SHIFT FY Sales Jump 24.5% and Beat Targets, but Net Profit Falls 17% on Equity-Method Loss; First Dividend Paid

Growth outpaces profit

SHIFT Inc. (TSE: 3697) reported consolidated results for FY8/2026, the twelve months from September 1, 2025 to August 31, 2026, on October 15, 2026 under Japanese GAAP. Net sales rose 24.5% to ¥161,600 million, helped by stronger selling and the consolidation of Nissay Com, and operating profit grew 11.6% to ¥17,445 million. Profit lagged sales because recruiting costs returned to normal after hiring was deliberately held back the year before, and because sales staff were concentrated on winning future large projects, which temporarily lowered utilization. Adjusted operating profit, which adds back goodwill amortization and M&A costs, rose 14.8% to ¥20,259 million, 101.3% of the ¥20,000 million target. A ¥3,861 million equity-method investment loss cut ordinary profit 12.3% to ¥13,320 million, and net profit attributable to owners of the parent fell 16.8% to ¥7,430 million; on the adjusted basis it was ¥10,120 million, 112.4% of target.

Development grows fastest

Under the new segment structure adopted in the fourth quarter, consulting grew sales 30.3% to ¥19,263 million and operating profit 26.9% to ¥5,449 million on demand for digital transformation and business reform. Development, boosted by Nissay Com, grew sales 35.8% to ¥65,107 million, while higher SG&A held its profit gain to 16.0%, at ¥5,838 million. Testing, the founding quality-assurance business, grew sales 11.7% to ¥64,382 million and remained the largest profit source at ¥16,897 million, up 6.1%. The BPaaS back-office business lifted profit 76.0% to ¥801 million, and a new investment-platform segment, created by consolidating investment partnerships, posted sales of ¥638 million and a ¥361 million operating loss.

Balance sheet, dividend and outlook

Total assets rose 42.4% to ¥109,685 million, including ¥14,477 million more goodwill from acquisitions, funded mainly by ¥22,676 million more long-term borrowings; with share buybacks also lifting treasury stock, the equity ratio fell to 37.9% from 52.7%. Operating cash flow was ¥13,723 million. The company paid its first year-end dividend of ¥4.53 and plans ¥5.20 for FY8/2027, when it expects net sales of ¥190,000 million (+17.6%), adjusted operating profit of ¥25,000 million (+23.4%) and adjusted net profit of ¥16,500 million (+63.0%). On October 15 it also decided to set up an investment partnership, run by subsidiary SHIFT Growth Capital, into which SHIFT and Tokyo Gas agreed in principle to commit ¥15 billion in total, to invest in domestic system integrators and software companies.

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.