Software Service, Inc. (TSE: 3733), a leading developer and supplier of information systems for Japanese hospitals and medical institutions, released its second-quarter (interim) results for the fiscal year ending October 2026 on June 5, 2026. The consolidated first-half figures — covering the six months from November 1, 2025 to April 30, 2026 — showed revenue accelerating sharply by 20.8% year-on-year to ¥24,334 million, significantly outpacing the prior-year first half which had itself declined 8.4%. Despite this powerful revenue rebound, operating profit slipped 2.2% to ¥4,180 million (from ¥4,274 million), ordinary profit fell 1.6% to ¥4,223 million, and profit attributable to owners of the parent declined 7.7% to ¥2,752 million. Earnings per share fell to ¥532.75 from ¥569.81 a year earlier.
The divergence between robust revenue growth and a modest profit decline reflects deliberate investment acceleration by the company, consistent with a multi-year expansion of its hospital IT footprint. Comprehensive income for the half-year was ¥2,774 million, down 6.5% from ¥2,968 million. The company operates on an October fiscal year-end, meaning this interim report covers the first six months of the current fiscal year, with the full-year results due in early 2027.
Strong top-line rebound after prior-year contraction
The 20.8% revenue jump in the first half is a significant reversal of fortunes following the 8.4% revenue decline in the comparative prior-year period. Software Service operates in the hospital information system (HIS) market, providing integrated software, hardware, and support services to acute-care hospitals, clinics, and other medical institutions across Japan. Demand for hospital IT modernisation, electronic medical records, and cloud-based healthcare data management has been strengthening as Japan's healthcare sector pursues digital transformation. The revenue rebound reflects both the recovery of deferred procurement cycles in the hospital sector and ongoing contract expansions, particularly in software licensing and systems implementation services. Hardware procurement — a lumpy revenue stream tied to hospital replacement cycles — also appears to have contributed meaningfully in the period.
Balance sheet remains highly capitalised
On the balance sheet, total assets stood at ¥50,715 million at the half-year end, down from ¥52,188 million at the prior fiscal year-end (October 2025). Net assets were ¥40,396 million, compared with ¥41,896 million at the prior year-end. The equity ratio was 79.7% at the interim close, slightly below the 80.3% at fiscal year-end — still an exceptionally high level for a listed software company, reflecting Software Service's strong cash generation, minimal debt, and conservative financial management. The decline in both total assets and net assets from the year-end level is consistent with the seasonal pattern of interim dividend payments and capital deployment.
Full-year guidance unchanged; year-end dividend set at ¥170
Management has kept the full-year FY2026 guidance unchanged at consolidated revenue of ¥44,338 million (+4.8%), operating profit of ¥8,795 million (+4.8%), ordinary profit of ¥8,875 million (+4.8%), and net profit attributable to owners of ¥5,982 million (−2.1%), translating to EPS of ¥1,142.94. The interim dividend for the current fiscal year was set at ¥0.00 (in line with the company's policy of no interim dividend), with the full-year dividend forecast at ¥170 per share (all paid at year-end), up from ¥160 in FY2025. With first-half revenue representing approximately 55% of the full-year target, the company appears broadly on track for the annual revenue goal, though the profit compression seen in the first half will need to reverse in the second half to meet the annual operating profit guidance.
| Metric | H1 FY2026 | H1 FY2025 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 24,334 | 20,145 | +20.8% |
| Operating profit (¥ million) | 4,180 | 4,274 | −2.2% |
| Ordinary profit (¥ million) | 4,223 | 4,291 | −1.6% |
| Net profit attrib. to owners (¥ million) | 2,752 | 2,981 | −7.7% |
| EPS (¥) | 532.75 | 569.81 | −6.5% |
| Comprehensive income (¥ million) | 2,774 | 2,968 | −6.5% |
| Total assets (¥ million) | 50,715 | 52,188 | −2.8% |
| Net assets (¥ million) | 40,396 | 41,896 | −3.6% |
| Equity ratio | 79.7% | 80.3% | −0.6pp |
| Interim dividend (¥) | 0.00 | 0.00 | — |
| Annual dividend forecast (¥) | 170 | 160 | +6.3% |
| FY guidance — revenue (¥ million) | 44,338 | — | +4.8% |
| FY guidance — operating profit (¥ million) | 8,795 | — | +4.8% |
| FY guidance — ordinary profit (¥ million) | 8,875 | — | +4.8% |
| FY guidance — net profit (¥ million) | 5,982 | — | −2.1% |
| FY guidance — EPS (¥) | 1,142.94 | — | — |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.