Dentsu Soken (4812) Q1 2026 earnings summary

Executive summary

• Net sales rose 8.9% year-over-year in Q1 FY2026 to ¥43,820 million, led by Financial Solutions, Business Solutions, and Communication IT segments, with operating profit up 14.0% to ¥6,588 million and profit attributable to owners of parent up 13.1% to ¥4,648 million.

• Growth was driven by strong demand for digital transformation, AI-powered productivity reforms, and expanded custom system development, especially in Financial, Business, and Communication IT segments.

• Orders received grew 19.8% and order backlog expanded 33.0% year-over-year, reflecting robust demand across all segments.

• The company is executing a medium-term plan targeting ¥210 billion in net sales, ¥31.5 billion in operating profit, a 15.0% operating margin, and ROE of 18% or higher by 2027.

• Progress toward first-half forecasts is strong, with net sales at 50.4% and operating profit at 54.9% of the first-half target.

Financial highlights

• Q1 FY2026 net sales: ¥43,820 million (+8.9% YoY); gross profit: ¥15,894 million (+10.4% YoY); gross profit margin: 36.3% (+0.5p YoY).

• Operating profit: ¥6,588 million (+14.0% YoY); operating margin: 15.0% (+0.6p YoY).

• Ordinary profit: ¥6,725 million (+12.2% YoY); profit attributable to owners of parent: ¥4,648 million (+13.1% YoY); comprehensive income rose 22.0% to ¥4,783 million.

• Basic earnings per share for the quarter was ¥23.82, reflecting a 3-for-1 stock split effective January 1, 2026.

• Number of employees increased by 5.4% year-over-year to 4,627.

Outlook and guidance

• FY2026 full-year guidance unchanged: net sales ¥182,000 million (+10.4% YoY), operating profit ¥25,500 million (+11.4% YoY), operating margin 14.0%, profit attributable to owners of parent ¥18,000 million (+10.0% YoY), EPS ¥92.22.

• First-half FY2026 forecast: net sales ¥87,000 million (+8.4% YoY), operating profit ¥12,000 million (+12.6% YoY).

• Segment and service category forecasts remain as previously announced, with double-digit growth expected in Financial Solutions, Business Solutions, and custom system development.

• No changes to previously announced forecasts; guidance incorporates the impact of the stock split.