard Market・Information & Communication
Tera Technology, Inc.
483A・Standard Market・Information & Communication
Business
Tera Technology Co., Ltd. is an independent systems development company founded in 1991, operating through a two-company structure that includes one consolidated subsidiary (Knowledge Engineering Co., Ltd.). The company provides end-to-end services from requirements definition through design, development, testing, and maintenance across five sectors: Public Sector (government agencies and municipalities), Telecommunications (major carriers), Information Services (cloud and e-commerce), Financial (banks and securities firms), and Manufacturing and Other (IoT and automotive). Major clients are primarily large IT vendors and SIers such as Fujitsu and TIS, accounting for approximately 70% of business, while the ratio of direct contracts with end clients has risen to 32.0%. The company listed on the TSE Standard Market in December 2025.
Business Model
The company receives outsourced system development contracts from clients and organizes teams primarily composed of its own full-time engineers (subcontracting ratio approximately 20%) to provide development and maintenance services. The 3-to-4-year continuous order cycle of development → operation and maintenance → next-phase development forms the foundation of stable earnings, with the continuous order rate reaching 94.0% in FY2026 (ending March 2026). Direct contracts with end customers carry higher gross profit margins, and an increasing proportion of direct contracts is contributing to improved profitability.
Company Strengths
The continuation order rate for FY2026 (ending March 2026) was 94.0%. The company has maintained continuous transactions with a major information provision service company since 2005 and with a major telecommunications carrier since 2012. It has been certified as a core partner of Fujitsu (since 2007) and as an organizational strategy partner of TIS (since 2023), and long-term relationships of trust with major IT vendors and SIers form the foundation of stable order intake.
The retention rate of new graduate employees three years after joining was 91.3% (significantly exceeding the information and communications industry average of 72.8%). This high retention rate allows the company to control its outsourcing ratio at approximately 20%, enabling high-quality project operations by its own employees. The accumulation of know-how within the company is also contributing to improved profit margins.
As of the end of FY2026 (ending March 2026), the balance of interest-bearing debt was zero. The equity ratio was 76.4% (up 3.3 percentage points from 73.1% at the end of the previous fiscal year). Cash and cash equivalents stood at ¥1,910,246 thousand, and free cash flow was a surplus of ¥321,450 thousand. The company maintains sound financial health while retaining capacity for growth investment.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), the company achieved revenue of ¥4,749 million (+8.2% year on year), operating profit of ¥556 million (+9.6%), and net income attributable to owners of the parent of ¥413 million (+10.2%), marking three consecutive years of revenue and profit growth. The operating margin improved slightly to 11.7% (from 11.6% in the prior period). The Telecommunications Sector Systems Development business led growth with a 32.0% increase year on year, while the Public Sector Systems Development business declined 3.1% due to a lull between large-scale projects. In terms of the external environment, expanding demand for DX investment in the market underpinned orders in the Information Services Sector Systems Development and Manufacturing and Other Sectors Systems Development businesses. Due to the recording of listing-related expenses (¥16,509 thousand), the growth in ordinary profit slightly lagged behind that of operating profit, but this was a one-time factor. The equity ratio improved to 76.4% (from 73.1% in the prior period), reflecting stronger financial soundness. For FY2027 (ending March 2027), the company has disclosed a forecast of revenue of ¥4,976 million (+4.8%) and operating profit of ¥577 million (+3.9%).
Growth Strategy
Promoting the capture of DX demand across five sectors and the expansion of direct contracts, along with expanding order-taking capacity through the strengthening of development personnel
Against the backdrop of progress in in-house development driven by DX promotion, the company is advancing a shift from transactions via major IT vendors to direct transactions with telecom carriers. In FY2026 (ending March 2026), sales in the Telecommunications Sector expanded sharply, up 32.0% year on year, and a further 18.7% increase is expected in the FY2027 (ending March 2027) forecast. A rise in the direct transaction ratio directly contributes to improvement in the gross profit margin.
A strategy of expanding the scale and number of orders that can be accepted through personnel expansion, based on a target of increasing development division employee headcount every period. In FY2026 (ending March 2026), SG&A expenses increased 13.9% year on year, reflecting continued investment in recruitment and training. The degree to which the headcount increase target is achieved is a rate-limiting factor for sales growth.
The listing on the TSE Standard Market in December 2025 has enhanced corporate credibility and brand recognition. The company aims to leverage this to strengthen recruiting competitiveness and develop new customers (particularly to expand direct clients). Listing-related expenses were recorded as a one-time cost in FY2026 (ending March 2026), and this expense burden will disappear from the following period onward.
In the Financial Sector, the company is advancing the launch of payment service projects and expanding the framework for existing projects, forecasting sales of ¥652 million in FY2027 (ending March 2027), up 19.2% year on year. In the Manufacturing and Other Sectors, the company has launched new projects for trading companies and manufacturers, aiming to expand orders for IoT-related software development. The FY2027 (ending March 2027) forecast is ¥1,191 million, up 12.3% year on year.
Last updated: July 19, 2026