Tobila Systems Q3 FY2026 Earnings Analysis: Solution Business Drives Record-High Revenue, Accompanied by 20th Anniversary Dividend and Accelerated Growth Investment

1. Earnings Overview: Record-High Revenue Driven by Rapid Growth in the Solution Business

Tobila Systems, Inc. reported its financial results for the first nine months of the fiscal year ending October 31, 2026 (November 1, 2025 – July 31, 2026) , with revenue reaching 2,636 million yen (up 27.1% YoY) , marking a significant new record for the first nine months of a fiscal year.

Operating profit was 755 million yen (down 0.6% YoY) , ordinary profit was 771 million yen (up 1.0% YoY) , and profit attributable to owners of the parent was 516 million yen (up 0.1% YoY) . Despite executing planned business foundation enhancements—including aggressive hiring, development investments, and office relocation in line with the Mid-Term Management Plan 2028—the company maintained high profitability, supported by substantial revenue growth.

Significance of Highlight Slides and Analysis of Performance Drivers

The highlight slide above symbolizes the structural shift in the company's business portfolio. While the traditional core Security Business continues to serve as a solid foundation, the accelerating momentum of the "Solution Business" is clearly evident.

• Security Business : Revenue of 1,497 million yen (up 4.1% YoY)
  • Mobile-related revenue was 1,240 million yen (down 1.3% YoY) due to timing shifts in development projects and a decline in certain apps. However, fixed-line services saw rapid growth, reaching 256 million yen (up 56.8% YoY) , driven by an increase in contracts as call-blocking became a standard service.
• Solution Business : Revenue of 1,139 million yen (up 79.0% YoY)
  • "Tobila Phone Biz" (business phone service) reached 793 million yen (up 70.6% YoY) , and "Tobila Phone Cloud" (cloud PBX service) reached 346 million yen (up 101.8% YoY) . Both segments recorded explosive growth, exceeding their full-year results from the previous fiscal year by the end of the third quarter.

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2. Evolution of Revenue Structure: Accumulation of Stock Revenue and Expansion of Flow Revenue

The company's high-profit business model is confirmed by its quarterly trends. Quarterly revenue has maintained an upward trajectory, with Q3 FY2026 revenue reaching 962 million yen (up 37.0% YoY) .

Qualitative Changes in Profitability and the Strength of Stock Revenue

The slide above, showing the transition of stock and flow revenue, demonstrates that the company’s business model combines strong defensive characteristics with high top-line growth potential.

1. Stable Expansion of Stock Revenue :
   • Q3 stock revenue grew to 733 million yen (up 27.0% YoY) . In addition to the solid monthly base from the Security Business, the accumulation of monthly usage fees and license fees in the Solution Business is accelerating.
2. Surge in Flow Revenue :
   • Q3 flow revenue reached 228 million yen (up 82.4% YoY) . This was driven by record-high quarterly unit sales of "Tobila Phone Biz" and an increase in initial setup fees associated with "Tobila Phone Cloud" implementations.
   • Notably, the company operates a circular model where increased hardware sales (flow) directly translate into long-term license fees (stock) recognized as contract liabilities and revenue over the subsequent 5–7 years.

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3. Segment Trends and KPI Analysis

(1) Solution Business: Surging Demand Addressing Social Issues

• Tobila Phone Biz :
  • Cumulative unit sales reached 8,588 units . Growth is primarily driven by demand for call recording and warning features as a countermeasure against "Customer Harassment (Kasuhara)," which has gained significant social attention, as well as the expansion of new customer segments via "Biz Lite" and strengthened sales channels, including agencies.
• Tobila Phone Cloud :
  • The number of billed IDs expanded rapidly to 17,399 , marking the highest quarterly net increase in billed IDs to date.

KPI Analysis for Tobila Phone Cloud

The trend in billed IDs and the average monthly churn rate shown in the slide above prove that the company’s cloud services maintain extremely high customer retention and scalability.

• Direct sales to enterprise (large and mid-sized) clients are progressing, leading to larger implementation scales per project.
• The average monthly churn rate remains at an extremely low level of less than 1% (approximately 0.7% in Q3) . The high necessity of the service as business infrastructure and high switching costs support this low churn rate.

(2) Security Business: Driven by Fixed-Line Services

• Mobile-related : The company employs a combination of contract models (monthly active users × unit price, number of subscribers × unit price, and fixed-rate contracts) through major carriers. The price revision implemented in April 2026 contributed fully to the Q3 results.
• Fixed-line-related : According to National Police Agency statistics, damages from special fraud in the first half of 2026 reached 181.6 billion yen , showing a continued upward trend. As telecommunications companies increasingly adopt call-blocking as a standard service to protect the elderly, the number of subscribers is steadily increasing.

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4. Progress Against Full-Year Forecasts and Cost Structure

Progress against the full-year earnings forecast for the fiscal year ending October 2026 remains at a very high level.

• Revenue : 78.3% progress (2,636 million yen against a 3,366 million yen forecast)
• Operating Profit : 96.2% progress (755 million yen against a 785 million yen forecast)
• Ordinary Profit : 96.9% progress (771 million yen against a 796 million yen forecast)
• Net Profit : 97.3% progress (516 million yen against a 531 million yen forecast)

Q4 Investment Plan and Outlook

Although profit progress has already exceeded 96% of the full-year plan, the company has maintained its initial forecast. This is because the following growth investments are concentrated in the fourth quarter :

1. Accelerated Hiring : The number of full-time employees was 138 at the end of Q3 (an increase of 24 from the end of the previous fiscal year). With 10 new hires confirmed for August and September, the company is on track to reach its full-year target of 155 employees.
2. Facility and Branding Expenses : Costs associated with the relocation of the Nagoya headquarters (following the Tokyo office) and the renewal of the corporate website to commemorate the 20th anniversary are scheduled for Q4.
3. Development Investment : The company will continue to execute R&D expenditures for new product development and the launch of new offerings.

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5. Capital Policy, Topics, and Future Growth Strategy

① 20th Anniversary Commemorative Dividend

As performance has exceeded initial expectations and sufficient funds for growth investment have been secured, the company is strengthening shareholder returns. In addition to the ordinary year-end dividend of 20 yen per share, the company has decided to implement a 20 yen commemorative dividend (totaling 40 yen per share) .

② Capital and Business Alliance with Prodelight Co., Ltd.

To accelerate sales and expand the market share of "Tobila Phone Cloud," the company entered into a capital and business alliance with Prodelight Co., Ltd. (acquiring a 5.948% stake in voting rights). Both companies will leverage their respective customer bases, sales networks, and development capabilities to strengthen their position in the cloud telephony market.

③ Financial Soundness and Cash Flow

Total assets at the end of Q3 were 6,737 million yen (up 1,356 million yen from the end of the previous fiscal year) , with cash and deposits of 4,301 million yen (up 565 million yen) , ensuring ample liquidity. While current liabilities increased due to higher contract liabilities (deferred revenue) from "Tobila Phone Biz" sales, resulting in an equity ratio of 45.6% , the company’s underlying cash-generating ability and financial foundation remain extremely robust.

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6. Conclusion

Tobila Systems' Q3 FY2026 earnings report demonstrates that the Solution Business has blossomed as a second pillar of growth , capturing demand for customer harassment countermeasures and corporate cloud migration, all while leveraging the unique nuisance information database built through its core call-blocking services. By balancing abundant cash reserves with high profitability, the company is accelerating investments in human resources and infrastructure to achieve its Mid-Term Management Plan 2028.