Expanding education ICT solutions and the cloud business

「Effective 1 July 2022, we transferred the E-learning Business and LMS services operated by the company.」

「As disclosed in our notice dated 25 May 2022 concerning the transfer of a business, we plan to transfer our E-learning Business and LMS services effective 1 July 2022.」

「Going forward, we will actively capture demand for replacing large on-premise projects and demand from small and midsize companies through referral-based sales. We have also received commitments from several companies.」

「More companies are considering introducing learning management systems because changes in how training is delivered have increased the need for LMS implementation. In particular, demand has emerged to replace other companies’ LMS products with our on-premise LMS, and, after securing a large project, we will continue to capture further demand for on-premise replacements. As a result, revenue was ¥820 million, an increase of ¥193 million year on year, EBITDA was ¥91 million, a decrease of ¥84 million, and segment profit was ¥69 million, a decrease of ¥87 million.」

「As working styles changed significantly because of the novel coronavirus, many companies began reviewing their approach to training and employee development, and demand for corporate learning, including e-learning and home-based learning, expanded. Implementation projects for both “iStudy LMS” and “SLAP” increased.」

「As working styles changed significantly because of the novel coronavirus, previously deferred customer needs emerged, and implementation projects for both “iStudy LMS” and “SLAP” increased.」

「Regarding the renewal of our infrastructure environment, we completed the planned transition to a stable platform through proactive migration to a public cloud environment. We will now proceed with update development focused on providing customers with an easier-to-use environment and expand functionality.」

「Demand for the corporate learning management systems “iStudy LMS” and “SLAP” remained solid. As working styles changed significantly because of the novel coronavirus, many companies began reviewing their approach to training and employee development, and demand for corporate self-directed learning, including e-learning, expanded. “SLAP,” released at the end of last year, began contributing to performance as it received a large order and attracted strong interest from midsize companies. We also continued to receive numerous customization orders for the existing “iStudy LMS” and achieved our second-quarter plan.」

「In our founding LMS Business, we updated the version of “iStudy LMS,” used mainly by major financial institutions, launched the New LMS “SLAP” for small and midsize companies, accelerated new customer development and focused on deepening relationships with existing clients.」

「There is also considerable demand to replace other companies’ products with the corporate learning management system “iStudy LMS,” and the order environment remains solid. Development of the existing product version is ending, and development of a new product version has begun. Given this situation, during the six-month period under review we refrained from acquiring new projects and focused on customizing existing projects.」

「The existing version of the corporate learning management system “iStudy LMS” is approaching the decline phase of its lifecycle, and development of functional updates is scheduled to end with the update planned for June 2019. Development of a new product version has already begun, and a demo version is scheduled for release from July 2019 onward. Given this situation, we refrained from acquiring new projects in the first quarter and focused on customizing existing projects.」

「The corporate video solution “Qumu,” which we began selling last year, continued to add new customers steadily. Because most contracts are for cloud services, stock-based revenue remained solid, supplemented by flow-based spot revenue from a major life insurer. In addition, higher-margin revenue from implementation support and environment setup for “iStudy LMS” and “Qumu” increased during the fiscal year, resulting in solid segment profit. Revenue was ¥619 million, up 56.2% year on year, and segment profit was ¥66 million, up 447.2%.」

「During the nine-month period under review, higher-margin revenue increased, including implementation support and environment setup for “iStudy LMS” and “Qumu,” resulting in solid segment profit. Accordingly, revenue for the nine-month period was ¥447 million, up 55.3% year on year, and segment profit was ¥21 million, compared with a segment loss of ¥0.2 million in the same period of the previous year.」

「We added the corporate video solution “Qumu,” which we began selling last year, and the video recording and studio streaming services acquired from V-cube,Inc., our parent company, as new pillars of the business. Performance has remained steady, including the acquisition of new projects in our traditional LMS business.」

「In the LMS business, our focus on sales activities, including acquiring new customers for the business video solution QUMU, resulted in steady growth in the customer base. However, new projects for the corporate learning management system iStudy LMS did not progress as planned, and revenue fell below plan. As a result, revenue was ¥136 million, up 64.5% year on year, and the segment loss was ¥0.7 million, compared with a segment loss of ¥14 million in the same quarter of the previous year.」

「In the LMS business, a large project for the corporate learning management system “iStudy LMS” began in September, while the number of new companies adopting the corporate video solution “Qumu,” launched in April, increased steadily from its launch. As a result, segment revenue was ¥396 million and segment profit was ¥12 million.」

「In the LMS Business, a large project for the enterprise learning management system “iStudy LMS” began in September, while the number of new companies adopting the enterprise business video solution “Qumu,” which we began selling in April, doubled from the start of sales and continued to perform well. However, because the contract value with a major iStudy LMS customer was reduced beginning in the third quarter, revenue increased only slightly compared with the second quarter.」

「In the LMS business, we closed orders from several new customers for the corporate learning management system “iStudy LMS.” Most orders for the corporate video solution “Qumu,” launched on 1 April, were cloud-service contracts, with revenue recognized monthly over the contract period as stock-based revenue. Accordingly, revenue recognized in the second quarter was limited. As a result, revenue was ¥182 million and the segment loss was ¥15 million.」

「In the LMS business, we focused on a campaign to promote the introduction of a paperless meeting system to accelerate year-end budget spending and on closing new projects related to the corporate learning management system “iStudy LMS.” However, new iStudy LMS projects did not increase as planned, and flow-based revenue fell below plan. Stock-based revenue remained strong because new customer acquisitions through December 2016 increased. As a result, revenue was ¥82 million and the segment loss was ¥14 million.」

「At HR EXPO “Human Resources, General Affairs and Accounting World 2016,” where we exhibited in July 2016, the flexible administrative functions of “iStudy LMS,” which can accommodate complex organizations, and its original content creation functions received high praise not only from companies considering a new system but also from companies dissatisfied with their existing systems. Interest in iStudy LMS exceeded our expectations, enabling us to acquire more prospective customers than targeted.」

「In the LMS business, we worked with the V-cube,Inc. group and our business partners to expand sales channels and focused on winning new projects related to the corporate learning management system “iStudy LMS.” Flow-based revenue remained strong as the number of new projects increased.」

「In the LMS business, we focused on expanding sales of new products combining the V-cube,Inc. group's products with ours, primarily to financial institutions, pharmaceutical companies, distributors and government agencies. Active sales efforts led to an increase in new projects and growth in flow-based revenue from October onward, but revenue fell short of plan because some large projects were postponed.」

「We will expand our highly profitable cloud business by strengthening our sales force, working with sales partners to provide our products and services and those of the V-cube,Inc. group to a broad range of customers, developing a learning management system required for human-resources training, responding to diverse customer needs, and expanding the personnel needed to develop systems integrated with V-cube,Inc. group products.」