9 markets and 3 years later, Adways finally turns a profit overseas

Last week, Adways sent around a press release hinting it would reveal that its overseas business became profitable. Today, in its latest quarterly earnings announcement, the firm confirmed as much. Known for its online and mobile ad network, Adways expects revenue of JPY 5.4 billion (US$45.4 million) against an operating profit of JPY 70 million (US$588,000) for the fiscal year.

Those numbers are modest. In the past quarter alone, Adways registered JPY 8.5 billion (US$71.5 million) in revenue and JPY 195 million (US$1.6 million) in operating profit. They do, however, represent the firm’s dogged approach to making its overseas business work. The achievement sticks out because the vast majority of Japanese companies that try to scale overseas fail to generate traction and ultimately retreat back home. Adways is bolstering its chances of becoming one of Japan’s truly global tech companies.

Founded in 2001, Adways went public in 2006, and now employs over 1,000 people worldwide. For all that success – mostly domestic – the company has struggled to make headway overseas. After an underwhelming attempt to enter China in 2003, most plans were shelved. Then, in 2011, a new initiative started that resulted in nine new markets within two-and-a-half years.

Nobuyoshi Noda, Adways’ head of international, is pleased to see the results and credits the boom in smartphone use as a major factor. More smartphone users means more people for Adways to connect to advertisers and developers.

Speaking with Tech in Asia, Noda says Adways made the right choice in going for winnable markets, not just the biggest ones. The firm has entered Singapore, Vietnam, Indonesia, the Philippines, Thailand, Taiwan, India, Korea, and the United States. AppDriver, the company’s cost-per-impression mobile advertising platform, has been particularly well received, he adds.

The breakthrough puts Noda one step closer to hitting his revenue goal. When we last spoke with him, Noda mentioned that he’s aiming for revenue of US$100 million to come from overseas for Adways’ fiscal year 2016. Revenue targets aside, Noda says that the company is still focused on building up its overseas operations. Vietnam, currently home to only a development center, will soon host a proper office.

The new branch offices get a lot of the attention, but Noda has not forgotten about Adways’ presence in China. When asked about where Adways is mostly likely to find a market similar to Japan – flush with consumers ready to spend on apps – he pointed to China.

“It has to be a country that is strong at producing [game] content. In Asia now, there is only China, Japan, and Korea. From there, I’d have to say China. There are lots of players, lots of capital, and they are fast with aggressive investments.”

See: How Adways’ founder went from high school dropout to a multi-millionaire entrepreneur