NS Solutions (2327) Q1 2027 earnings summary

Executive summary

• Revenue rose 13.3% year-over-year to ¥93,660 million, driven by robust domestic IT demand, strong sales in manufacturing and retail, business model transformation, and new AI/cloud solutions.

• Gross profit margin improved by 1.1 points to 26.5%, reflecting increased productivity and high-value projects.

• Operating profit increased 8.8% year-over-year to ¥9,228 million, despite higher SG&A expenses mainly from the Infocom acquisition and strategic initiatives.

• Orders surged 43% year-over-year, with a significant boost from a major Oracle license order and Infocom.

• Comprehensive income grew 11.7% year-over-year to ¥5,719 million, with profit attributable to owners of parent at ¥5,207 million.

Financial highlights

• Revenue: ¥93.7 billion (+13% YoY); Gross profit: ¥24.8 billion (+18% YoY); Operating profit: ¥9.2 billion (+9% YoY).

• Gross profit margin: 26.5% (+1.1 pts YoY); Operating profit margin: 9.9% (-0.4 pts YoY).

• Profit attributable to owners: ¥5.2 billion (+2% YoY); Basic EPS: ¥28.46.

• Cash and cash equivalents at quarter-end were ¥114,954 million, up ¥6,156 million from the previous fiscal year-end.

• Total assets decreased to ¥413,828 million, mainly due to lower receivables and financial assets.

Outlook and guidance

• FY2026 revenue forecast revised upward to ¥419.0 billion (+10% YoY), operating profit to ¥48.5 billion (+10% YoY), and net profit to ¥32.3 billion (+5% YoY).

• Dividend forecast to be revised at the next quarter; current full-year dividend outlook is ¥87 per share, targeting a consolidated payout ratio of 50%.

• TAM model transition progressing, with a Q1 ratio of 40% and a 50% target for FY2026.

• Basic EPS forecast for FY2026: ¥176.5.

• Profit attributable to owners of parent projected at ¥32,300 million.