Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — Q3 FY2014 Earnings Presentation

19 slides from Internet Initiative Japan's earnings presentation, Feb 10, 2015

  1. Slide 1: Consolidated Financial Results for 1Q-3Q FY2014

    Consolidated Financial Results for 1Q-3Q FY2014 (9 months ended December 31, 2014) Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) February 10, 2015

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1Q-3Q FY2014 Financial Results Ⅱ. Consolidated Financial Results for 1Q-3Q FY2014 Ⅲ. Reference Materials 1

  3. Slide 3: Summary of 1Q-3Q FY2014 Financial Results

    Ⅰ. Summary of 1Q-3Q FY2014 Financial Results < 3Q FY2014 > < 1Q-3Q FY2014 > %: YoY change Revenues JPY30.67 billion up 8.2% JPY87.85 billion up 6.2% Gross margin JPY5.54 billion up 9.0% JPY16.45 billion up 6.0% Operating income JPY1.37 billion up 14.0% JPY3.79 billion down 10.1% Net Income attributa

  4. Slide 4: Consolidated Financial Results for 1Q-3Q FY2014

    Ⅱ- 1. Consolidated Financial Results for 1Q-3Q FY2014 Unit: JPY billion % of Revenues % of Revenues % of Revenues 1Q-3Q14 1Q-3Q13 YoY FY14 Target Change in % (Apr. 2014 (Apr. 2013 (Apr. 2014 -Dec. 2014) -Dec. 2013) -Mar. 2015) Total Revenues 87.8 82.7 +6.2% 122.0 Total Cost of 81.3% 81.2% +6.2% ― Re

  5. Slide 5: Revenues

    Ⅱ- 2. Revenues Network Services Systems Integration (SI) Equipment Sales Unit: JPY million Internet Connectivity Services (Enterprise) Systems Construction ATM Operation Business Internet Connectivity Services (Consumer) Systems Operation and Maintenance Outsourcing Service WAN Service YoY = 1Q-3Q F

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

    Ⅱ- 3. Cost of Revenues and Gross Margin Ratio Cost of revenues : Network Services Systems Integration（SI） Equipment Sales ATM Operation Business Gross margin ratio : Network Services Systems Integration（SI) Total Revenues Unit: JPY million YoY = 1Q-3Q FY14 compared to 1Q-3Q FY13 1Q-3Q FY13: 67,229 1

  7. Slide 7: Network Services (1) Revenues

    Ⅱ- 4. Network Services (1)Revenues WAN Services Unit: JPY million Outsourcing Services Total Contracted YoY = 1Q-3Q FY14 compared to 1Q-3Q FY13 Internet Connectivity Services (Consumer) Bandwidth (Gbps) QoQ = 3Q14 compared to 2Q14 Internet Connectivity Services (Enterprise)  Internet Connectivity (

  8. Slide 8: Network Services (2) Cost of Revenues

    Ⅱ- 4. Network Services (2)Cost of Revenues Unit: JPY million YoY = 1Q-3Q FY14 compared to 1Q-3Q FY13 1Q-3Q FY13: 39,764 (20.9%) 1Q-3Q FY14: 40,131 (21.6%) FY13: 53,046 (21.2%) 13,242 13,223 13,299 13,282 13,213 13,155 13,762 (21.1%) (21.4%) (20.3%) (21.8%) (21.3%) (22.1%) (21.2%) Others Outsourcing

  9. Slide 9: Systems Integration (SI) (1) Revenues

    Ⅱ- 5. Systems Integration (SI) (1)Revenues < Systems Construction > Unit: JPY million Systems Construction Revenues Systems Operation and Maintenance Revenues Order Backlog ※Systems construction’s order backlog and order received 1Q-3Q FY13: 11,635 1Q-3Q FY14: 12,494 Order Received include equipment

  10. Slide 10: Systems Integration (SI) (2) Cost of Revenues

    Ⅱ- 5. Systems Integration (SI) (2)Cost of Revenues 1Q-3Q FY13: 24,826 (15.0%) 1Q-3Q FY14: 28,179 (13.7%) Unit: JPY million YoY = 1Q-3Q FY14 compared to 1Q-3Q FY13 FY13: 36,510 (14.0%) QoQ = 3Q14 compared to 2Q14 7,350 8,416 9,061 11,684 8,322 9,618 10,239 (15.4%) (15.7%) (13.9%) (12.0%) (12.0%) (15.

