AVANT GROUP (3836): FY2025 Results Summary — Record Sales and Operating Profit, AVANT Business Being Rebuilt

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: AVANT GROUP CORPORATION has a June fiscal year-end. The results covered here are for the fiscal year ended June 30, 2026, which the company labels “FY6/26”; this site classifies the most recent completed fiscal year as FY2025. Labels in the text and tables follow the company’s materials.

AVANT GROUP CORPORATION reported net sales of ¥30,481 million (YoY +8.0%) and operating profit of ¥4,697 million (YoY +2.0%) for FY6/26, both record highs, driven by the Consolidated Financial Disclosure Business (DIVA). Net income declined 13.1% to ¥2,985 million, reflecting higher commission expenses and other factors as well as the absence of the gain on the sale of shares recorded in the previous fiscal year. Net sales, operating profit and net income fell 8.5%, 7.9% and 14.7% short of the full-year forecast, respectively, as the Management Solutions Business (AVANT) significantly underperformed internal expectations. The annual dividend was raised to ¥32 per share from ¥25, and the company carried out approximately ¥3.2 billion in share repurchases during the fiscal year.

Consolidated Results (Full-Year Actual)

Gross profit rose 7.5% to ¥13,523 million. Operating margin was 15.4%, down 0.9pt year on year. Excluding the one-time expense of approximately ¥238 million associated with the recognition of a provision for loss on orders received, adjusted operating profit was ¥4,936 million (YoY +7.2%), 3.2% below the initial forecast. EBITDA was ¥5,114 million (YoY +0.1%). Other highlights included ROE of 19.8% (YoY -4.0pts), operating profit per capita of ¥2.6 million (YoY -8.2%) and software gross profit of ¥2,957 million (YoY +4.7%).

Item (millions of yen)	FY6/26	Yr earlier	% chg	Forecast	vs. Forecast
Net Sales	30,481	28,227	8.0%	33,300	(8.5%)
Gross Profit	13,523	12,578	7.5%	ー	ー
Operating Profit	4,697	4,604	2.0%	5,100	(7.9%)
OPM	15.4%	16.3%	(0.9pt)	15.3%	0.1pt
Adjusted Operating Profit*	4,936	4,604	7.2%	5,100	(3.2%)
Net Income	2,985	3,434	(13.1%)	3,500	(14.7%)
EBITDA	5,114	5,110	0.1%	ー	ー

*Adjusted operating profit is calculated by adding back to operating profit the one-time expense associated with the recognition of a provision for loss on orders received. On the cost side, full-year personnel expenses increased 11.2% to ¥14,715 million in line with business expansion, while outsourcing expenses declined 7.2% to ¥4,491 million as the development of in-house personnel progressed. In Q4 alone, operating profit was ¥624 million (YoY -36.1%). Operating cash flow was ¥3,790 million (previous year: ¥4,469 million), and total assets stood at ¥24,147 million at fiscal year-end.

Segment Results

From FY6/26, the business segments were reorganized so that each of the three core group companies—DIVA Corporation, ZEAL Corporation and AVANT Corporation—constitutes a single segment, with all other subsidiaries grouped under “Other.” The Consolidated Financial Disclosure Business (DIVA) drove group performance: the outsourcing business contributed to revenue growth, and profit growth was supported by the transfer of certain maintenance services (a cumulative total of approximately ¥340 million), productivity improvements and progress in the cloud migration. In the DX Promotion Business (ZEAL), revenue fell short of internal expectations due to factors such as the cancellation of a project, and profitability declined due to slowing sales growth, one-time relocation expenses and higher personnel expenses. In the Management Solutions Business (AVANT), sales rose only slightly, and operating profit declined due to higher growth-related expenses and the one-time provision for loss on orders received.

