The orders received for SI and equipment sales were JPY13,090 million, up 28.9% YoY. In the breakdown, the orders received for systems construction and equipment sales were JPY5,102 million, up 36.2% YoY, and the orders received for systems operation and maintenance were JPY7,988 million, up 24.7% YoY.

The order backlog for SI and equipment sales as of June 30, 2013 amounted to JPY24,159 million, up 29.0% YoY. In the breakdown, the order backlog for systems construction and equipment sales was JPY5,523 million, up 22.9% YoY, and the order backlog for systems operation and maintenance was JPY18,636 million, up 31.0% YoY.

Equipment sales revenues were JPY319 million, down 3.6% YoY.

2 IP Service revenues include revenues from the Data Center Connectivity Service.

3 Revenue from mobile data communication service for home use is included in Internet Connectivity Service (Home Use). 

4 Contracts of IIJ Mobile Service are of mobile data communication service for corporate use.

ATM Operation Business revenues were JPY645 million, up 37.9% YoY. The increase was in accordance with the increase in the numbers of newly placed ATMs. 652 ATMs were placed as of August 6, 2013.

Cost and expense

Total cost of revenues was JPY21,411 million, up 6.9% YoY.

Cost of Network Services revenue s was JPY13,242 million, up 3.7% YoY. Gross margin was JPY3,544 million, up 6.5% YoY. Gross margin ratio was 21.1%, up 0.4 points from 1Q12. The increase was mainly due to the increase in outsourcing-related, personnel-related and circuit-related costs.

Cost of SI revenues was JPY7,350 million, up 12.0% YoY. The increase was mainly due to the increase in outsourcing-related and personnel-related costs. Gross margin was JPY1,343 million, down 3.2% YoY and gross margin ratio was 15.4%.

Cost of Equipment Sales revenues was JPY284 million, up 4.3% YoY. Gross margin was JPY34 million and gross margin ratio was 10.7%.

Cost of ATM Operation Business revenues was JPY535 million, up 27.1% YoY. The increase was in accordance with the number of newly placed ATMs. Gross margin was JPY110 million and gross margin ratio was 17.0%.

SG&A and R&D expenses

SG&A and R&D expenses were JPY3,725 million, up 8.1% YoY.

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