■Performance trends of TERRASKY ＜3915＞
2. Trends by business segment
(1) Solution business
Sales in the solutions business rose 25.2% from the previous fiscal year to 17,643 million yen, and segment profit (operating profit) hit a record high of 2,074 million yen, up 6.6% from the same period. As for sales, demand for cloud service introduction and development projects centered on Salesforce and SAP cloud migration projects handled by Beex was strong, and recruitment and training of inexperienced people progressed in the Terasky Technologies' dispatch business, and personnel increased 1.6 times from 195 at the end of the previous fiscal year to 320 people, contributing to sales growth. The occupancy rate of temporary personnel is also over 90%, which is almost close to full operation. On the profit side, profit margins declined from 13.8% in the previous fiscal year to 11.8% due to delays in business start-up for Quemix and TerraSky (Thailand), rising labor cost burdens (increase in unused labor costs due to an increase in new graduate employees), occurrence of unprofitable projects, recording of upfront investment costs for opening satellite offices (Akita City, Matsue City) ※, and growth in the temporary staffing business with relatively low profit margins, etc., but profit increases were secured due to increased sales effects.
*The Akita office will begin operation with a few people in 2024/3, and it is planned to have a 30-person system in 2030. The Matsue office will begin operation with a few people in 2024/9, and it is planned to have a 15-person system in 2026. Both have entered into location agreements with local governments. The satellite office was established in Joetsu City, Niigata Prefecture in 2017, and there will be a total of 3 locations.
Regarding Salesforce-related matters, inquiries for additional development projects from not only new customers but also existing customers continue to be active regardless of industry or region, and sales growth continues to depend on human resources. The number of competitors is also increasing, but for large enterprises where the company is the main battleground, a wealth of knowledge and know-how sufficient to respond to the diverse and advanced requests of customers is required, so companies that can handle it, including the company, are limited, and it seems that there is no threat.
Furthermore, the company is actively working on partnership strategies to strengthen Salesforce-related solution capabilities. Flosum Corporation in 2023/6. An exclusive domestic sales agreement for “Flosum*1” was signed with (US). In addition to recruiting reseller partner companies and expanding sales channels, we are opening a Flosum website “Success Portal” with enhanced manuals and FAQs, etc., and proceeding with the launch of the Flosum user community, and the goal is to introduce 100 companies after 3 years. In 2024/2, the first implementation partner agreement in Japan was signed with HardHat Ltd. (Australia), and a partnership was agreed on a project to introduce the “HardHat*2” solution for the construction industry. In the future, we will jointly proceed with sales activities for construction companies that have introduced Salesforce domestically. Both are expected to have a minor impact on immediate business results, but it is expected that aligning diverse products and strengthening solution capabilities will lead to maintaining competitiveness in the Salesforce field.
*1 “Flosum” is an application that streamlines Salesforce release management and CI (continuous integration) operations, and has been adopted by companies that reduce work man-hours that are burdensome for developers and system personnel, such as Salesforce releases and version control, and promote the use and in-house production of Salesforce.
*2 “HardHat” is a Salesforce AppExchange developed for general contractors and subcontractors, and streamlines operations throughout the project lifecycle and supports improvements in the efficiency, safety, and profitability of construction projects.
Looking at trends in subsidiaries, Terasky Technologies is in a state of almost full operation due to strong dispatch needs for Salesforce specialist personnel (mainly system operation managers), and it achieved profitability in the 3rd year since establishment. In order to expand the business, an AWS specialist personnel dispatch service has also started in 2023/10, and in 2026, it will increase to a system of 100 people, and the target is 1 billion yen in sales. Libersky, which constructs GCP and develops big data analysis/AI consulting services, etc., has an increase in sales and profit due to strong demand, although the number of personnel at the end of the 2024/2 fiscal year is still low, about 20 people. The expansion of human resources is expected to hold the key to growth in the future.
As for DiceWorks, which supports the introduction, operation, and adoption of Salesforce's MA tools, sales activities were carried out for the company's customers, and at the same time, there were customer introduction projects etc. from Salesforce, etc., and sales steadily expanded, and operating profit became slightly profitable. The number of employees is around 30. As for Cuon, sales and profit declined due to the effects of unprofitable projects occurring, but excluding the same factors, a “generative AI introduction support service” started smoothly from 2023/8, and EC site construction/operation and maintenance service “ECO (EC Optimization)” based on the open source e-commerce platform “Spree Commerce” began from 2024/1. It is characterized by quick service launch and excellent expandability such as customization functions, etc., and aims to expand sales for customers considering long-term operation while expanding EC site functions.
Quemix, which conducts research and development of algorithms and software related to quantum computers, is proceeding with the license business and joint research with companies, but it is still in the advance investment stage, and establishing a business model that realizes monetization is an immediate goal. CEO Mr. Matsushita took office as a Specially Appointed Associate Professor at the Department of Physics at the University of Tokyo Graduate School of Science in 2024/4, and since the development base was moved to the University of Tokyo, it is expected that future research and development will accelerate and increase joint research projects with companies.
The Thai subsidiary has been dormant due to the COVID-19 pandemic since it was established in 2019, but business activities began in the summer of 2022, and currently it has a system of several engineers, and is currently at the stage where sales activities are being promoted in collaboration with Salesforce's local subsidiary. However, recruitment of human resources did not progress as expected, and losses were recorded for the 2024/2 fiscal year. In the future, in addition to increasing personnel, we aim for monetization while collaborating with our capital and business partner NTT DATA.
(Author: FISCO Visiting Analyst Joe Sato)