Launch of i-FILTER and m-FILTER Cloud Services

「Meanwhile, the contract backlog for cloud service products increased substantially, expanding the foundation for future net sales and recurring revenue.」

「However, the accumulation of order backlog for cloud service-related products indicates that the revenue model is steadily shifting from “one-time license revenue” to “recurring service revenue,” which is expected to lead to stable and sustainable growth from the next fiscal year onward.」

「However, because the increase in contracted value was driven mainly by cloud service-related products, it was not immediately reflected in revenue due to revenue recognition under the applicable accounting standards, and revenue increased only slightly. These contracts are expected to contribute to revenue going forward, and steady progress is being made in expanding the foundation for recurring revenue.」

「During the current consolidated fiscal year, revenue recognition did not progress because orders for cloud service-related products increased more than planned.」

「As orders for cloud service-related products in the public-sector market increased beyond plan, data center communications costs rose, resulting in higher cost of sales.」

「Against this backdrop, to address the increasingly diverse security needs of companies and organizations of all sizes, we focused on expanding sales of our proprietary next-generation SWG (Secure Web Gateway), together with the Anti-Virus & Sandbox option released in the previous fiscal year, by continuously enhancing the functionality of our core products i-FILTER, m-FILTER and FinalCode and adding CASB functionality to i-FILTER@Cloud in April 2023.」

「In addition, functionality addressing PPAP (the practice of sending a password-protected ZIP file by email and sending the password separately), ransomware and targeted attacks such as Agent Tesla was well received. We won orders for new m-FILTER projects, resulting in higher revenue from cloud service-related products.」

「Amid these conditions, to address growing total security needs, the Group focused on deploying its proprietary next-generation SWG by integrating and enhancing the functionality of its core products, “i-FILTER,” “m-FILTER” and “FinalCode,” adding various security solutions, and adding new functionality such as CASB capabilities to i-FILTER@Cloud. CASB capabilities enable the visualization and control of cloud service usage.」

「We are accelerating product development to enable broader security measures, including expanding sales of the cloud services i-FILTER@Cloud, m-FILTER@Cloud and FinalCode@Cloud and providing a world in which users can safely access the Web and email in cloud environments.」

「In addition, in recent years, damage caused by phishing, in which users are directed from email and other sources to phishing sites, has increased alongside unknown threats and malicious files. Phishing sites mimic the websites of financial institutions, online retailers and others, making them extremely difficult to distinguish. To prevent the threat posed by such sites, we have added a Credential Protection feature to i-FILTER@Cloud that, using our proprietary technology, permits the transmission of authentication information only to URLs whose safety has been verified and blocks transmission to websites whose safety could not be verified. We are also pursuing various initiatives to meet customer needs and enhance product value as a comprehensive security provider.」

「As orders for cloud-service products continued to perform strongly in the current fiscal year, following the previous fiscal year, sales deferred to the following fiscal year and beyond increased from the end of the previous fiscal year.」

「As orders for cloud-service products continued to perform strongly in the current fiscal year, following the previous fiscal year, sales deferred to the following fiscal year and beyond increased from the end of the same period of the previous year.」

「In the enterprise market, orders for cloud services for i-FILTER and m-FILTER increased as the COVID-19 pandemic spread, reflecting the need to reduce operational management workloads and costs.」

「Under these conditions, in the corporate market, against a backdrop of the shift of web services and email environments to the cloud due to the spread of telework and other factors, we expanded sales of the i-FILTER@Cloud and m-FILTER@Cloud cloud services, providing an environment in the cloud where users can use the web and email safely. We also developed Desk@Cloud, a communications tool with online meeting and chat functions combined with security features, and worked to raise awareness of solutions that improve operational efficiency in addition to providing security.」

「In the corporate market, against a backdrop of the rapid shift of web services and email environments to the cloud due to the spread of telework and other factors, we worked to raise awareness of and expand sales of DigitalArts@Cloud, broadening in the cloud an environment where users could access only safe websites and receive only safe emails. We also developed Desk@Cloud, a communications tool with online meeting and chat functions combined with security features, and began providing solutions that improve operational efficiency in addition to security.」

「During the current fiscal year, demand for cloud-service products in the corporate and public-sector markets rose sharply as the COVID-19 pandemic spread. Whereas traditional core license-based products recognise most of the contract value as sales in a lump sum upon shipment, cloud-service products recognise sales monthly on a pro rata basis over the service period. As a result, as the proportion of contract value represented by cloud-service products increases, the amount of deferred sales increases, widening the difference between contract value and reported sales.」

「In the corporate market, against a backdrop of the rapid shift of web services and email environments to the cloud due to the spread of telework and other factors, we worked to raise awareness of and promote DigitalArts@Cloud, providing an environment in the cloud where users could access only safe websites and receive only safe emails. We also began selling Desk@Cloud, a communications tool with online meeting, calling and chat functions combined with security measures, establishing a framework for providing improved operational efficiency through cloud services in addition to security measures.」

「Against a backdrop of the shortage of security personnel and the spread of telework, use of cloud services to reduce the burden of security operations accelerated. The proportion of cloud-service products in the i-FILTER series within our product lineup gradually increased, as did sales.」

「For DigitalArts@Cloud, we added FinalCode@Cloud and Chat@Cloud to the lineup, bringing to the cloud an environment that creates a world resembling a sterile room, free from the need to be conscious of security. We also revised sales prices and introduced new plans, i-FILTER@Cloud Malicious Content Protection and m-FILTER@Cloud Misdelivery Protection, establishing a framework for providing cloud products tailored to the needs of all users.」

「In the corporate market in particular, as work styles diversified and employees increasingly took company-issued tablets, laptops and other devices offsite to work, sales of "i-FILTER Browser & Cloud," which enables web access control regardless of location or situation, expanded.」

「For DigitalArts@Cloud, we added FinalCode@Cloud and Chat@Cloud to the lineup, bringing to the cloud an environment that creates a world resembling a sterile room, free from the need to be conscious of security.」

「Against a backdrop of the shortage of security personnel and other factors, use of cloud services to reduce the burden of security operations accelerated, increasing the proportion of cloud-service products in our product lineup's sales. License sales are recognised in full when products are shipped, whereas cloud-service sales are recognised monthly on a pro rata basis over the service period, resulting in an increase in deferred revenue. This balance will be recognised as sales from the following consolidated fiscal year onward.」

「Against a backdrop of the rapid shift of web services and email environments to the cloud, we launched cloud services for i-FILTER and m-FILTER in May 2018. We have continued to provide an environment in the cloud where users can browse the web safely and open emails without hesitation.」

「Against a backdrop of the rapid shift of web services and email environments to the cloud, we launched cloud services for i-FILTER and m-FILTER in May 2018. We have continued to provide an environment in the cloud where users can browse the web safely and open emails without hesitation.」