Densan System Holdings Co (4072) Q1 2026 earnings summary

Executive summary

• Q1 FY2026 revenue rose 10.8% year-over-year to ¥17,223M, with operating profit up 13.2% to ¥1,227M and net income up 8.3% to ¥888M, driven by strong growth in the Google business and stable performance across segments.

• Ordinary profit grew 4.7% to ¥1,301M, and comprehensive income reached ¥834M, a 1.4% increase from the prior year.

• All profit levels and sales are progressing on track with the initial full-year forecast, and the company maintains its guidance.

Financial highlights

• Net sales reached a record high in Q1, continuing a steady upward trend each quarter.

• Gross profit for the quarter was ¥3,079M, up from ¥2,829M year-over-year.

• Operating profit margin improved slightly to 7.1% (up 0.1pt YoY), while ordinary profit margin declined to 7.6% (down 0.4pt YoY).

• Total assets increased to ¥74,215M as of March 31, 2026, mainly due to higher cash and money trusts.

• Net cash available for strategic allocation stands at ¥17.03B.

Outlook and guidance

• Full-year revenue forecast is ¥70,000M (+2.7% YoY), with operating profit projected at ¥3,650M (+0.7% YoY), ordinary profit at ¥3,850M (+0.2%), and net income at ¥2,620M (down 9.6%).

• Net income is expected to decrease YoY due to normalization of tax rates after a one-time gain in FY2025.

• Revenue growth is expected to decelerate due to a high baseline from prior GIGA School projects.

• Strategic R&D investments in blockchain payment infrastructure and new business ventures will impact profitability.

• Annual dividend forecast is ¥100 per share.