OBIC released its FY 25 results on April 22, 2025, posting a decent 12% y/y increase in revenues to JPY47bn, driven by an increase in solution sales. EBIT rose 16% to JPY21.7bn, with margins expanding by 159bp to 46.3%. Net profit increased by 16.9% y/y to JPY16.2bn, with margins expanding to 34.4%, supported by gain on sales of investment securities.
Founded in 1980 and headquartered in Tokyo, Japan, OBIC Business Consultants Co., Ltd., specializes in developing business solution technology and IT solution technology, selling products to customers by sales partners and IT channels, and providing services like maintenance and implementation guidance.
With over 900 employees, OBIC operates primarily through three business segments: the Solutions segment, which comprises Cloud services, contributed 55% and On-premises services, contributed 4% of FY 25 sales; the Related products segment, which accounted for 9%; and the Services segment, which made up 32%.
Increased returns reflecting positive outlook
The company is poised for a promising year ahead, with revenue projected to rise by 10% y/y to JPY51.7bn. This growth is driven by a strategic expansion in the sales of Bugyo V ERP Cloud and the market penetration of Bugyo Cloud Edge, aimed at capturing new demand. The company has also initiated cloud migration measures, leveraging IT implementation subsidies to facilitate this transition. Despite the anticipated decline in on-premise sales by approximately JPY1bn due to restrictions on new shipments to on-premise facilities, the solutions segment is expected to experience the highest growth, surging by 17.9% to JPY32.6bn.
In addition, related products are also set to grow by 3.1% y/y, with continued growth in Bugyo-linked solutions. However, the services segment is forecasted to decrease by 2.4%, primarily due to a moderate decline in on-premise maintenance contract revenues as the shift to cloud computing continues.
On the expense side, SG&A costs are planned to rise, driven by higher personnel expenses due to an increase in headcount and competitive base salary increases. Moreover, advertising expenses are set to increase to boost product awareness for offerings such as Bugyo V ERP Cloud and Billing DX Cloud. The company expects to receive JPY1bn in dividend income from listed REITs and other sources for the full year. Reflecting this positive outlook, the annual dividend has been increased from JPY100 to JPY106 for FY 25. Overall, the company is navigating a dynamic landscape with strategic initiatives aimed at fostering growth and adapting to market shifts, while also rewarding shareholders with increased dividends.
Consistent long-term performance
OBIC posted a decent revenue CAGR of 10.6% over the last three years (FY 22-25), reaching JPY47bn in FY 25. Revenue growth was achieved through an increase in the proportion of solution sales. EBIT grew at a CAGR of 10% to JPY21.7bn, with an impressive margin of 46.3%, driven by operational efficiency. Net profit growth outpaced revenues, registering a CAGR of 11.1% to JPY16.2bn, driven by higher investment income.
Strong net profit growth led to consistently positive cash from operations, reaching JPY17.7bn in FY 25 from JPY16bn in FY 22. As a result, cash increased from JPY124bn to JPY161bn as of the end of FY 25. Return on equity rose from 8.9% in FY 22 to 10.5% in FY 25.
In comparison, its local peer, Cybozu Inc., experienced a higher revenue CAGR of 17.1%, reaching JPY29.7bn in FY 25. Net income grew at an impressive CAGR of 86.2%, reaching JPY3.6bn, outpacing OBIC.
Projected financial growth
Over the past one year, OBIC’s stock has delivered decent returns of approximately 9%. However, Cybozu’s stock outperformed with returns of 86% over the same period.
The company is currently trading at a P/E of 33x, based on the FY 26 estimated EPS of JPY243, which is lower than its three-year historical average of 35.9x but higher than Cybozu’s 22.2x. Moreover, in terms of EV/EBIT, OBIC is currently trading at 17.3x, based on the FY 26 estimated EBIT of JPY25bn, which is lower than its three-year historical average of 17.8x.
Analysts anticipate net sales CAGR of 11.2% over FY 24-27, reaching JPY57.7bn. EBIT is expected to grow at a CAGR of 15%, reaching JPY28.5bn. Net income is expected to grow at a CAGR of 14.3% to JPY20.7bn. EPS is projected to increase from JPY184 in FY 24 to JPY275 in FY 27.
Overall, OBIC posted strong FY 25 results, with significant revenue and profit growth driven by increased solution sales. The company anticipates further growth in FY 26, with strategic expansions in cloud services and product awareness initiatives. Despite a decline in on-premise sales, the solutions segment is expected to see substantial growth. OBIC has consistently delivered positive cash flow and increased dividends, reflecting a positive outlook. Analysts project continued growth in revenue, EBIT, and net income, supported by operational efficiency and investment income. However, the company faces technical risk, operational risk, credit risk and liquidity risk.
