Improved operating profit driven by SBC licence sales and maintenance projects

「By product and service, the subscription business continued to grow steadily, increasing 8.5% from the previous fiscal year. Maintenance services remained firm as existing contracts accumulated, while expanded usage drove growth in cloud services. In the one-time business, high-margin projects accumulated through the acquisition of major license-business projects, while the expansion of DX-related implementation projects and revenue including hardware sales to a specific customer resulted in revenue of ¥4,256.981 million, up 17.6% from the previous fiscal year.」

「By product and service, subscription revenue grew steadily, increasing 8.6% year on year, while one-time revenue included nonrecurring sales of hardware to a specific customer. As a result, revenue for the six months ended 30 September increased 18.4% year on year to ¥1,894.385 million.」

「The revenue structure is shifting away from one-time projects, in which hardware and software licenses were sold together to telecommunications companies in large projects worth several hundred million yen each, toward cloud and subscription businesses in which customers do not own the hardware themselves.」

「Revenue for the six months ended 30 September decreased 6.3% year on year to ¥1,088.135 million. Unlike the previous year, however, the subscription business has progressed steadily as an earnings base without being affected by fluctuations in one-time businesses.」

「In the Voice Communications business, sales of highly profitable software to telecommunications operators, government agencies and railway companies increased, backup-system implementation projects were secured for a major electric utility to stabilize service operations, and cloud-service sales to telecommunications operators increased.」

「In terms of profit and loss, in addition to the positive effect of higher sales, lower software development investment and lower fixed costs due to reduced personnel and software amortisation costs resulted in gross profit of ¥927.739 million, up 35.8% year on year, operating profit of ¥71.546 million, compared with an operating loss of ¥178.012 million, ordinary profit of ¥65.294 million, compared with an ordinary loss of ¥183.333 million, and quarterly profit attributable to owners of the parent of ¥51.941 million, compared with a quarterly net loss of ¥165.157 million.」

「In terms of profit and loss, in addition to the positive effect of higher sales, lower software development investment and lower fixed costs due to reduced personnel and outsourcing costs resulted in gross profit of ¥600.622 million, up 37.7% year on year, operating profit of ¥26.933 million, compared with an operating loss of ¥155.763 million, ordinary profit of ¥21.094 million, compared with an ordinary loss of ¥160.609 million, and quarterly profit attributable to owners of the parent of ¥17.202 million, compared with a quarterly net loss of ¥142.060 million.」

「Revenue for the three months ended 30 June increased 36.4% year on year to ¥745.751 million, driven by steady sales of the Company’s software and implementation projects for telecommunications operators secured in the previous period in the Voice Communications business, accumulated sales of subscription services launched for MVNO operators at the end of the previous period in the Communications DX business, and renewal work to strengthen the security and simplify the operation of installed mobile core systems.」

「Revenue for the nine months ended 31 December decreased 24.9% year on year to ¥1,779.723 million due to lower sales of the Company’s software and VOICEMARK products in the Voice Communications business and the concentration of acceptance dates for the Mobile Communications Solutions business in the fourth quarter.」

「Revenue for the six months ended 30 September decreased 30.7% year on year to ¥1,163.333 million due to lower sales of the Company’s software and VOICEMARK products in the Voice Communications business, declines in MVNO platform implementation support and network equipment renewal projects in the Mobile Communications Solutions business, which had contributed significantly to the previous period’s revenue, and the concentration of the current year’s sales plan in the second half.」

「Revenue for the nine months ended 30 June exceeded the original plan. However, revenue decreased 37.8% year on year to ¥546.708 million due to lower sales of the Company’s software and VOICEMARK products in the Voice Communications business, declines in MVNO platform implementation support and network equipment renewal projects in the Mobile Communications Solutions business, which had contributed significantly to the previous year’s revenue, and the concentration of the current year’s sales plan in the second half.」

「The Group’s revenue decreased 2.9% from the previous fiscal year to ¥3,750.288 million. In Enterprise Solutions, sales of VOICEMARK products and implementation projects increased, as did new maintenance services related to prior-period sales. These increases were offset in Communications Systems and Solutions by a decline following the previous year’s major license sales to telecommunications operators and the postponement into the following fiscal year of certain acceptance dates due to changes in the schedule for MVNO renewal projects.」

