DAIKO XTECH (8023) Q4 2026 earnings summary

Executive summary

• FY ended Mar 2026 revenue was ¥42,500m, down 0.4%; operating profit fell 21.0% to ¥1,903m as project losses and higher costs outweighed growth in software and recurring services.

• Software solutions and stock businesses grew, while hardware and network solutions declined; orders and backlog increased, and the shift toward software and recurring revenue continued.

• Strategy emphasized strengthening core and growth businesses, with continued R&D and human-capital investment.

Financial highlights

• Gross profit was ¥10.69bn, up 1.3%, and gross margin rose 0.4pt to 25.1%; SG&A increased 7.8% to ¥8.78bn.

• Operating margin declined to 4.5% from 5.6%; ordinary profit fell 20.2% to ¥1.99bn, and net income attributable to shareholders fell 14.3% to ¥1,442m.

• Orders rose 2.1% to ¥43.17bn and backlog increased 6.9% to ¥10.35bn year over year.

• Cash and equivalents at year-end were ¥9,976m, down from ¥10,452m; fourth-quarter revenue and profit declined amid lower hardware sales, fewer network projects, project losses and higher SG&A.

• Dividend per share increased to ¥36 from ¥32; payout ratio was 31.6%.

Outlook and guidance

• FY Mar 2027 guidance: revenue ¥43,500m, operating profit ¥2,600m, ordinary profit ¥2.68bn and net income ¥1,750m.

• Operating margin is forecast to rise to 6.0%; guidance includes higher personnel and priority-solution spending, while emphasizing high-value software, consulting and human-capital investment.

• Additional costs for one-time project losses were provided for in FY Mar 2026; growing backlog, ongoing customer work and recurring services are expected to support earnings stability.

• CANVAS TWO targets FY Mar 2028 revenue of ¥45.0bn, gross profit of ¥12.5bn, operating profit of ¥3.0bn and net income of ¥2.05bn.