Digital Arts (2326) Q2 2026 earnings summary

Executive summary

• Contracts for the first six months rose 46.8% year-over-year to 6,629 million yen, driven by strong public sector demand, especially for Phase 2 of the GIGA School Concept.

• Net sales increased 3.2% year-over-year to 4,992 million yen, mainly from cloud service products.

• Operating profit declined 1.5% year-over-year to 2,021 million yen, as higher sales were offset by increased costs, particularly in personnel.

• The business model is shifting from one-time license sales to recurring cloud service revenue, supporting long-term growth.

• Security awareness increased across all sectors due to rising cyber threats, driving demand for security products and services.

Financial highlights

• Gross profit for the first six months was 3,433 million yen, up 2.3% year-over-year.

• EBITDA for the period was 2,514 million yen, down 1.8% year-over-year.

• Profit attributable to owners of parent was 1,408 million yen, down 0.7% year-over-year.

• Full-year forecast revised: contracts expected at 19,000 million yen (+79.7% YoY), net sales at 11,800 million yen (+18.2% YoY), and operating profit at 5,607 million yen (+23.0% YoY).

• Basic earnings per share was 103.83 yen, slightly up from 103.41 yen year-over-year.

Outlook and guidance

• Full-year net sales forecast revised downward by 6.0% from previous guidance due to a higher proportion of cloud service contracts, which defer revenue recognition.

• Operating profit forecast also revised downward by 8.8% from previous guidance, despite strong contract growth.

• Full-year forecast: net sales projected at 11,800 million yen (+18.2% YoY), operating profit at 5,607 million yen (+23.0%), and profit attributable to owners of parent at 3,880 million yen (+21.9%).

• Basic earnings per share for the full year forecasted at 286.06 yen.

• Dividend forecast raised to 95 yen per share, including a 5 yen special dividend for the 30th anniversary.