Interim report
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Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. October 28, 2025 Consolidated Financial Results for the Six Months Ended September 30, 2025 (Japanese standard) Company name: INES Corporation Listing: Tokyo Stock Exchange Securities code: 9742 URL: https://www.ines.co.jp/en/ Representative: Shuji Hattori, President and Representative Director Contacts: Satoshi Numazaki, General Manager, Corporate Staff Division Tel: +81-3-6775-4401 Scheduled date to file semi-annual securities report: November 12, 2025 Scheduled date to commence dividend payments: December 5, 2025 Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the six months ended September 30, 2025 (April 1, 2025 to September 30, 2025) (1) Consolidated operating results (cumulative) (Figures in percentages denote year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Six months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % September 30, 2025 16,486 (11.5) (920) – (801) – (601) – September 30, 2024 18,631 (5.0) 876 2.4 898 0.9 537 13.5 Note: Comprehensive income For the six months ended September 30, 2025: ¥(455) million [ –%] For the six months ended September 30, 2024: ¥557 million [(9.0)%] Profit per share Fully diluted profit per share Six months ended Yen Yen September 30, 2025 (28.92) – September 30, 2024 25.83 – (2) Consolidated financial position Total assets Net assets Equity ratio As of Millions of yen Millions of yen % September 30, 2025 50,669 38,134 75.3 March 31, 2025 56,727 39,192 69.1 Reference: Shareholders’ equity As of September 30, 2025: ¥38,134 million As of March 31, 2025: ¥39,192 million
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2. Dividends Dividends per share End of Q1 End of Q2 End of Q3 Fiscal year end Annual Yen Yen Yen Yen Yen Fiscal year ended March 31, 2025 – 25.00 – 30.00 55.00 Fiscal year ending March 31, 2026 – 25.00 Fiscal year ending March 31, 2026 (Forecast) – 30.00 55.00 Note: Revisions to the forecast of cash dividends most recently a nnounced: Yes The Company has decided to pay a second quarter-end dividend of ¥25 for the fiscal year ending March 31, 2026 (forecast). In addition, the annual dividend forecast, including the year-end dividend, was revised to ¥55. For details, please refer to the “Notice Concerning Revision of Earnings Forecasts, Determination of Dividends of Surplus (Interim Dividend) and Revision of Year-End Dividend Forecast” released today (October 28, 2025). 3. Forecasts for consolidated financial results for the fiscal year ending March 31, 2026 (April 1, 2025 to March 31, 2026) (Figures in percentages denote year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Profit per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full year 39,000 (3.9) 1,400 (60.4) 1,500 (58.4) 1,000 (59.0) 48.05 Note: Revisions to the earnings forecasts most recently a nnounced: Yes For details on the revisions to the consolidated earnings forecasts, please refer to the “Notice Concerning Revision of Earnings Forecasts, Determination of Dividends of Surplus (Interim Dividend) and Revision of Year-End Dividend Forecast” released today (October 28, 2025).
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* Notes (1) Significant changes in the scope of consolidation during the period: No (2) Adoption of accounting treatment specific to the preparation of semi-annual consolidated financial statements: Yes Note: For details, please refer to page 10 of the accompanying materials “2. Semi-annual consolidated financial statements and significant notes thereto, (4) Notes to Semi-annual Consolidated Financial Statements, (Notes to accounting treatment specific to the preparation of semi-annual consolidated financial statements).” (3) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies associated with the revision of accounting standards, etc.: No (ii) Changes in accounting policies other than (i): No (iii) Changes in accounting estimates: No (iv) Restatement: No (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of September 30, 2025 20,900,000 shares As of March 31, 2025 20,900,000 shares (ii) Number of treasury shares at the end of the period As of September 30, 2025 86,907 shares As of March 31, 2025 99,687 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Six months ended September 30, 2025 20,809,533 shares Six months ended September 30, 2024 20,803,927 shares * Semi-annual consolidated financial statements are placed outside the scope of reviews performed by certified public accountants or audit corporations. * Explanation regarding the proper use of re sults forecasts and other important notes (Disclaimer regarding forward-looking statements) Forward-looking statements such as results forecasts provided in this document are prepared based on currently available information and assumptions that are deemed reasonable, but the Company does not intend to guarantee their achievement. Actual results may differ significantly from the above forecasts for various reasons. For conditions regarding the assumptions for results forecasts and notes on the use of results forecasts, etc., please refer to page 3 of the accompanying materials “1. Outline of Operating Results, (3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements.”
