Digital Arts (2326) Q4 2025 earnings summary

Executive summary

• Contracts grew over 20% year-over-year, surpassing projections, driven by strong enterprise and public sector demand, especially for cloud service products and GIGA School Concept projects.

• Net sales for FY ended March 31, 2025 were ¥9,982 million, down 13.3% year-over-year due to the DAC sale, but excluding DAC, net sales increased 7.2% year-over-year.

• Operating profit rose 3.0% year-over-year to ¥4,558 million, as higher net sales and controlled SG&A expenses offset increased data center communication costs.

• Profit attributable to owners fell 27.3% to ¥3,183 million, but excluding DAC, profit was up 4.3% year-over-year.

• The company re-established its Medium-Term Management Plan, focusing on security business growth, public sector market share, and personnel investment.

Financial highlights

• Consolidated net sales: ¥9,982 million (+7.2% YoY, excluding DAC; -13.3% YoY including DAC).

• Operating profit: ¥4,558 million (+3.0% YoY, excluding DAC +5.3%).

• EBITDA: ¥5,566 million (+2.5% YoY).

• Profit attributable to owners: ¥3,183 million (-27.3% YoY, but +4.3% excluding DAC).

• Gross profit margin improved to 70.5%; operating margin increased to 45.7%.

Outlook and guidance

• FY Mar. 2026 forecast: net sales ¥12,550 million (+25.7%), operating profit ¥6,150 million (+34.9%), profit attributable to owners ¥4,200 million (+31.9%).

• Growth expected from expanded solution proposals, cross/up-selling, new product releases, and public sector projects.

• Increased investment in human resources and product development anticipated.