Investment Thesis
FY2026 (ended March 2026): NI ¥3,439M (+7.9%), revenue ~¥10.8B (+8.2%). Dominant Japan web filtering: i-FILTER 53% education share, GIGA School Phase 2 confirmed. CONTRACT BOOKINGS SURGE: contract amount ¥16,598M (+57.2%), prepaid revenue ¥7,800M (+91.1%) — SaaS transition front-loads deferred revenue → strong future revenue pipeline. RISK: FY2027 medium-term targets REVISED DOWN (May 7 2026) — enterprise growth and cloud recognition lagged expectations; FY2027 repositioned as foundation-building year. UPCOMING CATALYST: Active Cyber Defense Law (Oct 1 2026) — mandates enterprise cybersecurity = filtering demand surge.
Risk
1) FY2027 targets revised DOWN: enterprise expansion slower than plan, cloud revenue recognition deferred. 2) Medium-term re-rating risk: lower targets = lower forward PE expansion until enterprise ramp proves. 3) Competition from bundled security (Microsoft Defender, Google Workspace) in enterprise. 4) GIGA School Phase 2 timing uncertainty if procurement cycles delayed further.
Monitoring Trigger
Watch for Active Cyber Defense Law (Oct 1 2026) enterprise contract announcements. If FY2027 H1 revenue growth <5%, EXIT (confirms enterprise ramp failed). If contract bookings Q1 FY2027 maintain >30% growth, HOLD conviction at MEDIUM. If Active Cyber Defense Law generates >¥1B incremental revenue in FY2027, UPGRADE back to HIGH.
Key Dates
Key Metrics
Business Segments
| Segment | Revenue | Share | Description |
|---|---|---|---|
| i-FILTER (Web Security) | ¥6B | 57% | Web filtering for education, government, enterprise — 53% edu market share |
| m-FILTER (Mail Security) | ¥2.5B | 24% | Email security, anti-spam, anti-phishing |
| FinalCode / Other | ¥2B | 19% | File encryption, tracking, DLP solutions |
Supply Chain Evidence
| Evidence | Customer | Product | Detail |
|---|---|---|---|
| confirmed | Japanese schools (GIGAスクール) | i-FILTER@Cloud | 53% market share in education filtering, 37,000+ devices in Kashiwa City |
| confirmed | Japanese enterprises/government | i-FILTER, m-FILTER | Web and email security for government agencies and enterprises |