Cloud growth continues, but Q3 will determine whether monthly growth is slowing

FY2026-H1 consolidated revenue was ¥20,780 million, up 16.1% year on year. The full-year forecast is ¥42,168 million, putting first-half progress at approximately 49.3%, broadly in line with the 50% expected after six months. Operating income was ¥5,963 million, representing approximately 56.7% progress against the full-year forecast of ¥10,514 million. Accordingly, the first issue to monitor in Q3 is whether there are signs that revenue will materially exceed or fall short of the full-year forecast.

Revenue from the cloud-related business was ¥19,112 million, up 15.9% year on year, and accounted for 92.0% of consolidated revenue. Cloud-related revenue for FY2025 was ¥34,485 million, up 28.7% from the previous fiscal year, so the growth rate has moderated recently. Nevertheless, the number of contracted companies increased from 70,000 at the end of the previous fiscal year to 71,000, while contracted user licenses rose from 3.6 million to 3.8 million, indicating continued expansion of the user base.

According to the supplementary materials, monthly cloud revenue increased from ¥3,203 million in April to ¥3,242 million in May and ¥3,272 million in June, while year-on-year growth edged down from 15.5% to 14.6% and 14.3%. Since monthly revenue is rising, it is not yet a situation that can immediately be characterized as a slowdown, but maintaining growth in the 14% range year on year from July to September in Q3 will be important. Consolidated kintone revenue was ¥12,243 million, up 19.1% year on year, so whether it can maintain a higher growth rate than the cloud business overall will also provide insight into the product mix.

Although the company discloses the number of contracted companies, user licenses, cloud revenue and kintone revenue, it does not disclose unit economics such as churn, revenue per customer, revenue per user or the contribution from upselling to existing customers. At the next earnings release, we will look for the number of contracted companies to exceed 71,000 and the number of users to rise further from 3.8 million, as well as whether monthly cloud revenue growth remains in the 14% range and whether growth is being driven more by price revisions or volume growth.