ACCESS Q2 FY2027 Earnings Analysis: Double-Digit Revenue Growth and Significant Loss Reduction Driven by Network Business; Full-Year Profitability Plan and Internal Control Review Progress Detailed

For the second quarter (interim period) of the fiscal year ending January 2027 (43rd term), ACCESS Co., Ltd. achieved significant year-on-year revenue growth and an improvement in operating profit/loss , bolstered by large-scale projects in the Network business secured in the previous fiscal year. However, due to the timing of revenue recognition for certain projects and conservative cost estimates in the IoT business, the results fell slightly short of the initial forecasts, with a wider-than-expected loss.

This report provides a detailed analysis of the overall performance, segment-by-segment status, progress in improving internal control systems following the designation as a Security on Alert, and the roadmap toward achieving full-year profitability.

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1. Q2 FY2027 Earnings Highlights

For the cumulative second quarter, the company reported revenue of 10,578 million yen (+16.8% YoY, an increase of 1,523 million yen) and an operating loss of 779 million yen (a significant improvement of 1,209 million yen YoY) .

As shown in the slide above, the full-scale revenue recognition of large-scale Network business projects secured in the previous term was the primary driver of the substantial year-on-year growth. However, compared to the initial guidance (revenue of 10,800 million yen, operating loss of 300 million yen), the results were impacted by conservative cost provisioning in the IoT business and the deferral of revenue recognition for certain Network business projects, leading to a larger deficit than planned.

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2. Analysis of Revenue and Operating Profit/Loss Factors

A breakdown of the revenue and operating profit fluctuations during the interim period highlights the contrasting performance and structural shifts across business segments.

Factors Affecting Revenue

Changes from the same period last year (9,055 million yen) are as follows:

• IoT Business Decline : -1,418 million yen (due to the reactionary decline from large projects in the previous year)
• Web Platform Business Decline : -147 million yen (due to timing of domestic license sales, etc.)
• Network Business Growth : +3,086 million yen (contribution from large-scale projects)

The robust growth in the Network business (more than double the previous year's level) fully absorbed the reactionary decline in the IoT business, securing an overall revenue increase of 16.8%.

Factors Affecting Operating Profit

Factors contributing to the significant improvement in operating profit from the previous year (-1,989 million yen) are as follows:

• Network Business Improvement : +2,004 million yen (profitability improvement driven by significant revenue growth)
• IoT Business Decline : -497 million yen (due to lower sales and conservative estimates for unprofitable/additional development costs)
• Web Platform Business Decline : -187 million yen
• Consolidated Adjustments, etc. : -109 million yen

While the improved profitability of the Network business strongly boosted overall earnings, the IoT business's upfront costs and timing issues prevented the company from reaching the initial operating loss target of 300 million yen.

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3. Segment-Specific Trends

(1) Network Business: Significant Growth Leveraged by Large Projects

• Revenue : 5,745 million yen (approx. 2.16x increase from 2,659 million yen in the same period last year)
• Segment Profit/Loss : -589 million yen (an improvement of approx. 2 billion yen from -2,594 million yen in the same period last year)

The Network business maintained a high level of revenue, comparable to the second half of the previous year (5,829 million yen), as large-scale projects progressed. Despite some timing issues in revenue recognition, the business is generally performing well. Furthermore, regular orders outside of large-scale projects have also increased year-on-year, broadening the business foundation.

(2) IoT Business: Reactionary Decline and Conservative Cost Estimates

• Revenue : 3,859 million yen (5,275 million yen in the same period last year)
• Segment Profit/Loss : -113 million yen (384 million yen in the same period last year)

The IoT business saw a revenue decline due to the absence of large-scale projects from the previous year. While orders and sales for core professional services (custom development including consulting) are growing steadily, segment profit was pressured by conservative provisioning for potential future development costs in certain projects. Although the Taiwan business is experiencing a delay in sales recovery, cost efficiency has improved, and the operating profit is on a recovery trend.

(3) Web Platform Business: In Line with Expectations

• Revenue : 973 million yen (1,120 million yen in the same period last year)
• Segment Profit/Loss : -90 million yen (96 million yen in the same period last year)

Due to the impact of certain license sales recorded in the domestic market during the same period last year, the segment saw a year-on-year decline in both revenue and profit. However, progress remains largely in line with initial expectations, including overseas operations (Europe and others).

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4. Governance and Internal Control System Development

Regarding the development and operation of internal control systems—a critical topic for ACCESS—the company is taking steady steps as outlined in the timeline provided in the slide.

• August 27, 2025 : Designated as a Security on Alert by the Tokyo Stock Exchange (TSE).
• January 30, 2026 : Submitted the Improvement Plan and Status Report.
• August 26, 2026 : Transitioned to a new management structure following the successful implementation of governance improvements.
• August 27, 2026 : Submitted the " Internal Control System Confirmation Report " to the TSE, summarizing the status of development and operation.
• Current Status : The TSE is currently reviewing the internal control system based on the submitted report.

The company has indicated its policy to continue promoting the effective operation and establishment of internal controls under the new management structure.

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5. Full-Year FY2027 Earnings Forecast and Profitability Plan

ACCESS has maintained its initial full-year consolidated earnings forecast for the fiscal year ending January 2027.

• Revenue : 23,000 million yen (+19.7% YoY, +3,784 million yen)
• Operating Profit : 800 million yen (Turnaround from -2,688 million yen in the previous year, +3,488 million yen)
• Ordinary Profit : 840 million yen (Turnaround from -2,635 million yen in the previous year, +3,475 million yen)
• Net Income Attributable to Owners of Parent : 610 million yen (Turnaround from -3,398 million yen in the previous year, +4,008 million yen)

While the operating loss stands at 779 million yen at the interim stage, the plan is to generate approximately 1.58 billion yen in operating profit during the second half (Q3 and Q4) to achieve the full-year target of 800 million yen.

Full-Year Segment Plan Breakdown

• Network Business : Revenue 13,000 million yen (+53.1% YoY) , Segment Profit 400 million yen (Turnaround from -3,149 million yen)
• IoT Business : Revenue 7,650 million yen (-9.7% YoY) , Segment Profit 350 million yen (+13.4% YoY)
• Web Platform Business : Revenue 2,350 million yen (+4.1% YoY) , Segment Profit 50 million yen (-75.7% YoY)

The primary driver for the company-wide turnaround is the significant revenue growth (+4.5 billion yen YoY) and profitability improvement (approx. 3.55 billion yen improvement in segment profit) in the Network business . The IoT business is also expected to recover profitability in the second half, with a full-year profit increase (350 million yen) planned.

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6. Summary and Outlook

ACCESS's Q2 FY2027 results showed a significant year-on-year improvement in earnings, driven by large-scale Network business projects , although results fell short of interim targets due to conservative provisioning and timing issues in the IoT business. However, the full-year target of 23 billion yen in revenue and 800 million yen in operating profit remains unchanged .

Key points to watch going forward:

1. Resolution of revenue recognition timing in the Network business and the certainty of second-half sales growth.
2. Recovery of profitability in the IoT business and the expansion of professional services.
3. Progress of the TSE's internal control review and developments regarding the removal of the Security on Alert designation.