Risk of earnings volatility due to project acceptance and delivery timing

「During the interim consolidated accounting period, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「Within the Group, project revenue and profit margins vary, and earnings fluctuate significantly depending on when revenue is recognized.」

「Revenue from the mobile communications solutions business for the first nine months of the current fiscal year was ¥154.143 million, down 69.4% year on year. In the first nine months of the previous fiscal year, delivery of a large project in progress had a significant impact on revenue. This fiscal year, however, no projects in progress were scheduled for delivery during the first nine months, resulting in a large year-on-year difference.」

「In the first half of the previous fiscal year, delivery of a large project in progress had a significant impact on revenue. This fiscal year, however, no projects in progress were scheduled for delivery during the first half, resulting in a large year-on-year difference.」

「In the first quarter of the previous fiscal year, there were early deliveries of contracted development of a vaccine ordering system amid the COVID-19 pandemic and license sales related to the promotion of remote work. However, progress in proposing projects this fiscal year remains in line with the plan.」

「Revenue was ¥3,750.288 million, down 2.9% year on year, due to the decline following the significant contribution from license sales to major telecommunications operators in the previous fiscal year and the postponement to the following fiscal year of the acceptance inspection for some MVNO renewal projects following changes to their plans.」

「Within the Group, the scale of sales and profit margin differ from project to project, and operating results fluctuate significantly depending on when sales are recognised. If customer acceptance cannot be obtained within the period initially scheduled under the contract due to customer-related factors such as unexpected specification changes, or if service delivery is delayed due to system defects or other factors, the Group's quarterly operating results may fluctuate significantly.」

「In terms of orders, communications systems and solutions were affected by the decline following the large project for a major telecommunications operator in the same quarter of the previous year. However, maintenance projects accumulated steadily in maintenance support, resulting in an order backlog of ¥1,392.232 million, down 4.3% year on year.」

「In terms of orders, maintenance projects accumulated steadily in maintenance support. However, in communications systems and solutions, the significant decline following the large project for a major telecommunications operator in the same quarter of the previous year had a substantial impact, resulting in an order backlog of ¥871.235 million, down 42.5% year on year.」

「In terms of orders, maintenance projects accumulated steadily in maintenance support. However, in communications systems and solutions, the significant decline following the large project for a major telecommunications operator in the same quarter of the previous year had a substantial impact, resulting in an order backlog of ¥1,122.043 million, down 26.3% year on year.」

「The Group's results for the current consolidated fiscal year were affected by some projects being pushed into a different period due to the spread of COVID-19. However, revenue reached ¥3,878.513 million, up 21.6% year on year, owing to the introduction of cloud PBX services for power-sector communications operators, sales of the AI platform ASH, sales of mobile network virtualization solutions to major telecommunications operators, participation in a proof-of-concept demonstration using local 5G conducted by SUMITOMO CORPORATION (SUMITOMO SHOJI KAISHA,LTD.), sales of AudioCodes VoIP gateways to major telecommunications operators, and increased sales of VOICEMARK by a subsidiary to major companies.」

「Progress for the first nine months of the current fiscal year is slightly below plan, but full-year results are expected to be in line with the initial plan.」

「The Group's business is characterized by revenue and operating profit being concentrated in the fourth-quarter consolidated accounting period, and full-year results are expected to be in line with the initial plan. A loss had been anticipated from the planning stage for the first half of the current fiscal year, and progress is broadly in line with the plan.」

「The Group has a business profile in which sales and operating profit are concentrated in the fourth quarter, and expects full-year results to be in line with the initial plan. A loss had been anticipated for the first quarter from the planning stage, and progress has been broadly in line with the plan.」

「The Group's business is characterized by revenue and operating profit being concentrated in the fourth-quarter consolidated accounting period, and full-year results are expected to be in line with the initial plan. A loss had been anticipated from the planning stage for the first nine months of the current fiscal year, and progress is broadly in line with the plan.」

「The Group's business is characterized by revenue and operating profit being concentrated in the fourth-quarter consolidated accounting period, and full-year results are expected to be in line with the initial plan. A loss had been anticipated from the planning stage for the first half of the current fiscal year, and progress is broadly in line with the plan.」

「The Group has a business profile in which sales and operating profit are concentrated in the fourth quarter, and expects full-year results to be in line with the initial plan. A loss had been anticipated for the first quarter from the planning stage, and progress has been broadly in line with the plan.」

「Within the Group, the scale of sales and profit margin differ from project to project, and operating results fluctuate significantly depending on when sales are recognised. If customer acceptance cannot be obtained within the period initially scheduled under the contract due to customer-related factors such as unexpected specification changes, or if service delivery is delayed due to system defects or other factors, the Group's quarterly operating results may fluctuate significantly.」

「Operating loss was ¥317.384 million, compared with an operating loss of ¥65.570 million in the same quarter of the previous year, and ordinary loss was ¥319.757 million, compared with an ordinary loss of ¥69.770 million. The company has a business profile in which sales and operating profit are concentrated in the fourth quarter and expects full-year results to be in line with the initial plan. This trend is stronger in the current fiscal year, and a loss had been anticipated for the third quarter from the planning stage, with progress broadly in line with the plan.」

「In terms of orders, implementation support projects related to in-house software licences and renewals of ongoing maintenance contracts accumulated steadily. However, because there were no new orders for large-scale projects in the enterprise solutions business during the fiscal year, the order backlog was ¥693.563 million, down 13.9% year on year. The company has a business profile in which sales and operating profit are concentrated in the fourth quarter, and expects full-year results to be in line with the initial plan. A loss had been anticipated for the second quarter from the planning stage, and progress has been broadly in line with the plan.」

「In terms of orders, the order backlog for in-house licensed products declined 12.6% year on year to ¥672.776 million, but is expected to recover as planned over the full fiscal year. The company has a business profile in which sales and operating profit are concentrated in the fourth quarter, and expects full-year results to be in line with the initial plan. A loss had been anticipated for the first quarter from the planning stage, and progress has been broadly in line with the plan.」

「Sales were ¥2,494.186 million, down 11.4% from the previous fiscal year, due to delays in the sales plan for some new products and a shift in products sold from third-party products for IP telephony services to in-house software licences for the same applications, which generate a higher absolute amount of profit but lower sales, together with delays in implementing the shift. The resulting decline in sales could not be offset by increases in other sales.」

「In terms of orders, new projects for implementation support related to IP radio solutions and maintenance services remained firm. However, fluctuations in the timing of orders for large-scale projects resulted in an order backlog of ¥506.723 million, down 13.5% year on year.」

「The scale of sales and profit margin differs from project to project, and operating results fluctuate significantly depending on when sales are recognised.」