Q1 Consolidated Financial Results Presentation for the Fiscal Year Ending March 2027 | Internet Initiative Japan Inc. (3774) timely disclosure

Worth reading

58In focus

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Direction

Improvement

Direction inferred from the company’s description.

Scale

27.1

% (year-on-year increase in revenue)

Wording

Conditional

How definitive the wording is.

Contents of this document

Presentation materials for financial resultsFirst quarter of the fiscal year ending March 202710 items taken from the company’s own explanation

Financial Results Figures (The key points of this material are explained below)

Net Sales976 Hundreds of millions of yen+27.1%

Operating profit65.9 Hundreds of millions of yen+9.2%

Net income44 Hundreds of millions of yen+16.4%

Gross Profit Margin18.4 %

Operating profit margin6.7 %

Selling, general and administrative expenses113.8 Hundreds of millions of yen+6.8%

Results for the three months of the current quarter

Net Sales¥97.60 billion

Operating profit¥6.59 billion

Profit before tax¥6.71 billion

Profit for the period¥4.40 billion

Full-year earnings forecast

Revenue¥385.0 billion (up 11.5% year on year)

Cost of sales¥299.3 billion (up 11.2% year on year)

Gross profit¥85.7 billion (up 12.5% year on year)

Selling, general and administrative expenses, etc.¥47.2 billion (up 14.2% year on year)

Operating profit¥38.5 billion (up 10.5% year on year)

Profit before tax¥37.0 billion (up 5.0% year on year)

Profit for the period¥25.0 billion (up 3.4% year on year)

What the company explained in this material

Self-assessment against the planThe company's self-assessment against its own plan.

Revenue growth exceeded expectations; profit progress was in line with expectations

Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.

Revenue Growth+¥20.78 billion
Increase in operating profit+¥560 million
Growth in IP and outsourcing services
Growth in consumer and business IoT
Recording of revenue from two individual large-scale construction projects and accumulation of operations and maintenance revenue
Decline in gross margin due to large-scale construction projects with high procurement ratios

Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.

Exchange rate¥155/USD (assumed rate in the FY26 business plan)

New initiatives

Scheduled to launch an integrated security service in 4Q26
Scheduled to launch a solution supporting compliance with the SCS assessment program
Launching multi-carrier support using SoftSIM
Launching unlimited-data prepaid SIMs for visitors to Japan
Developing physical AI solutions through investments in and partnerships with 7 U.S. AGI companies
Rolling out commercial DCJPY payments with The Hokuriku Bank, targeting FY27
Expanding a multi-professional collaboration platform in the healthcare sector
Rolling out STRIGHT with the aim of establishing it as an industry standard

Key KPIsA metric the company considers important as a management benchmark.

Total contracted bandwidth19,533 Gbps
Mobile lines350.9 10,000 lines
Number of MVNE customers211 companies
Overall employee satisfaction in employee engagement survey3.8 5-point scale
Year on year against the same period last yearDown from 3.9 in FY24
Percentage of Female Managers8.8 %
Year on year against the same period last year+0.4 percentage points (versus April 2025)

Segment results

Network services (excluding mobile)
Sales¥31.63 billion
Year on year against the same period last year+7.2%
Mobile and IoT
Sales¥14.47 billion
Year on year against the same period last year+11.3%
SI
Sales¥50.74 billion
Year on year against the same period last year+51.2%
Network services gross profit
Profit¥11.68 billion
Year on year against the same period last year+0.7%
SI gross profit
Profit¥5.93 billion
Year on year against the same period last year+25.2%

Medium-term management plan targets

Target fiscal yearFY29
TargetTargeting consolidated revenue of more than ¥500.0 billion
Target fiscal yearEnd of FY29
TargetTargeting the use of AI in approximately 30% of company-wide operations

Orders received and order backlog

SI construction
Orders received¥40.21 billion
Year on year against the same period last year+126.3%
Order backlog¥47.96 billion
SI Operations and Maintenance
Orders received¥31.17 billion
Year on year against the same period last year+24.1%
Order backlog¥131.59 billion

Number of employees

Headcount at fiscal year-end5,818 People

Year on year against the same period last year+314 people

Hiring planNet increase of approximately 400 consolidated employees in FY26, including 277 new graduates