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INES Corporation (9742) - 1 - ○ Table of contents of the attached materials Index 1. Outline of Operating Results .................................................................................................................... 2 (1) Outline of Operating Results for the First Half Ended September 30, 2025 ...................................... 2 (2) Outline of Financial Position for the First Half Ended September 30, 2025 ...................................... 3 (3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements ................. 3 2. Semi-annual consolidated financial statements and significant notes thereto .......................................... 5 (1) Semi-annual consolidated balance sheets ........................................................................................... 5 (2) Semi-annual consolidated statement of income and consolidated statement of comprehensive income ................................................................................................................................................ 7 Semi-annual consolidated statement of income ................................................................................. 7 Semi-annual consolidated statement of comprehensive income ........................................................ 8 (3) Semi-annual consolidated statement of cash flow .............................................................................. 9 (4) Notes to Semi-annual Consolidated Financial Statements ............................................................... 10 Notes to accounting treatment specific to the preparation of semi-annual consolidated financial statements ......................................................................................................................................... 10 Notes when there are significant changes in amounts of equity ....................................................... 10 Notes on premise of going concern .................................................................................................. 10
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INES Corporation (9742) - 2 - 1. Outline of Operating Results During the first half of the fiscal year under review, the Japanese economy continued to recover gradually. However, the outlook remained uncertain due to factors such as increasing geopolitical risks and rising raw material prices. In the domestic IT market, system investments centered on digital transformation (DX) and AI utilization to achieve sustained corporate growth are progressing steadily. In this business environment, the Group promoted the following initiatives in the second year of the 2026 Medium-Term Management Plan. “Standardization of local government information systems” In standardization of local government information systems, we have revised the transition method to ensure accurate and reliable system transitions across multiple municipalities. Locations nationwide are working as one to execute the plan according to a transition schedule that prioritizes safety and security. “Development of next-generation solutions” The Group is continuing work on developing a system that will be the next generation of our flagship product, the WebRings administration system for local governments. We will add AI agent functions and customizable general-purpose functions for local government employees to our service menu, aiming to differentiate from solutions of other companies. Additionally, we have started to provide AI-powered rapid development services to accelerate companies’ promotion of DX. “Enhancement of business foundations” To smoothly advance these business strategies, we continue to strengthen our collaboration with partner companies and strive to enhance our business foundations. Through our project to utilize generative AI, we are also working to improve productivity and quality company-wide. In investment into human capital, we will appropriately evaluate engineers’ expertise and establish mechanisms where each employee’s challenges and growth strengthen our technological foundation and organizational capabilities as we work to achieve sustainable management. In financial and capital strategies, we will work to optimize capital efficiency and enhance engagement across the entire Group with an aim of increasing corporate value. (1) Outline of Operating Results for the First Half Ended September 30, 2025 Consolidated net sales for the first half of the fiscal year under review decreased 11.5% year on year, to ¥16,486 million (please refer to “Consolidated net sales by sector,” which are shown in the table below). Net sales in the Public sector stood at ¥6,913 million (down 18.1% year on year), mainly reflecting lower sales due to the extension of local government system standardization and review of its transition method, as well as the revision to the legal system. Net sales in the Private sector stood at ¥9,573 million (down 6.1% year on year), mainly reflecting a decline in the development of a system for finance business and lower sales due to the partial withdrawal of the outsourcing business in the Group company. On the profit front, operating loss came to ¥920 million (compared to operating profit of ¥876 million in the same period of the previous year) and the ordinary loss was ¥801 million (compared to an ordinary profit of ¥898 million in the same period of the previous year), mainly reflecting lower net sales in each field and worsening cost ratio for the project as a whole associated with the review of the transition method for the local government system standardization. As a result, the Company recorded a loss attributable to owners of parent of ¥601 million (compared with profit attributable to owners of parent of ¥537 million in the same period of the previous year).
