Interim report
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IIJ Internet Initiative Japan IIJ Announces its First Three Months Results for the Fiscal Year Ending March 31 , 2027 For Immediate Release Internet Initiative Japan Inc. E - mail : ir@iij.ad.jp Tel : + 81-3-5205-6500 URL : https://www.iij.ad.jp/en/ir Tokyo , August 7 , 2026 - Internet Initiative Japan Inc. ( “ IIJ ” , TSE Prime : 3774 ) today announced its consolidated financial results for the first three months for the fiscal year ending March 31 , 2027 ( “ 1Q26 ” , from April 1 , 2026 to June 30 , 2026 ) under International Financial Reporting Standards ( IFRS ) .¹ Highlights of Financial Results for 1Q26 FY2026 Targets First Half Total revenues Operating profit JPY97.6 billion up 27.1 % YoY² JPY180.0 billion Full Year JPY385.0 billion JPY6.6 billion up Profit before tax Net profit³ JPY6.7 billion up JPY4.4 billion up 9.2 % YoY 17.0 % YoY 16.4 % YoY JPY15.4 billion JPY38.5 billion JPY14.1 billion JPY37.0 billion JPY9.6 billion JPY25.0 billion Overview of 1Q26 Financial Results and Business Outlook " The first quarter is typically a quiet period , as it marks the start of the new fiscal year for most Japanese enterprises . In this environment , we saw very strong revenue growth of 27.1 % YoY in 1Q26 , including approximately JPY1.7 billion of an enterprise mobile device implementation project and approximately JPY6.0 billion of overseas large- scale systems construction projects at PTC SYSTEM ( S ) PTE LTD , our Singapore subsidiary , largely exceeding our expectations . Operating profit increased 9.2 % YoY as expected , reflecting the revenues from large - scale , low - margin hardware - related projects and generally rising costs driven by inflation . While steadily executing this fiscal year's business plan , we are also developing our next three - year mid - term plan , which should start from FY27 . Our core strategy remains unchanged , and we envision FY29 revenue exceeding JPY500 billion , enabling greater economies of scale that should further enhance corporate value , ” said Yasuhiko Taniwaki , President of IIJ . " We have been cultivating our Internet - related expertise through over 2,000 highly skilled network engineers , which are very prominent in the Japanese market . By leveraging these capabilities , we operate one of Japan's largest Internet backbone networks with a global reach , continuously develop and provide our own services and solutions , and manage network and system platforms with secure and stable operations . We recognize that these core strengths are key differentiators and drivers of continued growth as Japanese enterprises increasingly adopt more open and flexible IT and network environments along with the growing use of AI . To address these trends , we are advancing our “ Offering Model Approach³ , ” combining our business elements including network , security , cloud , systems integration , and operations to deliver optimal solutions that meet common needs in specific domains . We are also developing our next- generation core integrated security services , which are scheduled to launch in 4Q26 . We believe this approach will further strengthen our competitive advantage and continue to drive sustainable business growth over the medium to long term , ” concluded Koichi Suzuki , Founder and Chairman of IIJ . 1 Unless otherwise stated , all financial figures discussed in this announcement are prepared in accordance with IFRS , unaudited and consolidated . 2 YoY is an abbreviation for year over year change . 3 Net profit is " profit attributable to owners of the parent . " 4 SI gross profit is generated from both hardware and labor portions . The procurement - based hardware portion generally tends to have a lower margin than the labor portion . 5 An approach that starts with solving customer issues by combining NW , security , cloud , operations , AI and other capabilities into reproducible solutions , then channels the resulting know - how into enhancing the features and competitiveness of our own in - house developed services . -1- IIJ 1Q FY2026
