(338A) Stock Price

Zenmu Tech is a company that develops and provides data protection and utilization solutions. The company's core technology is "ZENMU-AONT," a proprietary secret sharing method. It offers the "ZENMU" series, which renders data meaningless and stores it in distributed locations, and "QueryAhead," a secure computation solution that performs calculations on encrypted data. The company is centered on creating systems that safely handle data across devices and cloud environments.

The company serves diverse customers including think tanks, consulting firms, financial institutions, and IT vendors, with adoption not limited to specific industries or company sizes. Revenue is primarily generated through per-device license sales, offered in three forms: one-time sales, subscriptions that include licenses plus maintenance and updates, and maintenance-only contracts. Subscriptions and maintenance contracts provide stable recurring revenue.

The business operates in a single information security segment with three main product lines. "ZENMU Virtual Drive" is an endpoint data loss prevention solution; "ZENMU Engine" is a development kit for embedding the technology, which generates OEM licensing and royalty income; and "QueryAhead" is a secure computation product developed through collaborative research. Additionally, the company provides consulting services such as Windows Embedded OS customization and thin-client infrastructure optimization. Through distributor partnerships, it has acquired large-scale projects and built a user base of approximately 100,000 users.

The company has placed expanding its license base at the center of its growth strategy to establish a stable revenue foundation. Recent financial results show consolidated sales grew approximately 2.8 times, from 232,282 thousand yen in the December 2022 period to 648,942 thousand yen in the December 2024 period, with "ZENMU Virtual Drive"—centered on secret sharing technology—serving as the primary revenue driver. Given market conditions where the endpoint security market is expected to expand at a compound annual growth rate of 7.4% from 2023 to 2030, reaching approximately $28.8 billion by 2030, and the confidential computing market is projected to grow rapidly from $16–18 billion in 2024 to $52–54 billion in 2026, the company aims to increase its subscription ratio centered on licenses and maintenance services, advancing recurring revenue to drive medium- to long-term growth.

The company is prioritizing investment in secret sharing solutions that render endpoint data meaningless and store it in distributed form, as well as confidential computing technology that processes encrypted data. For "ZENMU Virtual Drive," the company is pursuing differentiation based on price and convenience—leveraging lower deployment and operational costs compared to VDI (virtual desktop infrastructure) and network-independent work speed—through replacement proposals to VDI-deployed enterprises and feature-limited versions offered as options via distributors. Meanwhile, through the development kit "ZENMU Engine" for OEM partners, the company is expanding into IoT applications including drones, surveillance cameras, and wearable devices, aiming to diversify royalty and license revenue streams.

Market development and business expansion are pursued through distributor strategies targeting domestic government agencies, local municipalities, and small-to-medium enterprises, alongside strengthened international expansion. Specifically, the company exhibits at major U.S. trade shows and co-creates with leading think tanks to research application areas, while developing OEM partnerships in drone applications such as "Integrity Drone" and AI surveillance camera sectors. The confidential computing solution "QueryAhead" prioritizes application in materials development and manufacturing, with plans to conduct joint prototype development and proof-of-concept with customers before transitioning to commercialization. Given seasonal order fluctuations—particularly concentrated in March and December—the company is also working to stabilize order timing through distributor incentives and subscription expansion.

On technological innovation, the company is accelerating research and development in both secret sharing and confidential computing technologies, including joint research with the National Institute of Advanced Industrial Science and Technology. The development approach follows a phased progression: validating use case effectiveness and creating prototypes, conducting proof-of-concept to confirm intended outcomes, and then developing actual commercial solutions. The company continues investing in product improvements for the 5G era to support cloud data protection, strengthening customer support systems, and improving organizational capabilities through recruitment and development of talented engineers, aiming to translate technological superiority into revenue growth.