Fines inc.

Business Details

Targeting small and medium-sized businesses (SMBs) and sole proprietors nationwide as its primary customers, the company provides DX consulting services that leverage data across two axes: the video distribution platform "Video Cloud" and the marketing platform "Raise." Cumulative number of client companies reached 24,022 (as of end-June 2025), with 6,384 companies having adopted Video Cloud. The segment accounted for 97.2% of sales composition in FY2025 (ended June 2025), making it effectively a single-business company. The company accumulates video viewing data and marketing data to visualize customer issues and promote cross-selling.

Recent Overview

Correction of an error in deferred tax asset recognition led to a significant downward revision of Q3 net income

Regarding the Q3 (FY2026, ending June 2026) financial results summary announced on May 15, 2026, an error was found in the accounting treatment for deferred tax assets and income tax adjustment amounts, and a correction was issued as of June 30, 2026. In the corrected cumulative Q3 results (July 1, 2025 to March 31, 2026), net sales remained unchanged at ¥1,844 million, but operating profit was revised downward from ¥61 million to ¥57 million, ordinary profit from ¥68 million to ¥64 million, and quarterly net income attributable to owners of parent was significantly revised downward from ¥44 million to ¥17 million. The primary cause was the income tax adjustment amount shifting from -¥23 million (a tax benefit) to approximately +¥0 million (near zero). Deferred tax assets were also reduced from ¥76 million to ¥53 million, and both total assets and net assets decreased by approximately ¥23 million each.

Key Products

Growth Drivers

• Continued tailwind from the expanding DX market (Fuji Chimera Research Institute estimates the market size will reach ¥9,266.6 billion by 2030)
• Expansion of the stock revenue base through accumulation of active SaaS contracts for Video Cloud (5,637 contracts, up 30% year-on-year)
• Increase in DX Consulting (Raise) active contracts (2,381) and rising unit price (¥8,945 per month)
• Improvement in gross profit margin (reduction in cost of sales) through focused sales efforts on website production and Raise-related services
• Subsequent event: business expansion into the recruitment placement domain and deployment of AI-powered RPO services through the acquisition of Orpla Co., Ltd. and Nexil Co., Ltd. as subsidiaries
• Expansion of solutions through new AI-powered services (MEO Navi, Fines Website AI Package)

Risks

• Concerns over the reliability of internal controls and accounting treatment following the discovery of an error in deferred tax asset recognition (this correction reduced net income by approximately 62%)
• Sluggish growth in new Video Cloud acquisitions due to a decline in the number of sales consultants (flow contract count: 1,474 in FY2025 ended June 2025, down from 1,592 in FY2024 ended June 2024, a declining trend)
• Declining trend in flow contract unit prices (Video Cloud: ¥1.32 million in FY2023 ended June 2023 → ¥1.20 million in FY2025 ended June 2025)
• Risk of rising cost of sales due to an increase in delivered website production projects with high outsourcing unit costs (post-correction SG&A expenses increased by ¥4 million compared to pre-correction figures)
• Integration risk associated with the subsidiarization of Orpla Co., Ltd. and Nexil Co., Ltd., and increased financial leverage due to a ¥700,000 thousand loan from Sumitomo Mitsui Banking Corporation
• Loan covenant requiring maintenance of consolidated subsidiary status (voting rights exceeding 50%), which triggers an obligation to repay the outstanding balance upon breach
• Impairment risk related to goodwill (¥843 million as of March 31, 2026) in the event business plans are not achieved