DIGITAL GRID (350A) Q2 2026 earnings summary

Executive summary

• Net sales for the six months ended January 31, 2026, were ¥3,328 million, up 0.6% year-over-year, with profits tracking ahead of plan and supporting progress toward full-year targets.

• Operating profit declined 10.1% year-over-year to ¥1,536 million, but the Aggregation Services business turned profitable, with grid-scale battery capacity handled exceeding 50 MW.

• Ordinary profit was ¥1,651 million, nearly flat compared to the prior year, and profit attributable to owners of parent rose 2.6% year-over-year to ¥1,216 million.

• Contracted capacity reached a record high, up 25.1% year-over-year, now including grid-scale battery capacity.

Financial highlights

• 2Q net sales were ¥1,323 million, down 34% quarter-on-quarter due to lower TSO settlement; first-half net sales reached ¥3,328 million (53% of full-year target).

• Gross profit increased to ¥2,635 million from ¥2,459 million year-over-year, with a gross profit margin for the first half of 79.2%.

• Operating profit for the first half was ¥1,536 million (65% of full-year target), with a high margin of 46.2%, though the margin decreased due to higher SG&A expenses.

• Net income for the first half was ¥1,216 million (82.4% of full-year target), despite a 46.3% QoQ decline in 2Q.

• Cash and cash equivalents at period end rose to ¥7,875 million from ¥3,680 million year-over-year.

Outlook and guidance

• Full-year net sales forecast for FY ending July 31, 2026, is ¥6,281 million, up 2.1% year-over-year, with operating profit projected to decline 13.8% to ¥2,363 million.

• Profit attributable to owners of parent is expected to decrease 21.0% to ¥1,476 million, and basic earnings per share forecast is ¥37.11.

• Full-year targets remain unchanged, with strong progress rates in net sales, operating profit, and net income.

• Operating profit margin expected to dip below 40% in FYE26/7 due to unit price declines, but to recover as contracted capacity and marginal profit expand.

• Medium-term plan targets ROE above 20%, operating profit margin above 40%, and ¥10 billion investment in grid-scale batteries by FYE28/7.