ENVALITH
株式会社TKC logo

TKC Corporation

9746・Prime Market・Information & Communication

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株式会社TKC logo
TKC Corporation9746

Business

TKC Corporation was founded in 1966 and is headquartered in Utsunomiya City, Tochigi Prefecture. It is listed on the Prime Market of the Tokyo Stock Exchange. The company maintains its founding twin business objectives of "defending the professional domain of accounting firms and opening up their future prospects" and "improving the administrative efficiency of local governments." It comprises three segments: the Accounting Firm Business (approximately 63% of sales composition), conducted in partnership with the TKC National Federation (11,600 certified tax accountants and certified public accountants); the Local Government Administrative DX Support Business (approximately 33%); and the Printing Business (approximately 4%). The company provides cloud services to over 800,000 customers, operating on a 24-hour, 365-day basis built on its own proprietary data centers.

Business Model

Stock-type revenue centered on computer services (cloud usage fees) and software license fees forms the core of earnings. The company employs a channel strategy leveraging close cooperation with TKC National Federation to disseminate systems to affiliated small and medium-sized enterprises via accounting firms. For local government clients, the company captures demand for migration to standards-compliant systems, while securing ongoing revenue through subscription-based software usage fees even after migration is complete. Hardware sales function as one-time revenue responding to PC replacement and server installation demand.

Company Strengths

Operating profit for the current period (FY2025) was ¥16,142 million, with both ordinary profit and net income for the period marking record highs for the 12th and 11th consecutive terms, respectively. The equity ratio stood at 83.6% and the interest coverage ratio at 39,612x, indicating extremely high financial soundness, maintaining a state close to debt-free management. Consolidated ROE reached 11.5%, achieving the company's own target (11% or higher).

The corporate electronic tax filing system and related systems have been adopted by approximately 46% of companies with capital exceeding ¥100 million. The company's market share among Japanese listed companies has reached 44%, with 94 of the top 100 companies by revenue (94%) filing their taxes using the company's system. TKC Law Library boasts registrations from approximately 27,500 institutions and 70,000 IDs, maintaining a strong presence in the legal and academic markets as well.

Through close collaboration with the TKC National Federation, an organization comprising 11,600 tax accountants and certified public accountants, the company has built a unique distribution channel that spreads its systems to 327,000 client SMEs via accounting firms. The TKC Monitoring Information Service (MIS) has been adopted by 498 financial institutions, with usage exceeding 360,000 cases, and the ecosystem connecting financial institutions, SMEs, and accounting firms makes it difficult for competitors to imitate.

ENVALITH's Perspective

The substantial increase in revenue and profit in the current interim period (net sales +19.4%, operating profit +28.2%) was mainly driven by a one-time "standardization special demand" arising from Gov-Cloud migration support for 96 local government bodies in the Local Government Business Segment (consulting service revenue +1,029.1%). With migration completed for all 164 client bodies by the end of March 2026 (Reiwa 8), this special demand has run its course, and the 61st fiscal term (FYE September 2027) is forecast to see a decline in revenue, with consolidated net sales of ¥82,200 million (down 3.9% year on year). The key focus going forward will be the balance between the magnitude of this reversal decline and the growth pace of the company's underlying, recurring business foundation.

Operating profit in the Accounting Firm Business Segment fell sharply to ¥5,443 million (down 22.2% year on year) in the current interim period, but the company explains that the marginal profit ratio has been maintained at roughly the same level as the same period last year, with the decline mainly attributable to increased personnel expenses from higher performance-linked bonuses and stronger hiring. As an external factor, demand for IT investment—driven by DX needs, the Electronic Books Preservation Act, and invoice system compliance—remains robust, and the structure whereby accumulating recurring revenue through accelerated cloud migration supports a medium- to long-term earnings recovery remains intact.

While the 61st fiscal term is expected to see a revenue decline due to the reversal of standardization special demand, the plan for the 62nd fiscal term points to a recovery, with net sales of ¥83,900 million (+2.1%) and ordinary profit of ¥17,350 million (+1.5%). This recovery is premised on the pace of recurring revenue accumulation from Gov-Cloud operation and management support services (subscription-based), Smart Government DX-related SaaS (Kantan Madoguchi at 130 bodies, Smart Shinsei at 70 bodies, convenience store certificate issuance at 280 bodies), digitalization of public payment services starting in September 2026 (Reiwa 8), and expanded functionality of the TASK Cloud public accounting system (adopted by 410 bodies). Progress on these fronts will be the deciding factor in the stock's valuation.

Growth Strategy

Acceleration of cloud migration, accumulation of stock revenue from government digital transformation, and transition to an AI-driven development structure

Migration from the standalone version to the cloud version is progressing smoothly, with the number of companies using the FX series exceeding 335,000. In February 2026, the company obtained JIIMA's Digital Seamless Software Legal Requirements Certification (the first such certification in Japan), establishing a competitive advantage through end-to-end processing from voucher issuance to electronic tax filing and payment. The company aims to capture demand related to compliance with the Electronic Bookkeeping Act and the invoice system, thereby expanding new usage.

Migration to systems compliant with standard specifications and to the Government Cloud for 164 client organizations (48 cities, 99 towns, and 17 villages) was completed by the end of March 2026. Following the migration, the company positions the accumulation of stock revenue from Government Cloud operation management support services (subscription-based), the TASK Cloud public accounting system (adopted by 410 organizations), and various SaaS offerings (Kantan Madoguchi with 130 organizations, Smart Shinsei with 70 organizations, and Konbini Kofu with 280 organizations) as a growth driver.

In January 2026, the company granted AI coding assistant licenses to all engineers and is promoting a transition to an AI-driven development structure through repeated systematic training and hands-on support. From July 2026 onward, the company plans to sequentially deploy AI agents into systems provided by its accounting firm business division, aiming to enhance added value through business innovation support and to improve development productivity.

The consolidated group tax filing system is used by over 80% of companies that have adopted the group tax consolidation system. As part of support for the new lease accounting standard (Accounting Standards Board of Japan Statement No. 34), which becomes mandatory for listed companies from April 2027, the company is strengthening sales promotion of FAManager, developed in collaboration with First Accounting Inc., which enables end-to-end processing from automated lease determination through to accounting and tax filing. In March 2026, the company also began offering the new 'e-Tax Business Establishment Tax' service.

Last updated: July 17, 2026