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IIJ 1Q FY2026 1Q26 Financial Results Summary We provide combined network services and systems integration to customers, and therefore, Network services and Systems integration (SI) business is our main reportable segment. Our analysis by service is described below. 1Q25 1Q26 YoY Change JPY millions JPY millions ％ Total revenues 76,821 97,604 27.1 Network services 42,512 46,101 8.4 Systems integration (SI) 33,560 50,739 51.2 ATM operation business 749 764 2.0 Total costs (60,128) (79,633) 32.4 Network services (30,912) (34,419) 11.3 Systems integration (SI) (28,822) (44,805) 55.5 ATM operation business (394) (409) 3.8 Total gross profit 16,693 17,971 7.7 Network services 11,600 11,682 0.7 Systems integration (SI) 4,738 5,934 25.2 ATM operation business 355 355 0.0 SG&A, R&D, and other operating income (expenses) (10,662) (11,383) 6.8 Operating profit 6,031 6,588 9.2 Profit before tax 5,737 6,712 17.0 Profit for the period attributable to owners of the parent 3,777 4,395 16.4 (Note) Systems integration includes equipment sales. Operating Results Summary 1Q25 1Q26 JPY millions JPY millions Total revenues 76,821 97,604 Network services and SI business 76,081 96,848 ATM operation business 749 764 E limination (9) (8) Operating profit 6,031 6,588 Network services and SI business 5,744 6,282 ATM operation business 287 306 E limination - － Segment Results Summary - 2 -
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IIJ 1Q FY2026 1Q26 Revenues and Income Revenues Total revenues were JPY97,604 million, up 27.1% YoY (JPY76,821 million for 1Q25). Network services revenue was JPY46,101 million, up 8.4% YoY (JPY42,512 million for 1Q25). Revenues for Internet connectivity services for enterprise were JPY13,794 million, up 8.3% YoY from JPY12,731 million for 1Q25, mainly due to an increase in revenues of enterprise mobile services and IP services. Revenues for Internet connectivity services for consumers were JPY7,462 million, up 7.2% YoY from JPY6,958 million for 1Q25, mainly due to an increase in revenues of IIJmio Mobile services. Revenues for Outsourcing services were JPY17,730 million, up 11.5% YoY from JPY15,898 million for 1Q25, mainly due to an increase in security-related services revenues. Revenues for WAN services were JPY7,115 million, up 2.7% YoY from JPY6,925 million for 1Q25. 1Q25 1Q26 YoY Change JPY millions JPY millions ％ Total network services 42,512 46,101 8.4 Internet connectivity services (enterprise) 12,731 13,794 8.3 4,568 4,734 3.6 IIJ Mobile Services 6,899 7,805 13.1 E nterprise mobile services (IoT usages etc.) 4,013 4,619 15.1 IIJ Mobile MVNO Platform Service (MVNE ) 2,886 3,186 10.4 Others 1,264 1,255 (0.7) Internet connectivity services (consumer) 6,958 7,462 7.2 IIJmio Mobile Services 6,107 6,665 9.1 Others 851 797 (6.3) Outsourcing services 15,898 17,730 11.5 WAN services 6,925 7,115 2.7 As of June 30, 2025 As of June 30, 2026 YoY Change Internet connectivity services (enterprise) 4,530,747 5,018,149 487,402 IP service (greater than or equal to 1Gbps) (Note 2) 1,474 1,509 35 IP service (less than 1Gbps) (Note 2) 1,567 1,620 53 IIJ Mobile Services 4,422,233 4,911,048 488,815 E nterprise mobile services (IoT usages etc.) 3,173,529 3,508,718 335,189 IIJ Mobile MVNO Platform Service (MVNE ) 1,248,704 1,402,330 153,626 Others 105,473 103,972 (1,501) Internet connectivity services (consumer) 1,663,459 1,739,970 76,511 IIJmio Mobile Services 1,350,225 1,453,415 103,190 Others 313,234 286,555 (26,679) 14,328.8 19,532.7 5,203.9 (Notes) 1. 2. 3. Network Services Revenues Breakdown IP services (including data center connectivity services) Total contracted bandwidth (Gbps) (Note 3) Numbers in the table above show number of contracts except for “IIJ Mobile Services (enterprise)” and “IIJmio Mobile Services” which show number of subscriptions. Total contracted bandwidth is calculated by multiplying number of contracts under “Internet connectivity services (enterprise)” except for “IIJ Mobile Services” and the contracted bandwidths of the services respectively. Number of Contracts and Subscription for Connectivity Services (Note 1) The numbers of IP service contracts include the numbers of IIJ data center connectivity service contracts. - 3 -
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IIJ 1Q FY2026 SI revenues, including equipment sales, were JPY50,739 million, up 51.2% YoY (JPY33,560 million for 1Q25). Systems construction and equipment sales, a one-time revenue, was JPY24,190 million, up 106.9% YoY (JPY11,689 million for 1Q25), mainly due to contributions from a large-scale enterprise mobile device implementation project and an overseas large-scale server infrastructure construction project. Systems operation and maintenance revenue, a recurring revenue, was JPY26,549 million, up 21.4% YoY (JPY21,871 million for 1Q25), mainly due to continued accumulation of systems operation orders. Orders received for SI, including equipment sales, totaled JPY71,379 million, up 57.5% YoY (JPY45,317 million for 1Q25); orders received for systems construction and equipment sales were JPY40,208 million, up 135.5% YoY (JPY17,073 million for 1Q25), and orders received for systems operation and maintenance