Delivery Consulting Inc.

Business Details

Guided by the corporate philosophy of "technology consulting that transforms Japan's IT services," the company supports clients' DX by leveraging advanced technologies such as cloud-native environments, generative AI, data analytics infrastructure, and business process automation. Centered on three services—Digital Migration, Data Strategy, and Intelligent Automation—the company provides support from concept development through implementation and in-house capability building. Major customers are Trans Cosmos Inc. (15.2% of net sales) and Accenture Japan Ltd (10.1% of net sales).

Recent Overview

Net sales up 8.1% and operating profit rebounded roughly six-fold year on year in cumulative 3Q

In the cumulative third quarter of FY2026 (ending July 2026) (August 2025 to April 2026), net sales significantly improved to ¥2,162 million (up 8.1% year on year) and operating profit rose to ¥167 million (up 497.7% year on year). The company secured revenue growth through expanded collaboration with partners including Nippon Steel Solutions, while curbing outsourcing costs through improved consultant utilization rates. SG&A expenses decreased by ¥54 million to ¥694 million from ¥748 million in the same period of the prior year, resulting in a significant improvement in profit margins. During the third quarter, the company hired close to 40 new graduates and mid-career staff combined, but fell short of its hiring plan. The full-year earnings forecast (net sales of ¥3,098 million, operating profit of ¥172 million) remains unchanged, with operating profit reaching 97.3% of the full-year forecast as of the cumulative third quarter.

Key Products

Growth Drivers

• Increased order intake through expanded capital and business alliances and collaboration with partners including Nippon Steel Solutions Corporation
• Deepening of existing client relationships and increased sales per client through the establishment of a dedicated account management department
• Improvement in gross margin (39.8% cumulative 3Q) through curbed outsourcing costs resulting from higher consultant utilization rates
• Increased demand driven by the expansion of the domestic DX market (projected to reach ¥8,035.0 billion by 2030, CAGR of 11.0%)
• Creation of new revenue opportunities such as Data Literacy Engineering (DLE) and AI agent-related services
• Expansion of the service lineup through a sales agency partnership agreement concluded with Accenture Japan Ltd
• Robust client demand for generative AI, cloud-native, and business process automation solutions

Risks

• Risk that hiring plans will not be met due to industry-wide tightness in labor supply and demand (hiring fell short of plan even during the third quarter)
• Risk of revenue dependence on specific customers (Trans Cosmos 15.2%, Accenture 10.1%)
• Risk of profit pressure from increased SG&A expenses such as personnel costs, recruitment-related expenses, training costs, and advertising expenses
• Risk of clients curtailing DX investment due to macroeconomic uncertainty stemming from factors such as Middle East tensions, US trade policy, and volatility in financial and capital markets
• Risk of declining competitiveness due to delayed response to rapid technological evolution in areas such as generative AI and cloud
• Risk of a downturn in new project acquisition following the completion of large-scale projects
• Risk of a downward revision due to additional cost recognition in the fourth quarter, given that cumulative third-quarter operating profit has nearly reached the full-year forecast level