Cloud growth continues, but the next focus is whether SaaS customer expansion can be replicated

In the first half of FY2026, the cloud business recorded revenue of ¥2,492.101 million, up 15.3% year on year, and segment profit of ¥1,042.444 million, up 14.2%. Cloud accounted for 83.7% of consolidated revenue of ¥2,977.465 million, creating a structure in which cloud growth largely determines company-wide revenue growth. In the third quarter, it will be necessary to assess not only whether cloud revenue increased, but also whether the source of revenue was new customers, increased usage by existing customers or upselling.

A breakdown of cloud revenue shows differences in customer trends among horizontal SaaS, vertical SaaS and DCR. At the end of the first half, horizontal SaaS had MRR of ¥349.311 million and 203 contracted companies, with MRR up ¥62.686 million and contracted companies up 30 year on year. Vertical SaaS had MRR of ¥68.363 million and 171 contracted companies, while DCR had MRR of ¥11.209 million and 2 contracted companies. DCR’s MRR decreased by ¥3.807 million year on year and its contracted companies decreased by 1. The overall cloud growth rate alone does not show whether the revenue base outside the core service is expanding.

For horizontal SaaS, the company disclosed NRR of 115.1%, ARPA of ¥1.720 million and 203 contracted companies. NRR above 100% indicates that expansion from increased user numbers, additional binders and added options among existing customers is exceeding cancellations, while it is also important to determine whether ARPA is falling as new customers increase. Next time, the assessment should cover not only the net increase in contracted companies, but also whether NRR remains around 115.1% and ARPA stays at or above ¥1.720 million.

The number of new customers acquired was 18 in total for the first half, increasing from 5 in the first quarter to 13 in the second quarter. The company attributed growth to the creation of new sales opportunities through its own events and exhibitions, as well as upselling through support for existing customers’ use of the service. However, an increase in contracted companies does not necessarily translate into short-term revenue and profit, as implementation support periods and the timing of revenue recognition for large projects also have an impact. Next time, it will be important to see whether the company discloses third-quarter standalone new customer acquisitions, the increase in MRR and the proportion of upselling from existing customers.

First-half progress against the full-year cloud revenue plan of ¥5,140 million was 48.5%, meaning that ¥2,647.9 million must be generated in the second half to meet the plan. The company said cloud revenue is tracking slightly above plan, but the next results announcement should be checked for the cumulative third-quarter progress rate, the increase from MRR of ¥349.311 million and whether NRR of 115.1% has been maintained. With cloud revenue accounting for 83.7%, the next evaluation point will be whether growth is slowing at the same time as customer spending declines.