were JPY31,171 million, up 10.4% YoY (JPY28,244 million for 1Q25). Order backlog for SI, including equipment sales, as of June 30, 2026 amounted to JPY179,550 million, up 41.2% YoY (JPY127,200 million as of June 30, 2025); order backlog for systems construction and equipment sales was JPY47,956 million, up 126.3% YoY (JPY21,189 million as of June 30, 2025) and order backlog for systems operation and maintenance was JPY131,594 million, up 24.1% YoY (JPY106,011 million as of June 30, 2025). ATM operation business revenues were JPY764 million, up 2.0% YoY (JPY749 million for 1Q25). Cost of sales Total cost of sales was JPY79,633 million, up 32.4% YoY (JPY60,128 million for 1Q25). Cost of network services revenue was JPY34,419 million, up 11.3% YoY (JPY30,912 million for 1Q25), mainly due to increases in outsourcing-related costs and purchasing cost of mobile devices. Gross profit was JPY11,682 million, up 0.7% YoY (JPY11,600 million for 1Q25) and gross profit ratio was 25.3% (27.3% for 1Q25). Cost of SI revenues, including equipment sales was JPY44,805 million, up 55.5% YoY (JPY28,822 million for 1Q25), mainly due to an increase in purchasing costs. Gross profit was JPY5,934 million, up 25.2% YoY (JPY4,738 million for 1Q25) and gross profit ratio was 11.7% (14.1% for 1Q25). Cost of ATM operation business revenues was JPY409 million, up 3.8% YoY (JPY394 million for 1Q25). Gross profit was JPY355 million, the same level as 1Q25 (JPY355 million for 1Q25) and gross profit ratio was 46.5% (47.4% for 1Q25). Selling, general and administrative expenses and other operating income and expenses Selling, general and administrative expenses, including research and development expenses, totaled JPY11,386 million, up 7.6% YoY (JPY10,584 million for 1Q25), mainly due to an increase in personnel-related expenses associated with the hiring of new graduates and annual revision of salary levels. Other operating income was JPY40 million (JPY16 million for 1Q25). Other operating expenses were JPY37 million (JPY94 million for 1Q25). Operating profit Operating profit was JPY6,588 million (JPY6,031 million for 1Q25), up 9.2% YoY . Finance income and expenses, and share of profit (loss) of investments accounted for using equity method Finance income was JPY796 million, compared to JPY223 million for 1Q25. It included gains on financial instruments, mainly related to funds, of JPY426 million (loss of JPY14 million for 1Q25) and dividend income of JPY225 million (JPY179 million for 1Q25). Finance expenses were JPY463 million compared to JPY409 million for 1Q25. It included interest expenses of JPY380 million (JPY327 million for 1Q25), mainly related to bank borrowings and lease transactions. Share of loss of investments accounted for using equity method was JPY209 million (loss of JPY108 million for 1Q25), mainly due to loss of DCP Co., Ltd. of JPY282 million (loss of JPY174 million for 1Q25). Profit before tax Profit before tax was JPY6,712 million (JPY5,737 million for 1Q25), up 17.0% YoY. - 4 -
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IIJ 1Q FY2026 Profit for the period Income tax expense was JPY2,266 million (JPY1,928 million for 1Q25). As a result, profit for the period was JPY4,446 million (JPY3,809 million for 1Q25), up 16.7% YoY . Profit for the period attributable to non-controlling interests was JPY51 million (JPY32 million for 1Q25), mainly related to net income of Trust Networks Inc. Profit for the period attributable to owners of the parent was JPY4,395 million (JPY3,777 million for 1Q25), up 16.4% YoY. Comprehensive income for the period Comprehensive income for the period was JPY6,383 million (JPY6,092 million for 1Q25), up 4.8% YoY. There were profit for the period of JPY4,446 million (JPY3,809 million for 1Q25) and impact of an increase in the market value of investment securities and others (*) of JPY1,686 million (increase of JPY2,278 million for 1Q25). Comprehensive income for the period attributable to owners of parent was JPY6,332 million (JPY6,060 million for 1Q25), up 4.5% YoY. (*) Regarding financial instruments under IFRS, we recognize changes in the fair value of funds as net profit or loss in the consolidated statements of profit or loss, while changes in the fair value of equity securities are recognized as changes in equity through other comprehensive income. - 5 -
