Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — Q1 FY2016 Earnings Presentation

21 slides from Internet Initiative Japan's earnings presentation, Aug 5, 2016

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

    Consolidated Financial Results for 1Q FY2016 (First 3 months ended June 30, 2016) Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) August 5, 2016 © 2016 Internet Initiative Japan Inc.

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1Q FY2016 Financial Results Ⅱ. Consolidated Financial Results for 1Q FY2016 Ⅲ. Reference Materials © 2016 Internet Initiative Japan Inc. 1

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

    Ⅰ. Summary of 1Q FY2016 Financial Results YoY = 1Q16 compared to 1Q15 < 1Q FY2016 Results > Revenues JPY36.18 billion (up 15.0% YoY) Operating income JPY0.84 billion (down 26.7% YoY) Gross margin JPY5.78 billion (up 2.2% YoY) Income before income tax JPY0.99 billion (down 22.2% YoY) SG&A JPY4.95 bil

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

    Ⅱ- 1. Consolidated Financial Results for 1Q FY2016 Unit: JPY billion % of Revenues % of Revenues % of Revenues YoY YoY 1Q16 1Q15 FY16 Target Change in % Change in % (Apr. 2016 - Jun. 2016) (Apr. 2015 - Jun. 2015) (Apr. 2016 - Mar. 2017) Total Revenues 36.2 31.5 +15.0% 159.0 +13.1% 84.0% 82.0% 82.6%

  5. Slide 5: Revenues

    Ⅱ- 2. Revenues Unit: JPY million Network Services Systems Integration (SI) YoY = 1Q16 compared to 1Q15 Internet Connectivity Services (Enterprise) Systems Construction Internet Connectivity Services (Consumer) Systems Operation and Maintenance Outsourcing Service Equipment Sales WAN Service ATM Oper

  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 Gross margin ratio: Network Services SI YoY = 1Q16 compared to 1Q15 Total Revenues 1Q16 Gross Margin Total  JPY5,782 million (up JPY124 million, up 2.2% YoY)

  7. Slide 7: 1Q16 Income Change YoY

    Ⅱ- 4. 1Q16 Income Change YoY YoY change in ATM operation business gross margin Unit: JPY billion Network Services YoY change in SI gross margin (incl. equipment sales) YoY = 1Q16 compared to 1Q15 YoY change in network services gross margin Revenue Mobile +2.71, non-Mobile +0.89 YoY change in SG&A ex

  8. Slide 8: Situation of Business and Service Development

    Ⅱ- 5. Situation of Business and Service Development  Launched in Nov. 2015. Unified operation management service and enlargement of servers and storage facilities in 1Q16 IIJ GIO P2  Depreciation costs increased by service facility investment in FY15. Enhancing personnel and outsourcing recourses

  9. Slide 9: Network Services: Revenues

    Ⅱ- 6. Network Services (1)Revenues WAN Services Unit: JPY million [ ] , YoY = compared to the same period in a previous year Outsourcing Services QoQ: 1Q16 compared to 4Q15 Internet Connectivity Services (Consumer) Total Contracted Internet Connectivity Services (Enterprise) Bandwidth (Gbps) Intern

  10. Slide 10: Network Services: Cost of Revenues

    Ⅱ- 6. 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 Cost of network services Network operation-related costs  1Q16: up JPY3,328 million, up 22.6% YoY Circuit-related costs 

  11. Slide 11: Systems Integration (SI): Revenues

    Ⅱ- 7. Systems Integration (SI) (1)Revenues < Systems Construction > Unit: JPY million [ ] , YoY = compared to the same period in a previous year Systems Construction Revenues FY15: 21,145 Systems Operation and Maintenance Revenues [+3.5%] Order backlog *Systems construction’s order backlog and 3,203

