SECOM (9735): FY2025 Results Summary — Record Sales and Profits with a 100 Billion Yen Buyback

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

Note: SECOM’s fiscal year ends on March 31, and the company labels the year just completed as “2026/03” (FY2026/03); this article follows the site convention of classifying the most recently completed fiscal year as FY2025, while all figures, tables, captions and period labels below are kept exactly as the company reports them.

SECOM CO., LTD. released its financial results for the fiscal year ended March 31, 2026 on May 12, 2026. Net sales, operating profit, ordinary profit and profit attributable to owners of parent each reached a record high, with net sales of 1,256,896 million yen (+4.7%) and operating profit of 160,333 million yen (+11.1%). Alongside the results, the Board of Directors resolved to repurchase and cancel own shares up to a maximum total repurchase price of 100 billion yen, and the company formulated the SECOM Group’s Vision for 2040 together with a capital allocation plan and initiatives related to its business portfolio. For the fiscal year ending March 31, 2027, SECOM projects higher net sales and operating profit but lower ordinary profit and net profit.

Consolidated Results (Full-Year Actual)

Net sales rose 4.7% to 1,256,896 million yen, owing to an increase in revenue in all business segments. Operating profit increased 11.1% to 160,333 million yen. Ordinary profit grew a more modest 4.0% to 182,160 million yen, mainly due to the decrease in gain on investments in investment partnerships in the U.S. etc. of 12.3 billion yen. Profit attributable to owners of parent rose 4.2% to 112,662 million yen. The company notes that net sales, operating profit, ordinary profit and profit attributable to owners of parent each reached a record high. Basic earnings per share was 276.17 yen and the dividend per share was 100.00 yen, for a consolidated dividend payout ratio of 36.2%. Per-share figures are calculated on the assumption that the 2 for 1 common stock split implemented on October 1, 2024 was in effect from the beginning of the fiscal year ended March 31, 2024.

Item (In millions of yen)	2024/03	2025/03	2026/03	Change (2026/03)
Net sales	1,154,740	1,199,942	1,256,896	+ 4.7%
Operating profit	140,658	144,297	160,333	+ 11.1%
Ordinary profit	166,859	175,123	182,160	+ 4.0%
Profit attributable to owners of parent	101,951	108,109	112,662	+ 4.2%
Basic earnings per share (In yen)	241.02	259.97	276.17	–
Dividend per share (In yen)	95.00	97.50	100.00	–
Consolidated dividend payout ratio (%)	39.4	37.5	36.2	–

On a non-consolidated basis, net sales were 436,459 million yen (+4.7%), operating profit 78,479 million yen (+3.2%), ordinary profit 125,267 million yen (+10.0%) and net income 100,798 million yen (+9.7%), with basic earnings per share of 247.09 yen.

Segment Results

Security Services remains by far the largest business, accounting for 52.6% of consolidated net sales, followed by Fire Protection Services at 14.9% and BPO and ICT Services at 10.3%. Security Services net sales rose 4.3% to 660,602 million yen and its operating profit rose 7.7% to 123,826 million yen, mainly due to the brisk sales of centralized monitoring services (on-line security systems) for commercial and residential use, the effects of price revisions (price increases), and the increase in sales in static guard services. Fire Protection Services net sales rose 5.5% to 186,884 million yen, attributable to the increase in revenue from fire extinguishing systems and other devices, while its operating profit rose 23.1% to 24,748 million yen chiefly owing to the improvement in the cost ratio.

Segment (In millions of yen)	Net sales 2025/03	Net sales 2026/03	Operating profit 2025/03	Operating profit 2026/03
Security Services	633,392	660,602	114,990	123,826
Fire Protection Services	177,095	186,884	20,109	24,748
Medical Services	86,250	92,086	5,397	6,239
Insurance Services	59,356	65,401	4,228	5,970
Geospatial Information Services	58,372	60,645	3,460	5,395
BPO and ICT Services	128,456	129,901	9,165	8,988
Other Services	57,018	61,375	8,633	9,290

Among the smaller segments, Medical Services net sales rose 6.8% to 92,086 million yen and operating profit rose 15.6% to 6,239 million yen, mainly due to the brisk sales of medical equipment and pharmaceutical products and an increase in sales of Takshasila Hospitals Operating Pvt. Ltd., a company operating general hospitals in India. Insurance Services net sales rose 10.2% to 65,401 million yen and operating profit rose 41.2% to 5,970 million yen, mainly due to the strong sales of cancer insurance, MEDCOM, an unrestricted cancer treatment policy, and automobile insurance offered by SECOM General Insurance Co., Ltd., an increase in investment income, a decrease in losses from natural disasters and a decrease in selling, general and administrative expenses. Geospatial Information Services net sales rose 3.9% to 60,645 million yen and operating profit rose 55.9% to 5,395 million yen, due to an improved cost ratio in the domestic public sector division and a decrease in selling, general and administrative expenses. BPO and ICT Services was the only segment with lower operating profit, down 1.9% to 8,988 million yen on a rise in cost largely owing to the effects of the new data center, which commenced operations in the previous fiscal year, even as net sales rose 1.1% to 129,901 million yen on higher data center revenue and brisk sales of servers and other equipment. Other Services net sales rose 7.6% to 61,375 million yen and operating profit rose 7.6% to 9,290 million yen.

