Eltes Reports Strong First Quarter but Sees Challenges Ahead

TOKYO, Jul 31 (Pulse News Wire) – Eltes CO.,LTD. (3967.T) reported strong consolidated revenue and operating profit for the quarter ended July 31, 2026, marking record highs for the first quarter.

Consolidated revenue reached ¥2.110 billion (up 11.5% year-over-year), while operating profit stood at ¥65 million (up 46.5%). However, net income was negatively impacted by special losses totaling -¥68 million due to the sale of subsidiaries, leading to a temporary deficit. Despite this, the company expects significant gains from the remaining two subsidiary sales later in the fiscal year, maintaining its full-year outlook unchanged.

In the digital security segment, revenue declined to ¥688 million (down -¥1 million) and operating profit was ¥215 million (down -¥49 million), primarily due to reduced recurring revenue from social risk management services and higher costs associated with office relocation and investments in AI governance. Nevertheless, the company remains confident in achieving its annual goals, citing robust growth in key metrics such as monthly recurring revenue (MRR) for internal threat detection services, which grew from ¥77 million to ¥82 million. Looking ahead, Eltes plans to accelerate growth through strategic focus on core businesses and cost optimization measures, including reducing amortization expenses from divested subsidiaries and streamlining operations.

The company also highlighted ongoing efforts to leverage AI technology for operational efficiency and customer service enhancements, positioning itself well for future opportunities in AI governance solutions.