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Introduction & Market Context
System D Inc. (3804) presented its third-quarter financial results for the fiscal year ending October 2025 on September 16, showing robust performance across all key metrics. The company’s stock closed at 2,260 yen before the presentation, having gained 5.13% (116 yen) in the most recent trading session. The shares have traded in a 52-week range of 1,330 to 2,503 yen, indicating strong market performance over the past year.
Quarterly Performance Highlights
System D reported impressive year-over-year growth in its Q3 2025 results, with sales reaching 3,744 million yen, a 14.2% increase from the previous year. Operating profit showed even stronger growth, rising 33.5% to 693 million yen compared to 519 million yen in Q3 2024.
As shown in the following chart of quarterly financial results, both sales and operating profit have rebounded strongly after a slight dip in 2024, exceeding 2023 levels and showing accelerating growth momentum:
The company attributed this performance to new user system implementations and new budget projects that contributed to increased stock revenue and flow sales. Notably, the results exceeded the company’s initial plans, demonstrating effective execution of its growth strategy.
Detailed Financial Analysis
The profit and loss statement reveals strong performance across all profitability metrics. Net profit showed the most dramatic improvement, surging 42.0% year-over-year to 489 million yen, while ordinary profit increased by 34.4% to 698 million yen.
The detailed year-over-year comparison shows consistent growth across all financial metrics:
System D’s balance sheet also strengthened during the period, with total assets reaching 7,206 million yen, up from 6,963 million yen at the end of the previous fiscal year. Net assets increased to 4,868 million yen from 4,505 million yen, while the equity ratio improved to 67.6% from 64.7%.
Looking at longer-term financial indicators, System D has demonstrated consistent improvement across key metrics over the past several years:
The company has maintained strong profitability with its operating profit margin hovering around 20%, while steadily improving its equity ratio and book value per share. The presentation noted that System D aims to maintain a sales revenue operating profit rate of approximately 20% by continuing to develop efficient business practices.
Strategic Initiatives
Beyond its core financial performance, System D highlighted two significant strategic initiatives that position the company for future growth.
First, the company announced its participation in the Ministry of Education, Culture, Sports, Science and Technology’s project focused on AI applications in secure school administration environments. System D’s "V. Development of AI Chatbot Function for School Support System" has been selected for this demonstration project.
As illustrated in the following slide, the AI chatbot will have multiple applications in educational settings:
The AI system aims to improve learning outcomes, reduce teacher workload, enhance data utilization, and increase operational efficiency. Specific applications include document creation and translation, proofreading, information analysis, and concept explanation.
Additionally, System D announced the implementation of its "Smart Hello Ticket" system at the Hokkaido Government Office, a nationally designated important cultural property:
This cloud-based system enables integrated management of web ticket sales, self-service ticketing, and counter sales. The implementation coincides with the reopening of the historic building on July 25, 2025, following large-scale renovations.
Forward-Looking Statements
System D continues to enhance shareholder returns, with plans to increase its dividend payout ratio to 28% in fiscal year 2025. The planned dividend per share for 2025 is 27 yen, an increase of 3 yen from the previous year.
The following chart illustrates the company’s consistent dividend growth strategy:
This represents a significant improvement from 2018, when the dividend was just 7.0 yen per share with a 17.6% payout ratio, demonstrating the company’s commitment to increasing shareholder returns as its financial performance strengthens.
With its strong financial performance, improving profitability metrics, and strategic initiatives in AI and ticketing systems, System D appears well-positioned to maintain its growth trajectory through the remainder of fiscal year 2025 and beyond.
Full presentation:
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