MIGALO HOLDINGS Inc.
5535・Prime Market・Real Estate
DX Promotion Business
DX and AI Promotion Business continuing upfront investment as a growth pillar for the Group
| Period | Current | Previous | Change |
|---|---|---|---|
| Revenue (FY2026, ending March 2026) | ¥4,479 million | ¥3,765 million (FY2025, ended March 2025) | ↑ |
| Operating profit (FY2026, ending March 2026) | ¥366 million | ¥76 million (FY2025, ended March 2025) | ↑ |
| Segment assets (end of FY2026, ending March 2026) | ¥3,730 million | ¥2,492 million (end of FY2025, ended March 2025) | ↑ |
| Number of FreeiD condominium installations (end of FY2026, ending March 2026) | 376 buildings | 1.8x year-on-year | ↑ |
| Unamortized goodwill balance (end of FY2026, ending March 2026) | ¥642 million | ¥558 million (end of FY2025, ended March 2025) | ↑ |
| Goodwill amortization (FY2026, ending March 2026) | ¥81 million | ¥55 million (FY2025, ended March 2025) | ↑ |
Business Details
A business providing smart city solutions centered on the facial recognition ID platform (FreeiD), along with digital integration, contract system development, and cloud system implementation and operation support. This includes DXYZ Inc., Avant Corporation, TIERO Co., Ltd., CloudTechPlus Co., Ltd., Terra Web Create Co., Ltd., and U-System Creation Co., Ltd. The basic policy is accelerated growth through M&A and active hiring, and while the upfront investment phase continues, the segment achieved significant profitability during the current period.
Recent Overview
Profitability accelerated amid continued upfront investment, with operating profit surging 384% year-on-year
In FY2026 (ending March 2026), the DX Promotion Business achieved revenue of ¥4,479 million (up 19.0% year-on-year) and operating profit of ¥366 million (up 384.0% year-on-year). During the period, the company acquired two digital integration companies, Terra Web Create Co., Ltd. and U-System Creation Co., Ltd. In addition, synergies were strengthened through group reorganization, including the merger of Banners Inc. and Best Practice Co., Ltd. (renamed TIERO Co., Ltd.), Avant Corporation's absorption-type merger of Omniscience Co., Ltd., and the business succession from CB Lab Co., Ltd.
Key Products
Growth Drivers
- Expansion of FreeiD condominium installations (376 buildings as of the end of FY2026, ending March 2026, 1.8x year-on-year) and accumulation of recurring revenue
- Continued expansion of engineering talent and group companies through M&A (two companies acquired in the current period: Terra Web Create and U-System Creation)
- Increase in orders and efficient project handling through in-group synergies (mutual utilization of skills, know-how, and track records) and personnel exchange
- Expansion of the AI solutions business and productivity improvements through AI Campus, AXiS, and In-house AI Lab
- High level of domestic DX and software investment against the backdrop of labor shortages and demand for labor-saving measures
- Improved business operation efficiency and faster decision-making through in-group reorganization (mergers and corporate splits)
Risks
- Cost increase pressure from the continued upfront investment phase (hiring, M&A, FreeiD new feature development, promotional advertising expenses)
- Risk that the success of post-M&A PMI (integration) directly affects the realization of group synergies
- Risk of rising hiring costs and talent attrition due to intensifying competition for engineers
- Risk of deteriorating performance at acquired companies (goodwill balance of ¥642 million, 10-year amortization period)
- DX Promotion Business revenue accounts for only about 7.8% of consolidated total revenue, remaining at a stage with a small absolute revenue scale
- Actual profitability after allocation of company-wide expenses is low, with the company-wide expense adjustment of ¥1,546 million significantly weighing on segment profit
Last updated: June 23, 2026