TerraSky (3915): FY2025 Results Summary — Record Sales and Operating Profit, Inaugural Dividend of JPY 16

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

Note: TerraSky has a February fiscal year-end. This article covers the fiscal year ended February 28, 2026, which the company labels “FY2/2026” (“FY26” in its presentation) and which this site classifies as FY2025. Labels in the text and tables follow the company’s materials; the next-year plan is labeled “FY27” (FY2/2027).

TerraSky Co., Ltd. reported FY26 consolidated net sales of JPY 28,056 million (+13.5% Y/Y) and operating profit of JPY 1,560 million (+7.4% Y/Y), both record highs, with ordinary profit also at a record JPY 1,727 million. Net sales achieved 100.6% of the revised plan and operating profit 111.2%. For FY27, the company plans net sales of JPY 34,349 million (+22.4%) and operating profit of JPY 2,541 million (+62.9%), driven by its alliance with NTT DATA and partnership with Mizuho Bank. The company paid an inaugural dividend of JPY 16 per share for FY2/2026 and forecasts JPY 17 for FY2/2027.

Consolidated Results (Full-Year Actual)

According to the company, consolidated net sales rose 13.5% Y/Y, supported by the continuously expanding domestic DX market; TerraSky on a non-consolidated basis and most consolidated subsidiaries achieved double-digit growth, and Quemix (quantum computing) also maintained high growth. Operating profit rose 7.4% Y/Y, driven by profit improvements at LiberSky, TerraSky Technologies, Quemix and Cuon, together with improved management efficiency from the group reorganization and cost improvement measures in TerraSky’s Solutions business. Net profit attributable to TerraSky increased 54.4% to JPY 1,572 million, and ROE was 13.3% (FY25: 9.2%).

Item (JPY MM)	FY25 Results	FY26 Results	Y/Y Change (JPY)	Y/Y Change (%)
Net sales	24,709	28,056	+3,346	+13.5%
Cost of sales	18,034	20,584	+2,549	+14.1%
SG&A expense	5,222	5,912	+689	+13.2%
Operating profit	1,452	1,560	+108	+7.4%
Operating profit margin	5.9%	5.6%	–	(0.3)pp
Ordinary profit	1,603	1,727	+123	+7.7%
Net profit attributable to TerraSky	1,018	1,572	+553	+54.4%
ROE (%)	9.2	13.3	–	–

Against the FY26 forecast as of January 14, results came in at 100.6% for net sales (forecast JPY 27,901 million), 111.2% for operating profit (forecast JPY 1,402 million), 116.2% for ordinary profit (forecast JPY 1,486 million) and 115.1% for net profit attributable to TerraSky (forecast JPY 1,366 million). Fourth-quarter net sales were JPY 7,740 million and fourth-quarter operating profit JPY 691 million; the company cites the initial contribution of NTT DATA projects and seasonal factors in its non-consolidated Solutions business.

As of February 28, 2026, total assets were JPY 22,212 million (+2,742) and total net assets JPY 14,967 million (+2,127). Cash flow from operating activities was JPY 1,763 million, free cash flow JPY 1,656 million, and cash and cash equivalents at the end of the period JPY 8,265 million.

Segment Results

TerraSky reports two segments: the Solutions business (contract development and support for systems utilizing cloud technology, including Salesforce, IaaS and quantum computing) and the Products business (development and provision of cloud services and products such as mitoco). In the Solutions business, segment sales grew 13.4% to JPY 26,020 million with double-digit growth across almost all consolidated subsidiaries, and segment profit rose 9.7% to JPY 3,213 million; although reorganization costs at TerraSky (non-consolidated) had an impact, triple-digit growth at Cuon, LiberSky and TerraSky Technologies supported the result. In the Products business, segment sales grew 14.2% to JPY 2,254 million on strong orders for AI-related products such as mitoco Buddy and mitoco AI, while the segment loss widened to JPY (126) million from JPY (68) million due to higher amortization expenses from multiple releases and version upgrades of mitoco-related products.

Segment	Metric	FY25	FY26	Y/Y
Solutions business	Segment sales (JPY MM)	22,946	26,020	+13.4%
Solutions business	Segment profit (JPY MM)	2,927	3,213	+9.7%
Products business	Segment sales (JPY MM)	1,973	2,254	+14.2%
Products business	Segment loss (JPY MM)	(68)	(126)	(57)MM

Within the Products business, total subscription sales increased 7.3% Y/Y. By product, the company reports Y/Y changes of +6.7% for mitocoX (data collaboration tool), +18.8% for mitoco, +0.7% for SkyVisualEditor and +12.8% for CLOUDSIGN.

FY27 Forecast

For FY27, TerraSky plans net sales of JPY 34,349 million (+22.4% Y/Y) and operating profit of JPY 2,541 million (+62.9% Y/Y), with both expected to reach record highs. The company expects large projects through the NTT DATA alliance, which began contributing in Q4 FY26 (including Salesforce implementations for the financial sector and Glovia OM), to contribute throughout the full year, while expanding targets into regional, public and social sectors. It also cites the Mizuho Bank partnership, revenue growth across all consolidated subsidiaries, efficiency gains from the FY26 group reorganization, and SG&A control from scaling back large-scale events. Net profit attributable to TerraSky is planned at JPY 1,526 million, down 2.9%. The group plans 104 new graduates in April 2026, bringing total group employees in FY27 to 1,871.

Item (JPY MM)	FY26 Results	FY27 Forecast	Y/Y Change (JPY)	Y/Y Change (%)
Net sales	28,056	34,349	+6292	+22.4%
Operating profit	1,560	2,541	+980	+62.9%
Operating profit margin	5.6%	7.4%	–	+1.8pp
Ordinary profit	1,727	2,628	+901	+52.2%
Net profit attributable to TerraSky	1,572	1,526	(46)	(2.9)%
EPS (yen)	121.81	118.21	(3.6)	(2.9)%

Shareholder Returns

TerraSky revised its shareholder return policy to initiate year-end dividends starting in FY2/2026. While continuing to prioritize investments for growth, the company intends to treat shareholder returns as a key management priority and pursue a progressive dividend policy. Based on business performance and financial health, it plans to raise the FY2/2027 dividend by JPY 1 to JPY 17 per share. The company also notes that its shareholder benefits program will be discontinued next fiscal year.

Dividend per share (JPY)	Interim	Year-end	Total
FY2/2026	0.00	16.00	16.00
FY2/2027 (Forecast)	0.00	17.00	17.00

Cost of Capital and Growth Strategy

As of the fiscal year ended February 2026, TerraSky puts its cost of capital at approximately 7%, with ROE of 13.2% and PBR of 1.8X, compared with an industry average (Prime Market, Information & Communication) of 10.0% ROE and 2.2X PBR. Its numerical targets for the fiscal year ending February 2027 are operating profit of ¥2.5BN and ROE of 10%. Key initiatives include expansion in the Salesforce/AWS domains, a regional satellite office strategy, M&A, raising unit price per engineer through higher value-added projects and consulting, increasing the proprietary product ratio centered on mitoco, an early turnaround of loss-making subsidiaries (Quemix and the Thailand business), and enhanced IR activities including expanded English disclosures. The company has also established a Consulting Business Unit to expand into upstream operations and positions itself to shift from a cloud integrator to an “AI Integrator”.

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.