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IIJ 1Q FY2026 Financial Position as of June 30, 2026 As of June 30, 2026, the balance of total assets was JPY363,758 million, increased by JPY16,825 million from the balance as of March 31, 2026 of JPY346,933 million. As of June 30, 2026, the balance of current assets was JPY158,302 million, increased by JPY6,135 million from the balance as of March 31, 2026 of JPY152,167 million. As for the major breakdown of balance and fluctuation of current assets, prepaid expenses increased by JPY7,286 million to JPY45,105 million mainly due to increases in project costs for customers, license fees, equipment-related costs and bonus, inventories increased by JPY4,716 million to JPY11,848 million, cash and cash equivalents decreased by JPY4,209 million to JPY34,186 million, and trade receivables decreased by JPY2,740 million to JPY59,344 million. As of June 30, 2026, the balance of non-current assets was JPY205,456 million, increased by JPY10,690 million from the balance as of March 31, 2026 of JPY194,766 million. As for the major breakdown of balance and fluctuation of non-current assets, tangible assets increased by JPY4,705 million to JPY49,819 million mainly due to purchases related to data centers, prepaid expenses increased by JPY4,331 million to JPY38,370 million mainly due to increases in project costs for customers and license fees, investment securities (equity) increased by JPY2,490 million to JPY14,596 million, right-of-use assets, the rights under operating lease contracts such as office and data centers and under finance lease contracts such as data communication equipment, decreased by JPY1,746 million to JPY37,364 million mainly due to depreciation, and intangible assets increased by JPY685 million to JPY23,340 million. As of June 30, 2026, the balance of current liabilities was JPY139,508 million, increased by JPY9,967 million from the balance as of March 31, 2026 of JPY129,541 million. As for the major breakdown of balance and fluctuation of current liabilities, trade and other payables increased by JPY8,882 million to JPY43,360 million, contract liabilities increased by JPY3,608 million to JPY26,388 million, and income taxes payable decreased by JPY2,653 million to JPY2,466 million. As of June 30, 2026, the balance of non-current liabilities was JPY61,778 million, increased by JPY3,857 million from the balance as of March 31, 2026 of JPY57,921 million. As for the major breakdown of balance and fluctuation of non-current liabilities, contract liabilities increased by JPY2,340 million to JPY18,467 million, deferred income increased by JPY1,787 million to JPY1,968 million mainly due to a subsidy for purchases related to a data center, and other financial liabilities decreased by JPY1,090 million to JPY35,695 million. As of June 30, 2026, the balance of total equity attributable to owners of the parent was JPY160,945 million, increased by JPY2,938 million from the balance as of March 31, 2026 of JPY158,007 million. Ratio of owners' equity to total assets was 44.2% as of June 30, 2026. - 6 -
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IIJ 1Q FY2026 1Q26 Cash Flows Cash and cash equivalents as of June 30, 2026 were JPY34,186 million (JPY30,020 million as of June 30, 2025). Net cash provided by operating activities for 1Q26 was JPY10,527 million (net cash provided in operating activities of JPY12,106 million for 1Q25). There were profit before tax of JPY6,712 million (JPY5,737 million for 1Q25), depreciation and amortization of JPY8,167 million (JPY7,963 million for 1Q25), including JPY2,939 million (JPY2,890 million for 1Q25) of depreciation of right-of-use operating lease assets under IFRS 16, and income taxes paid of JPY4,923 million (JPY5,043 million for 1Q25). Regarding changes in working capital, there was net cash in of JPY542 million compared to net cash in of JPY2,952 million for 1Q25. As for the major factors for the decrease in net cash inflow in comparison with 1Q25, there were a decrease in proceeds from trade receivables, an increase in payments for prepaid expenses, and a decrease in payments mainly related to trade and other payables. Net cash used in investing activities for 1Q26 was JPY7,427 million (net cash used in investing activities of JPY6,825 million for 1Q25), mainly due to payments for purchases of tangible assets, such as assets related to data centers, of JPY7,786 million (JPY4,470 million for 1Q25), proceeds from subsidies for purchases related to a data center of JPY2,157 million, and purchases of intangible assets, such as software, of JPY2,063 million (JPY2,458 million for 1Q25). Net cash used in financing activities for 1Q26 was JPY7,472 million (net cash used in financing activities of JPY7,759 million for 1Q25), mainly due to payments for other financial liabilities of JPY6,458 million (JPY5,576 million for 1Q25), which included payments under operating lease contracts such as office rent and finance lease contracts such as network equipment, dividends paid of JPY3,457 million (JPY3,096 million for 1Q25), and proceeds from other financial liabilities of JPY2,431 million (JPY991 million for 1Q25). - 7 -
