Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — 9M FY2016 Earnings Presentation

19 slides from Internet Initiative Japan's earnings presentation, Feb 8, 2017

  1. Slide 1: Consolidated Financial Results for 1Q-3Q FY2016

    Consolidated Financial Results for 1Q-3Q FY2016 (9 months ended December 31, 2016) Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) February 8, 2017 © 2017 Internet Initiative Japan Inc.

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1Q-3Q FY2016 Financial Results Ⅱ. Consolidated Financial Results for 1Q-3Q FY2016 Ⅲ. Reference Materials © 2017 Internet Initiative Japan Inc. 1

  3. Slide 3: Summary of 1Q-3Q FY2016 Financial Results

    Ⅰ. Summary of 1Q-3Q FY2016 Financial Results < 1Q-3Q16 Results > < FY16 Targets > Total revenues JPY113.60 billion up 14.3% JPY158.0 billion up 12.3% Gross margin JPY17.83 billion up 0.2% JPY25.3 billion up 2.6% Operating income JPY3.16 billion down 22.5% JPY5.0 billion down 18.6% Net income JPY1.91

  4. Slide 4: Consolidated Financial Results for 1Q-3Q FY2016

    Ⅱ- 1. Consolidated Financial Results for 1Q-3Q FY2016 Unit: JPY billion *Net income attributable to IIJ © 2017 Internet Initiative Japan Inc. 3

  5. Slide 5: Revenues

    Ⅱ- 2. Revenues Unit: JPY million Network Services Systems Integration (SI) Systems Construction [ ] , YoY = compared to the same period in a previous year Internet Connectivity Services (Enterprise) Internet Connectivity Services (Consumer) Systems Operation and Maintenance Outsourcing Service Equip

  6. Slide 6: Cost of Revenues and Gross Margin Ratio

    Ⅱ- 3. Cost of Revenues and Gross Margin Ratio Cost of revenues: Network Services SI ATM Operation Business Unit: JPY million Equipment Sales [ ] , YoY = compared to the same period in a previous year Gross margin ratio: Network Services SI Total Revenues Gross Margin Total  JPY17,830 million (up 0

  7. Slide 7: Network Services: Revenues

    Ⅱ- 4. Network Services (1)Revenues WAN Services Unit: JPY million Total Contracted [ ] , YoY = compared to the same period in a previous year Outsourcing Services Bandwidth(*) (Gbps) QoQ = 3Q16 compared to 2Q16 Internet Connectivity Services (Consumer) Internet Connectivity Services (Enterprise) In

  8. Slide 8: Network Services: Cost of Revenues

    Ⅱ- 4. Network Services (2)Cost of Revenues Others Unit: JPY million [ ] , YoY = compared to the same period in a previous year Outsourcing-related costs Personnel-related costs Network operation-related costs Cost of network services Circuit-related costs  1Q-3Q16: up JPY9,195 million, up 19.5% Yo

  9. Slide 9: Systems Integration (SI): Revenues

    Ⅱ- 5. Systems Integration (SI) (1)Revenues Systems Construction Unit: JPY million [ ] , YoY = compared to the same period in a previous year QoQ = 3Q16 compared to 2Q16 Systems Construction Revenues Systems Operation and Maintenance Revenues Order backlog *Systems construction’s order backlog and Or

  10. Slide 10: Systems Integration (SI): Cost of Revenues

    Ⅱ- 5. Systems Integration (SI) (2)Cost of Revenues Unit: JPY million Purchasing costs Outsourcing-related costs [ ] , YoY = compared to the same period in a previous year QoQ: 3Q16 compared to 2Q16 Others Network operation-related costs Personnel-related costs ( ) Gross margin ratio 1Q-3Q15: 30,454

  11. Slide 11: Number of Employees

    Ⅱ- 6. Number of Employees Contract worker Unit: JPY million Full time worker YoY = compared to the same period in a previous year 2,975 2,981 2,977 2,980 3,110 3,124 3,108  3Q16: Number of employees slightly decreased at group company’s customer support division Employee Distribution Administration

  12. Slide 12: SG&A Expenses/R&D

    Ⅱ- 7. SG&A Expenses/R&D Research & development expenses Unit: JPY million General & administrative expenses YoY = compared to the same period in a previous year Sales & marketing expenses ( ) % of total revenues 1Q-3Q15: 13,720 (13.8%) 1Q-3Q16: 14,675(12.9%) FY15: 18,515 (13.2%) 4,517 4,627 4,576 4,

  13. Slide 13: Operating Income and Net Income

    Ⅱ- 8. Operating Income and Net Income Operating Income Net Income Attributable to IIJ Operating Margin Ratio Unit: JPY million YoY = compared to the same period in a previous year 1Q-3Q15 Operating income: 4,073 1Q-3Q16 Operating income: 3,155 Income before income tax expense: 1Q-3Q15 Net income at

  14. Slide 14: Consolidated Balance Sheets (Summary)

    Ⅱ- 9. Consolidated Balance Sheets (Summary) Unit: JPY million Total IIJ Shareholders’ Equity to Total Assets: 55.0% as of Mar. 31, 2016, 49.8% as of Dec. 31, 2016 © 2017 Internet Initiative Japan Inc. 13

  15. Slide 15: Consolidated Cash Flows

    Ⅱ- 10. Consolidated Cash Flows Unit: JPY million Operating Activities YoY = compared to the same period in a previous year 1Q-3Q15: 7,811 1Q-3Q16: 4,408 1Q-3Q16 Operating Activities FY15: 12,052 Major YoY Breakdown Change Net income 2,036 (651) Depreciation and amortization 8,006 +712 Fluctuation o

  16. Slide 16: Other Financial Data (CAPEX etc.)

    Ⅱ- 11. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX Cash CAPEX Capital Lease < Breakdown of CAPEX (unit: JPY billion) > FY15 1Q-3Q16 1Q-3Q15:12,211 1Q-3Q16: 12,258 FY15: 14,812 Network update, back office 10.2 9.0 investment and others Cloud-related 4.4 3.0 (of GIO P2-related) (2.2) (1.

  17. Slide 17: Cloud Business Developments

    Ⅲ- 1. Cloud Business Developments Cloud-related revenue (Unit: JPY billion) 3Q16 revenue (Unit: JPY billion) Large game customers 3Q16 cloud-related revenue recognition: General purpose SaaS 0.09 87.8% in systems operation and maintenance (groupware etc.) Business enterprise customers 12.2% in outso

  18. Slide 18: Mobile Business Developments

    Ⅲ- 2. Mobile Business Developments Total subscription & revenue IIJmio Mobile (consumer) & IIJ Mobile (enterprise) Total subscription (thousand) Subscription (thousand): Total revenue (JPY billion) IIJmio Mobile IIJ Mobile ( ) MVNE* Revenue (JPY billion): IIJ Mobile IIJmio Mobile * MVNE services are

  19. Slide 19: Forward-looking statements / Contact Information

    ※ Forward-looking statements Statements made in this presentation regarding IIJ’s or managements’ intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ’s and managements’ current expectations, assumptions, estimates and projections abou

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