「Although sales of MVNO platform implementation support projects, network equipment renewal projects and maintenance services to information and telecommunications services companies increased, as did the subsidiary’s sales of VOICEMARK products, revenue decreased 7.5% year on year to ¥2,368.767 million due to a decline in sales of the Company’s licensed products, which had contributed significantly to the previous year’s revenue.」

「Revenue for the six months ended 30 September increased 14.4% year on year to ¥1,678.331 million, driven by increased sales of MVNO platform implementation support projects, network equipment renewal projects and maintenance services to information and telecommunications services companies, as well as increased sales of VOICEMARK products by the subsidiary.」

「Revenue for the nine months ended 30 June increased 87.0% year on year to ¥878.364 million, driven by increased sales of MVNO platform implementation support projects and network equipment renewal projects to information and telecommunications services companies, as well as increased sales of VOICEMARK products by the subsidiary.」

「Although sales of third-party licenses, which had contributed significantly to the previous year’s revenue, declined and the subsidiary’s VOICEMARK brand sales also decreased, revenue for the fiscal year decreased 0.4% to ¥3,863.565 million due to the acquisition of SBC product sales projects for major telecommunications operators and increased sales and implementation support projects for mobile core systems (EPC) associated with the relocation and renewal of an MVNO platform for a major information and telecommunications services company.」

「Although sales of third-party licenses, which had contributed significantly to the previous year’s revenue, declined and the subsidiary’s VOICEMARK sales also decreased, revenue increased 27.3% year on year to ¥2,561.895 million due to winning SBC product sales projects for major telecommunications operators and increased sales and implementation support projects for 4G mobile core systems (EPC) associated with the relocation and renewal of an MVNO platform for a major telecommunications information-services provider.」

「Although sales of third-party licenses, which had contributed significantly to the year’s revenue, declined and the subsidiary’s VOICEMARK sales also decreased, revenue increased 10.1% year on year to ¥1,466.650 million due to winning SBC product sales projects for major telecommunications operators and an increase in implementation support projects related to the Company’s software.」

「Despite increased demand for cloud services, including demand arising from the development of remote-work environments following the spread of COVID-19, revenue decreased 24.3% year on year to ¥469.729 million due to a decline in sales of third-party licenses, which had contributed significantly to the previous year’s revenue, as well as lower VOICEMARK sales by the subsidiary.」

「As a result of these initiatives in the three areas described above, the Group’s performance for the fiscal year was affected by the postponement of certain projects due to the spread of COVID-19. However, revenue increased 21.6% from the previous fiscal year to ¥3,878 million, driven by the introduction of cloud PBX services for electric utility telecommunications operators, sales of the AI platform ASH, sales of mobile network virtualization solutions to major mobile network operators, participation in local 5G proof-of-concept projects conducted by SUMITOMO CORPORATION (SUMITOMO SHOJI KAISHA,LTD.), sales of AudioCodes VoIP gateways to major telecommunications operators, and increased VOICEMARK sales by the subsidiary to major companies.」

「Although security assessment projects for major mobile network operators declined during the nine months ended 31 December, revenue increased to ¥2,012 million, up 20.3% year on year, due to the introduction of cloud PBX services for electric utility telecommunications operators, sales of mobile network virtualization solutions to major mobile network operators, participation in local 5G proof-of-concept projects conducted by SUMITOMO CORPORATION (SUMITOMO SHOJI KAISHA,LTD.), and increased VOICEMARK sales by the subsidiary to major companies.」

「The Group's net sales for the cumulative second quarter under review were ¥1,331.937 million, up 14.7% year on year. Although security assessment projects for major mobile telecommunications carriers declined, sales increased through the sale of mobile network virtualisation solution projects to major mobile telecommunications carriers, participation in a proof-of-concept project conducted by Sumitomo Corporation using local 5G, and higher VOICEMARK sales to major companies by a subsidiary.」

「The Group's net sales for the cumulative first quarter under review were ¥620.489 million, up 8.8% year on year. Although security assessment projects for major mobile telecommunications carriers declined, sales increased through the sale of mobile network virtualisation solution projects to major mobile telecommunications carriers in preparation for full-scale 5G operations, and higher VOICEMARK sales to major companies by a subsidiary.」