Capital expenditures

¥76.27 100 million 1Q26 CAPEX

Contents of this document
Item	Details
Document type	Presentation materials for financial results
Fiscal Period Covered	First quarter of the fiscal year ending March 2027
Net Sales	976 Hundreds of millions of yen (YoY +27.1%)
Operating profit	65.9 Hundreds of millions of yen (YoY +9.2%)
Net income	44 Hundreds of millions of yen (YoY +16.4%)
Gross Profit Margin	18.4 %
Operating profit margin	6.7 %
Selling, general and administrative expenses	113.8 Hundreds of millions of yen (YoY +6.8%)
Results for the three months of the current quarter	Net Sales ¥97.60 billion / Operating profit ¥6.59 billion / Profit before tax ¥6.71 billion / Profit for the period ¥4.40 billion
Full-year earnings forecast	Revenue ¥385.0 billion (up 11.5% year on year) / Cost of sales ¥299.3 billion (up 11.2% year on year) / Gross profit ¥85.7 billion (up 12.5% year on year) / Selling, general and administrative expenses, etc. ¥47.2 billion (up 14.2% year on year) / Operating profit ¥38.5 billion (up 10.5% year on year) / Profit before tax ¥37.0 billion (up 5.0% year on year) / Profit for the period ¥25.0 billion (up 3.4% year on year)
Self-assessment against the plan	Revenue growth exceeded expectations; profit progress was in line with expectations
Segment results	Segment Network services (excluding mobile) / Sales ¥31.63 billion / Year on year against the same period last year +7.2%, Segment Mobile and IoT / Sales ¥14.47 billion / Year on year against the same period last year +11.3%, Segment SI / Sales ¥50.74 billion / Year on year against the same period last year +51.2%, Segment Network services gross profit / Profit ¥11.68 billion / Year on year against the same period last year +0.7%, Segment SI gross profit / Profit ¥5.93 billion / Year on year against the same period last year +25.2%
Breakdown of Factors Affecting the Change	Item Revenue Growth / Amount +¥20.78 billion, Item Increase in operating profit / Amount +¥560 million, Item Growth in IP and outsourcing services / Amount Not disclosed, Item Growth in consumer and business IoT / Amount Not disclosed, Item Recording of revenue from two individual large-scale construction projects and accumulation of operations and maintenance revenue / Amount Not disclosed, Item Decline in gross margin due to large-scale construction projects with high procurement ratios / Amount Not disclosed
Key KPIs	Indicator Total contracted bandwidth / Value 19,533 Gbps / Year on year against the same period last year Not disclosed, Indicator Mobile lines / Value 350.9 10,000 lines / Year on year against the same period last year Not disclosed, Indicator Number of MVNE customers / Value 211 companies / Year on year against the same period last year Not disclosed, Indicator Overall employee satisfaction in employee engagement survey / Value 3.8 5-point scale / Year on year against the same period last year Down from 3.9 in FY24, Indicator Percentage of Female Managers / Value 8.8 % / Year on year against the same period last year +0.4 percentage points (versus April 2025)
Number of employees	Headcount at fiscal year-end 5,818 People / Year on year against the same period last year +314 people / Hiring plan Net increase of approximately 400 consolidated employees in FY26, including 277 new graduates
Assumptions Underlying the Business Outlook	Exchange rate ¥155/USD (assumed rate in the FY26 business plan)
Medium-term management plan targets	Target fiscal year FY29 / Target Targeting consolidated revenue of more than ¥500.0 billion, Target fiscal year End of FY29 / Target Targeting the use of AI in approximately 30% of company-wide operations
Capital expenditures	¥76.27 100 million (1Q26 CAPEX)
Orders received and order backlog	Category SI construction / Orders received ¥40.21 billion / Year on year against the same period last year +126.3% / Order backlog ¥47.96 billion, Category SI Operations and Maintenance / Orders received ¥31.17 billion / Year on year against the same period last year +24.1% / Order backlog ¥131.59 billion
New initiatives	Scheduled to launch an integrated security service in 4Q26, Scheduled to launch a solution supporting compliance with the SCS assessment program, Launching multi-carrier support using SoftSIM, Launching unlimited-data prepaid SIMs for visitors to Japan, Developing physical AI solutions through investments in and partnerships with 7 U.S. AGI companies, Rolling out commercial DCJPY payments with The Hokuriku Bank, targeting FY27, Expanding a multi-professional collaboration platform in the healthcare sector, Rolling out STRIGHT with the aim of establishing it as an industry standard

Items this document does not state (11)

Ordinary incomeProgress against full-year forecastUnit price and quantity metricsNumber of stores and locationsRisk amount incorporated into the outlookFinancial targetsAnnual DividendPayout ratioAcquisition of treasury sharesMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The company identified strong domestic and overseas demand, steady growth in IP and outsourcing services, growth in consumer and business IoT, the recording of two individual large-scale system construction projects, and the accumulation of operations and maintenance revenue as factors behind the increase in revenue. For operating profit, the company cited the decline in gross margin resulting from large-scale projects, as well as the positive rebound from the negative impact of VMware-related profits in the previous year.

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