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INES Corporation (9742) - 3 - Consolidated net sales by sector (Millions of yen) Category/Term Six months ended September 30, 2024 Six months ended September 30, 2025 YoY change (%) Amount Composition ratio (%) Amount Composition ratio (%) Public 8,437 45.3% 6,913 41.9% (18.1)% Private 10,193 54.7% 9,573 58.1% (6.1)% Total 18,631 100.0% 16,486 100.0% (11.5)% Consolidated net sales by product/service (Millions of yen) Category/Term Six months ended September 30, 2024 Six months ended September 30, 2025 YoY change (%) Amount Composition ratio (%) Amount Composition ratio (%) System development 8,179 43.8% 6,605 40.1% (19.2)% System operation 6,555 35.2% 6,450 39.1% (1.6)% System Maintenance 2,451 13.2% 2,397 14.5% (2.2)% Sales of information equipment 424 2.3% 268 1.6% (36.9)% Other 1,020 5.5% 765 4.7% (25.0)% Total 18,631 100.0% 16,486 100.0% (11.5)% (2) Outline of Financial Position for the First Half Ended September 30, 2025 Looking at the financial position as of September 30, 2025, total assets stood at ¥50,669 million, a decrease of ¥6,057 million from the end of the previous fiscal year. Current assets decreased ¥5,862 million, to ¥18,901 million, reflecting decreases mainly in notes and accounts receivable-trade, and contract assets. Non-current assets decreased ¥194 million, to ¥31,768 million, due to a decrease in investment securities for the redemption of bonds, despite an increase in investment in software assets. Current liabilities decreased ¥4,089 million to ¥5,875 million, reflecting decreases mainly in short-term borrowings. Non-current liabilities decreased ¥909 million to ¥6,660 million, reflecting decreases in long-term borrowings and retirement benefit liability. Net assets decreased ¥1,058 million from the end of the previous fiscal year, to ¥38,134 million mainly due to the posting of loss attributable to owners of parent and dividends paid. (3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements The Company has revised the forecast for net sales due to factors such as the extension of local government system standardization and review of the transition method in the Public sector. The Company has revised the forecasts for operating profit, ordinary profit, and profit attributable to owners of parent due to a decrease in net sales and worsening cost ratio for local government system standardization.
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INES Corporation (9742) - 4 - [Revisions of the forecasts for consolidated financial results for the fiscal year ending March 31, 2026 (April 1, 2025 to March 31, 2026)] Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share (Millions of yen) (Millions of yen) (M illions of yen) (Millions of yen) (Yen) Before revision (A) (Announced on April 30, 2025) 43,000 4,000 4,100 2,800 134.61 After revision (B) 39,000 1,400 1,500 1,000 48.05 Amount of change (B-A) (4,000) (2,600) (2,600) (1,800) Change (%) (9.3) (65.0) (63.4) (64.3) Actual results for the previous fiscal year (Fiscal year ended March 31, 2025) 40,563 3,536 3,608 2,436 117.13 With respect to the payment of dividends, the Company has revised the annual dividend forecast per share from ¥60 to ¥55, a decrease of ¥5, in line with the aforementioned revisions of the financial results forecasts. (Yen) Dividends per share End of Q2 Fiscal year end Total Previous forecasts (Announced on April 30, 2025) To be determined To be determined 60.00 Revised forecasts – 30.00 55.00 Actual results for the current fiscal year 25.00 – – (Caution on future forecast information) Forward-looking statements such as results forecasts provided in this document are prepared based on currently available information and assumptions that are deemed reasonable, but the Company does not intend to guarantee their achievement. Actual results may differ significantly from the above forecasts for various reasons.
