Cube System (2335) Q4 2025 earnings summary

Executive summary

• Net sales for FY March 2025 rose 1.8% year-over-year to ¥18,351 million, driven by demand for DX and cloud migration, but offset by sluggish orders and unprofitable projects; operating profit declined 10.1% to ¥1,380 million, and ordinary profit fell 12.4% to ¥1,393 million due to increased personnel expenses and investments.

• Profit attributable to owners of parent increased 18.2% year-over-year to ¥1,261 million, aided by gains from retirement benefit plan revisions and sale of investment securities.

• Digital Business net sales surged 43.4% year-over-year; SI Business declined 6.5%; System Enhancement/Enhance Business grew 4.8%.

• Labor costs rose 11% due to employee system reforms and increased hiring; SG&A expenses increased from overseas training and engagement initiatives.

• Comprehensive income rose 29.1% year-over-year to ¥1,522 million.

Financial highlights

• Gross margin was 21.5%, slightly down from 21.8% the previous year; gross profit was ¥3,947 million, up from ¥3,922 million.

• Operating margin decreased to 7.5% from 8.5% year-over-year.

• ROE for FY March 2025 was 12.0% (up from 10.8%); return on assets was 10.0% (down from 12.2%).

• Orders received increased by 2.2% to ¥18,493 million, and order backlog rose 3.1% to ¥4,789 million.

• Cash and cash equivalents at year-end decreased by ¥601 million to ¥6,213 million.

Outlook and guidance

• FY March 2026 net sales are projected at ¥19,500 million (+6.3% YoY), with operating profit forecast at ¥1,750 million (+26.7% YoY), ordinary profit at ¥1,760 million (+26.3% YoY), and profit attributable to owners of parent at ¥1,220 million (−3.3% YoY).

• EPS forecast for FY2026 is ¥80.13.

• Dividend for FY March 2026 planned at ¥42 per share (¥20 interim, ¥22 year-end), targeting a 50% payout ratio.

• Medium-term plan targets FY2027 net sales of ¥23 billion, operating profit margin of 10.5%, and ROE of 14%.