Internet Initiative Japan (3774) Q4 2025 earnings summary

Executive summary

• FY24 revenues reached ¥316.8 bn, up 14.8% YoY, driven by large-scale network and systems integration projects, with recurring revenue and project acquisition becoming a new norm.

• Operating profit increased 3.7% YoY to ¥30.1 bn; net profit attributable to owners was ¥19.9 bn, up 0.5% YoY.

• Secured over 15 large-scale, multi-year projects totaling approximately ¥45.0 bn in contracts.

• VMware license price increases were largely passed through, though they impacted FY24 profit by approximately -¥1.5 bn.

• Human capital expanded with 418 new employees, including 307 new graduates, and turnover rates remained low.

Financial highlights

• Network services revenue rose 7.4% YoY to ¥162.6 bn; systems integration revenue surged 24.2% YoY to ¥151.3 bn.

• Recurring revenue accounted for 77.4% of total revenue, growing 9.8% YoY; one-time revenue grew 37.8% YoY.

• Gross profit increased 7.1% YoY to ¥68.4 bn; gross margin slightly declined due to cost increases.

• Dividend per share for FY24 was ¥35.00, with a forecast of ¥39.00 for FY25 (+11.4% YoY).

• Comprehensive income declined 14.5% YoY to ¥21.0 bn, mainly due to lower market value of investment securities.

Outlook and guidance

• FY25 revenue target is ¥340.0 bn (+7.3% YoY), with operating profit of ¥36.5 bn (+21.2% YoY) and net profit of ¥23.0 bn (+15.4% YoY).

• Gross profit expected to rise to ¥77.0 bn (+12.6% YoY), with improved margins from project accumulation and VMware impact rebound.

• Annual dividend forecast for FY25 is ¥39.00 per share, up from ¥35.00 in FY24.

• Continued focus on large-scale NW and SI projects, human capital expansion, and new management structure from April 2025.