STB Sales and VAR Sales Partner Network in the Video Distribution Sector

「In recent years, against the backdrop of the global proliferation of video streaming services, adoption of our next-generation products linking in-room televisions with smartphones has been progressing. Although the sharp rise in STB device prices driven by demand for AI semiconductors and other factors has recently weighed on the pace of adoption, the market is gradually accepting the new price level, and a path toward renewed growth is becoming visible. Building on our track record of supplying more than 200,000 units to the hotel market, we will continue to focus on market development with the aim of restoring this business's performance to pre-pandemic levels.」

「In the fiscal year, the contract-based Product business benefited from the recovery of the hospitality market accompanying increased inbound demand. Large STB development and delivery projects, primarily based on inquiries from hotels, restaurants and other businesses, progressed, with deliveries completed sequentially.」

「Through precise proposals drawing on our long-cultivated STB development capabilities and procurement network, we steadily secured stable orders from existing customers as well as orders for STBs equipped with new functions.」

「In the interim accounting period, the contract-based Product business performed steadily as inquiries about STBs and other products increased due to the recovery of the hospitality market, including hotels and restaurants. As a result, revenue was ¥75.052 million, up 95.8% year on year, and segment profit was ¥40.467 million, up 58.9%.」

「As the hospitality market recovered, orders for STBs, servers and other products exceeded expectations and progressed steadily.」

「In the interim accounting period, the contract-based Product business performed steadily, primarily due to an increase in STB orders from existing customers and more inquiries about Cygnus2. As a result, revenue was ¥38.336 million, up 26.8% year on year, and segment profit was ¥25.471 million, up 20.6%.」

「In the first-quarter cumulative period, the contract-based Product business performed steadily, primarily due to an increase in STB orders from existing customers and more inquiries about Cygnus2. As a result, revenue was ¥26.203 million, up 21.6% year on year, and segment profit was ¥20.076 million, up 17.5%.」

「In the contract-based Product business, revenue declined from the same quarter of the previous year due to the reaction to the large STB order from an existing customer received in the previous fiscal year, as well as the cancellation, for reasons attributable to the business partner, of part of an STB project that had been expected in the second half of the fiscal year.」

「In the contract-based Product business, revenue declined from the same quarter of the previous year due to the reaction to the large STB order from an existing customer received in the previous fiscal year.」

「In the contract-based Product business, server deliveries that had shifted from the previous fiscal year were completed steadily in the first quarter. Large orders from existing customers that had been pursued since the previous fiscal year made a significant contribution to revenue, and product orders also began to increase as semiconductor market conditions recovered. As a result, revenue increased substantially year on year to ¥260.525 million, up 87.1% from the same period of the previous year.」

「A large STB order from an existing customer, for which discussions had been underway since the previous fiscal year, also made a significant contribution to revenue.」

「The Group develops, manufactures and provides terminals and systems that meet the functional requirements of its VAR partners, an abbreviation for Value Added Reseller.」

「However, the decline in sales of older-model STBs in the video distribution field and delayed deliveries caused by production delays could not be offset by new products and services. As a result, consolidated net sales for the fiscal year were ¥694,460 thousand, down 44.8% year on year, and operating loss was ¥144,783 thousand, compared with operating profit of ¥251,873 thousand in the previous fiscal year.」

「In addition, as the fourth quarter of the current consolidated fiscal year approaches, when terminal deliveries are concentrated each year, deliveries to sales partners tend to decline in the third quarter, and terminal deliveries remained limited. As a result, during the cumulative third-quarter period of the current consolidated fiscal year, IT business support services secured net sales close to the same period of the previous year, while net sales from IoT solution services declined year on year to ¥348,291 thousand, down 51.3%.」

「During the cumulative second-quarter period of the current consolidated fiscal year, IT business support services remained solid, but in the video distribution field of the IoT solution services, customers held back on purchases of the core terminals for hotel VOD following the announcement of a next-generation model.」

「However, although orders for set-top boxes (STBs) deployed in the video distribution field of the IoT solution services that account for most of net sales accumulated steadily in line with the initial plan during the first quarter of the current consolidated fiscal year, deliveries of terminals to sales partners, or Value Added Resellers (VARs), remained limited during the quarter because terminal deliveries tend to be concentrated in the second and fourth quarters. Consequently, net sales remained sluggish.」

「In the video distribution field, where the Company provides STBs and services for hotel VOD and IP broadcasting, inquiries for hotel VOD increased in connection with new hotel construction and renovations. The Company also newly developed an STB compliant with international IPTV standards and worked to expand its products and services for IP broadcasting.」

「However, although orders for terminals, including set-top boxes (STBs) deployed in the video distribution field of the IoT solution services that account for most of net sales, accumulated steadily in line with the initial plan during the third quarter of the current consolidated fiscal year, deliveries of terminals to sales partners, or Value Added Resellers (VARs), remained limited during the quarter because terminal deliveries tend to be concentrated in the second and fourth quarters. Consequently, net sales remained sluggish.」

「Deliveries of set-top boxes (STBs) to Value Added Resellers (VARs), the Company's sales partners, increased substantially in the video distribution field.」