INES (9742) Q2 2026 earnings summary

Executive summary

• First-half net sales fell 11.5% YoY to ¥16,486m; operating loss was ¥920m, ordinary loss ¥801m and net loss ¥601m, as lower sales and higher project costs weighed on results.

• Public-sector sales declined 18.1% and private-sector sales 6.1%, mainly due to municipal standardization delays and lower finance system development.

• Full-year guidance was lowered for sales, profits and annual dividend amid migration delays and a quality-focused redesign that increased project costs.

Financial highlights

• Revenue was ¥16,486m versus ¥18,631m; gross profit fell to ¥2,199m from ¥4,004m, and gross margin declined to 13.3% from 21.5%.

• Operating margin was -5.6% versus 4.7%; ordinary and net results shifted from profits of ¥898m and ¥537m to losses of ¥801m and ¥601m, respectively.

• Total assets were ¥50,669m; net assets were ¥38,134m and the equity ratio was 75.3%.

• Cash and cash equivalents increased to ¥9,749m from ¥7,673m; operating cash flow was ¥6,079m and financing cash flow was -¥4,041m.

Outlook and guidance

• FY26 net sales forecast was reduced to ¥39,000m from ¥43,000m; operating profit to ¥1,400m, ordinary profit to ¥1,500m and net profit to ¥1,000m.

• H2 is expected to launch standardization systems for ~10 municipalities; full-year standardization revenue is expected to reach a level comparable with the prior year.

• Quality measures are expected to improve standardization project margins from the next fiscal year onward.

• Management cited uncertainty from geopolitical risks and rising raw material prices; actual results may differ materially from forecasts.