ISB CORPORATION
9702・Prime Market・Information & Communication
Business
ISB Corporation is an independent IT services company founded in 1970. It comprises two segments: Information Services (approximately 85% of net sales) and Security Systems (approximately 15%). The Information Services segment covers four areas: embedded software development for automotive, medical, and industrial equipment applications; business systems for the financial, public, and distribution sectors; cloud infrastructure construction and operation; and products such as MDM. The Security Systems segment handles the development, sales, and maintenance of access control systems, electric locks, and related products. The company has 10 domestic subsidiaries (including a Vietnam base) and is listed on the Prime Market of the Tokyo Stock Exchange. Its main customers are major corporations and public institutions such as financial institutions, local governments, and automakers.
Business Model
In the Information Services business, the company primarily undertakes software development, system construction, and infrastructure operation and maintenance contracts from client companies, securing stable revenue through ongoing maintenance and operation contracts. In the Security Systems business, in addition to hardware sales such as access control systems, the company is expanding its recurring, monthly subscription-based business, achieving a highly profitable structure with a segment profit margin of 13.7% for FY2025 (ending December 2025), significantly exceeding that of the Information Services business (4.8%).
Company Strengths
The company achieved five consecutive periods of revenue growth, from ¥26,177 million in FY2021 (ended December 2021) to ¥37,020 million in FY2025 (ended December 2025). Growth accelerated to +9.0% year-on-year in FY2025 (ended December 2025). Order intake also remained robust at ¥38,996 million (+9.3% year-on-year), with an order backlog of ¥8,669 million underpinning revenue in subsequent periods.
In the Security Systems business, the monthly-fee-based recurring business model has expanded, with the segment achieving a profit margin of 13.7% in FY2025 (ended December 2025). Order intake in this segment grew 15.6% year-on-year, and the order backlog increased 17.4% year-on-year, indicating solid forward demand and contributing to the stabilization of earnings across the group.
As of the end of FY2025 (ended December 2025), interest-bearing debt stood at ¥121 million against cash and cash equivalents of ¥9,078 million, reflecting an overwhelmingly strong liquidity position. The company maintains high financial soundness, providing a financial foundation that enables agile capital allocation toward M&A and growth investments.
ENVALITH's Perspective
Performance Trend
Revenue increased for five consecutive periods, rising from ¥26,177 million in FY2021 to ¥37,020 million in FY2025. In Q1 FY2026 (ending December 2026), revenue growth continued, reaching ¥10,128 million (up 4.3% year on year). Operating profit, however, peaked at ¥2,800 million in FY2024 before declining to ¥2,314 million in FY2025, and continued to edge down in Q1 FY2026 to ¥1,129 million (down 0.4% year on year). The main causes are increased costs from addressing unprofitable projects and growth investment in the Information Services business. Externally, the risk of rising crude oil prices and higher parts procurement costs stemming from escalating tensions in the Middle East has become apparent, raising concerns particularly about the cost impact on the Security Systems business. Achieving the full-year operating profit forecast of ¥3,000 million (up 29.6% year on year) will be a key test of profit recovery.
Growth Strategy
Under the Mid- to Long-Term Management Plan 2030, the company aims for net sales of ¥50.0 billion or more, operating profit of ¥4.5 billion or more, and ROE of 14% or more.
Under the mid- to long-term plan with FY2030 as its final year, the Group is advancing initiatives to enhance both social and economic value under the theme "ISB Innovation: Toward a Leap Forward – from challenge to breakthrough." Targets are net sales of ¥50.0 billion or more, operating profit of ¥4.5 billion or more, and ROE of 14% or more.
The company is promoting the continued expansion of its monthly subscription-based recurring business and the acquisition of renewal orders. Segment profit for the first quarter of FY2026 (ending December 2026) grew significantly, up 34.4% year on year to ¥580 million. The company continues to build a proposal framework covering both hardware sales and software development, while strengthening synergies within the ISB Group.
The company is concurrently strengthening management of unprofitable projects and pursuing continuous growth investments, including enhanced sales activities and improved employee treatment. It aims to maintain revenue growth—driven by new large-scale orders in AI/IoT-related projects and the MDM business, as well as the buildup of financial and public-sector projects in the enterprise domain—while working to restore profit margins.
The annual dividend forecast for FY2026 (ending December 2026) is ¥70 per share (a 27.3% increase from ¥55 in the previous fiscal year). Backed by a substantially debt-free financial position and a high equity ratio (69.5%), the company's policy is to continue strengthening shareholder returns in line with the recovery in business performance.
Last updated: July 17, 2026