PRIME STRATEGY CO.,LTD.

Business Details

The core business segment of GMO Prime Strategy. Built on the ultra-high-speed CMS execution environment "KUSANAGI," the company operates three services: "KUSANAGI Managed Service byGMO," a subscription-based maintenance and operation service for corporate websites; a cloud integration service handling cloud infrastructure construction and migration; and sales of paid licenses. An AI business segment was newly established as of this interim period, but due to its limited materiality, it continues to be disclosed as a single reporting segment.

Recent Overview

Revenue rose 8.7% year on year to ¥470 million, but operating profit declined 8.1% due to increased costs

In the second quarter (interim period) of FY2026 (ending December 2026), sales related to KUSANAGI Managed Service byGMO were strong, and revenue reached ¥470 million, up 8.7% year on year. On the other hand, due to various expenditures directed toward mid- to long-term growth and increased outsourcing costs, cost of sales rose 14.4% year on year to ¥216 million and SG&A expenses rose 9.1% year on year to ¥190 million, limiting operating profit to ¥63 million (down 8.1% year on year). In addition, an AI business segment was newly established as of this interim period (AI Automated Grading Solution, GMO AI RAG). The company's group joining of the GMO Internet Group was completed on December 26, 2025, and efforts to strengthen business synergies are progressing. The full-year forecast (13-month fiscal period) remains unchanged at revenue of ¥1,124 million and operating profit of ¥70 million.

Key Products

Growth Drivers

• Continued revenue expansion through new customer acquisition for KUSANAGI Managed Service byGMO and large-scale orders from existing customers
• Strengthened business synergies and expanded customer base through the group joining of the GMO Internet Group (completed December 26, 2025)
• New development in the AI business domain through the release of the AI Automated Grading Solution and GMO AI RAG
• Expanded sales of KUSANAGI Paid License through enhanced marketing and product capabilities
• Steady overall industry IT demand backed by expanding corporate investment in digitalization and operational efficiency
• Expanding market opportunities driven by the spread of advanced technology investment utilizing cloud and generative AI

Risks

• Declining profit margins due to continued increases in mid- to long-term growth investments (personnel expansion, marketing, outsourcing costs) (operating margin of 13.5% in this interim period, down 2.4 percentage points year on year)
• Unexpected increases in cancellations for KUSANAGI Managed Service (per existing reports: cancellation rate rose from 1.3% to 1.5%, number of cancelling customers rose from 17 to 21)
• Revenue dependence on Sumitomo Realty & Development Co., Ltd. (17.3% of revenue in FY2025 (ending November 2025)) and the risk of a year-on-year decline in that company's sales
• Risk of downside to results if monetization of the AI business (GMO AI RAG, etc.) falls short of expectations
• Risk of reduced IT investment due to deteriorating economic conditions stemming from unstable global conditions, resource price trends, and foreign exchange fluctuations
• Limited transparency in progress management due to difficulty in comparing year-on-year growth rates for the full-year forecast (13-month fiscal period)
• Risk of downside to earnings forecasts if targets for effective leads, negotiations, and order amounts are not achieved