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IIJ 1Q FY2026 Future Prospects including FY2026 Financial Targets As for 1Q26 consolidated financial results, total revenues largely exceeded our expectations, mainly due to contributions from the large-scale enterprise mobile device implementation project and the overseas large-scale server infrastructure construction project. Operating profit progressed mostly in line with our expectations, reflecting the revenues from large-scale, low-margin hardware-related projects and generally rising costs driven by inflation. Presentation Presentation materials will be posted on our web site (https://www.iij.ad.jp/en/ir/) on August 7, 2026. About Internet Initiative Japan Inc. Founded in 1992, IIJ is one of Japan’s leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, mobile services, security services, cloud computing services, and systems integration. Moreover, IIJ operates one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the First Section of the Tokyo Stock Exchange (“TSE”) in 2006 and transitioned to the Prime Market of TSE from April 2022. For inquiries, contact: IIJ Investor Relations Tel: +81-3-5205-6500 E-mail: ir@iij.ad.jp URL: https://www.iij.ad.jp/en/ir Disclaimer: Statements made in this press release regarding IIJ’s or management’s intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ’s and managements’ current expectations, assumptions, estimates and projections about its business and the industry. These forward-looking statements, such as statements regarding revenues and profits, are subject to various risks, uncertainties and other factors that could cause IIJ’s actual results to differ materially from those contained in any forward-looking statement. - 8 -
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Condensed Consolidated Statements of Financial Position (Unaudited) March 31, 2026 June 30, 2026 Millions of yen Millions of yen Assets Current assets Cash and cash equivalents 38,395 34,186 Trade receivables 62,084 59,344 Inventories 7,132 11,848 Prepaid expenses 37,819 45,105 Contract assets 3,345 3,556 Other financial assets 3,183 3,234 Other current assets 209 1,029 Total current assets 152,167 158,302 Non-current assets Tangible assets 45,114 49,819 Right-of-use assets 39,110 37,364 Goodwill 10,773 10,841 Intangible assets 22,655 23,340 Investments accounted for using equity method 6,293 5,818 Prepaid expenses 34,039 38,370 Contract assets 2,447 2,348 Investment securities (Equity) 12,106 14,596 Other investments 12,691 13,482 Deferred tax assets 334 333 Other financial assets 8,870 8,793 Other non-current assets 334 352 Total non-current assets 194,766 205,456 Total assets 346,933 363,758 IIJ １Q FY2026 - 9 -
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March 31, 2026 June 30, 2026 Millions of yen Millions of yen Liabilities and Equity Liabilities Current liabilities Trade and other payables 34,478 43,360 Borrowings 35,570 35,570 Income taxes payable 5,119 2,466 Provisions 480 ― Contract liabilities 22,780 26,388 Deferred income 32 232 Other financial liabilities 23,875 24,813 Other current liabilities 7,207 6,679 Total current liabilities 129,541 139,508 Non-current liabilities Retirement benefit liabilities 1,013 1,016 Provisions 1,255 1,299 Contract liabilities 16,127 18,467 Deferred income 181 1,968 Deferred tax liabilities 1,316 2,119 Other financial liabilities 36,785 35,695 Other non-current liabilities 1,244 1,214 Total non-current liabilities 57,921 61,778 Total liabilities 187,462 201,286 Equity Share capital 25,663 25,671 Share premium 35,930 35,860 Retained earnings 98,163 99,101 Other components of equity 10,006 11,939 Treasury shares (11,755) (11,626) Total equity attributable to owners of the parent 158,007 160,945 Non-controlling interests 1,464 1,527 Total equity 159,471 162,472 Total liabilities and equity 346,933 363,758 IIJ １Q FY2026 - 10 -
