CREO CO.,LTD.
9698・Standard Market・Information & Communication
Business
Cleo Inc. was founded in 1974 and is listed on the Standard Market of the Tokyo Stock Exchange as a comprehensive IT services company. With the HR/payroll and accounting cloud solution "ZeeM" as the core of its Solution Services business, positioned as the pillar of growth, the company operates four businesses: contracted system development for the Fujitsu Group and Amano Corporation, system operations and services for the LINE Yahoo Group, and Support Services covering help desk and contact center operations. Consolidated net sales stood at ¥14,569 million (FY2026, ending March 2026). Amano Corporation (14.3% of sales) and Fujitsu Limited (12.3% of sales) are major customers, and the company operates its business in collaboration with three consolidated group subsidiaries: Bley Inc., Adams Communication Inc., and Cocoto Inc.
Business Model
In the Solution Service business, the company is expanding recurring revenue from cloud usage fees (SaaS-type) for the ZeeM series, achieving a high profit margin (operating margin of 19.1%). The Contracted Development business secures stable orders through long-term transactions with the Fujitsu Group and others (profit margin of 19.7%). The System Operation & Service business generates stable revenue from maintenance and operation services for the LINE Yahoo Group. The Support Service business, which outsources call center and help desk operations, accounts for approximately 29% of net sales. Working capital is self-funded through operating cash flow, maintaining a financial structure close to debt-free management.
Company Strengths
Cloud usage fees (SaaS model) for the flagship ZeeM series have continued to grow, with Solution Services segment sales up 5.6% year on year to ¥5,342 million and operating income up 12.8% year on year to ¥1,019 million (margin of 19.1%). Order intake also rose 8.6% year on year to ¥5,240 million, and order backlog increased 12.9% year on year to ¥1,666 million, with leading indicators remaining favorable, confirming stable expansion of the earnings base.
Sales to Amano Corporation totaled ¥2,090 million (14.3% of total sales), while sales to Fujitsu Limited totaled ¥1,797 million (12.3% of total sales), with the top two clients accounting for approximately 27% of total sales, reflecting long-term continuing transactions. In the Contract Development segment, the completion of low-margin projects lifted the margin from 18.1% to 19.7%, confirming a track record of improved profitability through appropriate project management.
Cash flow from operating activities for FY2026 (ending March 2026) was ¥1,341 million (a substantial increase from ¥972 million in the previous period). Cash and cash equivalents at period-end reached ¥6,128 million, with a net increase of ¥506 million after covering investing activities (outflow of ¥426 million) and financing activities (outflow of ¥407 million). The company is strengthening its financial base while maintaining a shareholder return policy targeting a consolidated dividend payout ratio of over 40%.
ENVALITH's Perspective
Performance Trend
Revenue bottomed out at ¥14,351 million in FY2024 and has since followed a gradual recovery trend, with FY2026 revenue flat at ¥14,569 million (up 0.3% year on year). Operating profit, meanwhile, recovered after bottoming at ¥904 million in FY2023, with FY2026 operating profit of ¥1,194 million marking the highest level in the past five fiscal years. Profit attributable to owners of parent of ¥807 million was also the highest in the past five fiscal years. The main driver of the profit expansion was a ¥61 million decrease in cost of sales, from ¥10,960 million in the prior period to ¥10,899 million, which improved the gross profit margin from 24.5% to 25.2%. Extraordinary losses fell to just ¥74 million in the current period (comprising a ¥47 million valuation loss on investment securities and a ¥25 million valuation loss on software), as the prior period's ¥84 million impairment loss did not recur. As an external factor, steady demand for productivity improvement and digitalization investment in the IT services market has been underpinning growth in the solution services business.
Growth Strategy
Aiming for sustainable growth by expanding ZeeM's SaaS offerings and strengthening customer DX support centered on the DX Promotion Department
Expanding stock-type business centered on the SaaS-based usage fee model for the ZeeM series. In FY2026 (ended March 2026), Solution Services segment sales grew steadily to ¥5,342 million (up 5.6% year on year), with operating income of ¥1,019 million (up 12.8% year on year), continuing the stable expansion of the earnings base.
The newly established DX Promotion Department (established April 2025) serves as the core of a company-wide execution framework, promoting the creation of new value through the use of digital technologies including AI. The company aims to conduct digital-related training for all employees, raise the proportion of employees with digital skills, and acquire and maintain DX certification.
Continuing to expand sales of HR solutions through collaboration with major customer Amano Corporation. Sales to Amano in the current period rose slightly to ¥2,090 million (from ¥2,080 million in the prior period). Positioned as a growth driver for the Solution Services segment, the company will continue to deepen this relationship.
In the current period, sales and profit declined due to the impact of in-house operational consolidation following the organizational integration of a major customer (sales of ¥4,275 million, operating income of ¥275 million, profit margin of 6.4%). Improving profitability through new customer acquisition and higher value-added services remains a challenge. While the FY2027 (ending March 2027) forecast anticipates increased sales and profit company-wide, the pace of recovery in this segment is a key focus.
Last updated: July 19, 2026