GRCS (9250) Q2 FY2026 Earnings Deep Dive Report

GRCS (9250) announced its financial results for the second quarter of the fiscal year ending November 2026 (December 1, 2025 – May 31, 2026). This report provides a detailed analysis of the company's earnings overview, segment-specific progress, financial status, and future growth strategies and outlook, based on the provided materials.

Q2 FY22026 Earnings Highlights

In the second quarter of FY2026, net sales reached 1,743 million yen , representing an 8.8% increase year-on-year. This marks a record high for quarterly sales , driven by deeper engagement in existing projects and the acquisition of new projects in the Asian market. In terms of profitability, EBITDA was 18 million yen (up 3 million yen year-on-year), and operating loss improved to △48 million yen (from △95 million yen in the prior year), showing a 47 million yen improvement from the previous year. The gross profit margin was 26.4%, a decrease of 3.1 percentage points year-on-year. However, the steady progress in sales and control over selling, general, and administrative (SG&A) expenses contributed to operating profit and EBITDA exceeding initial plans.

The full-year outlook indicates achievement of targets , supported by the development and provision of AI-related services and the expansion of the financial technology business in Asia. Notably, the joint AI model development project with FIXSTARS Corporation is progressing smoothly towards a release within the current fiscal year.

The following slide presents an executive summary of the financial results, concisely outlining key financial indicators and the full-year outlook. It clearly shows the record-high sales and the direction of profit improvement, making it crucial for understanding the overall business performance.

Segmental Progress and Growth Drivers

The company's business primarily consists of two segments: the "GRC Security Business" and the "Financial Technology Business."

The GRC Security Business showed solid performance with sales of 1,336 million yen (up 11.2% year-on-year), driven by expanded projects with existing clients. Gross profit was 356 million yen (up 2.3% year-on-year), with a gross profit margin of 26.7%. Improvements in transaction unit prices and maintenance of operational efficiency contributed to the increase in gross profit.

The Financial Technology Business secured new large-scale projects in Asia during Q2, resulting in sales of 406 million yen (up 1.5% year-on-year). Gross profit was 102 million yen (down 16.5% year-on-year), with a gross profit margin of 25.3%. The acquisition of new projects contributed to profit generation, and further new project acquisitions are anticipated in the second half of the fiscal year.

Product sales increased by 14.3% year-on-year , outperforming the solution business and serving as a significant driver of overall sales growth.

The slide below illustrates the quarterly sales trend by business segment, clearly showing the remarkable growth of the Financial Technology Business. The steady increase in product sales also indicates its importance as a key pillar in the company's growth strategy.

Cost Structure and Profit Improvement

Selling, general, and administrative expenses for the second quarter of FY2026 were 507 million yen , an increase of 10.5% year-on-year. However, the increase in expenses was controlled relative to sales growth, leading to operating profit and EBITDA exceeding initial plans. Specifically, recruitment activities for building the growth foundation are progressing smoothly , and efforts to optimize indirect costs continue. Regarding personnel, recruitment in the GRC Security Business is on track, and staffing has increased in line with the expansion of projects in the Financial Technology Business.

Improvement in Financial Health

As of the end of May 2026, the balance sheet shows that the negative net worth has been resolved , and total net assets have improved to 3 million yen . This is a significant improvement from △95 million yen at the end of the previous fiscal year, marking an important step towards stabilizing the financial foundation. The company plans to continue improving its revenue structure and implementing capital enhancement measures to further stabilize its financial base.

Growth Strategy and Future Outlook

GRCS is pursuing several strategic initiatives to achieve sustainable growth and improve profitability.

1. Establishment of a new subsidiary, "GRCS Technologies Inc." : Established in April 2026 and commencing operations in August. This aims to consolidate and develop specialists, strengthen the overall group's competitiveness, and enhance recruitment competitiveness and market value, holding significant strategic importance for achieving sustainable profit improvement and growth .

2. Collaboration with SOMPO Risk Management in the ERMT field : The enterprise risk management tool "ERMT" will integrate with SOMPO Risk Management's consulting services, contributing to the advancement of ERM for Japanese companies. This initiative aims to support the establishment of corporate risk management systems and lead to the creation of new business opportunities.

3. Response to the Ministry of Economy, Trade and Industry's "Security Measures Evaluation System" : In anticipation of the system's launch at the end of FY2026, GRCS has begun offering gap analysis services to help companies achieve "★3" certification. This new evaluation system aims to improve the overall security level of supply chains. GRCS will provide support for creating status reports based on evaluation criteria and assist in implementing security solutions. This initiative represents an expansion of business domains in response to societal demands , enhancing the company's expertise and market presence.

The slide below explains the response to the "SCS Evaluation System" promoted by the Ministry of Economy, Trade and Industry, which aims to improve the overall security level of supply chains. This response demonstrates that GRCS's strategy is to contribute to solving social issues while capturing new market opportunities. Specifically, the gap analysis service for achieving "★3" certification directly supports companies in strengthening their security measures, leveraging the company's specialized expertise.

4. Integration of AI-driven operational automation and expert team support into a BPaas model : For companies contracting "Supplier Risk MT" and "CSIRT MT.msS," AI and expert teams will handle practical processes such as periodic assessment collection, aggregation, and filtering of incident information. This provides comprehensive support for high-quality and smart risk management , offering solutions to corporate challenges and making effective risk management more accessible.

Full-Year Earnings Forecast

Based on the on-track performance in the first half, the full-year earnings forecast for FY2026 projects net sales of 3,678 million yen (up 10.3% year-on-year), EBITDA of 235 million yen (up 234.5% year-on-year), and operating profit of 119 million yen (compared to △67 million yen in the previous year). Particularly, the Financial Technology Business tends to recognize profits more heavily in the second half due to its business characteristics, so further profit contribution is expected in the latter half of the year.

Conclusion

In the second quarter of FY2026, GRCS achieved record-high quarterly sales and showed significant improvement in profitability. The robust growth of the GRC Security Business and the acquisition of new large-scale projects in Asia for the Financial Technology Business were key drivers of overall performance. Furthermore, the company is actively pursuing diversified growth strategies , including the establishment of a new subsidiary, collaboration with SOMPO Risk Management, response to the Ministry of Economy, Trade and Industry's new security evaluation system, and the deployment of an AI-powered BPaas model, which raises expectations for future business expansion and improved profitability. Financial health has also improved, reaching the significant milestone of resolving negative net worth . These initiatives indicate that GRCS is building a strong foundation to establish its position as a "leader in the GRC security domain" and achieve sustainable growth.