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Condensed Consolidated Statements of Profit or Loss (Unaudited) Three Months Ended Three Months Ended June 30, 2025 June 30, 2026 Millions of yen Millions of yen Revenues Network services 42,512 46,101 Systems integration 33,560 50,739 ATM operation business 749 764 Total revenues 76,821 97,604 Cost of sales Cost of network services (30,912) (34,419) Cost of systems integration (28,822) (44,805) Cost of ATM operation business (394) (409) Total cost of sales (60,128) (79,633) Gross Profit 16,693 17,971 Selling, general and administrative expenses (10,584) (11,386) Other operating income 16 40 Other operating expenses (94) (37) Operating Profit 6,031 6,588 Finance income 223 796 Finance expenses (409) (463) Share of profit (loss) of investments accounted for using equity metho d (108) (209) Profit (loss) before tax 5,737 6,712 Income tax expense (1,928) (2,266) Profit (loss) for the period 3,809 4,446 Profit (loss) for the period attributable to: Owners of the parent 3,777 4,395 Non-controlling interests 32 51 Total 3,809 4,446 Earnings per share Basic earnings per share (yen) 21.35 24.79 Diluted earnings per share (yen) 21.24 24.70IIJ １Q FY2026 - 11 -
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Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended Three Months Ended June 30, 2025 June 30, 2026 Millions of yen Millions of yen Profit (loss) 3,809 4,446 Other comprehensive income, net of tax Items that will not be reclassified to profit or loss Net change in fair value of equity instruments designated as measured at fair value through other comprehensive income 2,278 1,686 Total items that will not be reclassified to profit or loss 2,278 1,686 Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations (4) 247 Share of other comprehensive income of investments accounted for using equity method (16) 0 Effective portion of cash flow hedges 25 4 Total of items that may be reclassified to profit or loss 5 251 Total other comprehensive income, net of tax 2,283 1,937 Comprehensive income 6,092 6,383 Comprehensive income attributable to: Owners of the parent 6,060 6,332 Non-controlling interests 32 51 Comprehensive income 6,092 6,383 IIJ １Q FY2026 - 12 -
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Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) Three months ended June 30, 2025 Share capital Share premium Retained earnings Other components of equity Treasury shares Total Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Balance, April 1, 2025 25,577 35,865 79,885 11,266 (11,910) 140,683 1,403 142,086 Comprehensive income Profit (loss) - - 3,777 - - 3,777 32 3,809 Other comprehensive income - - - 2,283 - 2,283 - 2,283 Total comprehensive income - - 3,777 2,283 - 6,060 32 6,092 Transactions with owners Issuance of common stock 7 (7) ------ Disposal of treasury shares - 24 - - 93 117 - 117 Dividends paid - - (3,096) - - (3,096) (63) (3,159) Stock-based compensation - (74) - - - (74) - (74) Transfer from other components of e quity to retained earnings - - 97 (97) - - - - Transfer to non-financial assets - - - (25) - (25) - (25) Total transactions with owners 7 (57) (2,999) (122) 93 (3,078) (63) (3,141) Balance, June 30, 2025 25,584 35,808 80,663 13,427 (11,817) 143,665 1,372 145,037 Three months ended June 30, 2026 Share capital Share premium Retained earnings Other components of equity Treasury shares Total Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Balance, April 1, 2026 25,663 35,930 98,163 10,006 (11,755) 158,007 1,464 159,471 Comprehensive income Profit (loss) - - 4,395 - - 4,395 51 4,446 Other comprehensive income - - - 1,937 - 1,937 - 1,937 Total comprehensive income - - 4,395 1,937 - 6,332 51 6,383 Transactions with owners Issuance of common stock 8 (8) ------ Disposal of treasury shares - (111) - - 129 18 - 18 Dividends paid - - (3,457) - - (3,457) (72) (3,529) Stock-based compensation - 49 - - - 49 - 49 Transfer to non-financial assets - - - (4) - (4) - (4) Changes in ownership interest in subsidiaries ------ 8 4 8 4 Total transactions with owners 8 (70) (3,457) (4) 129 (3,394) 12 (3,382) Balance, June 30, 2026 25,671 35,860 99,101 11,939 (11,626) 160,945 1,527 162,472 Owners of the parent’s shareholders’ equity Non-controlling interests Total equity Owners of the parent’s shareholders’ equity Non-controlling interests Total equity IIJ １Q FY2026 - 13 -
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Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Three Months Ended June 30, 2025 June 30, 2026 Millions of yen Millions of yen Cash flows from operating activities Profit (loss) before tax 5,737 6,712 Adjustments Depreciation and amortization 7,963 8,167 Loss (gain) on sales/disposals of property and equipment 64 (2) Shares of loss (profit) of investments accounted for using equity method 108 209 Finance income (223) (796) Finance expenses 409 463 Other 152 121 Changes in working capital Decrease (increase) in trade receivables 9,610 2,874 Decrease (increase) in inventories (1,073) (4,657) Decrease (increase) in prepaid expenses (5,520) (11,519) Decrease (increase) in contract assets 749 (107) Decrease (increase) in other assets 22 (809) Decrease (increase) in other financial assets (934) 258 Increase (decrease) in trade and other payables (4,170) 9,039 Increase (decrease) in contract liabilities 4,248 5,793 Increase (decrease) in deferred income 18 (1) Increase (decrease) in provisions (330) (464) Increase (decrease) in other liabilities (1,004) (571) Increase (decrease) in other financial liabilities 1,224 704 Increase (decrease) in retirement benefit liabilities 112 2 Subtotal 17,162 15,416 Interest and dividends received 282 370 Interest paid (295) (336) Income taxes paid (5,043) (4,923) Cash flows from operating activities 12,106 10,527 IIJ １Q FY2026 - 14 -
