BeeX Inc. Q4 FY2025 earnings call

• Company Overview & Core Competencies

  • Founded in March 2016, BeeX is a cloud-only system integrator with 184 employees (approaching 200), focused on public cloud IaaS/PaaS integration (does not work with SaaS).
  • Holds multi-cloud capabilities for AWS, Microsoft Azure, and Google Cloud, matching customer use case preferences; AWS is the largest segment by revenue and headcount, and BeeX is one of only 15 domestic AWS Premier Tier Service Partners (a credential dominated by large incumbent SI firms).
  • Core differentiation is specialization in large enterprise core system cloud migration, particularly for SAP ERP systems, which makes up ~50% of the company's total revenue, with a focus on the technical migration and extension work rather than upstream business consulting (partnered with larger SIs/consultancies for upstream work).
  • Engineers are trained to be proficient in at least two cloud platforms to support customer multi-cloud needs, prioritizing consulting capability over deep single-platform specialization.

• Strategic Shifts & Operational Updates

  • Changed the business development cycle from "cloud integration leads to license resale" to proactively acquire license resale accounts first, which then convert to integration projects, addressing the constraint that integration growth is limited by headcount expansion.
  • Acquired full-service MSP firm Sky365 (a 24/7 monitoring specialist based in Hokkaido) to expand MSP capabilities, enable shared know-how and platform commonization, and support future expansion into adjacent security services.
  • Began expanding cloud security solutions including automated vulnerability detection (via CloudGuard) and zero-trust network architecture (via OKTA), with the first customer case already completed.
  • Adopted flexible work policies with 20 employees working full-remote from regional locations across Japan, with no operational issues reported, even for remote-based managers.
  • Shifted hiring strategy from only mid-career experienced hires to include new graduate hiring starting in 2025, to support long-term growth, and meets hiring targets within +/-10% annually (though management wants faster expansion).

• Growth Pillars

  • First pillar: SAP core system cloud migration and S/4HANA modernization driven by the 2027 end of support for SAP ERP 6.0, with ongoing demand for post-migration extensions including data analytics and AI integration that create long-term recurring revenue.
  • Second pillar: Digital transformation (DX) enablement, combining predictive and generative AI for customer data use cases, and utilizing hybrid agile-waterfall (bi-modal) development to support both large core system projects and fast-paced new DX initiatives.
  • Third pillar: Expansion of stock-type businesses (license resale and MSP) to create more stable recurring revenue and reduce reliance on headcount-dependent flow integration revenue.

For the 2025 February period, total company revenue reached 9.2 billion yen. BeeX operates three business segments:

1. Cloud Integration: Flow-type business covering cloud consulting, system construction, on-premise to cloud migration, and cloud-native application development. It accounts for approximately 40% of total revenue, with revenue growing in line with headcount expansion.
2. Cloud License Resale: Recurring stock-type business reselling AWS, Microsoft Azure, and Google Cloud licenses, providing yen-denominated invoicing and customer support. It accounts for approximately 55% of total revenue, grew strongly in 2025 February period, with new account growth accelerating from a deliberate strategic shift. AWS is the largest and fastest-growing contributor within this segment.
3. Managed Service Provider (MSP): Recurring stock-type business providing 24/7/365 monitoring, maintenance, incident response, and cloud feature improvement for customer cloud systems. It accounts for approximately 5% of total revenue, with both revenue and user count growing steadily year over year.

• The 2026 February period (first consolidated fiscal period following the Sky365 acquisition) is guided to reach 10 billion yen in total revenue, representing continued year-over-year growth following 9.2 billion yen in the 2025 February period.
• Management has an intermediate target of 16 billion yen to 17 billion yen in total revenue for the 2028 February period, representing continued steady expansion from current levels.
• The SAP S/4HANA migration market is expected to remain strong beyond 2030, as full enterprise-wide migration will not be completed by the 2030 end of extended support, creating sustained long-term demand for BeeX's services.

• The company's growth is currently constrained by a limited talent pool: BeeX turns down qualified SAP-related projects due to lack of available staff, so slow hiring progress would limit top-line growth.
• Most large enterprise customers do not permit public disclosure of their core system or security projects, limiting the company's ability to showcase its work to potential new clients.
• Cloud integration revenue growth is inherently tied to headcount growth, creating a natural growth constraint if talent acquisition cannot keep up with market demand.

Q: What is the company's plan for cash allocation, and what types of targets are being considered for M&A? / A: Management plans to allocate cash first to new solution R&D, particularly for AI and security offerings that align with the company's growth pillars. The second priority is M&A: the company is actively seeking acquisitions to expand its SAP service footprint (to address the industry-wide talent shortage in SAP skilled labor) and to add missing solution capabilities like security that can be integrated into BeeX's existing product portfolio to expand its total addressable market. Management regularly discusses potential M&A targets with its parent company Terasky.

Q: Why did BeeX recently start disclosing new customer implementation cases, and will this continue going forward? / A: The recent disclosure of the Kyosan Manufacturing zero-trust implementation was a deliberate change to signal the company's expansion into new security solutions, which is a new strategic priority. Previously, the company rarely disclosed cases due to customer sensitivity around disclosing core system and security infrastructure. Going forward, BeeX will disclose cases for new solutions when customer permission is granted to communicate the company's expansion into new service lines to the market.

Q: What is the current status of hiring and talent development, and is talent a bottleneck to growth? / A: Hiring currently hits targets within 10% of plan, but management wants to accelerate hiring to address unmet demand. BeeX recently added new graduate hiring for the first time (previously only hiring mid-career talent) and offers flexible full-remote work to expand the talent pool beyond Tokyo. Current training uses a mix of on-demand self-paced training for flexible remote learning and in-person management training. Yes, talent is the primary bottleneck: BeeX regularly turns down SAP projects because of insufficient staffing, so faster hiring directly translates to faster revenue growth.