We would like to express our deepest gratitude to our shareholders and investors for your constant support and patronage.
Triggered by protectionist trade policies between various foreign countries, domestic companies actively reviewed export prices, suppressed costs, and restructured supply chains. In the IT industry to which the Group belongs, events such as the cancellation or postponement of development and investment projects were also observed. In addition, price levels remain high, and at the end of 2025 the Bank of Japan raised its policy interest rate, further heightening concerns about corporate performance.
In particular, in the fourth quarter, the surge in crude oil prices due to the situation in the Middle East began to have a serious impact on the operations of domestic companies. Moreover, concerns about substitution by generative AI, referred to as the Anthropic Shock or the death of SaaS, caused a sharp decline in stock prices across the entire IT and software industry, among other events that could pose challenges to the maintenance and enhancement of the Group’s corporate value.
However, among the Group’s client companies, demand for system investments aimed at renewing existing systems and improving productivity remains robust, and inquiries for technical support aimed at the introduction of generative AI are also strong. Therefore, we have determined that there is no serious impact on the Group’s orders. Specifically, in the current fiscal year, orders in the digital solutions fields on which the Group has focused, such as AI, cloud, security, and data analytics, increased significantly.
Since its founding, the Company has cultivated CRESCO’s unique strengths, including a corporate attitude of taking responsibility for high technology and quality, as well as business expertise and corporate culture that place the highest priority on the success of customers’ business strategies. This strength, which can be called CRESCO’s DNA, is not easily imitated by competitors or replaced by AI, and we are further evolving this strength by leveraging generative AI and promoting co-creation that accelerates the establishment of new quality standards in the AI era and the realization of customer strategies. The Company will research and utilize generative AI as a driver to further accelerate the growth of CRESCO, thereby achieving growth in the next-generation SI business model and enhancing corporate value.
Under this business environment, the Group launched the “Medium-Term Management Plan 2026” in the previous fiscal year. With consolidated net sales of 70 billion yen, a consolidated operating profit ratio of 11.5%, and a consolidated ROE of 15% set as financial KPIs for fiscal 2026, the Group aims to achieve these KPIs and its mission of “continuously growing and moving society forward together with our customers” through the implementation of seven growth strategies: (1) Establish a co-creation model, (2) Exercise quality leadership, (3) Promote human capital management, (4) Expand technological and digital solutions, (5) Promote coordination among businesses, (6) Realize digital transformation, and (7) Integrated Group management.
At the Company, in order to strengthen development and proposal capabilities in the “automotive, transport equipment” area, we reorganized the Industrial Business-Unit and newly established the Mobility DX Business-Unit. In addition, for the purpose of strengthening sales capabilities, we newly established the Market Development-Unit. We also enhanced the executive officer system to establish a structure capable of advancing our business in all directions.
In July 2025, we consolidated the Company’s previously dispersed development sites and opened Teq-C, as well as thoroughly pursuing improvements in employee work environments and communication activation.
Furthermore, as ZXY MEQQE Corporation, which was an equity-method affiliate, completed liquidation in January 2026, we have excluded the company from the scope of the equity method.
On May 9, 2025, we announced an increase in the consolidated dividend payout ratio from the previous 40% to 50%, starting from the interim dividend for the current fiscal year.
On the same date, we also announced an open-market purchase of treasury shares with an upper limit of 1,000,000 shares or 1,500 million yen. The actual purchases during the current fiscal year totaled 903,600 shares (total acquisition cost: 1,499 million yen).
Furthermore, in August 2025, the Company disposed of 30, 120 treasury shares as restricted shares remuneration granted to its Directors (excluding Outside Directors and Directors serving on the Audit and Supervisory Committee), employees of the Company serving as Executive Officers, and some Directors of our subsidiaries (the total disposal amount was 48,914,880 yen). In December 2025, the Company disposed of 35,640 treasury shares as restricted shares remuneration granted to some employees of the Company and its subsidiaries (the total disposal amount was 53,994,600 yen).
In August 2025, we concluded a business partner agreement with SonarSource Sàrl, headquartered in Switzerland, and were certified as the first “SonarQube Gold Reseller Partner” in Japan. We also began offering Trust Code Hub, as a service that utilizes the code quality analysis platform SonarQube.
In October 2025, we began supporting Microsoft Sentinel for Creage SIEM+. We were also certified as Diamond (highest tier) for Business Partners and Service Partners accreditations provided by UiPath.
At EdgeTech+ 2025 held in November 2025, the industry-academia partnership project Open SDV Initiative, in which the Company participates in the mobility field, exhibited a demonstration allowing participants to experience SDV (Software Defined Vehicle) operations.
In February 2026, we announced the joint development with Japan Airlines Co., Ltd. and JAL Engineering Co., Ltd. of a system to streamline recording and analysis in aircraft engine borescope inspections, and the start of its operation. We also announced a case study on migration acceleration utilizing generative AI.
In March 2026, we expanded the menu of our Security Vulnerability Diagnosis services by adding ASM Diagnosis and AWS Configuration Diagnosis, thereby enhancing our service lineup.
On April 1, 2025, CRESCO J CUBE CO., LTD. took over its subsidiary TAKAGI SYSTEM CO., LTD for the purpose of maximizing synergistic effects and expanding business through integration. In addition, based on a resolution of its Board of Directors meeting held on September 9, 2025, the company acquired all issued shares of iS Technoport, which has strengths in the IBMi business, effective October 1, 2025.
Similarly, CRESCO HOKURIKU. LTD. acquired all issued shares of APES CO., LTD., which specializes in system development for the manufacturing industry, effective October 1, 2025, based on a resolution of its Board of Directors meeting held on August 25, 2025.
IOS Co., Ltd. entered into a ten-year basic partnership agreement with Mitsubishi UFJ Trust and Banking Corporation as of May 1, 2025 for the purpose of steadily securing IT engineers in system development and services that are incidental to it over the long term.
CRESCO Digital Technologies Ltd. announced in January 2026 the expansion of the scope of its Network Survey Service from LAN to WAN.
CRESCO e-Solution Co., Ltd. was certified for the second consecutive year in March 2026 as a Platinum Partner, the highest in Concur Japan, Ltd.’s service partner rank.
Aside from the above, in funds management, the Company recorded a gain on sale of investment securities (in extraordinary income) of 641 million yen and a gain on redemption of investment securities (in extraordinary income) of 54 million yen.
With regard to the outlook for the fiscal 2026, we expect that, due to the surge in crude oil prices associated with the situation in the Middle East and to continuing inflation, client companies with particularly high dependence on energy market conditions will proceed with more selective IT investment projects. Specifically, while IT investments for new businesses such as proof-of-concept trials are likely to be restrained, we anticipate that IT investments essential to business activities, such as replacement of existing systems, IT investments to improve productivity, and security investments to address cyber attacks, will become even more robust. The Group will strive for steady growth from fiscal 2026 onward by accurately converting customer demand for system replacement and IT investment into orders, improving profitability through development efficiency and cost efficiency utilizing generative AI, and expanding sales channels by supporting growing customer needs for the utilization of generative AI and other DX.
May, 2026
Hiroyuki Nemoto, Chairman & CEO
Hiroshi Tominaga, President
