CNS Co (4076) Q2 2025 earnings summary

Executive summary

• H1 FY25 revenue rose 2.0% YoY to ¥3,364 million, driven by Digital Innovation and Big Data Analytics; progress was described as broadly in line with plan.

• Operating profit fell 30.0% to ¥226 million as wage increases, higher personnel expenses and outsourcing fees weighed on earnings.

• Net income declined 26.4% YoY to ¥162 million amid higher labor costs and a rising SG&A ratio.

• Investment continued in DX, AI and consulting capabilities amid persistent IT labor shortages.

Financial highlights

• Revenue was ¥3,364 million, up 2.0% YoY; gross profit was ¥803 million, down 1.9%, and gross margin declined to 23.9% from 24.8%.

• Operating profit was ¥226 million, down 30.0%; ordinary profit was ¥240 million, down 28.7%; interim net income was ¥162 million, down 26.4%.

• SG&A rose 16.4% YoY to ¥577 million, lifting its ratio 2.1 percentage points to 17.2%; personnel expenses rose ~11%, increasing the labor cost ratio by 2.6 points.

• EPS was ¥55.82, down from ¥75.82 in the prior-year interim period.

Outlook and guidance

• FY25 guidance remains unchanged: revenue ¥7,562 million, gross profit ¥1,834 million, operating profit ¥660 million, ordinary profit ¥676 million and net income ¥489 million.

• H1 progress against FY25 guidance was 44.5% for revenue, 43.8% for gross profit, 34.2% for operating profit, 35.6% for ordinary profit and 33.1% for net income.

• FY25 revenue and operating profit are forecast to rise 13.6% and 6.6% YoY, respectively; management aims to achieve plan through H2 initiatives.

• FY25 segment revenue forecast: Digital Innovation ¥2,367 million; Big Data Analytics ¥1,295 million; Systems Infrastructure ¥2,219 million; Business Systems Integration ¥1,524 million; Consulting ¥156 million.