「The Group's net sales were ¥3,190.405 million, an increase of 11.2% from the previous consolidated fiscal year, owing to the acquisition of cloud PBX services for major telecommunications carriers, the centralised reorganisation of the enterprise business under the subsidiary NxG-BS to strengthen the enterprise business, and increased sales of VOICEMARK to major companies.」

「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.」

「The Group's operating results for the cumulative second quarter under review reflected an increase in security assessment projects for major mobile telecommunications carriers, sales of the integrated call-recording solutions VoISplus and LA-6000 to consumer finance companies and major railway operators, sales of a call-centre display system to a major electric power company by a subsidiary, and the acquisition of contract development projects for telephone communications terminal equipment from a major company. Net sales were ¥1,161.489 million.」

「Net sales were ¥570.299 million, owing to an increase in security assessment projects and the acquisition of software SBC product renewal projects for major mobile telecommunications carriers, as well as sales of a call-centre display system to a major electric power company and sales of call-recording products and a system to prevent misdirected fax transmissions to a major securities company by a subsidiary.」

「Net sales were ¥2,868.374 million, owing to an increase in security assessment projects for major mobile telecommunications carriers, higher sales of the company's own software products in response to increased traffic and the growing functionality of cloud PBX systems, higher equipment sales of call-recording products and automated voice response systems acquired through the transfer of a business from neix, which had provided business revitalisation support, the expansion of distribution channels as VOICEMARK products steadily gained market recognition, and a strong start for the voice-recognition BPO service.」

「During the cumulative third quarter under review, sales of licence products declined year on year. However, net sales increased 0.6% year on year to ¥1,557.643 million, owing to an increase in security assessment projects for major mobile telecommunications carriers, higher sales of equipment related to the company's own software products as traffic increased through risk diversification, and the provision of voice-recognition BPO services to a major securities company.」

「Although sales of third-party licence products declined during the cumulative second quarter under review, net sales increased to ¥990.258 million, up 6.6% year on year, owing to an increase in security assessment projects and the acquisition of new SBC product projects for major mobile telecommunications carriers.」

「During the cumulative first quarter under review, the company secured more security assessment projects for major mobile telecommunications carriers and new software SBC (*) product projects. However, sales of the company's own licences for existing projects, which had contributed significantly to sales in the previous fiscal year, declined, resulting in net sales of ¥402.031 million, a decrease of 14.2% year on year.」

「For the fiscal year under review, the increase in sales of the company's own licences and construction support projects related to IP radio solutions, the increase in large-scale security projects for major mobile telecommunications carriers, and growth in sales of call-recording products were offset by declines in maintenance projects for overseas vendors' products, delays in the sales plans for certain new products, and a decline in sales as products for IP telephone services shifted from third-party products to the company's own software licences for the same applications, which generate higher absolute profit but lower sales. As implementation of this shift was also delayed, these factors could not be offset by other sales growth, and net sales were ¥2,494.186 million, a decrease of 11.4% from the previous fiscal year.」

「Although sales of the company's own licences related to IP radio solutions and sales of call-recording products increased during the cumulative third quarter under review, sales of third-party licence products, which had made a significant contribution to sales in the same quarter of the previous year, declined, as did maintenance projects for overseas vendors' products. As a result, net sales were ¥1,548.518 million, a decrease of 10.6% year on year.」

「Although sales of the company's own software SBC products under licence to major telecommunications carriers increased, as did sales of call-recording products, sales of third-party licence products, which had made a significant contribution to sales in the same quarter of the previous year, declined, as did maintenance projects for overseas vendors' products. As a result, net sales were ¥929.072 million, a decrease of 11.1% year on year.」

「Although sales of the company's own software SBC products to major telecommunications carriers increased, sales of third-party licence products, which had made a significant contribution to sales in the same quarter of the previous year, declined, as did sales of call-recording products and maintenance projects for overseas vendors' products. As a result, net sales were ¥468.787 million, a decrease of 17.4% year on year.」

「Due to higher sales of SBC products under licence to major telecommunications carriers and an increase in maintenance projects for overseas vendors' products, net sales were ¥2,815.426 million, compared with ¥2,401.152 million in the same period of the previous year.」