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INES Corporation (9742) - 5 - 2. Semi-annual consolidated financial statements and significant notes thereto (1) Semi-annual consolidated balance sheets (Millions of yen) As of March 31, 2025 As of September 30, 2025 Assets Current assets Cash and deposits 8,205 9,963 Notes and accounts receivable - trade, and contract assets 15,473 6,837 Securities – 201 Work in process 399 796 Raw materials and supplies 55 54 Prepaid expenses 505 766 Other 139 290 Allowance for doubtful accounts (15) (7) Total current assets 24,764 18,901 Non-current assets Property, plant and equipment Buildings and structures 5,951 6,033 Accumulated depreciation (665) (816) Buildings and structures, net 5,286 5,216 Tools, furniture and fixtures 4,020 4,016 Accumulated depreciation (2,951) (3,113) Tools, furniture and fixtures, net 1,068 903 Land 5,299 5,299 Total property, plant and equipment 11,654 11,419 Intangible assets Software 3,216 4,062 Other 22 23 Total intangible assets 3,238 4,085 Investments and other assets Investment securities 11,836 10,802 Long-term prepaid expenses 503 397 Deferred tax assets 3,514 3,933 Other 1,215 1,130 Total investments and other assets 17,069 16,263 Total non-current assets 31,963 31,768 Total assets 56,727 50,669
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INES Corporation (9742) - 6 - (Millions of yen) As of March 31, 2025 As of September 30, 2025 Liabilities Current liabilities Accounts payable - trade 2,639 1,733 Short-term borrowings 3,000 – Current portion of long-term borrowings 833 833 Accrued expenses 960 839 Income taxes payable 253 429 Accrued consumption taxes 571 104 Advances received 136 272 Provision for bonuses 925 888 Provision for bonuses for directors (and other officers) 107 57 Provision for loss on orders received – 48 Asset retirement obligations 10 26 Other 526 641 Total current liabilities 9,965 5,875 Non-current liabilities Long-term borrowings 3,749 3,332 Provision for retirement benefits for directors (and other officers) 35 22 Retirement benefit liability 2,866 2,391 Asset retirement obligations 146 142 Other 772 770 Total non-current liabilities 7,569 6,660 Total liabilities 17,535 12,535 Net assets Shareholders’ equity Share capital 15,000 15,000 Capital surplus 10,102 10,108 Retained earnings 13,835 12,609 Treasury shares (120) (105) Total shareholders’ equity 38,816 37,611 Accumulated other comprehensive income Valuation difference on available-for-sale securities 153 288 Remeasurements of defined benefit plans 222 234 Total accumulated other comprehensive income 375 522 Total net assets 39,192 38,134 Total liabilities and net assets 56,727 50,669
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INES Corporation (9742) - 7 - (2) Semi-annual consolidated statement of income and consolidated statement of comprehensive income Semi-annual consolidated statement of income (Millions of yen) Six months ended September 30, 2024 Six months ended September 30, 2025 Net sales 18,631 16,486 Cost of sales 14,626 14,286 Gross profit 4,004 2,199 Selling, general and administrative expenses 3,128 3,119 Operating profit (loss) 876 (920) Non-operating income Interest income 26 21 Dividend income 7 14 Compensation income – 90 Other 11 27 Total non-operating income 45 155 Non-operating expenses Interest expenses 15 29 Loss on investments in investment partnerships 1 – Other 6 7 Total non-operating expenses 23 36 Ordinary profit (loss) 898 (801) Extraordinary income Gain on sale of membership – 3 Total extraordinary income – 3 Extraordinary losses Loss on retirement of non-current assets 17 6 Special retirement benefits 82 – Other 22 – Total extraordinary losses 122 6 Profit (loss) before income taxes 776 (805) Income taxes 238 (203) Profit (loss) 537 (601) Profit (loss) attributable to owners of parent 537 (601)
