Kudan Inc. Q4 FY2025 earnings call

Customer Productization Achievements

• Kudan achieved 8 customer productization projects in FY2025, doubling the number from the prior year, with growth concentrated in global robotics projects covering delivery robots, industrial automated guided vehicles, cleaning robots, and broadcast camera robots
• Management noted that while technical validation of Kudan's spatial perception technology has been established in the market, product license revenue from robotics customer projects has stagnated due to slower-than-expected adoption of advanced customer products

Key Operational Milestones

• Completed a successful technical collaboration with NTT Infranet to generate high-precision 3D maps in dense urban areas where satellite positioning is unstable, with future applications targeted at smart cities, urban infrastructure management, and disaster response
• Entered a strategic partnership with a major global multi-industry service provider for European industrial asset management, developing a next-generation digital twin solution for facility digital transformation that has already demonstrated large improvements in asset data accuracy and operational efficiency in trials
• Kudan's spatial perception technology was adopted by FOX Sports for AR robotic cameras, and was successfully deployed at the Super Bowl, which had 140 million viewers, with plans to expand use to other large-scale events
• Collaborated with Nvidia to integrate Kudan SLAM technology with Nvidia's robot AI platform, enabling low-cost autonomous navigation without 3D sensors for collaborative robots; the integrated solution has already been commercialized by Taiwan's NexAIoT for factory floor use

Updated Growth Strategy

• Kudan is expanding its core technology from artificial perception to full spatial perception by merging its existing artificial perception with artificial intelligence, adding semantic 3D recognition, robotic navigation, and photorealistic 3D representation capabilities to deliver higher added-value solutions for robotics and digital twin end markets
• The company is expanding its business model from a pure software focus to include software/hardware packages, using external hardware technology to build a multi-layered business; packages are split into optimized embedded SW/HW packages for commercial use, and complementary SW/HW packages that pair Kudan's software with compatible third-party hardware
• The company completed a strategic rebalancing of its portfolio and organizational structure in FY2025, shifting to a more solution-oriented approach and focusing on higher-profit projects in the robotics segment, with full benefits of this rebalancing expected to appear in FY2026 and beyond

Kudan did not report segmented financial results with separate absolute values and revenue contribution percentages in the provided transcript. Aggregate full year 2025 March fiscal year results: total revenue reached 0.51 billion yen, missing the planned target of 0.7 billion yen, representing a 5% year-over-year increase. Adjusted operating loss was 0.75 billion yen, worse than the planned adjusted loss of 0.35 billion yen. Total operating costs hit 1.31 billion yen, exceeding the planned cost budget of 1.13 billion yen.

• For the 2026 March fiscal year, Kudan guides total revenue of 0.7 billion yen, representing a 35.3% year-over-year increase, driven by revenue contributions from spatial perception technology expansion and new SW/HW package offerings, with large new projects expected to launch during the fiscal year
• Full-year adjusted operating loss is guided to 0.72 billion yen, with a smaller full-year improvement due to carryover elevated costs from the first half of the fiscal year
• Kudan targets reducing its end-of-period adjusted operating deficit to 0.59 billion yen, down from 0.88 billion yen at the end of FY2025. The expected deficit reduction comes from 0.15 billion yen in fixed cost cuts from organizational optimization, 0.05 billion yen in development cost reductions from pausing non-core development, 0.08 billion yen in profit contribution from higher sales, and 0.01 billion yen in higher expected development subsidies
• Management plans to continue further deficit reduction and target profitability in fiscal years after FY2026, with medium-term growth focused on scaling high-margin software license revenue as the market for spatial perception technology matures

• Adoption of Kudan's advanced customer products has been slower than expected, held back by insufficient maturity of complementary technologies and supporting market ecosystems, leading to missed revenue targets in the robotics segment and project delays in European public sector digital twin projects
• Changes to UK government subsidy programs reduced development grant disbursement levels, and German development subsidy approvals were delayed, leading to lower-than-planned non-operating income in FY2025
• The strategic rebalancing and organizational restructuring completed in FY2025 led to one-time cost increases that widened the annual operating loss, with full revenue benefits from the new strategy not expected until FY2026
• Limited yen depreciation in FY2025 led to a large drop in foreign exchange gains year-over-year, falling from 0.38 billion yen in FY2024 to 0.02 billion yen in FY2025, driving a large decline in non-operating income

The full question-and-answer section of the call is not included in the provided transcript. Only header information for the Q&A segment is present, with no actual exchanges between analysts and management published in the available excerpt.