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Three Months Ended Three Months Ended June 30, 2025 June 30, 2026 Millions of yen Millions of yen Cash flows from investing activities Purchases of tangible assets (4,470) (7,786) Proceeds from sales of tangible assets 433 713 Purchases of intangible assets (2,458) (2,063) Proceeds from sale of investments accounted for using equity method - 263 Purchases of other investments (267) (436) Payments for leasehold deposits and guarantee deposits (55) (256) Proceeds from collection of leasehold deposits and guarantee deposits 11 13 Payments for refundable insurance policies (19) (30) Proceeds from subsidies - 2,157 Other 0 (2) Cash flows from investing activities (6,825) (7,427) Cash flows from financing activities Repayment of long-term borrowings (15) - Proceeds from other financial liabilities 991 2,431 Payments of other financial liabilities (5,576) (6,458) Dividends paid (3,096) (3,457) Capital contribution from non-controlling interests - 84 Other (63) (72) Cash flows from financing activities (7,759) (7,472) Effect of exchange rate changes on cash and cash equivalents (36) 163 Net increase (decrease) in cash and cash equivalents (2,514) (4,209) Cash and cash equivalents, beginning of the period 32,534 38,395 Cash and cash equivalents, end of the period 30,020 34,186 IIJ １Q FY2026 - 15 -
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IIJ 1Q FY2026 Notes to Condensed Consolidated Financial Statements (Unaudited) Going Concern Assumption Nothing to be reported. Changes in Accounting Policies Nothing to be reported. Segment Information The reportable segments of IIJ and its subsidiaries (collectively “the Company”) are defined as the Company's constituent units for which separated financial information is available and which are regularly reviewed by the Representative Director, President and Executive Officer of IIJ, who is the chief decision -maker regarding business operations in order to determine the allocation of resources and evaluate performance. The Representative Director, President and Executive Officer of IIJ evaluates the performance of each segment, with operating revenue and operating profit as the primary indicator. The Company defined two reportable segments: “Network service and systems integration business” and “ATM operation business.” Network service and systems integration business is provided comprehensively with Network services, which is composed of Internet connectivity services, WAN services, outsourcing services, and systems integration service. ATM operation business constructs and operates ATMs and network systems for them, and receives a commission for each bank withdrawal transaction when a customer uses its serviced ATMs. - 16 -
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IIJ 1Q FY2026 Segment information for the Company is as follows: Three months ended June 30, 2025 Reportable segments Network service and systems integration business ATM operation business Adjustments Consolidated JPY millions JPY millions JPY millions JPY millions Revenue Customers 76,072 749 － 76,821 Intersegment transactions 9 － (9) － Total revenue 76,081 749 (9) 76,821 Segment operating profit 5,744 287 － 6,031 Finance income 223 Finance expense (409) Share of profit (loss) of investments accounted for using the equity method (108) Profit before tax 5,737 Three months ended June 30, 2026 Reportable segments Network service and systems integration business ATM operation business Adjustments Consolidated JPY millions JPY millions JPY millions JPY millions Revenue Customers 96,840 764 － 97,604 Intersegment transactions 8 － (8) － Total revenue 96,848 764 (8) 97,604 Segment operating profit 6,282 306 － 6,588 Finance income 796 Finance expense (463) Share of profit (loss) of investments accounted for using the equity method (209) Profit before tax 6,712 Intersegment transactions are based on market price. Subsequent Events Nothing to be reported. - 17 -
