Expanding business areas and customer segments and reducing customer concentration

「Regarding orders, subscription-based business centered on cloud and maintenance services remained solid in the Voice Communications business, continuing the trend from the previous fiscal year. In addition, new orders for licenses contributed to an expansion in orders. In the Cloud DX business, orders increased substantially, mainly for system development projects supporting companies' digital transformation initiatives.」

「From large enterprises to small and medium-sized businesses, including regional companies」

「The Group sells its products and services directly to major telecommunications carriers, which have been customers since its founding. For government agencies and general corporate customers, it sells through telecommunications-focused SI partners with which it has capital and business alliances, including EXEO Group,Inc., SAXA,Inc., NEC Networks & System Integration Corporation and TSUZUKI DENKI CO.,LTD.」

「The company also provided a call-center solution to the Construction Skills Human Resources Organization, integrating its existing telephone system, omnichannel communications service and CTI.」

「The company also implemented the NX-C1000 for Enterprise software for an insurance company. The software works with the product described above and enables companies to make and receive calls on various devices, including smartphones and PCs. Its track record with major financial institutions and insurance companies was recognized, leading to this adoption.」

「The company also provided the NX-C1000 for Enterprise software as a SIP server connecting the multimedia terminals located at convenience-store outlets. This case addressed the needs of the multi-site retail sector.」

「The company also implemented a call-center solution for the Construction Skills Human Resources Organization, an incorporated association, integrating its existing telephone system and the Group's omnichannel communications service with the cloud-based CTI system of Com Design Co., Ltd., a Group company of TSUZUKI DENKI CO.,LTD.」

「The company also provided the NX-C1000 for Enterprise software as a SIP server connecting the multimedia terminals located at convenience-store outlets. This is an example of meeting the needs of the multi-site retail sector.」

「Following the PSTN migration for telecommunications carriers, which is nearing completion, demand is growing for the conversion of legacy PBXs and business phones installed in physical offices to IP and cloud-based systems. In response, we are shifting our sales approach to reach business users across all segments through partners, and the number of opportunities is expanding. However, as the business is also transitioning to a subscription model, this is having a negative impact on revenue recognized during the period.」

「Revenue from enterprise solutions for the consolidated fiscal year was ¥1,265.608 million, an increase of 14.2% from the previous consolidated fiscal year.」

「Regarding orders, in the communications systems and solutions business, the company secured a large order for its software from a telecommunications operator affiliated with the power sector and an MVNO network equipment upgrade project from an information and communications services company. In the enterprise solutions business, it received an order for VOICEMARK products. As a result, orders outstanding were ¥1,426.038 million, an increase of 2.4% from the same quarter of the previous year.」

「Revenue from enterprise solutions for the cumulative second quarter ended period was ¥535.245 million, an increase of 31.3% from the same quarter of the previous year.」

「In cooperation with 株式会社エヌ・ティ・ティ ネオメイト, the company's subsidiary developed a telephone support solution using the CPaaS platform "pluscomm," received an order for a vaccine order-acceptance system for local governments, and began operating the system. In related license sales, "LA-6000" was adopted by and delivered to a financial institution that became a new customer. As a result, revenue from enterprise solutions for the cumulative first quarter ended period was ¥227.113 million, an increase of 93.6% from the same quarter of the previous year.」

「Upgrades to PBX equipment and other systems accelerated at major financial institutions, government agencies, and insurance companies to promote DX and telework in response to the COVID-19 pandemic. This drove sales of products including the software IP-PBX "NX-C1000 for Enterprise," the IP-PBX-compatible call-recording software "NX-LA6000," the automated voice response software "NX-IVR," and a web telephone directory application linked to smartphones.」

「・Continuing from the previous fiscal year, the company promoted sales of call-recording systems, which were adopted as large projects by government agencies, multiple financial institutions, insurance companies, and others and delivered in full. Sales activities continued to secure additional deployments from existing customers and acquire new customers. ・The company received a large volume of orders for new deployments and additional licenses for web telephone directory services, call-recording systems, and terminals as use of cloud PBX services provided by a regional power-sector telecommunications operator increased. ・The company received and completed delivery of a large order for its software SBC "NX-B5000 for Enterprise" from the call center of one of the world's largest television shopping and mail-order companies.」

「・Continuing from the previous fiscal year, the company promoted sales of call-recording systems, which were adopted as large projects by government agencies, multiple financial institutions, insurance companies, and others and delivered in full. ・The company received a large volume of orders for new deployments and additional licenses for web telephone directory services, call-recording systems, and terminals as use of cloud telephone services provided by a regional power-sector telecommunications operator increased. ・The company received and completed delivery of a large order for its software SBC "NX-B5000 for Enterprise" from the call center of one of the world's largest television shopping and mail-order companies.」

「Continuing from the previous fiscal year, the company promoted sales of call-recording systems, which were adopted as large projects by multiple financial institutions and delivered in full.」

