TIS (3626) Q4 2026 earnings summary

Executive summary

• Sales and operating income for fiscal 2026 increased year-over-year, surpassing revised forecasts due to robust IT investment demand and expanded service offerings.

• Net income declined year-over-year, impacted by higher extraordinary losses, including litigation provisions and impairment losses.

• Orders received and order backlog grew steadily, especially in software development across most business segments.

• The company completed a major treasury share repurchase and announced a merger with INTEC Inc., effective July 2026.

• Continued investment in growth and compensation, with a focus on AI-driven development, modernization, and global expansion.

Financial highlights

• Fiscal 2026 net sales rose 4.3% year-over-year to ¥596.5 billion; operating income up 10.4% to ¥76.2 billion.

• Operating margin improved by 0.7 points to 12.8%; gross profit margin rose to 28.2%.

• Net income attributable to owners fell 6.8% year-over-year to ¥46.6 billion, with EPS down 4.7% to ¥204.91.

• ROE decreased to 14.0% from 15.3% the prior year.

• Free cash flow increased to ¥50.5 billion, driven by higher operating cash flow.

Outlook and guidance

• Fiscal 2027 forecasts: net sales of ¥620 billion (+3.9%), operating income of ¥81 billion (+6.3%), net income of ¥57 billion (+22.3%), and ROE of 17.5%.

• EPS expected to rise 32.6% to ¥271.70, supported by an estimated ¥5 billion extraordinary gain from investment securities sales.

• Gross profit margin expected to rise to 29.0%; operating margin to 13.1%.

• Segment guidance: Financial IT Business to see 9.9% sales growth and 17.0% profit growth; other segments forecast moderate growth.

• Continued growth investments and higher compensation planned, with a focus on AI, modernization, and global expansion.