  12. Slide 12: Systems Integration (SI): Cost of Revenues

    Ⅱ- 7. Systems Integration (SI) (2)Cost of Revenues Unit: JPY million Purchasing costs [ ] , YoY = compared to the same period in a previous year Outsourcing-related costs QoQ: 1Q16 compared to 4Q15 Others Network operation-related costs Personnel-related costs ( ) Gross margin ratio FY15: 46,226 (14

  13. Slide 13: Number of Employees

    Ⅱ- 8. Number of Employees Contract worker Unit: JPY million YoY = 1Q16 compared to 1Q15 Full time worker 2,835 2,975 2,981 2,977 2,980 3,110 Employee Distribution Administration 11% Sales 17% Engineers 72% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 5,114 5,266 5,297 5,271 5,321 5,464 Personnel related costs & ex

  14. Slide 14: SG&A Expenses/R&D

    Ⅱ- 9. SG&A Expenses/R&D Research & development expenses Unit: JPY million YoY = 1Q16 compared to 1Q15 General & administrative expenses Sales & marketing expenses ( ) % of total revenues FY15: 18,515 (13.2%) 4,517 4,627 4,576 4,795 4,946 Sales & marketing expenses (14.4%) (13.7%) (13.4%) (11.6%) (1

  15. Slide 15: Operating Income and Net Income

    Ⅱ- 10. Operating Income and Net Income Operating Income Net Income Attributable to IIJ Operating Margin Ratio Unit: JPY million YoY = 1Q16 compared to 1Q15 Income before income tax expense: FY15 Operating income: 6,140  1Q16: JPY994 million FY15 Net income attributable to IIJ: 4,038 (down JPY284 m

  16. Slide 16: Consolidated Balance Sheets (Summary)

    Ⅱ- 11. Consolidated Balance Sheets (Summary) Unit: JPY million Mar. 31, 2016 Jun. 30, 2016 Changes Cash and Cash Equivalents 19,569 18,504 (1,065) Accounts Receivable 23,747 22,034 (1,712) Inventories and Prepaid Expenses (Current and Noncurrent) 11,761 14,568 +2,807 Investments in Equity Method Inv

  17. Slide 17: Consolidated Cash Flows

    Ⅳ- 12. Consolidated Cash Flows Unit: JPY million YoY = 1Q16 compared to 1Q15 < Operating Activities > 1Q16 Operating Activities FY15: 12,052 Major YoY Breakdown Change Net income 571 (208) Depreciation and amortization 2,612 +273 Fluctuation of operating assets and liabilities (3,571) (2,882) Cash

  18. Slide 18: Other Financial Data (CAPEX etc.)

    Ⅳ- 13. Other Financial Data (CAPEX etc.) Unit: JPY million < CAPEX > Cash CAPEX Capital Lease < Breakdown of CAPEX (unit: JPY billion) > 1Q15 FY15 1Q16 FY15: 14,812 TOTAL CAPEX 3.0 14.8 4.7 Network update, back office investment and others 2.3 10.2 3.3 Cloud-related 0.6 4.4 1.3 ATM operation busines

  19. Slide 19: Cloud Business Developments

    Ⅲ- 1. Cloud Business Developments Cloud-related revenue (Unit: JPY billion) 1Q16 revenue (Unit: JPY billion) Large game customers 1Q16 cloud-related revenue recognition: General purpose SaaS 0.08 Business enterprise customers 87.9% in systems operation and maintenance (groupware etc.) 12.1% in outso

  20. Slide 20: Mobile Business Developments

    Ⅲ- 2. Mobile Business Developments Total subscription & revenue IIJmio mobile & IIJ Mobile subscription & revenue Total subscription (thousand) Subscription IIJmio mobile (Consumer) 811 Total revenue (JPY billion) (thousand): IIJ Mobile (Enterprise) 747 1,401 685 IIJ Mobile Revenue 605 1,228 (JPY bi

  21. Slide 21: 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

Internet Initiative Japan — Q1 FY2016 Earnings Presentation on 6ix