Earnings pressure from upfront investment accompanying the shift in services

「また、コスト上昇を抑制するための効率化に努めつつも、中長期的な成長および競争力強化に向け、セキュリティやAIといった先端領域における高度人材の確保・育成への投資を強化するとともに、新規・注力商材の販促活動を積極的に展開したことから、販売費及び一般管理費は324百万円（前年同期比2.8％増）となりました。」

「The company optimized personnel expenses by reviewing its workforce structure and benefited from lower depreciation expenses in the current fiscal year following impairment charges on fixed assets at the end of the previous fiscal year. As a result, the full-year cost burden was contained, and SG&A expenses were ¥1,267 million, down 1.8% year on year.」

「Although the company increased advertising and sales activity expenses to promote sales, it pursued total cost reductions by optimizing personnel expenses through a review of its workforce structure and benefiting from the effect of impairment charges on fixed assets recognized at the end of the previous fiscal year. As a result, SG&A expenses were ¥628 million, down 3.7% year on year, indicating steady progress in efficiency improvements.」

「Costs were incurred ahead of revenue throughout the year as the company invested in recruiting personnel and strengthening its service platform, including SOC capabilities, in line with the “Azgent Medium- to Long-Term Growth Strategy.” As a result, SG&A expenses were ¥1,291 million, up 2.8% year on year.」

「At the end of the interim period, costs were incurred ahead of revenue due to preparations for launching new products and infrastructure enhancements to expand the service platform. However, as noted above, the order environment has also improved, resulting in higher revenue and narrower losses at each profit level. Operating profitability was also achieved in the second quarter on a standalone basis, indicating that performance has begun to recover.」

「Costs were incurred ahead of revenue as the company invested in recruiting personnel and strengthening its service platform, including SOC capabilities, in line with the “Azgent Medium- to Long-Term Growth Strategy.” As a result, SG&A expenses were ¥1,255 million, compared with ¥1,128 million in the same period of the previous year.」

「Costs were incurred ahead of revenue as the company invested in recruiting personnel and strengthening its service platform, including SOC capabilities, in line with the “Azgent Medium- to Long-Term Growth Strategy.” As a result, SG&A expenses were ¥941 million, up 10.4% year on year. The company recorded an operating loss of ¥246 million, compared with an operating loss of ¥87 million in the same period of the previous year, an ordinary loss of ¥246 million, compared with an operating loss of ¥101 million, and a quarterly net loss of ¥255 million, compared with a quarterly net loss of ¥109 million.」

「The company actively expanded its workforce and sales activities to strengthen sales, including participation in various trade shows. In addition, to restore a growth trajectory, it advanced investments in line with the “Azgent Medium- to Long-Term Growth Strategy,” including development for launching new products and preparing to expand the service platform, as well as strengthening SOC infrastructure. As a result, SG&A expenses were ¥628 million, up 11.0% year on year. The company recorded an operating loss of ¥164 million, compared with operating income of ¥0 million in the same period of the previous year, an ordinary loss of ¥157 million, compared with ordinary loss of ¥6 million, and a quarterly net loss of ¥158 million, compared with a quarterly net loss of ¥8 million.」

「The company actively expanded its workforce and sales activities to strengthen sales, including participation in trade shows, and intensified preparations for launching its investment and business development operation. As a result, SG&A expenses were ¥309 million, up 5.6% year on year. The company recorded an operating loss of ¥44 million, compared with an operating loss of ¥4 million in the same period of the previous year, an ordinary loss of ¥39 million, compared with an ordinary loss of ¥9 million, and a quarterly net loss of ¥44 million, compared with a quarterly net loss of ¥14 million.」

「The company actively expanded sales and advertising activities to strengthen sales, and also reinforced its organizational structure and upgraded its service platform, including system modifications, as temporary measures to ensure stable service delivery during the COVID-19 pandemic. As a result, costs temporarily increased, and SG&A expenses were ¥1,128 million, compared with ¥1,099 million in the same period of the previous year.」

「The double burden of operating costs from capital investment related to the service business's system migration, which had continued through the previous period, was eliminated, resulting in SG&A expenses of ¥1,335 million, down 7.3% year on year.」

「While revenue remained firm and gross profit increased, the company kept workforce reinforcement to the minimum necessary to accelerate measures aimed at achieving the medium-term management plan. It also eliminated the double burden of operating costs from capital investment related to the service business's system migration, which had continued through the previous period, and pursued cost reductions. As a result, SG&A expenses were ¥996 million, down 8.9% year on year.」