Segment	Metric (millions of yen)	FY6/26	Yr earlier	% chg
Consolidated Financial Disclosure Business (DIVA)	Net Sales	9,648	8,301	16.2%
Digital Transformation Promotion Business (ZEAL)	Net Sales	11,022	10,318	6.8%
Management Solutions Business (AVANT)	Net Sales	9,685	9,520	1.7%
Other	Net Sales	531	437	21.5%
Corporate expenses and elimination	Net Sales	-405	-349	ー
Segment Total	Net Sales	30,481	28,227	8.0%
Consolidated Financial Disclosure Business (DIVA)	Operating Profit	2,923	2,006	45.7%
Digital Transformation Promotion Business (ZEAL)	Operating Profit	1,717	1,716	0.1%
Management Solutions Business (AVANT)	Operating Profit	1,129	1,772	(36.3%)
Other	Operating Profit	104	99	4.7%
Corporate expenses and elimination	Operating Profit	-1,176	-990	ー
Segment Total	Operating Profit	4,697	4,604	2.0%
Management Solutions Business (AVANT) [Reference]	Adjusted Operating Profit	1,367	1,772	(22.9%)

Full-Year Forecast (FY6/27)

For the fiscal year ending June 30, 2027, the company forecasts net sales of ¥32,800 million (+7.6%), operating profit of ¥5,000 million (+6.4%) and net income of ¥3,450 million (+15.6%), each a record high. The Management Solutions Business (AVANT), the largest contributor to the gap against the medium-term management plan and the shortfall from the FY6/26 forecast, is being rebuilt to establish an execution framework for a strategy centered on DIVA.

Item (millions of yen)	FY6/27 (Forecast)	FY6/26 (Actual)	Variance	% Chg
Net Sales	32,800	30,481	2,318	7.6%
Operating Profit	5,000	4,697	302	6.4%
OPM	15.2%	15.4%	–	–
Net Income	3,450	2,985	464	15.6%

Shareholder Returns

The company aims to maintain an average ROE of over 20% while paying dividends based on DOE (dividend on equity), with a DOE target of 8% for the fiscal year ending June 2028, the final year of the medium-term plan. The year-end dividend for FY6/26 is ¥32 per share, resulting in a DOE of 7.5%, significantly higher than the 3.5% average for companies listed on the Tokyo Stock Exchange. Together with flexible share repurchases of approximately ¥3.2 billion, total shareholder returns for FY6/26 reached ¥4.35 billion. For FY6/27, the company forecasts a year-end dividend of ¥34 per share (DOE: 7.7%), under a stable dividend policy in which, in principle, the dividend per share will not fall below the previous fiscal year’s level.

Item (millions of yen)	FY6/23	FY6/24	FY6/25	FY6/26	FY6/27 Forecast
Total Dividends Paid (A)	564	708	930	1,123	ー
Total Share Repurchases (B)	0	477	351	3,231	ー
Total Shareholder Returns (A+B)	564	1,185	1,281	4,354	ー
EPS (yen)	55.65	76.62	94.15	83.41	100.13
Dividend per share	¥15	¥19	¥25	¥32	¥34
Net Income	2,094	2,850	3,434	2,985	3,450

Medium-Term Plan “BE GLOBAL 2028” and the Rebuilding of AVANT

Under the medium-term management plan “BE GLOBAL 2028,” the targets for the fiscal year ending June 2028 (the final, fifth year) are to double net sales and triple operating profit and net income, with planned net sales of ¥40,000–45,000 million, operating profit of ¥9,000–11,000 million and net income of ¥6,000–7,000 million. Over the three years through FY6/26, net sales, operating profit and net income each grew 1.4 times (net sales from ¥21,424 million in FY6/23 to ¥30,481 million), and ROE, DOE and dividends met their target levels. However, operating profit margin, operating profit per capita and software gross profit are lagging behind the plan’s targets.

The company identified the Management Solutions Business (AVANT) as the largest gap: while DIVA has a strong customer base and robust demand, AVANT has not been able to sufficiently convert this demand into projects, sales and profit. To execute the DIVA-centered strategy, AVANT GROUP’s management team will directly lead the rebuilding of AVANT across three areas: management structure (Group CEO Morikawa appointed President and Representative Director of AVANT), business model (a shift from a proprietary product-led approach to a customer challenge- and business process design-led approach) and talent (strengthening specialized personnel responsible for proposals and consulting). The consolidated accounting system “DivaSystem LCA” has been sold to more than 1,300 companies as of the end of June 2026. In FY6/27, the company will focus on rebuilding AVANT’s business model and operational framework in order to return to the growth trajectory originally envisioned under the current medium-term plan.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.