Sakura Internet's stock experienced a significant downturn in the afternoon trading session, driven by forecasts indicating a decline in profits for the fiscal year ending in March 2026. The company announced an expected operating profit of 3.8 billion yen, representing an 8.3% decrease compared to the previous year. Despite this, sales are projected to rise to 40.4 billion yen, a notable 28.6% increase year-on-year.
The anticipated growth in revenue is attributed to the launch of new offerings, specifically the 'H200' and 'B200' GPU cloud services. These products are expected to bolster the company's GPU cloud services segment, which has shown promise since its inception in November 2024. However, the company also faces challenges due to substantial investments in GPU infrastructure and recruitment aimed at enhancing government cloud service capabilities, which are likely to pressure profit margins.
In a concurrent announcement, Sakura Internet revealed its financial results for the fiscal year ending in March 2025. The company reported sales of 31.412 billion yen, marking a remarkable 43.9% increase from the previous year. Operating income surged to 4.145 billion yen, a staggering 4.7-fold increase, reflecting the robust growth of its cloud services and successful acquisition of large-scale projects by group companies.
For the current fiscal year, the annual dividend is set to increase by 1 yen from the previous year to 5 yen, reflecting the company's commitment to returning value to shareholders despite the profit forecast decline. This move is seen as a positive signal amid the anticipated profit decrease.
Looking back, the financial performance for the fiscal year ending in March 2024 showed sales of 21.826 billion yen and an operating income of 884 million yen. The results indicated a steady growth trajectory, with the company effectively capitalizing on the expanding cloud services market.
In the latest quarterly results for January to March 2025, Sakura Internet reported a consolidated ordinary income of 1.57 billion yen, a significant increase of 3.5 times compared to the same period last year. The sales operating profit margin also improved sharply, rising from 7.1% to 15.6%, showcasing the company's operational efficiency and strategic growth initiatives.
Despite the optimistic sales projections, the forecast for the first half of the fiscal year ending in March 2026 suggests challenges ahead. The company anticipates sales of 17.6 billion yen but expects a stark decrease in operating income to 700 million yen, ordinary income to 550 million yen, and net income to 300 million yen. This projection reflects a cautious outlook as the company navigates its growth strategy amidst increasing competition in the cloud services sector.
Overall, while Sakura Internet's stock may have dipped in response to the profit forecast, the company is poised for growth in sales and is actively investing in new services to capture market share. The upcoming months will be critical as the company balances its ambitious growth plans with the need to maintain profitability.
