Appirits Corp. saw profits plunge despite revenue growth as troubled web development projects weighed on the Japanese tech company’s bottom line.
The Tokyo-based firm reported a 69% drop in operating profit to ¥185 million ($1.2 million) for the fiscal year ended January 2025, even as revenue rose 6.9% to ¥9.01 billion ($60.1 million). Net income fell 88.1% to ¥45 million ($300,000).
The sharp profit decline stemmed from cost overruns in its Web Solutions segment, where a major project faced delivery delays requiring significant additional staffing. While this division’s sales inched up 1.9%, its profit crashed 54.7%.
Management indicated the troubled project was resolved by September, with the fourth quarter showing record-high quarterly sales in the division. The company has strengthened its middle management layer and escalation procedures following the setback.
Appirits’ other divisions performed well, with the Online Gaming unit posting a 93.3% profit surge on anniversary events for titles including “Kemono Friends 3.” The Digital Talent Staffing business increased profit by 41.1% amid steady demand.
For fiscal 2026, Appirits projects a strong recovery with revenue rising 16.2% to ¥10.46 billion and operating profit more than tripling to ¥610 million, which would mark record highs for both metrics.
