Digital Arts (2326) Q3 2025 earnings summary

Executive summary

• Net sales for the first nine months rose 7.3% year-over-year to 7,274 million yen, excluding the impact of the deconsolidation of Digital Arts Consulting (DAC), which otherwise caused a reported decline.

• Operating profit increased 0.7% year-over-year to 3,145 million yen, supported by strong demand in both enterprise and public sectors, particularly for cloud security.

• The contract amount excluding DAC grew 19.8% year-over-year, with robust order intake, especially for the GIGA School Concept.

• Security industry demand rose due to increased cyber threats, driving product needs for cloud and on-premises solutions.

• Medium-Term Management Plan focuses on security business growth, public sector expansion, and personnel investment.

Financial highlights

• EBITDA for the first nine months reached 3,901 million yen, up 1.3% year-over-year.

• Gross profit margin improved to 43.2% from 37.5% in the prior year period.

• Profit attributable to owners of parent increased 0.6% year-over-year to 2,174 million yen.

• Basic earnings per share was 158.89 yen, up from 155.38 yen year-on-year.

• Equity ratio/capital adequacy ratio rose to 78.6% at the end of the period, up from 71.0% at the previous fiscal year-end.

Outlook and guidance

• Full-year consolidated net sales forecast at 10,720 million yen, with operating profit projected at 5,140 million yen and operating margin improving to 47.9%.

• Profit attributable to owners of parent forecast at 3,540 million yen, down 19.1% year-on-year.

• Annual dividend forecast raised to 85 yen per share, marking the 11th consecutive year of increases.

• Excluding DAC, significant improvements in gross and operating profit margins are expected.