WingArc1st (4432) Q4 2025 earnings summary

Executive summary

• Achieved record-high revenue and profit in FY2025, with revenue up 11.5% YoY to ¥28,708 million and EBITDA up 12.2% YoY, surpassing forecasts.

• Profit attributable to equity holders grew 9.6% YoY to ¥5,929 million.

• Strong growth in SVF software licenses, driven by demand for core system upgrades and large public sector projects.

• Acquired digital government business from Smartvalue, strengthening expansion into the public DX market.

• Both BDS and DE segments exceeded sales and profit expectations, with recurring revenue up over 10%.

Financial highlights

• FY2025 revenue: ¥28,708 million (+11.5% YoY); EBITDA: ¥9,650 million (+12.2% YoY); profit attributable to equity holders: ¥5,929 million (+9.6% YoY).

• EBITDA margin stable at 33.6%; profit margin at 20.7%; operating profit to revenue ratio at 28.6%.

• Recurring revenue reached ¥17,494 million (+10.0% YoY), with a recurring ratio of 60.9%.

• Cloud services sales grew 22.5% YoY, led by Dr.Sum Cloud (+47.5%) and invoiceAgent (+41.8%).

• Cash and cash equivalents at FY-end were ¥14,715 million, up from ¥12,986 million a year earlier.

Outlook and guidance

• FY2026 revenue forecast: ¥30,300 million (+5.5% YoY); EBITDA: ¥10,400 million (+7.8% YoY); profit: ¥6,360 million (+7.3% YoY).

• BDS growth rate expected to slow due to prior large projects; DE segment, especially cloud, to drive growth.

• Dividend per share to remain at ¥104.00, with a payout ratio of 56.7%.

• Medium-term targets: cloud growth rate CAGR 16.3%, recurring ratio 75%, EBITDA ¥12 billion by FY2027.