The reins for investing in the cloud have not been loosened–TerraSky, which is expected to increase sales and profits

TerraSky held a briefing session on its financial results for the fiscal year ending February 2021 on April 16. Sales increased 19.8% year-on-year to 11,144 million yen, and operating income increased 7.5% to 779 million yen. In FY02 / 2022, sales are expected to increase 18.1% to 13,159 million yen, and operating income is expected to decrease 31.2% to 536 million yen. Hideya Sato, President and CEO, explained, “We will continue to increase sales by continuing to invest in the ever-expanding cloud domain.”

Mr. Hideya Sato, President and CEO of TerraSky The financial results for the fiscal year ended February 2021 announced on the 15th were due to the fact that cloud adoption was popular in digital transformation (DX) initiatives centered on major customers even in Corona. Even compared to the plan, it was strong with an increase of about 3%. IDC Japan forecasts an average annual growth rate of 19.8% in the public cloud market from 2020 to 2025, and sales of and Amazon Web Services (AWS), which are the core of the company’s cloud integration business. Citing the ongoing expansion, he said that the cloud market is still in the process of growth and that the company’s business will continue to expand. By segment, sales in the cloud integration business increased by 25.8% to 9,579 million yen, and sales in the product business such as groupware “mitoco” decreased by 7.1% to 1,570 million yen. The operating profit was 1,527 million yen, up 28.7% in the cloud integration business, and 158 million yen, down 41.2% in the product business. The decline in sales and profits in the product business was due to the fact that sales associated with the initial introduction and development of the latest major customers had settled down, while subscription sales increased by about 25% to 1,115 million yen.

Status of sales composition in the fiscal year ending February 2021 (from TerraSky financial results briefing materials) Sales forecasts for the fiscal year ending February 2022 by segment are up 19.4% in the cloud integration business to 11,446 million yen, and in the product business 9.1. It is expected to increase by% to 1,713 million yen. In particular, the product business expects subscription sales to increase by about 35% to 1,509 million yen. Although it was expected that the conversion to a stock-type business would contribute to a stable increase in profits, the company’s stock price plummeted after the announcement of financial results.

Sales and profits are expected to increase and profits to strengthen investment in the fiscal year ending February 2022 (from the financial results briefing materials for Terrace Kai). Regarding this, Mr. Sato said, “We are proud that we continue to draw a model growth curve for venture companies in terms of sales. However, we take it as a tough valuation (in the stock market for the FY02 / 2022 results, which are expected to increase sales and profits). ” Regarding the forecast of increased sales and decreased profits, “We would like to continue to strengthen investment in the ever-expanding cloud market and increase sales. If we relax our investment here, it will rebound to profits, but now we are investing. If you let go, you can’t expect future results in the ever-growing cloud market. ” Major investment activities include Quemix, a quantum computer-related business in 2019, Liberal Sky, which specializes in Google Cloud-related services in January 2021, and TerraSky Technologies, which trains and dispatches engineers in February. Established. Following and AWS-related businesses, the company’s strategy is to expand Microsoft Azure and Google Cloud-related businesses. In addition, there is a chronic shortage of IT human resources in Japan, and the movement of in-house production of system development in non-IT companies is expanding, so TerraSky Technologies is recruiting new graduates, second new graduates and young IT inexperienced human resources. From May, we will develop a business that hires, trains, and dispatches to TerraSky group companies and client companies.

Business areas of TerraSky Group companies (from TerraSky financial results briefing materials) Mr. Sato said that Quemix, Liberal Sky, and TerraSky Technologies are in the stage of upfront investment, and will strengthen such investment activities including investment from the fiscal year ending February 2022 onward. He announced his policy to continue. In FY02 / 2021, the company posted an extraordinary profit of approximately 2.8 billion yen from the sale of shares in Serverworks, which it collaborates with, and Mr. Sato said that this would also be used for investment, establishment of a new company, and product development.