OBIC BUSINESS CONSULTANTS CO.,LTD. Q2 FY2023 earnings call

• Company Positioning
  • OBC is a Japanese software manufacturer specialized in core business system software, focused primarily on small and medium-sized enterprises (SMEs), which make up 99% of all Japanese companies
  • The company holds high market share in SME-focused ERP packages, with cumulative installation experience across more than 550,000 client companies
  • The company has achieved a very high operating profit margin of 46.3%, driven by its recurring revenue SaaS model
• Business Model Advantages
  • Core business systems have high switching costs for clients, leading to very high customer loyalty and stable recurring revenue
  • The shift from legacy perpetual license software to cloud SaaS is the company's core growth strategy, and the transition is well advanced
• Operational Progress
  • The increasing proportion of higher-priced cloud products has driven continued growth in average revenue per user (ARPU)
  • Q2 FY2026 revenue and first-half operating profit hit record highs, led by strong growth in the core cloud business segment

1. Cloud SaaS Segment (recurring revenue from cloud usage fees and maintenance): For the 2025 March full year, total company revenue was 46.9 billion yen, with this segment accounting for 81.8% of total revenue. As of the 2025 September half-year period, this segment's revenue contribution increased to 83.7% of total revenue. Annual recurring revenue (ARR) for this segment has maintained a 36% average annual growth rate from Q2 FY2023 March to Q2 FY2026 March. Core cloud products are 奉行 i クラウド (core enterprise systems for accounting, HR, and payroll) and 奉行クラウドEdge (peripheral work tools for expense reporting and attendance management).
2. Legacy perpetual license segment: This segment is declining in absolute and percentage terms as the company completes its shift to cloud SaaS, and now makes up the remaining ~16.3% of total revenue as of September 2025.

No explicit forward-looking numerical guidance is provided in this transcript. The company's ongoing 36% average annual ARR growth trend is expected to continue as the SaaS transition progresses, with remaining growth upside from the ongoing shift of legacy clients to cloud offerings.

• Competition with third-party cloud accounting software and HR/labor SaaS services is intensifying
• The company's future growth and profitability depend on its ability to continuously maintain and improve product competitiveness to offset competitive pressure

No question-and-answer section from an official earnings call is included in the provided transcript material.