The number of subscribers of security services on a group aggregate basis (including affiliated companies) reached 3,869 thousand as of March 2026, comprising 1,004 thousand domestic commercial subscribers, 1,664 thousand domestic residential subscribers, 120 thousand domestic other contracts and 1,081 thousand overseas subscribers. The company projects a group total of 3,938 thousand subscribers for 2027/03, a change of +1.8% from the previous fiscal year.

Financial Position and Cash Flows

As of March 31, 2026, total assets stood at 2,230,127 million yen, an increase of 84,550 million yen from the previous year-end. Current assets were 981,653 million yen (44.0% of total assets, +12,838 million yen), including cash and deposits of 394,981 million yen (a decrease of 13,791 million yen), and non-current assets were 1,248,473 million yen (56.0%, +71,711 million yen), including property, plant and equipment of 464,449 million yen (+15,209 million yen) and investment securities of 480,821 million yen (+45,186 million yen). Total liabilities were 730,444 million yen (32.8%, +32,604 million yen) and net assets were 1,499,682 million yen (67.2%, +51,946 million yen). The current ratio was 242.1% (255.4% as of March 31, 2025) and the equity-to-asset ratio was 58.9% (59.2% as of March 31, 2025).

Cash flows from operating activities were 203,566 million yen, up from 167,842 million yen in the previous fiscal year, with major cash increases from profit before income taxes of 180.0 billion yen and depreciation of 73.9 billion yen, against income taxes paid of 50.6 billion yen. Cash flows from investing activities were negative 88,607 million yen, reflecting purchases of property, plant and equipment including security equipment and control stations of 70.4 billion yen, purchases of investment securities of 33.6 billion yen, purchases of intangible assets of 20.0 billion yen and acquisitions of subsidiaries accompanied with change in scope of consolidation of 10.0 billion yen, partly offset by proceeds from sale and redemption of investment securities of 46.7 billion yen. Cash flows from financing activities were negative 118,110 million yen, mainly reflecting an increase in treasury shares of 60.0 billion yen and dividends paid of 41.1 billion yen. Free cash flow was 114,958 million yen.

FY2027/03 Forecast

For the fiscal year ending March 31, 2027, SECOM expects an increase in revenue in all business segments, with total net sales expected to rise by 56.6 billion yen to 1,313.5 billion yen and consolidated operating profit to increase by 5.1 billion yen to 165.5 billion yen. Due to the strong performance from the gain on investments in investment partnerships in the U.S. etc. during the current fiscal year, consolidated ordinary profit is expected to decrease by 6.1 billion yen to 176.0 billion yen and consolidated profit attributable to owners of parent is expected to decrease by 6.8 billion yen to 105.8 billion yen. By segment, Security Services net sales are projected at 689,000 million yen (+4.3%) and Fire Protection Services at 206,500 million yen (+10.5%).

Item (In millions of yen)	2027/03 (Projections)	2026/03 (Actual)	Change
Net sales	1,313,500	1,256,896	+ 4.5%
Operating profit	165,500	160,333	+ 3.2%
Ordinary profit	176,000	182,160	△ 3.4%
Profit attributable to owners of parent	105,800	112,662	△ 6.1%
Basic earnings per share (In yen)	261.58	276.17	–
Dividend per share (In yen)	120.00	100.00	–
Consolidated dividend payout ratio (%)	45.9	36.2	–

The company also states that, in regard to the outlook for the Japanese economy, it is expected to recover moderately, supported by improvements in the employment and income environment as well as the effects of various policies, while conditions will remain uncertain, with attention required to the effects of the situation in the Middle East, the fluctuations of the financial and foreign exchange markets, and U.S. trade policy trends going forward.

Shareholder Returns

For the fiscal year ended March 31, 2026, interim dividends were 50 yen per share and year-end dividends are 50 yen per share, for annual dividends of 100 yen per share. Adjusted for the stock split, this is 2.5 yen higher than the 97.50 yen for the previous year. The year-end dividend is subject to approval at the General Shareholders’ Meeting in June 2026. Total annual dividend payout was 40,590 million yen and the consolidated dividend payout ratio was 36.2%. For the fiscal year ending March 31, 2027, the company plans annual dividends of 120 yen per share (interim dividends of 60 yen and year-end dividends of 60 yen), for a projected payout ratio of 45.9%.

