Strengthening the Recurring-Revenue Business

「As a result of focusing on cross-selling multiple products to individual customers, orders for stock-based products such as retail electricity, fiber-optic collaboration services and Bizisuke, a total support service for corporate customers, also remained strong.」

「Through the addition of new services, continued strengthening of sales channels and improvements in brand strength, stock-based revenue from the subscription model continued to build steadily. Meanwhile, flow-based revenue slowed as we strengthened staffing in the organization handling the subscription model. As a result, for the interim consolidated accounting period under review, the digital marketing-related business recorded net sales of ¥1,836,165 thousand, up 8.5% year on year, and segment profit (operating profit) of ¥287,484 thousand, up 246.3% year on year.」

「In the consolidated fiscal year under review, we established a customer base and organizational structure capable of supporting growth without large-scale development or substantial advertising investments. As planned, this enabled the single segment to generate a segment profit, laying the foundation for further profitability under the subscription model.」

「These feature additions expanded the range of proposals we could offer. In addition to strong subscription-model revenue, orders for Cloud CIRCUS-related contract development and web production also increased, driving growth in flow-based revenue.」

「As a result of these activities, subscription-model revenue remained strong, while orders for Cloud CIRCUS-related contract development and web production also increased, driving growth in flow-based revenue.」

「In the digital marketing-related business, we continue to provide Cloud CIRCUS, a digital marketing tool designed to "acquire and nurture customers," under a subscription model (recurring billing), while working to increase both customer acquisitions and ARR (annual recurring revenue). In addition to direct sales, we also focused on developing customer referrals and partner sales.」

「In light of these circumstances, from the fiscal year ending March 2024 onward, we will continue to develop this business primarily around the subscription model, achieve profitability in segment profit for the fiscal year ending March 2024, and work to improve profitability.」

「In December 2022, we raised the prices of all main plans for our SaaS tools by 20% to strengthen service development, customer support, and security so that customers can use the services safely and securely.」

「In the digital marketing-related business, we provide “Cloud CIRCUS,” a digital marketing tool designed to “increase and develop customers,” as a subscription-based service, and are working to increase customer acquisitions and ARR (annual recurring revenue).」

「In particular, in the digital marketing-related business, we shifted decisively to a SaaS-based subscription model from the previous fiscal year, lowering the barrier to adoption for customers who had been unable to afford our previous high-priced flow-based services, thereby increasing customer acquisitions and working to increase ARR (annual recurring revenue).」

「In particular, in the digital marketing-related business, we shifted decisively to a SaaS-based subscription model from the previous fiscal year, lowering the barrier to adoption for customers who had been unable to afford our previous high-priced flow-based services, thereby increasing customer acquisitions and working to increase ARR (annual recurring revenue).」

「During the cumulative consolidated first-quarter period, despite the impact of restrictions on economic activity and other effects of the COVID-19 pandemic, signs of activity emerged in customers' businesses as they adapted to living with and moving beyond COVID-19. In the digital marketing-related business, orders for the SaaS tool suite “Cloud CIRCUS” remained solid, enabling us to build monthly recurring revenue (MRR).」

「During the current consolidated fiscal year, in addition to broadcasting our Group's first TV commercials in the third and fourth quarters and holding our first in-house conference, “Marketing CIRCUS DAY 2021,” we conducted promotional activities to stimulate corporate demand for digitalization in the post-COVID environment. As cross-selling and new orders for Cloud CIRCUS increased, subscription-model sales and profit performed well against the plan, while orders for contract development related to Cloud CIRCUS also increased, resulting in higher sales and profit from flow-based products.」

「During the cumulative consolidated third-quarter period, we launched functions supporting the expansion of BowNow sales, including multilingual support and SFA integration, and were able to provide the service to more than 5,000 companies cumulatively. While preparing for further expansion through service enhancements, corporate demand for digitalization in the post-COVID environment provided support, and increases in cross-selling and new orders for Cloud CIRCUS resulted in solid recurring-revenue sales.」

「Recurring-revenue sales performed well as cross-selling and new orders for Cloud CIRCUS increased.」

「In particular, in the digital marketing-related business, we began shifting decisively to a SaaS-based subscription model, lowering the barrier to adoption for customers who had been unable to afford our previous high-priced flow-based services, with the aim of increasing customer acquisitions.」

「In this business from the fiscal year ending March 2021 onward, we will concentrate our business model and management resources on a subscription model, in which even if the revenue received from a customer at one time is small, it continues to accumulate as recurring revenue, instead of the conventional flow model. We will also strengthen our development structure and invest in marketing activities.」

「Sales of subscription products, including network equipment maintenance services, “Secure SAMBA,” and the “Robo-Pat” RPA product, remained solid, resulting in higher subscription revenue. In addition, demand related to the consumption tax increase and earlier delivery dates led to substantial sales growth in flow-based products, particularly UTM (unified threat management), network equipment, and MFPs.」

「During the cumulative consolidated first-quarter period, sales of network equipment remained solid, as in the previous fiscal year, while recurring-revenue products, including Bizisuke and network maintenance services, also performed well.」

「During the consolidated third-quarter period, UTM and network equipment performed well, while profit from recurring-revenue services, which we are working to strengthen as a stable revenue model, also increased steadily.」

「During the cumulative consolidated second-quarter period, demand for plan upgrades to the monthly plans of the “CMS Blue Monkey” content management system remained strong, particularly in the digital marketing-related business, while sales of MFPs and network equipment in the IT infrastructure-related business also remained solid.」

「Revenue from recurring-revenue businesses currently accounts for at least 40% of our Group's net sales. Under our customer contracts, services are often provided over an extended period based on a single contract, which also contributes to strengthening our Group's financial base. Although short-term sales trends are also important, growth in recurring-revenue business sales enables us to secure stable earnings growth from increased revenue and pursue medium- to long-term strategies. We will therefore continue to build recurring-revenue sales and aim for a more resilient sales mix.」

「We offer a package of 16 services, centered on comprehensive support for the electronic equipment, including PCs, and software used by customers, as well as specially priced copy paper and office supplies and services that help increase sales related to web marketing. Through the active rollout of the Bizisuke service, we will more aggressively pursue the strengthening of a stable revenue model by focusing on recurring-revenue services, which is also a business strategy for our IT infrastructure-related business, providing OA and network equipment to small and medium-sized companies.」

「In addition, our Group has steadily grown its recurring-revenue businesses, built a stable earnings base through a recurring-revenue model, developed businesses that contribute to productivity improvements at mid-sized and small companies, and worked to strengthen customer relationships, while also undertaking activities to respond to future changes in the business environment.」

「As described above, our Group has steadily grown its recurring-revenue businesses, built a stable earnings base through a recurring-revenue model, developed businesses that contribute to productivity improvements at mid-sized and small companies, and worked to strengthen customer relationships, while also undertaking activities to respond to future changes in the business environment.」

「Revenue from recurring-revenue businesses currently accounts for more than 40% of our Group's net sales.」

「In addition to generating stable monthly revenue, we believe recurring-revenue products are highly effective in retaining customers.」

「In addition to generating stable monthly revenue, we believe recurring-revenue products are highly effective in retaining customers.」

「In addition to generating stable monthly revenue, we believe recurring-revenue products are highly effective in retaining customers.」

「Revenue from recurring-revenue businesses currently accounts for more than 30% of our Group's net sales. Although short-term sales trends are also important, growth in recurring-revenue business sales enables us to secure stable earnings growth from increased revenue and pursue medium- to long-term strategies. We will therefore continue to build recurring-revenue sales and aim for a more resilient sales mix.」