WingArc1st (4432) Q1 2026 earnings summary

Executive summary

• Revenue increased 2.7% year-over-year to ¥7,314 million in FY2026 Q1, but profit declined 16.1% due to higher labor and other costs.

• Recurring revenue maintained double-digit growth, up 10.2% year-over-year, driven by strong maintenance, cloud, and subscription sales.

• EBITDA decreased 10.6% year-over-year to ¥2,467 million, reflecting higher personnel and R&D expenses.

• Acquisition of WingArcNEX Inc. completed at the end of June 2025, with earnings forecast revised to include its performance.

• Total comprehensive income surged 62.6% year-over-year to ¥2,209 million, driven by gains in financial assets measured at fair value.

Financial highlights

• FY2026 Q1 revenue: ¥7,314 million (+2.7% YoY); EBITDA: ¥2,467 million (-10.6% YoY); profit: ¥1,466 million (-16.1% YoY).

• EBITDA margin fell to 33.7% from 38.8% year-over-year; profit margin dropped to 20.1% from 24.6%.

• Recurring revenue ratio increased to 63.9% (from 59.6% YoY); maintenance retention rate at 92.4%.

• Basic EPS was ¥42.36, down from ¥50.80 year-over-year; diluted EPS was ¥42.08.

• Cash and cash equivalents at period end were ¥14,135 million, down from ¥14,715 million at the previous year-end.

Outlook and guidance

• FY2026 revenue forecast revised upward to ¥31,200 million (+8.7% YoY); EBITDA forecast at ¥10,460 million (+8.4% YoY); profit forecast at ¥6,400 million (+7.9% YoY).

• BDS segment revenue forecast raised to ¥20,300 million (+8.2% YoY); DE segment forecast unchanged at ¥10,900 million (+9.6% YoY).

• Dividend forecast maintained at ¥104 per share for the fiscal year ending February 2026.