Sales of Products and Services Overseas

「Overseas business revenue increased by ¥40.962 million year on year to ¥76.764 million, up 114.4%, as a result of efforts to strengthen sales capabilities through sales personnel training, raise awareness through trade show participation, develop distributors and approach Japanese business communities.」

「Revenue for the six months ended the interim period increased by ¥22.786 million year on year to ¥36.428 million, as a result of efforts to strengthen sales capabilities through sales personnel training, raise awareness through trade show participation and develop distributors.」

「During the fiscal year, revenue from the 3 ASEAN subsidiaries increased, while recruitment costs and personnel expenses related to establishing the development structure at the U.S. subsidiary, as well as start-up costs at the Philippine subsidiary, increased. As a result, overseas business revenue was ¥128.145 million, up 36.4% year on year, and the segment loss was ¥127.485 million, compared with a segment loss of ¥31.922 million in the previous year.」

「In the ASEAN region, we are pursuing sales activities centered on desknet's NEO and AppSuite. In Malaysia and Thailand, we are working to strengthen sales capabilities by training sales personnel, raise local awareness of our products and services through trade shows, and develop local distributors. As a result, overseas business revenue was ¥54.920 million, down 20.4% year on year, and the segment loss was ¥61.586 million, compared with segment profit of ¥7.593 million in the previous year.」

「In addition, in April 2024 we established a subsidiary in the Philippines, our third ASEAN country. Full-scale sales activities will begin in the second quarter, and we will work to expand sales of our products and services in the Philippines, where strong economic growth is expected and demand among local companies for IT adoption is also expected to increase along with economic growth.」

「As a result, overseas business revenue was ¥93.973 million, up 856.7% year on year, and the segment loss was ¥31.922 million, compared with a segment loss of ¥82.361 million in the previous year.」

「As a result, overseas business revenue was ¥68.991 million, up 1,193.5% year on year, and segment profit was ¥7.593 million, compared with a segment loss of ¥43.765 million in the previous year. The increase in overseas business revenue was mainly attributable to the U.S. subsidiary's transfer to the Company of the rights to a service it had been developing.」

「In the ASEAN region, we are pursuing sales activities centered on desknet's NEO and AppSuite. In Malaysia and Thailand, where our subsidiaries operate, we resumed full-scale sales activities from the previous fiscal year and have worked to raise awareness of our products and services locally by strengthening our sales force and exhibiting at trade shows. Although revenue at the 2 ASEAN subsidiaries has gradually increased, we are focusing on sales activities to steadily build recurring revenue and achieve stable monthly profitability.」

「For the 2 ASEAN subsidiaries, we conducted sales activities with the goal of achieving sustained monthly profitability during the fiscal year, but recurring revenue did not progress as planned and the target was not achieved.」

「For overseas operations, as described above, the ASEAN subsidiaries are targeting sustained monthly profitability during the fiscal year, but the overseas business is expected to remain loss-making for the full year. As a result, overseas business revenue was ¥7.061 million, down 61.0% year on year, and the segment loss was ¥72.963 million, compared with a segment loss of ¥34.610 million in the previous year.」

「In the ASEAN region, we are pursuing sales activities centered on desknet's NEO and AppSuite. In Malaysia and Thailand, where our subsidiaries operate, sales activities did not proceed as planned during the previous fiscal year due to movement restrictions associated with the spread of COVID-19. From the first quarter, however, we have focused on generating opportunities by recruiting local sales personnel, reviewing marketing activities and exhibiting at local trade shows in preparation for the full resumption of sales activities. For the 2 ASEAN subsidiaries, we are conducting sales activities with the goal of achieving sustained monthly profitability during the fourth quarter of the fiscal year. However, recurring revenue is progressing below plan, and the key challenges are generating additional opportunities in Malaysia and shortening the time from opportunity generation to order acquisition in Thailand.」

「For the 2 ASEAN subsidiaries, our target is to achieve sustained monthly profitability during the fourth quarter of the fiscal year. Results from sales activities have gradually begun to emerge, including months in which monthly profitability was achieved as a result of license sales during the second quarter, and we will continue to focus on sales activities.」

「During the first quarter, economic activity in the country was moving toward normalization. To resume full-scale sales activities, we focused on generating opportunities through the recruitment of local sales personnel and a review of marketing activities, with the aim of achieving the annual plan. For the 2 subsidiaries in the ASEAN region, our target is to achieve monthly profitability during the fourth quarter of the fiscal year.」

「In the ASEAN region, we are pursuing sales activities centered on desknet's NEO and AppSuite. However, sales activities, particularly in Malaysia, did not proceed as planned due in part to movement control orders issued in response to the spread of COVID-19, and revenue from external customers for the fiscal year was below the initial plan. Overseas operations are expected to remain investment-led for the time being. As a result, overseas business revenue was ¥25.230 million and the segment loss was ¥45.306 million.」

「In the ASEAN region, we are pursuing sales activities centered on desknet's NEO and AppSuite. However, sales activities, particularly in Malaysia, did not proceed as planned due in part to movement control orders issued in response to the spread of COVID-19, and revenue from external customers for the six months ended the second quarter was below the initial plan. Overseas operations are expected to remain investment-led for the time being.」

「In the ASEAN region, we are pursuing sales activities centered on desknet's NEO and AppSuite. However, sales activities did not proceed as planned due in part to the issuance of movement control orders in response to the spread of COVID-19, and revenue for the first quarter of the fiscal year was below the initial plan. Overseas operations are expected to remain investment-led for the time being.」

「The overseas business consists of operations conducted by the subsidiary NEOREKA ASIA Sdn.Bhd. The company had initially planned for its principal activities to be providing and operating cloud-based DaaS services for businesses, but from the fourth quarter of the fiscal year it adopted a policy of making the local sales of the Company's products and services, including desknet's NEO and AppSuite, its principal business. During the fiscal year, it mainly sold desknet's NEO licenses to Japanese companies operating locally.」

「Meanwhile, Japan's population is expected to decline over the long term, and the working population using the products and services provided by the Group is also expected to decrease. We recognize that expanding overseas is essential to sustaining growth over the medium to long term under these circumstances.」

「Meanwhile, Japan's population is expected to decline over the long term, and the working population using the products and services provided by the Group is also expected to decrease. We recognize that expanding overseas is essential to sustaining growth over the medium to long term under these circumstances.」

「In June, we established a wholly owned subsidiary in California, USA, to promote global marketing and global alliances aimed at expanding into global markets.」

「We established a subsidiary as a base to lead the execution of our future global market strategy, with responsibility for selling our products and services in global markets, conducting marketing from a global perspective and serving as a bridge between our investee and alliance partner companies and the market.」

「The Company will also continue pursuing sales of its products and services overseas.」