Nihon Knowledge Co.,Ltd.
5252・Growth Market・Information & Communication
Verification Business
Core business providing software testing and quality verification services (approx. 59% of net sales)
| Period | Current | Previous | Change |
|---|---|---|---|
| Segment net sales | ¥2,676 million (FY2026, ending March 2026) | ¥2,766 million (FY2025, ended March 2025) | ↓ |
| Segment profit (gross profit basis) | ¥379 million (FY2026, ending March 2026) | ¥493 million (FY2025, ended March 2025) | ↓ |
| Segment profit margin | 14.2% (FY2026, ending March 2026) | 17.8% (FY2025, ended March 2025) | ↓ |
| Depreciation | ¥6 million (FY2026, ending March 2026) | ¥6 million (FY2025, ended March 2025) | — |
| Share of consolidated net sales | Approx. 59% (FY2026, ending March 2026) | – (no comparison, as this is the first year of consolidation) | — |
Business Details
Provides an integrated offering across quality planning, test analysis and design, test execution, and consulting within the systems development process. Key customers include information systems departments of major SIer groups and package software vendors. Covers embedded software, enterprise systems, and web systems, with the Test Automation Service serving as the core of its competitive advantage. In FY2026 (ending March 2026), the company won test automation contracts from multiple customers, building up a track record, while personnel costs increased due to proactive hiring and training investment.
Recent Overview
Built up track record from test automation contracts with multiple customers, though profit margin declined due to increased personnel costs
In FY2026 (ending March 2026), the first year of consolidation, the Verification Business posted net sales of ¥2,676 million and segment profit of ¥379 million. Compared with the prior year on a non-consolidated basis (net sales of ¥2,766 million, profit of ¥493 million), both net sales and profit declined. While continued promotion of test automation led to an accumulation of contract wins from multiple customers, personnel costs and other expenses increased due to proactive hiring and training investment in preparation for future business expansion, causing the profit margin to decline to 14.2% (from 17.8% in the prior year).
Key Products
Growth Drivers
- Continued increase in demand for software testing outsourcing (third-party verification) driven by expanding corporate IT investment and DX promotion
- Continued expansion of Test Automation Service contract wins (accumulation of track record across multiple customers)
- High barrier to entry and high retention rate in enterprise systems, leveraging business knowledge and development know-how
- Expansion of the company's discretionary scope and shift toward higher-priced orders through an increased proportion of direct (prime contractor) contracts
- Expanded coverage and access to new customer groups through collaboration with subsidiary Artechs
Risks
- Risk that increased personnel costs from proactive hiring and training investment will pressure profit (materialized as a decline in profit margin in FY2026, ending March 2026)
- Risk that securing and training test engineers becomes a constraint on business expansion
- Risk of sales concentration in the key customer (Otsuka Corporation)
- Risk of declining competitiveness if the company falls behind in verification technology for AI and increasingly sophisticated systems
- Risk of expanded entry by industry peers into the test automation domain
Last updated: June 24, 2026