ENVALITH
株式会社ソラコム logo

SORACOM,INC.

147A・Growth Market・Information & Communication

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株式会社ソラコム logo
SORACOM,INC.147A

Business

SORACOM, Inc. operates the AI/IoT connectivity platform "SORACOM," which provides an integrated offering of communication SIMs, devices, network services, and applications for IoT. As an MVNO (Mobile Virtual Network Operator), the company procures lines from domestic and overseas MNOs while building its own mobile core on the cloud, achieving cost competitiveness. It employs a self-service model that allows a wide range of customers, from startups to large enterprises, to use the service starting from just one line, and as of the end of March 2026, it had more than 10,400 billed accounts, supporting global operations across 207 countries and regions and 550 carriers. The company has overseas subsidiaries in the United States and the United Kingdom, with an overseas sales ratio reaching 40.0%.

Business Model

Revenue is composed of recurring revenue (platform usage fees) and incremental revenue (product sales, professional services, and contracted operations). In FY2026 (ending March 2026), recurring revenue amounted to ¥9,297 million (74.8% of net sales), driven mainly by stable, ongoing income from usage-based charges tied to communication volume, among other metrics. Incremental revenue of ¥3,127 million from device sales and other sources functions as a leading indicator for recurring revenue, forming a structure in which the two grow in tandem as IoT projects expand.

Company Strengths

Built a proprietary mobile core software-based on public cloud, significantly reducing capital expenditure burden compared to hardware-type MNOs. Holds over 100 related patents, achieving cost competitiveness and high scalability. Continuously releases new features on an average two-week development cycle, and has also rolled out generative AI-integrated services such as SORACOM Flux and SORACOM Query.

The annual churn rate for major customers stood at just 0.4% as of the end of March 2026, while the Net Retention Rate (NRR) for recurring revenue recorded 121%. As existing customers expand their IoT usage, ARPA rose 24.4% year-on-year to ¥947 thousand, establishing a revenue growth structure driven by deeper penetration of the customer base.

In-house development of in-SIM software enables customization of line profiles, and through contracts with multiple carriers across Europe, the US, and Asia, the company supports 207 countries/regions and 550 carriers. The "Connectivity Agnostic" design, which allows use of multiple carriers without requiring contract switching, underpins competitive advantage in the US market, with overseas sales reaching ¥4,968 million (a 40.0% share).

ENVALITH's Perspective

In FY2026 (ending March 2026), recurring revenue accelerated to a 41.7% year-on-year increase, and operating cash flow improved significantly from an outflow of ¥728 million in the previous period to an inflow of ¥1,761 million. The pattern of "revenue growth alongside deteriorating operating cash flow" that had persisted through the prior period has been resolved, confirming a transition to a revenue-collection phase as a recurring-revenue (stock-type) business. The FY2027 (ending March 2027) forecast also anticipates 22.8% growth in recurring revenue, indicating strong sustainability of growth.

In FY2026 (ending March 2026), the company recorded ¥137 million in allowance for doubtful accounts due to concerns over the return of deposits from business partners, and a ¥50 million valuation loss on investment securities, both as extraordinary losses. In addition, an allowance for doubtful accounts related to the deteriorating financial condition of certain customers was recorded within selling, general and administrative expenses. As the business expands, the importance of credit risk management for customers and business partners is increasing, and continued attention should be paid to the strengthening of the credit management framework going forward.

Following the consolidation of Misora Connect as a subsidiary in August 2025, goodwill of ¥644 million was recorded (with a period-end balance of ¥692 million), and the equity ratio declined from 75.0% to 71.1%. In addition, the consolidation of this company caused the ratio of overseas sales to total sales to fall by 1.8 percentage points year-on-year to 40.0%. Goodwill amortization expense surged to ¥67 million in FY2026 (ending March 2026), 18 times the prior-year level, and attention should be paid to the widening gap between EBITDA and operating profit. As an external factor, the continued depreciation of the yen is functioning as a tailwind, boosting the yen-denominated value of overseas sales.

Growth Strategy

Four pillars: sustained growth in recurring revenue, advancement of AI/IoT transformation, global expansion, and strategic M&A.

The company renamed its strategy from the "Real World AI Platform" to the "AI/IoT Connectivity Platform," and is now in full swing expanding AI-enabled features such as SORACOM Flux. Under the new direction of connecting both physical and digital domains to AI, the company is pursuing new customer acquisition and ARPA improvement simultaneously.

The number of billed accounts expanded to over 9,600, while ARPA reached ¥947 thousand per account, up 24.4% YoY. Through a combination of expanded usage among existing customers (upselling and cross-selling) and acquisition of new customers, the company aims for 22.8% growth in recurring revenue in FY2027 (ending March 2027) as well.

Sales growth in the U.S. market remains notable, and the company aims to maintain and expand its overseas sales ratio at 40.0%. While absorbing the temporary decline in this ratio caused by the consolidation of Misora Connect, the company is accelerating efforts to capture global IoT demand.

In August 2025, the company made Misora Connect Co., Ltd. a subsidiary, acquiring property and equipment such as machinery and goodwill. The company also continues to deepen collaboration with major partners, including expanded contract development work with KDDI Corporation (contract liabilities increased by ¥312 million). Going forward, the company will continue to pursue business synergies through further expansion of its scope of consolidation.

Last updated: July 19, 2026