PCA CORPORATION

Business Details

PCA Corporation primarily serves small and medium-sized enterprises with 20 to 300 employees, providing core business applications such as accounting, payroll, and sales management as cloud services (PCA Cloud), on-premises subscriptions (PCA Subsc), and peripheral cloud services (PCA Hub). The company relies mainly on agency sales, with Ricoh Company, Ltd. and Fujifilm Business Innovation Corp. as major sales channels. The group, including subsidiaries Chronos Inc. (attendance management) and Tyrell Systems Co., Ltd. (joined the group in August 2025), operates the Information Services Business as a single segment.

Recent Overview

Revenue increased, but operating profit declined due to increased development investment, while net profit rose sharply on gains from sale of securities

In FY2026 (ending March 2026), revenue increased to ¥17,306 million (up 6.6% year on year), but the net increase in development personnel costs and outsourcing expenses aimed at achieving the medium-term management plan rose 16.1% year on year, causing operating profit to decline to ¥2,463 million (down 6.6% year on year). Ordinary profit also declined 7.2% due to the recognition of a ¥70 million loss on investment partnership operations. On the other hand, the recognition of a ¥887 million gain on sale of investment securities led to a significant increase in profit attributable to owners of parent to ¥2,355 million (up 35.3% year on year). ARR reached ¥11,320 million (up 14.4% year on year) and the number of billed contracts reached 43,857 (up 24.0% year on year), with KPIs of the recurring billing model expanding steadily. In August 2025, the company welcomed Tyrell Systems Co., Ltd. into the group, strengthening product development capabilities. The dividend policy was changed from a consolidated payout ratio of approximately 100% to a DOE of approximately 4.5%, with the projected dividend for FY2027 (ending March 2027) set at ¥40 (a significant decrease from ¥95 in the prior period).

Key Products

Growth Drivers

• Continued expansion of cloud service contracts: the number of billed contracts grew 24.0% year on year to 43,857, and ARR grew 14.4% year on year to ¥11,320 million, maintaining high growth
• Acceleration of the shift to a stock-type revenue model through promotion of migration to PCA Subsc following the discontinuation of packaged software sales (end of March 2024)
• Expansion of revenue contribution from peripheral cloud services through enhanced functionality of the PCA Hub Series (expense reimbursement, compliance with the Electronic Bookkeeping Act, etc.)
• Acquisition of new demand for AI-utilizing, one-stop core business support through the new service "PCA Arch" (released November 2025)
• Improved product development speed and strengthened technological capabilities through Tyrell Systems Co., Ltd. joining the group (August 2025)
• Medium- to long-term value-added enhancement through approximately ¥1,000 million in upfront investment for accelerating AI development, improving internal infrastructure, and strengthening IT/AI personnel recruitment toward FY2027 (ending March 2027)
• Expansion of value provided through integration with specialized personnel and BPO functions via KEC Corporation's acquisition of PRIMAS Co., Ltd. as a subsidiary (April 2026)

Risks

• Continued pressure on profit margins from ongoing increases in development personnel costs and outsourcing expenses (up 16.1% year on year) to achieve the medium-term management plan: operating profit for FY2027 (ending March 2027) is forecast to decline significantly to ¥1,267 million (down 48.6% year on year)
• Decline in maintenance service revenue (87.8% year on year): structural contraction of on-premises maintenance revenue continues following the discontinuation of packaged software sales
• Intensifying competition from low-cost cloud service providers and peripheral business domain operators expanding into the core business systems market
• Risk of substitution of existing core business software due to the rapid spread of generative AI and AI agents (the company positions this as a growth opportunity and is making upfront investments accordingly)
• Risk of profit and loss volatility associated with CVC investments, including losses on investment partnership operations (¥70 million recorded as non-operating expenses in the current period)
• Investor concerns over reduced shareholder returns due to a significant decrease in the projected dividend for FY2027 (ending March 2027) (from ¥95 to ¥40) following the change in dividend policy (to a DOE of 4.5%)
• Risk of fluctuating demand for software updates due to institutional changes such as revisions to accounting standards and tax laws
• Downward trend in ARPU (¥258 thousand at fiscal year-end, down ¥4 thousand from ¥262 thousand at end of Q3): risk of slowing ARR growth if per-contract pricing continues to decline despite growth in the number of contracts