  11. Slide 11: Number of Employees

    Ⅱ- 6. Number of Employees 2,269 2,311 2,322 2,353 2,523 2,546 2,818 RYUKOSHA NETWARE +264 employees Contract worker Full time worker [Employee Distribution] Administration 12% Sales 17% Engineers 71% Personnel related 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Unit: JPY million costs & expenses (% of revenu

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

    Ⅱ- 7. SG&A Expenses/R&D 1Q-3Q FY13: 11,307 (13.7%) 1Q-3Q FY14: 12,662 (14.4%) Unit: JPY million FY13: 15,343 (13.4%) YoY = 1Q-3Q FY14 compared to 1Q-3Q FY13 3,725 3,697 3,886 4,036 4,229 4,259 4,173 (14.1%) (13.2%) (13.7%) (12.8%) (15.4%) (14.4%) (13.6%) Research and Development Expenses General and

  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 = 1Q-3Q FY14 compared to 1Q-3Q FY13  Income before income tax expenses:  1Q-3Q14: JPY3,889 million (down JPY737 million, down 15.9% YoY) 1Q-3Q FY13 Operating Income: 4,

  14. Slide 14: Consolidated Balance Sheets (Summary)

    Ⅱ- 9. Consolidated Balance Sheets (Summary) Unit: JPY million March 31, December 31, Changes 2014 2014 Cash and Cash Equivalents 22,421 21,047 (1,374) Accounts Receivable 19,214 17,705 (1,509) Inventories and Prepaid Expenses (Current and Noncurrent) 7,432 9,834 +2,402 Investments in Equity Method I

  15. Slide 15: Consolidated Cash Flows

    Ⅱ- 10. Consolidated Cash Flows < Operating Activities > Unit: JPY million 1Q-3Q FY13: 5,732 1Q-3Q FY14: 10,012 YoY = 1Q-3Q FY14 compared to 1Q-3Q FY13 FY13: 8,787 Operating Activities 1Q-3Q14 YoY Change Breakdown Net income 2,371 (604) Depreciation and amortization 7,217 +713 Net gain on other non-c

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

    Ⅱ- 11. Other Financial Data (CAPEX etc.) < CAPEX (Include Capital Leases) > Unit: JPY million 1Q-3Q FY13: 9,863 1Q-3Q FY14: 9,290 FY13: 12,560 Cash CAPEX Capital Lease < Adjusted EBITDA > 1Q-3Q FY13: 10,715 1Q-3Q FY14: 11,003 FY13: 14,546 < Depreciation and Amortization > 1Q-3Q FY13: 6,504 1Q-3Q FY1

  17. Slide 17: Cloud Business Developments

    Ⅲ-1. Cloud Business Developments Cloud-related revenue (Unit: JPY billion) Breakdown of 3Q14 revenue (Unit: JPY billion) Large Game Customers Other Users General purpose SaaS (groupware SaaS etc.) 3Q14 1Q-3Q13: 7.19 1Q-3Q14: 8.95 (up 24.5%) 0.08 Revenue Task-specific SaaS 3.14 billion 2.29 2.42 2.48

  18. Slide 18: MVNO Business Developments

    Ⅲ-2. MVNO Business Developments Total Subscription and Revenue IIJmio & IIJmobile Subscription & Revenue Consumer IIJmio subscription Total subscription: Consumer IIJmio revenue 552 thousand as of Dec. 2014 Enterprise mobile subscription (exc. MVNE) Enterprise mobile revenue (exc. MVNE) Total Subscr

  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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