SAKURA internet (3778): FY2025 Results Summary — Record Net Sales on GPU and Cloud Growth; Operating Profit Expected to Recover Next Year

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: SAKURA internet Inc. has a March fiscal year-end and labels the fiscal year covered here as “FY 3/2026” (fiscal year ended March 31, 2026); on this site the most recently completed fiscal year is classified as FY2025, and the labels used in the text, tables and segment data below follow the company’s own materials (FY 3/2026 = fiscal year ended March 2026, FY 3/2027 = the current fiscal year).

SAKURA internet reported FY 3/2026 net sales of 35,301 million yen (an increase of 12.4% YoY), marking a record high, driven by its focus areas of GPU infrastructure services and Cloud services. On the profit side, costs were temporarily front-loaded due to upfront strategic investments, including investment in equipment and talent acquisition, resulting in an operating loss of (403) million yen versus operating profit of 4,145 million yen in the previous year. For FY 3/2027, the company projects net sales of 45,000 million yen (+27.5% YoY) and expects operating profit to recover significantly to 1,500 million yen, while raising the planned dividend to 5.50 yen per share.

Consolidated Results (Full-Year Actual)

GPU infrastructure services posted a 20.3% YoY increase driven by proactive investment in GPUs since the previous fiscal year, Cloud services remained solid, increasing 9.4% YoY, and Other services increased 19.6% YoY due to orders for large-scale government and public sector projects. Profit decreased temporarily due to an increase in equipment-related expenses and personnel expenses such as depreciation as a result of proactive investment. The company notes that GPU-related depreciation (procurement of computational resources, data center construction, etc.) and cost of sales for Other services increased, and that although selling unit prices continued to be adjusted amid intensifying competition in the AI market, utilization rates improved in the second half after strengthening the sales framework resulted in securing multiple large-scale projects. The number of consolidated employees increased by 138 from the end of the previous fiscal year.

Item (Millions of yen)	FY 3/26 Full year	FY 3/25 Full year	Change	Change (%)
Net sales	35,301	31,412	3,889	12.4
Cost of sales	27,345	20,182	7,163	35.5
Gross profit	7,956	11,230	(3,273)	(29.2)
SG&A expenses	8,360	7,084	1,275	18.0
Operating profit	(403)	4,145	(4,549)	–
Ordinary profit	105	4,060	(3,954)	(97.4)
Profit attributable to owners of parent	216	2,937	(2,721)	(92.6)

Non-operating income includes subsidy income of 617 million yen from Cloud Programs (compared to 160 million yen in the previous fiscal year). On a quarterly basis, Q4 FY 3/26 net sales were 11,277 million yen (QoQ +34.4%) and operating profit returned to 713 million yen after losses in Q1 through Q3. ARR (annual recurring revenue), which covers SAKURA internet’s cloud services, VPS and web hosting services on a non-consolidated basis, was 15,391 million yen in Q4 FY 3/26, up 9.3% YoY from 14,082 million yen.

Total assets at the end of FY 3/26 were 82,451 million yen (previous year-end: 81,419 million yen) and net assets were 30,329 million yen (previous year-end: 30,257 million yen). Current assets decreased due to payments for equipment investments for Generative AI services, while property, plant and equipment increased to 46,722 million yen from 33,469 million yen. Cash flow from operating activities was 6,223 million yen, cash flow from investing activities was (24,643) million yen and cash flow from financing activities was 4,319 million yen, leaving a cash and equivalents balance of 15,394 million yen.

Results by Service Category

From FY 3/2026, the consolidated service categories were changed: services that provide cloud-based GPUs (Koukaryoku DOK and VRT) are recorded under Cloud infrastructure, and services that provide bare-metal GPUs (Koukaryoku PHY, SAKURA Dedicated Server Koukaryoku Series and SAKURAONE) are newly defined as GPU infrastructure services. Reclassified figures are also used for FY 3/2025.

