GMO Internet, Inc.

Business Details

Generates stable revenue through a recurring subscription-based business model centered on three businesses: domain registration/sales, cloud/rental server (hosting), and internet connection (ISP). "GMO GPU Cloud," which serves as a development platform for AI and machine learning, is also included in this segment and functions as a new growth axis capturing AI demand. The company also operates an overseas infrastructure business under the Z.com brand (mainly in Vietnam, Thailand, and other Asian countries).

Recent Overview

GMO GPU Cloud transitioned to a profit contribution phase, driving substantial profit growth through synergy with existing businesses

In Q1 2026, in addition to continued solid performance in the existing domain, server, and internet connection businesses, "GMO GPU Cloud" entered a stable operation and profit contribution phase following the standalone business's profitability in the previous Q4, resulting in substantial growth in both sales and profit: segment sales of ¥17,584 million (up 12.9% year on year) and segment profit of ¥2,216 million (up 34.0% year on year). As a subsequent event, the company conducted a public offering of new shares (30,000,000 shares, total paid-in amount of ¥20,383 million) in April 2026, with the majority of the proceeds to be allocated to new GPU server capital expenditure for GMO GPU Cloud (¥16,557 million by the end of December 2027). Additionally, at the April 2026 Board of Directors meeting, the company resolved to make capital investments in GPU servers and related equipment (planned investment amount of ¥6.9 billion), with acquisitions to proceed sequentially from August 2026.

Key Products

Growth Drivers

• Transition of GMO GPU Cloud to a stable operation and profit contribution phase, and expansion of adoption across diverse industries through partnerships with Turing Inc. and CTC
• Stable revenue accumulation through the recurring subscription-based (stock revenue) business model of domain, server, and connection services
• Profit improvement in the internet connection (ISP) business through optimization of the sales mix of the proprietary product "GMO Tokutoku BB"
• Expansion of the GPU cloud business scale through new GPU server capital expenditure (to be acquired sequentially from August 2026) funded by proceeds from the public offering
• Increased demand for internet infrastructure services overall due to the progress of DX and expanding use of generative AI (the GPU server market for data centers is projected to expand rapidly at a CAGR of 39%)
• Revenue contribution from the overseas infrastructure business through the consolidation of nine overseas subsidiaries (Z.com brand, mainly Vietnam and Thailand)

Risks

• Risk of upfront large-scale capital expenditure in the GPU cloud service (planned new GPU server investment of ¥6.9 billion) and risk regarding the stability of GPU server procurement
• Dilution risk from the public offering of new shares (30,000,000 shares) and risk regarding the return on investment of the raised funds
• Risk of declining profitability due to intensifying competition and price competition in domain, server, and connection services
• Country risk and foreign exchange risk associated with the consolidation of nine overseas subsidiaries
• Risk of obsolescence of existing services due to rapid technological innovation in the AI and cloud markets
• Risk of rising financial leverage due to a substantial increase in short-term borrowings (up ¥8,200 million from the end of the previous fiscal year)