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INES Corporation (9742) - 8 - Semi-annual consolidated statement of comprehensive income (Millions of yen) Six months ended September 30, 2024 Six months ended September 30, 2025 Profit (loss) 537 (601) Other comprehensive income Valuation difference on available-for-sale securities 5 135 Remeasurements of defined benefit plans, net of tax 14 11 Total other comprehensive income 20 146 Comprehensive income 557 (455) Comprehensive income attributable to Comprehensive income attributable to owners of parent 557 (455)
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INES Corporation (9742) - 9 - (3) Semi-annual consolidated statement of cash flow (Millions of yen) Six months ended September 30, 2024 Six months ended September 30, 2025 Cash flows from operating activities Profit (loss) before income taxes 776 (805) Depreciation 934 858 Increase (decrease) in provision for bonuses (45) (36) Increase (decrease) in provision for bonuses for directors (and other officers) (27) (50) Increase (decrease) in provision for loss on orders received 15 48 Increase (decrease) in provision for retirement benefits for directors (and other officers) (54) (12) Increase (decrease) in retirement benefit liability (269) (458) Loss on retirement of non-current assets 17 6 Loss (gain) on sale of membership – (3) Special retirement benefits 82 – Decrease (increase) in trade receivables 3,002 8,772 Decrease (increase) in inventories (229) (395) Decrease (increase) in other assets (163) (265) Increase (decrease) in trade payables 283 (861) Increase (decrease) in other liabilities (86) (705) Other, net (19) 14 Subtotal 4,216 6,105 Income taxes refund 396 101 Income taxes paid (718) (127) Net cash provided by (used in) operating activities 3,893 6,079 Cash flows from investing activities Net decrease (increase) in time deposits 1,000 – Purchase of property, plant and equipment (860) (199) Proceeds from sale of property, plant and equipment – 24 Purchase of intangible assets (795) (1,178) Purchase of long-term prepaid expenses (38) (25) Purchase of investment securities (1) (0) Proceeds from redemption of investment securities – 1,000 Proceeds from sale of membership – 6 Payments of leasehold and guarantee deposits (242) (12) Proceeds from refund of leasehold and guarantee deposits 200 93 Payments for asset retirement obligations (228) (10) Other, net 2 20 Net cash provided by (used in) investing activities (963) (280) Cash flows from financing activities Net increase (decrease) in short-term borrowings – (3,000) Repayments of long-term borrowings – (416) Repayments of lease liabilities (1) (0) Purchase of treasury shares (1) (0) Dividends paid (519) (622) Net cash provided by (used in) financing activities (522) (4,041) Net increase (decrease) in cash and cash equivalents 2,408 1,757 Cash and cash equivalents at beginning of period 5,265 7,991 Cash and cash equivalents at end of period 7,673 9,749
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INES Corporation (9742) - 10 - (4) Notes to Semi-annual Consolidated Financial Statements Notes to accounting treatment specific to the preparation of semi-annual consolidated financial statements Calculation of tax expense Tax expense is calculated by reasonably estimating the effective tax rate after applying tax effect accounting to profit before income taxes for the fiscal year including the first half of the fiscal year under review, and multiplying profit before income taxes by this estimated effective tax rate. Notes when there are significant changes in amounts of equity Dividends of surplus Regarding the year-end dividends for the previous fiscal year, the Company resolved the following at the Ordinary General Meeting of Shareholders held on June 25, 2025. (1) Types of shares: Common stocks (2) Total amount of dividends: ¥624 million (3) Dividends per share: ¥30 (4) Record date: March 31, 2025 (5) Effective date: June 26, 2025 (6) Source of dividends: Retained earnings Notes on premise of going concern Not applicable.