Financial Summary for the Second Quarter (Interim) of Fiscal Year Ending May 2026 [Japanese GAAP] (Non-consolidated)

Explanation of Operating Results

In the second quarter of the fiscal year ending May 2026, net sales amounted to 134,677 million yen (7.5% year-over-year increase), operating income was 42,659 million yen (1.8% year-over-year increase), ordinary income was 43,178 million yen (1.9% year-over-year increase), and interim net income was 29,913 million yen (1.9% year-over-year increase), all achieving record highs for an interim accounting period. We have strengthened cloud service expansion and utilization of AI technologies, focusing on supporting client companies' innovation.

Market Development Policy and Key Initiatives

Our mission is to support corporate growth through cloud migration of core systems and data utilization. We promote modernization and generative AI services leveraging Oracle Cloud Infrastructure (OCI). Having obtained government certification for the Government Cloud, we also support digital transformation in local governments. By strengthening partnerships and providing hybrid cloud environments, we respond to clients' IT investment needs.

Performance by Segment

Net sales for Cloud and Software were 115,546 million yen (8.6% year-over-year increase), Hardware was 6,457 million yen (4.6% year-over-year decrease), and Services were 12,672 million yen (4.1% year-over-year increase). Segment profits were 42,699 million yen for Cloud and Software, 223 million yen for Hardware, and 2,919 million yen for Services. After company-wide expense adjustments, operating income amounted to 42,659 million yen.

Financial Position

At the end of the interim period of fiscal year ending May 2026, total assets were 315,596 million yen, net assets were 171,066 million yen, and the equity ratio was 54.2%, representing a 2.5 percentage point increase compared to the previous fiscal year-end. Current assets were 201,195 million yen, fixed assets 114,400 million yen, and liabilities 144,530 million yen.

Cash Flow Status

Cash flow from operating activities was 23,419 million yen, cash flow from investing activities was an outflow of 1,577 million yen, and cash flow from financing activities was an outflow of 24,334 million yen. The balance of cash and cash equivalents at the end of the period was 64,231 million yen.

Dividend Status and Earnings Forecast

The annual dividend for fiscal year ending May 2025 was 190.00 yen; the dividend for fiscal year ending May 2026 is undecided. The earnings forecast for fiscal year ending May 2026 indicates net sales growth of 6.0–10.0% and net income per share in the range of 490.00–505.00 yen, with no recent forecast revisions.