Service category (Millions of yen)	FY 3/26	FY 3/25	YoY
Cloud services	15,324	–	+9.4%
Cloud infrastructure	10,599	9,659	–
Cloud application	4,724	4,347	–
GPU infrastructure services	8,144	6,771	+20.3%
Physical base services	3,056	3,294	–
Other services	8,776	7,339	+19.6%
Total	35,301	31,412	12.4%

In Generative AI services, the company began providing approx. 1,100 B200 GPUs for major companies in Japan in February 2026, and utilization rates of existing H100 and H200 GPUs also improved through the strengthening of the sales framework. In Cloud services, SAKURA Cloud was officially selected for the Government Cloud program in March 2026, which the company describes as making it the only domestic Government Cloud provider alongside AWS, Google Cloud, Microsoft Azure and Oracle Cloud Infrastructure. The number of disclosed SAKURA Cloud sales partners reached 73 companies as of end-March.

FY 3/2027 Forecast

For FY 3/2027, net sales are expected to increase 27.5% year on year, driven by Generative AI services and Cloud services. In GPU infrastructure services, existing GPUs continue to maintain stable high utilization rates, and further sales growth is expected through more new business negotiations, an expanded service lineup and enhanced generative AI-related optional services (18,400 million yen, +125.9% YoY). Cloud services are expected to grow through functional enhancements, cross-selling and new public and enterprise sector projects backed by the Government Cloud certification (17,600 million yen, +14.9% YoY). Sales in Other services are expected to decline due to the absence of large one-off projects secured in the previous fiscal year. On the cost side, GPU-related depreciation is increasing, while electricity prices and costs of equipment associated with data center operations are rising sharply.

Item (Millions of yen)	FY 3/27 Full Year (Forecast)	FY 3/26 Actual	Change (%)	First Six Months of FY 3/27 (Forecast)
Net sales	45,000	35,301	27.5	21,000
Cloud services	17,600	15,324	14.9	–
Cloud infrastructure	12,850	10,599	21.2	–
Cloud application	4,750	4,724	0.5	–
GPU infrastructure services	18,400	8,144	125.9	–
Physical base services	2,400	3,056	(21.5)	–
Other services	6,600	8,776	(24.8)	–
Operating profit	1,500	(403)	–	650
Ordinary profit	1,200	105	1,037.7	550
Profit attributable to owners of parent	850	216	293.5	350

The FY 3/2027 investment plan (in units of 100 millions of yen) totals 198, including 87 for data centers (of which 44 for generator buildings for containerized data centers) and 105 for servers and network equipment (of which 63 for equipment for cloud services). Investment in next-generation GPUs is being considered, and the company plans 60 hires.

Shareholder Returns

The company’s basic dividend policy is to return profits to shareholders in accordance with business performance, while maintaining a certain level of internal reserves in order to ensure sustainable growth and profitability. The dividend for FY 3/2026 was 5.00 yen per share (+1 yen from 4.0 yen for FY 3/2025), and the planned dividend for FY 3/2027 is 5.50 yen per share (+0.5 yen). The company states that it is proceeding with large-scale investments in the AI and cloud fields while securing necessary capital as internal reserves, and aims to promote comprehensive returns through stable dividends and other means.

Annual dividend per share (yen)	FY 3/2025	FY 3/2026	FY 3/2027 (Forecast)
Dividend per share	4.0	5.00	5.50

Generative AI Investment and Medium- to Long-Term Policy

For an investment plan totaling approximately 113.0 billion yen to provide GPU infrastructure for generative AI, the project has been certified under the Ministry of Economy, Trade and Industry’s “Cloud Program” Supply Assurance Plan, with grants totaling up to 57.5 billion yen covering half of the project costs. Of this plan, 52.1 billion yen will be invested, including procurement of H100, H200 and B200 GPUs and the first and second phases of containerized data centers. For FY 3/2027 and beyond, 4.4 billion yen is planned for generator buildings, while generator buildings and a third-phase containerized data center (6.5 billion yen) and procurement of next-generation GPUs are under consideration. The top priority for FY 3/2027 will be stable operation of existing GPU resources, with additional investments considered based on market conditions.

Under its medium- to long-term management policy of focusing on its core business, the company aims to become a leading digital infrastructure company and a promising alternative to mega cloud providers in the public and private sectors. Positioning its official Government Cloud selection as a new starting point, it plans to expand its co-creation ecosystem with partners, including a basic agreement with Japan Business Systems, Inc. (March), discussions with Mitsubishi Research Institute, Inc. (April) and collaboration with Microsoft Japan Co., Ltd. to expand domestic AI infrastructure options (April).

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.