monoAI technology Co.,Ltd.

Business Details

Built on large-scale communication technology and AI technology cultivated through online game development, the segment consists of three categories: Metaverse Service, centered on OEM provision of the metaverse platform "XR CLOUD"; XR Event Service, which plans, produces, and operates virtual space events; and XR Peripheral Services / Industrial AX Solutions, which includes industrial AX solutions utilizing the AI agent platform "monoAI Agent". Targeting the domestic DX market, external sales of industrial AX solutions began from Q1 of FY2026 (ending December 2026).

Recent Overview

Net sales fell sharply by 67.8% year-on-year to ¥134 million, and the operating loss expanded significantly

In Q1 of FY2026 (ending December 2026) (January to March 2026), net sales were ¥134 million (down 67.8% year-on-year), gross profit was ¥30 million (down 82.9% year-on-year), and the operating loss expanded sharply to ¥143 million (compared to a loss of ¥9 million in the same period of the prior year). The cost of sales ratio worsened to 77.5% (57.4% in the same period of the prior year). SG&A expenses were compressed to ¥173 million from ¥186 million in the same period of the prior year, but this was not enough to absorb the impact of the sharp decline in sales. Cash and deposits decreased by ¥173 million in the quarter to ¥1,016 million. The full-year earnings forecast remains unchanged, with the Q1 progress rate on a sales basis standing at only about 15.6%. Note that a material event relating to going concern assumptions (operating loss, ordinary loss, and net loss for three consecutive fiscal years, and negative operating cash flow) continues to exist, but it has been determined that there is no material uncertainty given the sufficient cash balance.

Key Products

Growth Drivers

• Start of external sales of Industrial AX Solutions centered on the proprietary AI agent platform "monoAI Agent" (from Q1 of FY2026 ending December 2026)
• Effects of cost structure reforms carried out in FY2025 (ended December 2025), including the streamlining of unprofitable businesses, thorough in-house production, and reduction of SG&A expenses (SG&A expenses: ¥186 million in the same period of the prior year → ¥173 million in the current period)
• Overhaul of the organizational sales and marketing structure and promotion of larger-scale projects under the new management structure following the return of founder and President Kataro Honjo as Representative Director and President
• Expansion of the market, with domestic DX-related investment forecast to reach approximately ¥9.3 trillion by fiscal 2030
• Expansion of sales channels through the capital and business alliance with Dai Nippon Printing and the "Open Metaverse Network"
• Acquisition of new demand through progress in social implementation in the education and government sectors (including selection for the Tokyo Metropolitan Government's VLP program)

Risks

• Existence of material events relating to going concern assumptions due to operating losses, ordinary losses, and net losses for three consecutive fiscal years, as well as negative operating cash flow
• Q1 FY2026 (ending December 2026) net sales of ¥134 million represent only about 15.6% of the full-year forecast of ¥858 million, creating a risk to achieving the plan given the need for a significant sales recovery over the remaining three quarters
• Vulnerability of the revenue structure, with the cost of sales ratio worsening to 77.5% (57.4% in the same period of the prior year) amid a sharp 67.8% year-on-year decline in net sales, causing gross profit to shrink to ¥30 million
• A fixed-cost structure in which SG&A expenses of ¥173 million significantly exceed net sales of ¥134 million (SG&A-to-sales ratio of 129.5%)
• Uncertainty regarding the timing of monetization of new businesses such as Industrial AX Solutions
• Risk of revenue concentration among key clients such as Dai Nippon Printing, Pulse, and Odd Number
• Risk of deteriorating cash flow if losses continue, given that cash and deposits decreased by ¥173 million in a single quarter