Item	2024/03	2025/03	2026/03	2027/03 (Projections)
Annual dividends per share (In yen)	190.00	–	100.00	120.00
Year-end dividends per share (In yen)	(95.00)	(50.00)	(50.00)	(60.00)
Interim dividends per share (In yen)	(95.00)	(95.00)	(50.00)	(60.00)
Consolidated dividend payout ratio	39.4%	37.5%	36.2%	45.9%
Total annual dividend payout (In millions of yen)	40,098	40,484	40,590	–

The company implemented a 2 for 1 common stock split on October 1, 2024. For the fiscal year ended March 31, 2025 the interim dividend per share is stated as the actual pre-split amount and the annual total is displayed as “-“; adjusted for the stock split, the interim dividend for that year was 47.50 yen and the annual total was 97.50 yen. Without considering the stock split, the interim and year-end dividends for the fiscal year ended March 31, 2026 would be 100.00 yen each for an annual total of 200.00 yen, and the projected interim and year-end dividends for the fiscal year ending March 31, 2027 would be 120.00 yen each for an annual total of 240.00 yen.

In addition, at its meeting held on May 12, 2026, the Board of Directors resolved to repurchase the company’s own shares and to cancel treasury shares, with a maximum total repurchase price of 100 billion yen or 23 million shares over the period from May 2026 to February 2027. The Board also resolved to introduce a restricted stock plan for SECOM’s executive officers in May 2026.

Capital Allocation and Medium-Term Initiatives

SECOM announced its capital allocation policy alongside these results. For FY2024 to FY2025, operating cash flow of 370 billion yen funded investments in business foundation of 130 billion yen, investments in growth of 70 billion yen and shareholder returns of 170 billion yen. For FY2026 to FY2027, the company plans operating cash flow of 390 billion yen, supplemented by cash and deposits, borrowings and other sources, allocated to investments in business foundation of approximately 130 to 140 billion yen, investments in growth of approximately 70 to 150 billion yen, and shareholder returns. The company intends to maintain the capital necessary for a company providing safety and peace of mind at approximately 300 billion yen, equivalent to roughly three months of sales and including reserves for contingencies. On dividends, SECOM states it will continue to increase dividends over the long term and ensure stable and consistent profit distribution while taking the payout ratio into consideration, and will take a flexible approach to share buybacks.

On capital efficiency, SECOM targets an ROE of 10% for the fiscal year ending March 31, 2028, to be achieved through expansion of earnings and improvement of productivity under the core strategies of Road Map 2027. The stated levers are profitability (improving profitability through use of the cloud and promotion of digital transformation, and strengthening entry into overseas operations where market growth is expected), efficiency (improving operational efficiency through the cloud and security DX, and providing high value-added services), the equity-to-asset ratio (a target dividend payout ratio of around 45% and flexible share buybacks), and reduction of capital costs (management decisions and business activities based on a sustainability perspective, and efforts to secure and foster human resources). The cost of shareholder’s equity is given as around 5-7%.

SECOM also disclosed its approach to business portfolio management. The Group comprehensively assesses each business segment, looking at financial performance alongside intersegment synergies and the social significance of each business. Segment-specific financial performance is assessed based on growth potential, investment efficiency, market growth potential, industry profitability and relative market share, under four categories: businesses that drive growth (high capital return / high growth potential), businesses that maintain or improve profitability (high capital return / low growth potential), businesses that require development and careful observation (low capital return / high growth potential), and businesses that require restructuring (low capital return / low growth potential). As needed, SECOM reviews the group structure of businesses that require restructuring, seeking to shift such businesses into the category that maintains or improves profitability.

Topics

In May 2026 SECOM formulated the SECOM Group’s Vision for 2040, which aims to clarify the Group’s strategic direction going forward. The vision emphasizes providing “Peace of Mind through Anticipation” as value to customers by detecting signs of impending issues and promptly taking proactive action to avert concerns. Guided by this vision, the Group will integrate data, technologies and expertise obtained from multiple points of contact with diverse stakeholders with its own resources, advancing its fusion of people and technologies and reinforcing the ANSHIN Platform service infrastructure to facilitate the development of proactive services. Separately, the company will implement an 8% increase in subscription fees for existing residential on-line security systems effective from September 2026.

Other highlights disclosed with the results include: a joint contract awarded with a major telecommunications carrier by the Ministry of Defense to develop a remote surveillance system for the Japan Ground Self-Defense Force (February 2026); inclusion in Nikkei Inc.’s new stock indices, the Nikkei 225 Shareholder Return Stock 40 Index and the Nikkei Moat Stock Index (October 2025 and February 2026); Cocobo becoming the first robot offered by security companies permitted for use on public roads (March 2025); making AVTEL Holdings Pte. Ltd., a global security system integrator, a wholly owned subsidiary (October 2025); providing security services for Expo 2025 Osaka, Kansai, Japan (April to October 2025); and the development of an app that allows subscribers’ employees to report customer harassment to their supervisors using their iPhone or Apple Watch (August 2025).

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.