ENVALITH
株式会社ジーデップ・アドバンス logo

GDEP ADVANCE, Inc.

5885・Standard Market・Wholesale Trade

Official website
株式会社ジーデップ・アドバンス logo
GDEP ADVANCE, Inc.5885

Business

GDEP ADVANCE, Inc. operates under the mission "Advance with you – Let's move the world forward," providing a System Incubation Business centered on cutting-edge GPU servers for researchers and developers in the fields of AI, visualization, and big data, as a single reporting segment. Certified as a partner by NVIDIA, Intel, and AMD, the company offers one-stop services ranging from hardware planning and design to construction and operational support. Its main customers are research institutions, universities, and corporate R&D departments in Japan, and it has been steadily winning large-scale AI infrastructure projects amid the accelerating practical adoption of generative AI. Headquartered in Sendai City, the company listed on the Standard Market of the Tokyo Stock Exchange in June 2023.

Business Model

The majority of revenue is generated by the flow-type DX Service business, centered on hardware sales such as GPU servers (FY2025 (ended May 2025): ¥6,154 million, 92.8% of sales). Meanwhile, Service & Support (¥476 million, 7.2%), which provides post-installation maintenance and operational support, has a structure that accumulates as stock-type revenue, continuing to grow strongly at 32.7% year-on-year. Preferential purchasing terms and rebates received through partner certifications such as NVIDIA support cost competitiveness, and the company has set an operating margin target of 10% or higher as a management goal, achieving 12.7% in FY2025 (ended May 2025).

Company Strengths

The company holds NVIDIA Elite and Preferred certifications (7 certifications in total including LLP), Intel Gold certification, and AMD Elite certification. These certifications enable early access to the latest technology information, preferential purchasing terms, receipt of sales promotion subsidies and rebates, and customer referrals, securing an advantage in procurement costs and information relative to competitors.

Revenue grew 75.5% over two years, from ¥3,779 million in FY2023 (ended May 2023) to ¥6,631 million in FY2025 (ended May 2025). Growth accelerated to 50.0% year-on-year in FY2025 (ended May 2025). Operating profit also expanded over the same period, from ¥557 million to ¥840 million, maintaining an operating profit margin of 12.7%, which exceeds the company's own target of 10%.

Service & Support recorded ¥476 million (up 32.7% year-on-year) in FY2025 (ended May 2025). The provision of ongoing operational support to customers who have adopted DX services forms a "positive spiral" that leads to the creation of the next flow deals, and stock-type revenue, including subscriptions, is reinforcing a stable earnings base.

ENVALITH's Perspective

Revenue growth for FY2026 (ending May 2026) slowed sharply from 50.0% in the prior period to 4.8%, while profits accelerated, with operating profit up 33.0% and ordinary profit up 47.1%. The main driver was an absolute decline in cost of sales compared with the prior period (the ratio of material costs fell from 98.3% to 97.1%), and the reversal to a foreign exchange gain of ¥41 million (versus a loss of ¥63 million in the prior period) also boosted ordinary profit. It will be necessary to determine whether the slowdown in revenue growth is temporary or structural.

Cash flow from operating activities for FY2026 (ending May 2026) turned sharply negative at ¥-1,450 million (versus +¥596 million in the prior period). The main causes were a ¥1,065 million increase in merchandise inventory and a ¥1,608 million increase in advance payments, reflecting aggressive advance purchasing, and cash and cash equivalents declined from ¥3,334 million to ¥1,772 million. This can be interpreted as a strategic investment aimed at capturing next-period demand, but continued monitoring is needed of the inventory risk and impact on cash flow should the anticipated purchasing demand fail to materialize.

The earnings forecast for FY2027 (ending May 2027) calls for revenue of ¥8,840 million (+27.2%), operating profit of ¥1,269 million (+13.6%), and net income of ¥829 million (+5.4%). While revenue growth is expected to reaccelerate, profit growth is projected to remain limited at 5.4% on a net income basis. An increase in selling, general and administrative expenses (expected to rise from ¥618 million) and the risk of the foreign exchange gain not recurring could put pressure on margins. External risks also remain, including geopolitical risk and trends in semiconductor export regulations, which could affect procurement costs and delivery times.

Growth Strategy

Three pillars: migration to upper-layer solutions, expansion of the ecosystem, and growth of recurring (stock-type) revenue

The company is shifting from sales of standalone GPU servers to upper-layer solutions combining multiple AI servers, aiming to raise per-project unit prices and gross margin. The improvement in gross margin to 25.0% in FY2026 (ending May 2026) (from 20.2% in the prior fiscal year) is consistent with this direction.

The company is deepening partnerships with domestic system integrators (SIers) to strengthen its joint order-taking structure for AI infrastructure construction projects. From FY2026 (ending May 2026) onward, demand related to physical AI (robotics and autonomous control), particularly for R&D and demonstration environment development, has become apparent as a new growth area being captured.

The balance of long-term advances received has steadily accumulated to ¥606 million (from ¥503 million in the prior fiscal year). Together with the policy of raising the dividend payout ratio each fiscal year (23.0% in FY2025, 30.4% in FY2026, and a projected 31.8% in FY2027), the company continues to strengthen its stable revenue base. The current proportion of recurring revenue remains low, leaving further room for expansion.

Last updated: July 17, 2026