「However, to move away from the current high concentration of sales among specific solutions and telecommunications operators, we recognize the need to reduce the concentration of our solutions and customer base. This is also linked to resolving the issue of revenue recognition being weighted toward the second half of the fiscal year. We will therefore continue to develop and deepen relationships with domestic and overseas customers and partner companies, including through M&A, and work to expand our product lineup and solutions.」

「Orders outstanding were ¥1,455.379 million, an increase of 65.8% from the same quarter of the previous year, owing to the acquisition of VOICEMARK orders from major companies and other factors.」

「Demand for call-recording systems continued to expand. The company continued to receive large orders from multiple major life insurance companies, banks, and other customers. As a result, revenue from enterprise solutions for the cumulative second quarter ended period was ¥489.625 million, an increase of 36.9% from the same quarter of the previous year.」

「Regarding orders, the company issued a timely disclosure titled "Notice Concerning a Large Order" dated 5 June 2019 for its communications systems and solutions business. In addition to securing a large order from a major telecommunications operator, the enterprise solutions business secured orders for VOICEMARK and other products from major companies, bringing orders outstanding to ¥1,521.519 million, an increase of 90.2% from the same quarter of the previous year.」

「As a result, revenue in the enterprise solutions field was ¥1,302.325 million, an increase of 58.0% from the previous consolidated fiscal year.」

「Regarding the group's operating performance for the cumulative third quarter ended period, revenue was ¥1,672.091 million, reflecting an increase in security assessment projects for major mobile telecommunications operators and major European telecommunications operators; sales of the integrated call-recording solutions "VoISplus" and "LA-6000" to major telecommunications equipment manufacturers and major railway operators; and, through subsidiary products, sales of call-center display systems to major electric power companies and the acquisition of commissioned development projects for telephone communications terminal equipment from major companies.」

「Revenue was ¥1,161.489 million, driven by an increase in security assessment projects for major mobile telecommunications operators; sales of the integrated call-recording solutions VoISplus and LA-6000 to consumer finance companies and major railway operators; and, through subsidiary products, sales of call-center display systems to major electric power companies and the acquisition of commissioned development projects for telephone communications terminal equipment from major companies.」

「As a result of active sales efforts for VoIP solutions, centered on our sales partner 日本アバイア株式会社 and major companies with contact centers in the financial and non-life insurance sectors, inquiries for the software SBC "NX-B5000 for Enterprise" increased. Deployments at multiple financial institutions were approved.」

「To move away from the current high concentration of sales among specific solutions and telecommunications operators, we recognize the need to reduce the concentration of our solutions and customer base. This is also linked to resolving the issue of revenue recognition being weighted toward the second half of the fiscal year. We will therefore continue to develop and deepen relationships with domestic and overseas customers and partner companies, including through M&A, and work to expand our product lineup and solutions.」

「The company began selling the speech-recognition service "U³COGNI." U³COGNI is a monthly speech-recognition BPO service that converts voice data from calls and meetings into text. This enables customers to introduce the service with significantly lower upfront costs. Full-scale deployment is also planned at SMBC日興証券株式会社, which is working to achieve company-wide workplace reform through improved internal compliance and operational efficiency. The company plans to expand sales across a broad range of industries, including contact centers.」

「・The company received an order for a capital expenditure project involving call center integration and supplied its software SBC NX-B5000 for Enterprise. Another order is expected. ・Deployments of the company's IP-PBX NX-C1000 for Enterprise progressed among corporate customers, including major automobile dealers. The shift to IP telephony capable of integration with unified communications services such as Skype for Business is progressing to support workplace reform. As a result, revenue from enterprise solutions for the cumulative second quarter ended period was ¥152.712 million, an increase of 29.3% from the same quarter of the previous year.」

「・Additional call-recording products were introduced for existing major financial institution customers. ・Additional VoIP solutions were introduced for the call centers of major non-life insurance companies. ・As demand increased for the transcription and use of call-recording data through speech recognition technology amid stronger corporate compliance requirements, the company began providing call recording, speech-data transcription, and related operational services using a speech-recognition engine as a monthly BPO service. It received an order from a major securities company and began providing the service. As a result, revenue from enterprise solutions for the cumulative first quarter ended period was ¥52.958 million, an increase of 200.4% from the same quarter of the previous year.」

「As a result, revenue in the enterprise solutions field was ¥601.987 million, an increase of 41.6% from the previous fiscal year.」

「・New call-recording products were introduced for existing customers, including major electronics manufacturers, major financial institutions, major non-life insurance companies, government agencies, and railway operations control centers. ・The new software-based integrated call-recording solutions "VoISplus" and "LA-6000" were introduced for new customers, including major staffing companies. ・Additional licenses for the company's products were secured as the number of users of cloud PBX services provided by telecommunications operators increased. As a result, revenue from enterprise solutions for the cumulative third quarter ended period was ¥386.354 million, an increase of 145.9% from the same quarter of the previous year.」

「For sustainable growth, we consider expanding our business areas and reducing the concentration of our sales ratio in favor of specific telecommunications operators to be challenges.」