Digital Arts (2326) Q3 2026 earnings summary

Executive summary

• Contracts for the first nine months reached ¥10,875 million, up 58.6% year-over-year, driven by strong orders for Phase 2 of the GIGA School Concept and enterprise sector growth.

• Net sales rose 7.7% year-over-year to ¥7,835 million, with operating profit up 6.3% to ¥3,342 million and profit attributable to owners of parent up 7.0% to ¥2,328 million.

• Strong demand for security solutions in both enterprise and public sector markets, driven by heightened cybersecurity awareness and large-scale ransomware incidents.

• The launch of Z-FILTER, a new SSE and IDaaS product, contributed to new project wins and is expected to become a key revenue pillar.

• Achievement rates for contracts, net sales, and operating profit were roughly as planned, with sales expected to concentrate in 4Q.

Financial highlights

• Contracts: ¥10,875 million (+58.6% YoY); Net sales: ¥7,835 million (+7.7% YoY); Operating profit: ¥3,342 million (+6.3% YoY); EBITDA: ¥4,106 million (+5.3% YoY).

• Gross profit margin for the period was 68.9%; operating margin improved to 42.7%.

• Gross profit increased to ¥5,397 million from ¥5,045 million year-over-year.

• Basic earnings per share rose to ¥171.93 from ¥158.89 year-over-year.

• Net assets grew to ¥17,464 million, with an equity-to-asset ratio of 73.0%.

Outlook and guidance

• Full-year forecast: Contracts ¥19,000 million (+79.7% YoY), Net sales ¥11,800 million (+18.2% YoY), Operating profit ¥5,607 million (+23.0% YoY), profit attributable to owners of parent ¥3,880 million (+21.9% YoY), EPS ¥286.06.

• Net sales and orders are expected to be heavily concentrated in 4Q due to customer spending patterns and GIGA School Concept timing.

• Operating margin for the full year is projected at 47.5%.

• No change to previously announced forecasts; management notes actual results may differ due to economic and competitive uncertainties.