QAs from earnings release meetings and others

August 7, 2026：1Q26 Financial Results Briefing (Online)

(*)This is a summary of questions and answers took place at the Briefing.
Abbreviations: FY26 stands for a fiscal year ending March 31, 2027, 1Q26 stands for the first quarter of FY26, NW Services stands for Network Services, and SI stands for Systems Integration.

Question: Given mobile carriers' new pricing plans and rising mobile handset prices, what are the subscription trends for "IIJmio" and IIJ's direction?

Answer: Subscribers are shifting from low-capacity to medium- and large-capacity plans. While the 5GB plan holds the largest share, plans of 10GB or more are growing and ARPU (*) is gradually improving. We address diverse needs through a broad handset lineup and expanded sales of pre-owned devices.

• (*) ARPU stands for Average Revenue Per User.

Question: What caused the quarter-on-quarter decline in enterprise mobile subscriptions in 1Q26?

Answer: It was a temporary effect from a specific customer engaged in inbound tourists business. IoT-related demand remained solid.

Question: What caused the year-on-year decline in NW Services gross margin in 1Q26?

Answer: There are inflation-driven cost increases and a slight rise in fixed-type costs (maintenance, outsourcing, personnel) at the start of the fiscal year, mobile services gross profit fell both year-on-year and quarter-on-quarter mainly due to higher mobile handset procurement, and trends in mobile data connection unit prices.

Question: What is the earnings impact of the sharp rise in prices of computer components, including memory?

Answer: For SI, we expect the impact on our gross profit to be limited as we prepare quotations on a project-by-project basis, incorporating appropriate margin on top of procurement and other costs. For NW services, we expect such impact to be limited in the short-term as servers and other equipment are mainly used to maintain our own service infrastructure and depreciated over about four years, in general.

Question: As AI advances the efficiency and substitution of development, what is the impact on IIJ's SI profitability?

Answer: Our business is built on constructing and operating network infrastructure, positioned in the infrastructure layer of physical facilities and advanced network technologies. Compared with application development and consulting, where AI substitution progresses more readily, we believe our substitution risk is relatively low.

Question: Regarding the GPU platform project secured by our Singapore subsidiary PTC SYSTEM ("PTC"), what is the profitability of the operation phase?

Answer: In SI, construction gross margins tend to be low as they often include hardware, while operation-phase margins tend to be relatively high. Such projects carry a high hardware proportion and low margin, yet accumulate gross profit without requiring significant engineer man-hours.