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Note: The following information is provided to disclose Internet Initiative Japan Inc. (“IIJ”) financial results (unaudited) for the first three months ended June 30, 2026(“1Q26”) in the form defined by the Tokyo Stock Exchange. Consolidated Financial Results for the First Three Months ended June 30, 2026 [Under IFRS] August 7, 2026 Company name: Internet Initiative Japan Inc. Exchange listed: Tokyo Stock Exchange Ticker symbol: 3774 URL: https://www.iij.ad.jp/ Representative: Yasuhiko Taniwaki, Representative Director, President and Executive Officer Contact: Akihisa Watai, Member of the Board, Executive Vice President and CFO TEL: +81-3- 5205-6500 Scheduled date for dividend payment: - Supplemental material on quarterly results: Yes Presentation on quarterly results: Yes (for institutional investors and analysts) (Amounts of less than JPY one million are rounded) 1. Consolidated Financial Results for the Three Months ended June 30, 2026 (April 1, 2026 to June 30, 2026) (1) Consolidated Results of Operations (% shown is YoY change) Revenues Operating profit Profit (loss) before tax Profit (loss) for the period Profit (loss) attributable to owners of the parent Comprehensive income for the period JPY millions % JPY millions % JPY millions % JPY millions % JPY millions % JPY millions % Three Months ended June 30, 2026 97,604 27.1 6,588 9.2 6,712 17.0 4,446 16.7 4,395 16.4 6,383 4.8 Three Months ended June 30, 2025 76,821 6.7 6,031 34.6 5,737 13.9 3,809 12.5 3,777 13.7 6,092 35.1 Basic earnings per share Diluted earnings per share JPY JPY Three Months ended June 30, 2026 24.79 24.70 Three Months ended June 30, 2025 21.35 21.24 (2) Consolidated Financial Position Total assets Total equity Total equity attributable to owners of the parent Ratio of owners' equity to total assets JPY millions JPY millions JPY millions % As of June 30, 2026 363,758 162,472 160,945 44.2 As of March 31, 2026 346,933 159,471 158,007 45.5 2．Dividends Annual Dividends 1Q-end 2Q-end 3Q-end Year-end Total JPY JPY JPY JPY JPY Fiscal Year Ended March 31, 2026 ― 19.50 ― 19.50 39.00 Fiscal Year Ending March 31, 2027 ― Fiscal Year Ending March 31, 2027 (forecast) 21.50 ― 21.50 43.00 (Note) Changes from the latest forecasts disclosed: None - 18 -
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3．Targets of Consolidated Financial Results for the Fiscal Year ending March 31, 2027 (April 1, 2026 to March 31, 2027) (% shown is YoY change) Revenues Operating profit Profit (loss) before tax Profit (loss) for the year attributable to owners of the parent Basic earnings per share JPY millions % JPY millions % JPY millions % JPY millions % JPY Interim Period Ending September 30, 2026 180,000 11.2 15,350 (0.2) 14,050 (7.3) 9,550 (4.8) 53.88 Fiscal Year Ending March 31, 2027 385,000 11.5 38,500 10.5 37,000 5.0 25,000 3.4 141.03 (Notes) 1. Changes from the latest forecasts disclosed: None 2. As for the details about our financial targets for the fiscal year ending March 31, 2027, please refer to “Future Prospects including FY2026 Financial Targets” which is disclosed on page 8 of this earnings release. * Notes: (1) Changes in significant subsidiaries: None (2) Changes in accounting policies and estimate i. Changes in accounting policies required by IFRS: None ii. Other changes in accounting policies: None iii. Changes in accounting estimates: None (3) Number of shares issued (common stock) i. Number of shares issued (inclusive of treasury stock): As of June 30, 2026: 183,471,380 shares As of March 31, 2026: 183,448,852 shares ii. Number of treasury stock: As of June 30, 2026: 6,118,847 shares As of March 31, 2026: 6,186,958 shares iii. Number of weighted average common shares outstanding: For the three months ended June 30, 2026: 177,296,398 shares For the three months ended June 30, 2025: 176,948,883 shares * Review of quarterly consolidated financial statements by certified public accountants or auditing firms: None * Explanation on the Appropriate Use of Future Outlook and other special instructions i) Forward-looking statements Forward-looking statements disclosed in this document are based on IIJ Group’s expectation, estimates, and projections based on information available to IIJ Group as of August 7, 2026. As these forward-looking statements are subject to known and unknown risks and uncertainties, actual results may differ from those disclosed due, for example, to but not limited to changes in business climate and/or market trends. As for our latest forecast of our financial targets, please refer to “Future Prospects including FY2026 Financial Targets” written on page 8 of this document. ii) Others Presentation material will be disclosed on TDnet as well as posted on our website on August 7, 2026. - 19 -