Internet Initiative Japan (3774) Q4 2026 earnings summary

Executive summary

• FY25 revenues reached ¥345.4 bn, up 9.0% YoY, with operating profit at ¥34.8 bn (+15.7% YoY) and net profit at ¥24.2 bn (+21.3% YoY), driven by large-scale service integration, recurring revenues, and overseas expansion.

• Growth was fueled by strong demand for network-related system construction, multi-year contracts, and IoT-driven services.

• Focus remains on Service Integration, leveraging AI for operational efficiency and targeting further automation by FY2029.

• Major investments were made in data center capacity and human capital, emphasizing management development and diversity.

Financial highlights

• FY25 revenue: ¥345.4 bn (+9.0% YoY); operating profit: ¥34.8 bn (+15.7% YoY); net profit: ¥24.2 bn (+21.3% YoY); basic EPS: ¥136.51; ROE: 16.2%.

• Gross profit: ¥76.2 bn (+11.4% YoY); gross margin: 22.1%.

• Recurring revenue accounted for 79.5% of total revenue, with strong growth in network services and SI operation/maintenance.

• Dividend per share increased to ¥39.00 (+21.3% YoY); cash and cash equivalents at year-end: ¥38.4 bn.

• Free cash flow improved to ¥24.1 bn; ROE reached 16.2%.

Outlook and guidance

• FY26 revenue forecast: ¥385.0 bn (+11.5% YoY); operating profit: ¥38.5 bn (+10.5% YoY); net profit: ¥25.0 bn (+3.4% YoY); annual dividend forecast: ¥43.00 per share.

• Continued focus on service integration, cybersecurity, AI-driven productivity, and large-scale IT outsourcing.

• CAPEX plan for FY26: approx. ¥38.0 bn, with major investment in Shiroi DC 3rd site.