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Company Overview and Core Strategy

• Founded in 1997, Cybozu focuses on groupware development and sales, with a corporate mission of "Creating a society full of teamwork".
• After refocusing on groupware and shifting to cloud business in 2011, Cybozu has achieved stable growth. Most cloud infrastructure is self-built and operated, allowing better cost control and less exposure to US cloud service price hikes amid yen depreciation.
• Long-term strategy: Develop kintone into a comprehensive enterprise platform, expanding from department-level adoption to company-wide adoption with external stakeholder inclusion.

First Half 2025 Overall Financial Performance

• Consolidated revenue: 17.899 billion yen, up 27.1% YoY, with accelerated growth driven by price adjustment.
• Cloud revenue accounted for 92.1% of total revenue.
• Operating profit: 5.163 billion yen, up 129.7% YoY, driven by controlled cost growth despite 5.2% YoY increase in personnel cost and 20.9% YoY increase in R&D expense.

Key Operational Updates

• kintone adoption: Over 38,000 contracted customer companies, with 47% of Tokyo Stock Exchange Prime listed enterprises having adopted kintone in at least one department.
• New enterprise license tier: Launched "Wide Course" for large enterprises, priced at 3,000 yen per user per month, supporting 3,000 applications (3x the previous limit) and 10x more API requests per application to meet large-scale company-wide adoption needs. The offering is on track to meet order targets as planned.
• AI initiative: Launched beta version of AI features under "kintone AI Lab", including Search AI (custom internal AI based on company data), App Creation AI (generate apps via conversational interaction with generative AI), and Process Management Setting AI (no-code workflow configuration via generative AI). All features are currently provided for free to existing customers to test usage patterns.
• Ecosystem expansion: Launched beta free connector for easy integration with Microsoft 365 to promote utilization of kintone's extensibility.
• New business participation: Acquired a stake in and turned Ehime Orange Vikings (a Japanese B.League basketball team) into a subsidiary, as a first step to promote city-wide DX in Ehime Prefecture using kintone as a regional industry platform.
• External recognition: Named one of 21 global representative vendors for citizen application development platforms in a Gartner report, and won the highest three-star rating for 4 consecutive years in the HDI Rating Benchmark for call center quality.

• Full year 2025 guidance (revised June 25, 2025): Revenue of 37.202 billion yen, up 25.4% YoY; ordinary profit of 9.032 billion yen, up 69.3% YoY; full year dividend per share of 40 yen, increased by 10 yen from the previous fiscal year.
• Mid-term target for 2028 (3 years out): Set a stretch revenue target of 50.9 billion yen, which is double of 2023 revenue, with an internal target of 33 billion yen in annual kintone revenue.
• Mid-term priority initiatives: 1) Promote large-scale, company-wide adoption among enterprise customers; 2) Accelerate shift to a platform business model supporting diverse use cases; 3) Invest in product improvement and R&D to build global competitiveness.

• kintone: 10.281 billion yen in first half revenue, 36.4% YoY growth, accounting for approximately 57.4% of total first half consolidated revenue. kintone's average monthly revenue per subdomain (ARPA) reached 44,600 yen, up 9,600 yen YoY, with a churn rate of 0.92% which declined slightly YoY.
• Garoon: 13.1% YoY revenue growth, smaller growth due to smaller price adjustment range, with ARPA of around 135,000 yen per subdomain.
• Cybozu Office and Mailwise: Both delivered positive YoY revenue growth.

• The full impact of the 2024 price adjustment is not yet fully reflected. The increase in minimum user count from 5 to 10 for monthly contracts will not take effect until November 2026, which may lead to customer churn and uncertain impact on future revenue.
• Enterprise company-wide adoption is a long-term process that typically takes 3-5 years, with risk of losing customers to competitors even after initial penetration.
• US market operations face headwinds from slow partner ecosystem development, with flat customer growth on a company count basis.
• The migration to the new cloud infrastructure platform Neco will take several years, with dual operation costs creating near-term pressure on margins.
• Profit margin can fluctuate significantly based on investment pace for promotion and marketing, especially potential accelerated investment in domestic and global brand building.

Q: What are kintone's competitive advantages against competing low-code tools from foreign and domestic rivals? / A: Cybozu identifies three core competitive advantages. First, kintone focuses on ease of use, enabling no-code app development without requiring advanced IT knowledge or expertise, which is superior to many foreign competitors. Second, Cybozu has built a mature domestic partner ecosystem, where local partners provide implementation and support services to customers, which is critical for widespread adoption. Third, kintone has strong extensibility via open APIs, allowing it to scale from simple initial use cases to complex large-scale enterprise systems.

Q: If North American business continues to underperform, will Cybozo consider shrinking the business? / A: Cybozo does not plan to shrink North American operations, even if growth remains slow. The North American market provides strategic benefits beyond local revenue: being present in the US helps gain global recognition (such as the Gartner report inclusion), and competing against global rivals in their home market provides valuable experience to defend the Japanese market when foreign competitors enter. Cybozo evaluates North American investment based on global, not just local, returns.

Q: Can we expect continued profit margin improvement in coming fiscal years? / A: Cybozu cannot guarantee sustained margin improvement. Profitability is heavily impacted by personnel costs (which are rising with market rates) and investment decisions for promotional activities. The company prioritizes long-term business expansion over steady margin improvement, and will increase investment for growth (such as brand building) when appropriate, which can lead to fluctuating profit levels. The public should not expect continuous annual margin improvement.

Q: What is the company's stance on expansion to SMBs and regional governments, after increasing focus on large enterprise adoption? / A: Cybozu remains committed to serving all customer segments from small businesses to large enterprises, including regional governments, all of which are prioritized target markets. Promotional activities such as TV commercials already target SMBs, and adoption by regional governments is growing rapidly, with multiple large-scale whole-government adoption deals already closed. The current focus on enterprise customers represents expansion into an underpenetrated new market, not a retreat from the SMB and public sector segments.