PERFORMANCE

HOME
PERFORMANCE

PERFORMANCE

01.Financial Highlights
02.Interview with the CFO

01.Financial Highlights

Annual results

Revenue by Solutions

Revenue by Contract

EBITDA

Profit for Period

Trends in Cloud Sales

Cloud Sales Breakdown (FY2026)

Net debt/Net cash

Financial Leverage

Quarterly results

Revenue by Solutions

Revenue by Contract

EBITDA

Profit for Period

Trends in Cloud Sales

Number of companies

02.Interview with the CFO

Director
Executive Officer and CFO Taisuke Fujimoto

Accelerate growth through the use of AI.
We aim to improve capital efficiency
and enhance corporate value.

In FY2026, the fourth year of our medium-term management policy, revenue increased by 7.8% YoY to ¥30.9 billion yen, EBITDA increased by 9.1% to ¥10.5 billion yen, and profit increased by 9.6% to ¥6.5 billion yen, resulting in sales and profits exceeding the previous year's figures. We will review the factors driving this growth, future challenges, and progress on our mid-term management strategy from a financial perspective.

In FY2026, we laid the groundwork for future growth while maintaining stable growth.
A period that gives momentum for our next stage of growth.

The market environment in FY2026 was characterized by the strong demand for digital transformation (DX) and modernization, and corporate IT investment remained robust. Although there were variations in performance across our business units, we were able to achieve full-year revenue of ¥30.9 billion yen, and growth that was almost in line with our plan. This was supported by steady software license orders and the strong performance of SVF Cloud and Dr.Sum Cloud. As a result, cloud services grew by 34.9% compared to the previous period, and subscriptions also saw strong growth of 36.5%, driven by increasing demand for our flexible contract models, with their low initial costs. This accelerated the expansion of recurring revenue.

Revenue by Contract Category

(¥ million)

Contract Category	Breakdown	FY2025	FY2026	YoY
Licenses/Services		11,213	10,657	△5.0%
Recurring	Maintenance	10,880	11,345	4.3%
	Cloud	5,245	7,074	34.9%
	Subscriptions	1,368	1,868	36.5%
	Total	17,494	20,288	16.0%
Total		28,708	30,945	7.8%

Amid this steady growth, we have also released new products such as the GenAI version of MotionBoard and Trustee, a digital trust service essential in the AI era that addresses the risks of document forgery and tampering. We were also able to lay the groundwork for future developments to meet the growing demand for AI utilization among companies.

While the tailwind generated by legislative reforms has subsided following the enforcement of the revised Electronic Books Preservation Act (January 2024), demand remains high for the expanding use of GenAI, the replacement of legacy systems at various companies, and core systems and ERP solutions. This continues to present a great opportunity for business expansion for our company. We will capitalize on this demand and aim for further growth in FY2027.

In the age of AI, the high reliability and stability of our technology will be an even greater strength.

There are growing concerns that many IT services may lose their value due to advancements in AI. However, we view the evolution of AI not as a risk, but as an opportunity.

The reason for this is that the BDS segment, as represented by SVF, is related to core systems and ERP, which are fundamental to a company. These are the areas where the highest level of integrity and reliability is required in business management. In other words, it is very unsuitable for AI, which has a high degree of uncertainty in its output, and we believe that it is an area where replacement by AI will be difficult.

This also applies to the DE segment. Business intelligence (BI) tools such as MotionBoard and Dr.Sum require integration with highly reliable databases, which requires robust governance and clear processes for deriving results. This is another area where AI is not particularly strong. Therefore, it is unlikely that AI will pose a threat to our business.

However, AI will likely prove its worth in areas that are closely connected to the user, such as the user interface. Users can bring their ideas to life with no-code and low-code solutions. In that respect, we believe AI is a technology that adds value to our products. That is precisely why making full use of AI is a major growth opportunity for our company.

On the other hand, while some people have said that AI could disrupt the cloud-based user billing models, much of our business is based on fixed or pay-per-use models, and we believe this impact will be very limited. While MotionBoard Cloud uses a user-based billing system, it is integrated into daily operations and unlikely to be significantly affected by this change. In other words, as long as the number of people working on site doesn't decrease, the number of product users won't decrease either, so it won't have a significant impact on the revenue model.

AI will continue to evolve and may achieve a certain level of reliability and safety in the future. However, our core business lies in sectors, such as large corporations and central government agencies, where the ability to process massive amounts of data at high speeds and ensure robust security are essential. That's why I believe AI, which excels at creativity rather than certainty, cannot pose a threat to our company. In fact, we expect that in this age of AI, our company's unique and advanced technological capabilities will become an even greater strength than ever before.

Through selective and focused portfolio management, we achieved capital allocation that balances growth and returns.

Our ROE for FY2026 was a relatively high 14.6%, but we aim to raise this figure even further moving forward. The measures we will implement to achieve this are improving profitability and enhancing capital efficiency. Specifically, having made significant progress in increasing our workforce, which we have been actively pursuing for the past few years, we are now shifting our focus to training and have begun developing the next generation of talent. Furthermore, while undertaking numerous challenges, including launching new businesses, we have also reviewed our portfolio, identifying key focus areas through selection and concentration, and working to improve profitability. This effect should lead to an improvement in ROE in the future.

We also plan to continue making investments and providing shareholder returns in accordance with our Capital Allocation Policy (announced in October 2023). For FY2027, we plan to pay a dividend of ¥108 per share, an increase of ¥4 compared to the previous year. In terms of shareholder returns, we will continue to maintain a total shareholder return ratio of 50%, which is possible because our company is expected to have abundant cash flow from our recurring business model. Through this, we will provide substantial returns to our shareholders while improving capital efficiency and aim to grow into a healthier and more profitable company.

Strengthening governance is also essential. Currently, at monthly board meetings, we receive advice and suggestions from outside directors who possess diverse perspectives and extensive experience, which leads to lively discussions. I feel that the proposals from our executive officers are refined through in-depth discussions that incorporate diverse perspectives, leading to decisions that look toward the future of our company. Going forward, we intend to continue fostering a collaborative environment where each member takes initiative in sharing their opinions, and to engage in more in-depth discussions not only on current issues but also on how to enhance corporate value in the future, including ESG and sustainability.

This is the final year of our medium-term management plan.
We will lay the groundwork for the future and pave the way to further growth.

For FY2026, we aim for growth of more than 10% in both sales and profits. We are committed to working together as a team to ensure that the seeds we planted in FY2026 bear fruit, and we plan to focus our efforts on the rollout of the numerous new products.

Furthermore, this fiscal year we will also begin the full-scale launch of our public sector business. In the Japanese government's efforts to standardize and unify local government information systems, the DX of local governments is a major challenge that needs to be addressed urgently. We aim to expand our market share in this area and lay the groundwork for growth in the next fiscal year and beyond.

Last but not least, FY2027 will be the final year of our currently announced medium-term management policy. While carefully observing the rapidly evolving IT industry, we plan to formulate our next medium-term management plan after careful consideration to enable WingArc to achieve valuable growth.

We will continue to prioritize both growth and giving back to the community, and we will continue striving for even greater success. We sincerely appreciate your understanding and support.

WingArc1st Inc.
Director, Executive Officer and CFO
Taisuke Fujimoto