「Although operating costs from capital investment accompanying the system migration in the service business continued through the latter half of the third quarter due to the double burden of operating the old system in parallel, the company was able to keep the amount below its forecast by pursuing cost reductions. The service business exceeded its break-even point and became profitable from the fourth quarter of the fiscal year.」

「The system migration aimed at improving profitability in the service business was completed in the latter half of the third quarter, eliminating the double burden of personnel and operating costs.」

「The double burden of personnel and operating costs resulting from service-related capital investment is expected to end in the second half as parallel operation is eliminated. Operating costs are therefore expected to decline and earnings efficiency to improve.」

「While the company continued to strengthen its staffing structure to accelerate measures aimed at achieving its medium-term management plan, it continued to incur the duplicate personnel and operating costs of its old system due to capital investment made in the previous fiscal year to improve profitability and convert the service business to profitability. Accordingly, operating loss was ¥105 million, compared with operating income of ¥59 million in the same period of the previous year; ordinary loss was ¥105 million, compared with ordinary income of ¥59 million; and net loss for the quarter was ¥105 million, compared with net income for the quarter of ¥49 million.」

「The business had been loss-making, with an average annual loss of just under ¥200 million through the current period. As customer growth reached a certain level of visibility and the company sought to shift to a highly profitable structure from the latter half of the following period, it increased its cost and operating burdens during the current period and took measures to establish a reliably profitable structure from the latter half of the following period. Capital investment resulted in depreciation expense, while parallel operation during the transition from existing facilities to the new system created a temporary increase in costs through the double burden of personnel and operating costs for the old and new systems.」

「To accelerate measures aimed at achieving the medium-term management plan, the company continued strengthening its workforce, including by recruiting experienced personnel from outside the company, and expanding its facilities. As a result, SG&A expenses were ¥1,087 million, up 5.3% year on year. The company recorded an operating loss of ¥52 million, compared with operating income of ¥124 million in the same period of the previous year, an ordinary loss of ¥56 million, compared with ordinary income of ¥118 million, and a quarterly net loss of ¥67 million, compared with quarterly net income of ¥95 million.」

「To accelerate measures aimed at achieving the medium-term management plan, the company continued strengthening its workforce, including by recruiting experienced personnel from outside the company, and expanding its facilities. As a result, SG&A expenses were ¥727 million, up 9.2% year on year. Higher revenue led to higher gross profit, resulting in operating income of ¥28 million, up 94.2% year on year, ordinary income of ¥25 million, up 40.6%, and quarterly net income of ¥18 million, up 56.3%.」

「To accelerate measures aimed at achieving the medium-term management plan, the company continued strengthening its workforce through the recruitment of experienced personnel from outside the company and younger employees for future growth, as well as expanding its facilities. As a result, SG&A expenses were ¥369 million, up 7.8% year on year. At each profit level, higher revenue led to higher gross profit, resulting in operating income of ¥59 million, compared with an operating loss of ¥9 million in the same period of the previous year, ordinary income of ¥59 million, compared with an ordinary loss of ¥8 million, and quarterly net income of ¥49 million, compared with a quarterly net loss of ¥9 million.」

「Although the company continued marketing activities to establish its positioning and organisational strengthening to expand service offerings, gross profit also grew as revenue increased. As a result, it recorded operating profit of ¥337 million, ordinary profit of ¥332 million, and net profit of ¥312 million.」

「Although the company continues marketing activities to establish its positioning and organisational strengthening to expand service offerings, gross profit also grew as revenue remained solid. As a result, it recorded operating profit of ¥124 million (same period: -%), ordinary profit of ¥118 million (same period: -%), and quarterly net profit of ¥95 million (same period: -%).」

「Although the company continues marketing activities to establish its positioning and organisational strengthening to expand service offerings, gross profit also grew as revenue remained solid. As a result, it recorded operating profit of ¥14 million (same period: -%), ordinary profit of ¥18 million (same period: -%), and quarterly net profit of ¥11 million (same period: -%).」

「As a result of continuing marketing activities to establish the positioning of “Security Plus,” strengthening the organisational structure to expand service offerings, and other initiatives, the company recorded an operating loss of ¥9 million (same period: -%), ordinary loss of ¥8 million (same period: -%), and quarterly net loss of ¥9 million (same period: -%).」

「As the company continued making upfront investments, including marketing activities to establish the positioning of “Security Plus” and strengthening its organizational structure to expand its service lineup, it recorded an operating loss of ¥260 million.」