BeeX Inc. Q3 FY2026 earnings call

• Company Overview

  • BeeX is a cloud-only system integrator founded in March 2016, offering end-to-end cloud services from consulting, build, migration to post-migration operation and maintenance.
  • The company supports three major global cloud platforms: AWS, Microsoft Azure, and Google Cloud, and is one of only 15 AWS Premier Tier Service Partners in Japan, the highest partner tier for AWS.
  • The company is also an authorized SAP partner, with SAP-related business as a core strategic growth pillar.

• Key Operational Milestones

  • Acquired Sky 365, a specialized MSP subsidiary, and opened the company's first overseas MSP hub in Nha Trang, Vietnam. The hub operates out of the highly secure Army Software Park co-managed by the Vietnamese military and private sector, and will pursue global customer support, local talent recruitment, develop combined AI AIOps + manual operation services, and expand BPO offerings.
  • Officially entered the SAP S/4HANA Cloud Public Edition market, a SaaS product focused on small-to-medium enterprises. The company previously focused on the private edition, and is expanding into this fast-growing segment in line with SAP's own strategic focus.
  • Promoted from SAP Silver Partner to SAP Gold Partner in the SAP PartnerEdge program, in recognition of the company's strong track record in S/4HANA migration and SAP S/4HANA Cloud Public Edition projects. The company will further deepen collaboration with SAP to grow its core SAP business.

• Three Core Long-Term Growth Strategies

  1. SAP System Cloud Migration and S/4HANA Modernization Support
     • The widely used legacy SAP ECC 6.0 version will end standard support in 2027 and extended support in 2030, creating massive market demand for migration to the new S/4HANA platform.
     • BeeX uses two migration approaches: Brownfield (leverages existing customer assets for fast, low-downtime migration, which is the company's core existing strength) and Greenfield (builds new systems from scratch, including new SAP customers, aligned with SAP's push for S/4HANA Cloud Public Edition, enabling faster lower-cost ERP adoption via the "Fit-to-Standard" approach that aligns customer operations to the standard SAP package).
     • Supports SAP-recommended Side-by-Side extension on SAP Business Technology Platform (BTP), which keeps the core S/4HANA instance clean while enabling custom development, application automation, and AI integration, a business the company will expand aggressively.
  2. Accompanied Digital Transformation (DX) Support with AI Integration
     • Believes DX is an ongoing cultural transformation rather than a one-time product implementation, so the company provides long-term accompanied support, which it will further strengthen.
     • Prioritizes AI adoption, combining both generative AI and predictive AI. The company pursues two core AI initiatives: supporting customer value creation via use case templates, AI agent integration, and long-term accompanied support for AI architecture design and development; and improving internal productivity via AI-driven development and operations, which reduces manual labor needs and enables the company to support more customers with smaller teams.
  3. Multi-Cloud Stock Business and Security Solution Expansion
     • Stock-type recurring business already makes up over 70% of revenue and forms the core backbone of stable revenue and profit, so the company will continue expanding license resale and MSP.
     • For MSP, the company is shifting from basic break-fix operation to full customer business process outsourcing, combining AI automation and low-cost talent from the new Vietnam hub to scale this new offering, which has already generated strong customer interest.
     • Expanding security solutions including zero-trust network building and CNAPP vulnerability management, leveraging AI to detect threats early and improve cyber resilience to respond to growing malware threats, a market with growing customer demand.

BeeX operates three core business segments, two of which are classified as recurring stock-type businesses that make up ~76.7% of total cumulative revenue for the first three quarters of the 2026 February fiscal year: 1. Cloud License Resale: Cumulative revenue contribution is 63.5% of total revenue. This segment grew strongly from the second to third quarter, with business contract accounts increasing from 815 at the end of Q2 to 849 at the end of Q3, marking robust sequential growth that supports future recurring revenue expansion. 2. Managed Service Provider (MSP): Cumulative revenue contribution is 13.2% of total revenue. Revenue was flat sequentially in Q3, but customer count increased by 3 customers from Q2 to Q3, setting the foundation for stable future revenue. 3. Cloud Integration (one-time flow-type business): This segment saw a year-over-year revenue decline in Q3 cumulative results, as expected large government and SAP-related projects were not secured in the period, even though order volume grew steadily to 175 projects supported by small-to-medium sized deals. Cloud Integration has a relatively higher profit margin than the other segments, so its underperformance pulled down the company's overall gross profit margin. In total, cumulative revenue for the first three quarters was 7.815 billion yen, a 14.9% increase year-over-year, and cumulative operating profit was 450 million yen, an 18.7% decrease year-over-year due to higher SG&A from the Sky 365 acquisition and the lower gross profit margin from Cloud Integration underperformance.

• Full year 2026 February fiscal year consolidated guidance is maintained unchanged from the initial forecast.
• Current year-to-date progress is behind target, driven by delayed large project wins in Cloud Integration, which has impacted overall revenue and profit progress. Management expects that the planned large SAP-related projects will be secured in Q4, and the company will work aggressively to hit its full year targets.
• Q4 2026 February fiscal year planned priorities: on the revenue side, the company will recover Cloud Integration revenue via continued small-to-medium project acquisition while targeting large SAP-related project wins; expand MSP customer and service offerings via deeper Sky 365 collaboration and new services out of the Vietnam hub; continue growing license resale, driven by the strong performance of the dedicated license resale organization launched this year. On the cost side, the company will continue investing in the Vietnam hub and AIOps AI operation development; continue marketing investment to improve customer awareness of its license resale business; continue investing in human capital, including expanded engineer and sales hiring, additional engineer training programs, and preparation for new graduate hiring starting next fiscal year, with continued new graduate hiring planned for the following year.
• Mid-term target is to reach 16 billion to 17 billion yen in revenue by the 2028 February fiscal year.

• Large project acquisition in the Cloud Integration segment is uncertain: the segment missed expected large project wins in the first three quarters of the fiscal year, leading to lower revenue, lower overall gross margin, and slower full-year progress against guidance, even though management expects recovery in Q4 there is no guarantee these projects will be secured.
• Continued investment in new growth initiatives (overseas expansion, new service development, marketing, human capital hiring and training) will increase near-term operating costs, which may pressure near-term profitability.

No question and answer section was included in the provided transcript.