■Future outlook

Pacific Net ＜3021＞'s consolidated financial results for the fiscal year ending 2025/5 are expected to increase sales and profit, with sales of 7,800 million yen (up 12.7% from the previous fiscal year), operating income of 770 million yen (up 17.0% from the same period), ordinary income of 735 million yen (up 15.5% from the same period), and net income attributable to parent company shareholders of 477 million yen (up 10.4% from the same period). For the IT subscription business, which is the main force, full-scale PC update demand at various companies and organizations associated with the end of support for Windows 10 in 2025/10 will be a strong tailwind for IT subscription services, LCM services, etc. The company anticipates a further acceleration in the pace of growth due to the expansion of the subscription business. Even in the ITAD business, the market inflow of used PCs will increase as PC updates in companies etc. progress, and in particular, it is expected that both sales and profit will increase as high-spec PCs used in the subscription business become products. Realistically, the full-scale collection of used PCs will come after the timing when PC updates proceed, but even so, we believe that the contribution to the performance side for the 2025/5 fiscal year is reasonably high. Furthermore, the company sees the timing of this PC renewal demand as an important touchpoint with customers and an opportunity to propose “emission management BPO services.” The idea is to promote sales of the same service as an important tool for cross-selling and upselling, leading to expansion of service profits. As for the communication device business, domestic group trips and inbound demand will expand, and it is expected that factory tours for new companies and development of event companies will lead to results.

In addition to the chronic shortage of corporate IT human resources due to DX and security measures, etc., hacker attacks, spyware intrusions, etc. have occurred frequently, and the operation of information management systems has become an important issue from the viewpoint of corporate defense. Also, in addition to the fact that PCs updated when support for Windows 7 ended have reached the update period from 2024, as already described, support for Windows 10 is also about to end in 2025/10. Under such a business environment, the IT subscription business is expected to further expand orders, and it is expected that the strong order acceptance situation will continue as in the previous fiscal year.

As a market environment, PC shipments with subscriptions due to the end of support for Windows 10 are expected to be around 3.2 million units. There is a possibility that it will increase significantly when compared to the number of replacement shipments when Windows 7 support ended from 2018 to 2020, but we believe that it is definitely not a high number when taking into account the fact that awareness of IT subscriptions has improved from when they were replaced last time, and when corporate IT human resource shortages and heightened work burden reduction needs are taken into account.

The company believes that strengthening service supply capabilities and systems is essential in order to catch up with anticipated market growth. In the 2025/5 fiscal year, we will also actively invest in human resources, systems, DX, equipment, etc. for this purpose. Regarding human resources, the idea is to focus on reskilling existing employees, starting with the recruitment of new IT departments, which are the pillars of the business, in order to strengthen human capital management. Specifically, we are planning training related to generative AI and implementation of various e-learning. Regarding systems and DX, we aim to improve added value through improving work efficiency through systematization and transforming business processes through DX. On the equipment side, the plan is to consider expanding business sites in anticipation of an increase in employees.

In the ITAD business, since there is a time lag between the expansion of PC renewal demand and the increase in used PC emissions, it is expected that a full-scale recovery in business performance will gradually appear after the 2025/5 fiscal year. The “Emissions Management BPO Service” has received orders from multiple major companies, and business negotiations are also expanding. In the future, there is a large demand for PC updates, and it is expected that there will be an increase in orders and expansion of transactions due to IT subscriptions and cross-sell upsells with LCM services, etc., centering on major companies with high LCM outsourcing needs.

As for collection and data erasure services, the strength of providing the best security in the industry will be utilized as the only listed company in the industry. Also, with regard to “PCNET Auction,” there is a high demand for high-spec and excellent reused products, and since the number of corporations that become members is also increasing, it can be expected that the scale will expand due to listing agencies, increased items, etc. Meanwhile, it is a policy to handle low-spec PCs for which market prices have fallen while considering profitability.

Also, with regard to the communication device business, a further increase in domestic/overseas travel is expected, and it is planned to capture new demand after the COVID-19 pandemic has subsided (hereinafter, after COVID-19), such as inbound and educational trips. Factory tours are being resumed at various companies due to the post-COVID-19 pandemic, and as an increase in various tourism and events is expected, we will actively capture demand for earphone guides.

(Author: FISCO Analyst Tomokazu Murase)