ELEMENTS (5246) Q1 2026 earnings summary

Executive summary

• Positioned FY2026/11 as a ramp-up period for maximizing mid- to long-term profit growth, with continued investment and business expansion initiatives.

• Achieved record quarterly revenue of ¥1,291.9 million, up 80.6% year-over-year, driven by strong LIQUID eKYC performance, Polarify consolidation, and AI cloud platform demand.

• Operating profit reached ¥119.7 million (up from a loss YoY), EBITDA ¥269 million (up ¥178 million YoY), and net income attributable to parent ¥100.2 million, all returning to profitability.

• The company continues to expand its core AI cloud platform, driven by digital transformation and regulatory changes boosting the eKYC market.

Financial highlights

• Revenue: ¥1,291.9 million (+80.6% YoY), gross profit: ¥980.7 million (+55% YoY), gross margin: 76% (down from 88.7% YoY due to Polarify consolidation).

• SG&A expenses rose 33% YoY to ¥860 million, mainly from Polarify-related costs, but SG&A-to-sales ratio improved to 66.6% (down 24 pts YoY).

• EBITDA: ¥269 million (+196% YoY), operating profit: ¥119.7 million (vs. -¥13 million YoY), net income: ¥100.2 million (vs. -¥51.8 million YoY).

• Operating profit margin improved to 9.3% from a negative margin last year.

• Total assets at quarter-end were ¥6,957.9 million, down ¥282.1 million from the previous year-end.

Outlook and guidance

• FY2026/11 full-year revenue guidance: ¥5,100–5,300 million (+30% YoY), EBITDA: ¥800–1,000 million, operating profit: ¥0–200 million (return to operating profit).

• Net income forecast for the year is between a loss of ¥100 million and a profit of ¥100 million.

• Continued investment in eKYC and authentication solutions, with focus on expanding market share and launching new AI-driven services.

• No dividend is planned for the fiscal year.