SystemSoft Corporation

Business Details

Provides system development and solution services over many years to customers in the real estate, information and communications, life and non-life insurance, and education sectors. In addition to operating a rental real estate information site, providing RPA Solution Services, and offering SaaS including the SS Cloud Series (SaaS), the segment now also encompasses the SES Business & DX Consulting (Wasabi / Green&Digital Partners) business conducted by Wasabi Inc. and Green&Digital Partners, which became subsidiaries in October 2025. For the first half of FY2026 (ending September 2026), this segment accounted for ¥602 million of consolidated net sales of ¥636 million, making it the mainstay segment.

Recent Overview

Net sales up 40.6% and segment profit turned positive, driven by contributions from two subsidiaries

In the first half of FY2026 (ending September 2026) (October 2025 to March 2026), net sales of the Technology Business were ¥602 million (up 40.6% from ¥428 million in the same period of the prior year). Segment profit turned positive at ¥10 million (versus a segment loss of ¥8 million in the same period of the prior year). The main factor was the full six-month contribution of the results of Wasabi Inc. and Green&Digital Partners, which became subsidiaries on October 1, 2025. Existing projects also performed steadily. The goodwill balance increased to ¥224 million (from ¥175 million at the prior fiscal year-end), and the associated amortization burden is expected to continue going forward.

Key Products

Growth Drivers

• Expansion of business scale through M&A: The subsidiarization of Wasabi Inc. and Green&Digital Partners added SES and DX consulting functions, contributing to both net sales and profit exceeding the same period of the prior year
• Strong demand for IT and DX-related services: Continued rise in corporate appetite for system investment aimed at improving productivity and strengthening competitiveness
• Steady progress of existing projects: Existing customer projects in the real estate, telecommunications, life and non-life insurance, and education sectors have generally progressed smoothly
• Revenue diversification through SaaS and RPA solutions: Building up recurring revenue through the SS Cloud Series (SaaS) and RPA Solution Services
• Subsequent events: Further M&A and site expansion are planned, backed by ¥893 million secured for corporate acquisitions and ¥100 million secured for establishing a new Kyushu base, funded by a third-party allotment of new shares (proceeds of ¥1,008 million)

Risks

• Chronic shortage of engineering talent: Intensifying competition for hiring makes it difficult to secure necessary technical personnel, driving up recruitment and training costs
• Goodwill amortization burden: Future amortization burden of goodwill arising from the subsidiarization (provisional ¥59 million, period-end balance ¥224 million); the amortization period is currently being determined
• Incurrence of M&A-related expenses: Advisory fees and other costs of ¥31 million associated with the subsidiarization were recorded as expenses for the period, pressuring profitability
• Burden of company-wide expenses: Company-wide expenses of ¥108 million for the first half exceeded segment profit of ¥32 million, becoming the main cause of the consolidated operating loss of ¥75 million
• Dilution risk from third-party allotment of new shares: As a subsequent event, 21,000,000 shares (issue price ¥48) were issued in April 2026, diluting the equity interests of existing shareholders