circlace Inc.

Business Details

Leveraging world-leading cloud platforms such as Salesforce, Anaplan, AWS, and Microsoft, this segment comprehensively supports business process design, system construction, data utilization, organizational transformation, and human resource development. It consists of three services: "Consulting," "AI&Data Innovation," and "SaaS Service (AGAVE)." The company aims to grow through both upselling to existing customers and acquisition of new customers, while capturing demand for DX promotion and generative AI implementation.

Recent Overview

Revenue up 7.9% YoY, but segment profit down 28.2% due to increased human capital investment

Consulting Business revenue for FY2026 (ending March 2026) reached ¥3,498 million (up 7.9% year on year), securing revenue growth. AI&Data Innovation and the SaaS Service (AGAVE) performed solidly, with AGAVE performing well due to the implementation of new features such as overseas payroll calculation. On the other hand, the Consulting division fell short of some expectations. Selling, general and administrative expenses expanded due to continued increases in personnel expenses, recruitment costs, and outsourcing expenses, resulting in a significant decline in segment profit to ¥231 million (down 28.2% year on year).

Key Products

Growth Drivers

• Continued expansion of DX promotion demand: Corporate investment toward modernization of core systems, cloud migration, and generative AI implementation in business operations remains solid
• Solid performance of AI&Data Innovation: Demand for data infrastructure development and AI implementation support is expanding against the backdrop of expanding business applications of generative AI
• Expansion of AGAVE (SaaS) features: Upselling effects and new customer acquisition continue through the implementation of new features such as overseas payroll calculation
• Deepening relationships with existing customers: Improving customer satisfaction and upselling, as well as expanding new customer acquisition opportunities, are progressing
• Expanding needs accompanying deeper cloud utilization: Demand for continuous support such as strengthening security and data governance, cost optimization, operational sophistication, and adoption support is increasing

Risks

• Tightening supply-demand balance for digital talent: Intensifying recruitment competition has increased personnel expenses, recruitment costs, and outsourcing expenses, pressuring profit, with segment profit becoming apparent as down 28.2% year on year in FY2026 (ending March 2026)
• Fluctuations in Consulting division utilization rates: Consulting revenue fell short of some expectations in FY2026 (ending March 2026), with the impact on profit continuing
• Trade-off between revenue growth and profit margin: Risk that mid- to long-term investment in strengthening the organizational structure (human capital investment) will push down short-term profit margins
• Quality and delivery management risk accompanying increasing project complexity: The importance of quality control and delivery management is increasing as project scale expands and complexity increases
• Outstanding convertible bonds with stock acquisition rights: ¥48 million (as of end of FY2026, ending March 2026) of convertible bonds with stock acquisition rights scheduled for redemption within one year remain outstanding, requiring attention to the impact on fund liquidity