Digital Arts (2326) Q4 2026 earnings summary

Executive summary

• Contracts surged 57.1% year-over-year to ¥16,604 million, driven by strong demand in the public sector, especially Phase 2 of the GIGA School Concept, and higher project unit prices.

• Net sales reached a record ¥10,835 million, up 8.5% year-over-year, with operating profit rising 5.1% to ¥4,791 million and profit attributable to owners of parent up 7.7%.

• Cloud service product sales hit new highs, expanding the recurring revenue base.

• The company launched new security and authentication products, including Z-FILTER and a-FILTER, and entered the school education business.

• Investments in personnel and AI-driven operational efficiency supported both growth and profitability.

Financial highlights

• Gross profit increased 6.6% year-over-year to ¥7,500 million, with a gross profit margin of 69.2%.

• EBITDA rose 5.4% to ¥5,864 million.

• ROE remained high at 19.2%, and equity ratio decreased to 66.1% due to increased advances received.

• Advances received grew 91.1% to ¥7,800 million, reflecting strong contract growth.

• Cash and cash equivalents at period end: ¥23,083 million, up ¥5,131 million from prior year.

Outlook and guidance

• FY Mar. 2027 forecast: net sales of ¥12,000 million (+10.8%), operating profit of ¥5,400 million (+12.7%), ordinary profit of ¥5,505 million (+13.7%), and profit attributable to owners of parent of ¥3,770 million (+10.0%).

• Focus on expanding enterprise sector, accelerating AI implementation, and increasing recurring revenue.

• Dividend per share projected to rise to ¥100, marking the 13th consecutive annual increase.