I'LL (3854) Q4 2026 earnings summary

Executive summary

• Achieved record-high sales and profit in FY7/26, marking the 11th consecutive year of operating profit growth, driven by large-scale projects, robust digital transformation demand, and steady execution in both System Solutions and Online Solutions businesses.

• Recurring revenue and gross profit continued to rise, supporting stable and sustainable earnings; recurring GP now covers 86% of SG&A.

• Strategic investments in human capital, R&D, and internal systems accelerated, with significant hiring, adoption of AI tools, and a shift to microservices architecture.

• Advanced the "CROSS-OVER" strategy, integrating real and online services for agility and scalability.

Financial highlights

• Net sales reached ¥20.889B (+8.3% YoY); operating profit was ¥5.566B (+15.5% YoY); OPM improved to 26.6% (+1.7pp YoY).

• Gross profit rose 12% YoY to ¥11.99B; net profit increased 20% YoY to ¥4.18B; net profit per share was ¥167.01.

• ROE stood at 33.2%; equity ratio improved to 77.2%.

• 10-year CAGR: net sales +10.3%, OP +32.8%; OPM expanded from 5.0% to 26.6%.

• R&D expenses nearly doubled to ¥178 million.

Outlook and guidance

• FY7/27 net sales projected at ¥22.8B (+9.1%), but OP expected to decline to ¥5.0B (-10.2%) due to upfront growth investments.

• OPM to temporarily decrease to 21.9% in FY7/27, with a medium-term target of 30%.

• Dividend per share planned at ¥70, marking the 9th consecutive increase and maintaining a high payout ratio.

• Three-year plan focuses on transformation into an industrial platform provider, with continued investment in AI, human capital, and internal systems.