Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — 9M FY2015 Earnings Presentation

20 slides from Internet Initiative Japan's earnings presentation, Feb 9, 2016

  1. Slide 1: Consolidated Financial Results for 1Q-3Q FY2015

    Consolidated Financial Results for 1Ｑ-3Ｑ FY2015 (9 months ended December 31, 2015) Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) February 9, 2016 © 2016 Internet Initiative Japan Inc.

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1Q-3Q FY2015 Financial Results Ⅱ. Consolidated Financial Results for 1Q-3Q FY2015 Ⅲ. Reference Materials © 2016 Internet Initiative Japan Inc. 1

  3. Slide 3: Summary of 1Q-3Q15 Financial Results

    Ⅰ. Summary of 1Q-3Q15 Financial Results Resulted as planned: continuous revenue growth absorbed costs increase, led to Income growth < 1Q-3Q15 > < FY15 Targets > Revenues JPY99.38 billion up 13.1% JPY139.0 billion up 13.0% Gross margin JPY17.79 billion up 8.2% JPY25.1 billion up 13.7% Operating inco

  4. Slide 4: Consolidated Financial Results for 1Q-3Q FY2015

    Ⅱ- 1. Consolidated Financial Results for 1Q-3Q FY2015 Unit: JPY billion % of Revenues % of Revenues % of Revenues 1Q-3Q15 1Q-3Q14 YoY FY15 Target Change in % (Apr. 2015 - Dec. 2015) (Apr. 2014 - Dec. 2014) (Apr. 2015 - Mar. 2016) Total Revenues 99.4 87.8 +13.1% 139.0 82.1% 81.3% 81.9% Total Cost of

  5. Slide 5: Revenues

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

  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 Unit: JPY million Gross margin ratio: Network Services Systems Integration(SI) Total Revenues YoY = compared to the same period in a previous year 1Q-3Q15 G

  7. Slide 7: Network Services (1) Revenues

    Ⅱ- 4. Network Services (1)Revenues WAN Services Unit: JPY million Outsourcing Services Total Contracted YoY = compared to the same period in a previous year Bandwidth (Gbps) QoQ = 3Q15 compared to 2Q15 Internet Connectivity Services (Consumer) Internet Connectivity Services (Enterprise) ( ) compared

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

    Ⅱ- 4. Network Services (2)Cost of Revenues Unit: JPY million Others YoY = compared to the same period in a previous year Outsourcing-related costs Personnel-related costs Network operation-related costs Circuit-related costs Cost of network services: ( ) Gross margin ratio 1Q-3Q15:up JPY6,948 mill

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

    Ⅱ- 5. Systems Integration (SI) (1)Revenues < Systems Construction > Unit: JPY million YoY = compared to the same period a previous year Systems Construction Revenues Systems Operation and Maintenance Revenues Order backlog ※Systems construction’s order backlog and Orders received order received incl

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

    Ⅱ- 5. Systems Integration (SI) (2)Cost of Revenues 1Q-3Q14: 28,179 (13.7%) 1Q-3Q15: 30,454 (15.2%) Unit: JPY million YoY = compared to the same period in a previous year FY14: 41,562 (13.8%) QoQ = 3Q15 compared to 2Q15 8,322 9,618 10,239 13,382 9,591 10,749 10,114 (12.0%) (15.7%) (13.0%) (14.2%) (13

  11. Slide 11: Number of Employees

    Ⅱ- 6. Number of Employees Unit: JPY million (Number of employees) 2,523 2,546 2,818 2,835 2,975 2,981 2,977 YoY =1Q-3Q15 compared to 1Q-3Q14 Contract worker Full time worker [Employee Distribution] Administration 12% Sales 17% Engineers 71% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Personnel related costs

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

    Ⅱ- 7. SG&A Expenses/R&D 1Q-3Q14: 12,662 (14.4%) 1Q-3Q15: 13,720 (13.8%) Unit: JPY million YoY =1Q-3Q15 compared to 1Q-3Q14 FY14: 16,997 (13.8%) 4,229 4,259 4,173 4,336 4,517 4,627 4,576 (15.4%) (14.4%) (13.6%) (12.3%) (14.4%) (13.7%) (13.4%) Research & development expenses General & administrative e

  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-3Q15 compared to 1Q-3Q14 1Q-3Q14 Operating 1Q-3Q15 Operating income: 3,786 income: 4,073 1Q-3Q14 Net income 1Q-3Q15 Net income Income before income tax expenses: at

  14. Slide 14: Consolidated Balance Sheets (Summary)

    Ⅱ- 9. Consolidated Balance Sheets (Summary) Unit: JPY million Mar. 31, 2015 Dec. 31, 2015 Changes Cash and Cash Equivalents 21,094 18,234 (2,860) Accounts Receivable 22,252 20,226 (2,026) Inventories and Prepaid Expenses (Current and Noncurrent) 7,835 12,061 +4,226 Investments in Equity Method Inves

  15. Slide 15: Consolidated Cash Flows

    Ⅱ- 10. Consolidated Cash Flows < Operating Activities > Unit: JPY million YoY = 1Q-3Q15 compared to1Q-3Q14 1Q-3Q FY14: 10,012 1Q-3Q FY15: 7,811 FY14: 12,912 1Q-3Q15 Operating Activities Major YoY Breakdown Change Net income 2,688 +316 Depreciation and amortization 7,294 +77 Fluctuation of operating

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

    Ⅱ- 11. Other Financial Data (CAPEX etc.) < CAPEX > Cash CAPEX Unit: JPY million Capital Lease 1Q-3Q FY14: 9,290 1Q-3Q FY15:12,211 FY14: 11,835 < Breakdown of CAPEX (unit: JPY billion) > FY13 FY14 1Q-3Q15 TOTAL CAPEX 12.6 11.8 12.2 Network update, back office 8.0 8.9 7.7 investment and others Cloud-r

  17. Slide 17: Cloud Business Developments

    Ⅲ - 1. Cloud Business Developments Cloud-related revenue (Unit: JPY billion) 3Q15 revenue (Unit: JPY billion) Large game customers 3Q15 cloud-related revenue recognition: General purpose SaaS 0.08 Business enterprise customers 86% in systems operation and maintenance, 14% in outsourcing (groupware e

  18. Slide 18: Mobile Business Developments

    Ⅲ - 2. Mobile Business Developments Total subscription & revenue IIJmio mobile & IIJ Mobile subscription & revenue Total subscription (thousand): Subscription IIJmio mobile (Consumer) Total revenue (JPY billion): (unit: thousand): 685 IIJ Mobile (Enterprise) 605 IIJ Mobile (Enterprise) Revenue 527 (

  19. Slide 19: FY2015 Financial Target (Remain unchanged)

    Ⅲ - 3. FY2015 Financial Target (Remain unchanged) Unit: JPY billion FY15 Target FY14 Actual FY15 Target to FY14 Actual (Apr. 2015 - Mar. 2016) (Apr. 2014 - Mar. 2015) Total Revenues 139.0 123.1 +15.9 +13.0% Gross Margin 25.1 22.1 +3.0 +13.7% Operating Income 6.5 5.1 +1.4 +28.1% Income before Income

  20. Slide 20: 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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