Scala, Inc.

Business Details

Centered on Scala Communications Inc. and Egg Inc., the company provides DX solutions utilizing IT/AI/IoT to major corporations, local governments, and government agencies. It operates diverse service lines including SaaS/ASP services (i-ask, i-search, etc.), web services, Customer Support Consulting, Furusato Nozei System / BPO, and system development for national policy projects. The company is promoting a shift toward a business structure that emphasizes monthly recurring revenue. This core segment accounts for approximately 53% of the Group's revenue.

Recent Overview

Revenue and profit both declined sharply due to the reversal effect from a large prior-period project; structural shift toward monthly recurring revenue is underway

In the cumulative third quarter of FY2026 (ending June 2026), DX Business revenue declined sharply to ¥3,350 million (down 8.2% year on year), and segment profit (after HQ cost allocation) fell to ¥301 million (down 59.6% year on year). The main cause was the reversal decline from one-time revenue associated with a large order received in the prior period, as well as a decline in lower-margin usage-based revenue. Meanwhile, at Egg Inc., inquiries for secretariat systems for central government ministries expanded, and one-time revenue from system development for a specific Furusato Nozei client grew. The company is promoting a shift toward a business structure emphasizing monthly recurring revenue, and states that the foundation for mid- to long-term growth is steadily being built.

Key Products

Growth Drivers

• Continued growth maintained through advancing AI utilization in existing SaaS/ASP services (i-ask, i-search, etc.)
• Stabilization of revenue through the promotion of a shift toward a business structure emphasizing monthly recurring revenue
• Expansion of secretariat system projects driven by increased fiscal year-end procurement solicitations at central government ministries such as the Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism
• Acquisition of one-time revenue through system development for a specific Furusato Nozei client
• Continued upfront investment in national policy projects with an eye toward future growth
• Maintenance of high productivity and revenue support from the Engineer Talent Business

Risks

• Risk of fluctuation in revenue and profit due to the reversal effect from large prior-period projects (materialized in cumulative Q3 of FY2026 (ending June 2026), with revenue down 8.2% and segment profit down 59.6% year on year)
• Continued impact of declining monthly revenue in system maintenance
• Risk of temporary/volatile revenue due to dependence on large-scale projects
• Difficulty securing development resources due to domestic IT talent shortages and upward pressure on labor costs
• Risk of price declines and share loss in existing services due to intensifying competition in the SaaS industry
• Impact on related businesses from changes to the Furusato Nozei system (such as the abolition of points)