Global Security Experts Inc. · TSE:4417
Global Security Experts — Q2 FYE3/2025 Earnings Presentation
63 slides from Global Security Experts's earnings presentation, October 2024
Slide 1: Financial Results Presentation (Interim) for Q2 FYE3/2025
Financial Results Presentation (Interim) f o r t h e S e c o n d Q u a r t e r o f t h e F i s c a l Ye a r Ending March 31, 2025 Global Security Experts, Inc., Securities Code: 4417 October 2024
Slide 2: Agenda
Ag e n d a 1 FYE3/2025 Q2 Performance Highlights P3 2 FYE3/2025 Q2 Performance Overview P14 3 Management Topics P23 4 FYE3/2025 Consolidated Performance Forecast P28 5 Growth Strategy P32 6 ESG Initiatives P40 7 Appendix P42 © GLOBAL SECURITY EXPERTS 2
Slide 3: FYE3/2025 Q2 Performance Highlights
FYE3/2025 Q2 Performance Highlights
Slide 4: FYE3/2025 1H Performance Highlights
FYE3/2025 1H Performance Highlights Net sales Operating income Quarterly net income FYE3/2024 1H FYE3/2024 1H FYE3/2024 1H 3,209 million yen 533 million yen 352 million yen 4,007 million yen 709 million yen 422 million yen YoY change +24.8% YoY change +33.1% YoY change +19.9% 45.5% 44.8% 40.7% Progr
Slide 5: FYE3/2025 Q2 Performance Highlights Summary
FYE3/2025 Q2 Performance Highlights Summary Year on year significant increase in sales and profit Record highs for both the quarter and first half Growth in all business domains thanks to business strategies per target segment: Security services for semi-large and medium-sized companies and SMEs, se
Slide 6: Impact of One-Time Expenses on Operating Income
I m p a c t o f O n e - Ti m e E x p e n s e s o n O p e r a t i n g I n c o m e Due to one-time expenses incurred in connection with the headquarter relocation, operating income growth rate and progress toward the full-year forecast were slightly lower than in previous years YoY change before one-t
Slide 7: One-Time Expenses from Headquarter Relocation
O n e - Ti m e E x p e n s e s f r o m H e a d q u a r t e r R e l o c a t i o n The number of employees increased due to active recruitment in line with business expansion. One-time expenses were incurred due to the relocation of our headquarters to a new location to create a better working environ
Slide 8: FYE/1H Performance (Excluding One-Time Expenses)
F Y E 3 / 2 0 2 5 1 H P e r f o r m a n c e ( W h e n E x c l u d i n g O n e - Ti m e E x p e n s e s ) Net sales Operating income Quarterly net income FYE3/2024 1H FYE3/2024 1H FYE3/2024 1H 3,209 million yen 533 million yen 352 million yen When excluding When excluding one-time expenses one-time e
Slide 9: FYE3/2025 Consolidated Performance Forecast (Full-Year)
F Y E 3 / 2 0 2 5 C o n s o l i d a t e d P e r f o r m a n c e F o r e c a s t ( F u l l - Ye a r ) Steady year-on-year growth rates in consolidated performance for the full year FYE3/2025 Consolidated Performance Forecast (Full-Year) FYE3/2024 FYE3/2025 (Millions of yen) Change Change (%) Results
Slide 10: Transition to Consolidated Accounting
Tr a n s i t i o n t o C o n s o l i d a t e d Ac c o u n t i n g Spin-off of the security personnel SES business on April 1, 2024 into CyberSTAR, a consolidated subsidiary, marking transition to consolidating accounting from the fiscal year ending March 31, 2025 Reflects the profit/loss of BroadBan
Slide 11: Effect of Equity Method on Quarterly Net Income
E f f e c t o f Ap p l i c a t i o n o f E q u i t y M e t h o d o n Q u a r t e r l y N e t I n c o m e The Company’s first half results reflect performance from BBSec for Q4 of the previous fiscal year and Q1 of the current fiscal year BroadBand Security, Inc. (BBSec) GSX FYE6/2024 FYE3/2025 Q4 Q1
Slide 12: Effect of Equity Method on Quarterly Net Income
E f f e c t o f Ap p l i c a t i o n o f E q u i t y M e t h o d o n Q u a r t e r l y N e t I n c o m e BBSec tends to build up profit toward Q3; expecting solid profit growth for the full year BBSec Quarterly Profit and Profit Bias (FYE6/2024 Results) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11% 49% 38% 2% (Millio
Slide 13: Net Sales and Operating Income Quarterly Trends
N e t S a l e s a n d O p e r a t i n g I n c o m e Q u a r t e r l y Tr e n d s Net sales grew by 24.9% and operating income by 26.6% year on year, reaching record highs Operating income margin maintained a high level, similar to the same period of the previous year Net sales (Millions of yen) Oper
Slide 14: FYE3/2025 Q2 Performance Overview by Business
FYE3/2025 Q2 Performance Overview by Business
Slide 15: Business Lines
Business Lines From FYE3/2025, we have clearly established three target segments—semi-large and medium-sized companies and SMEs, IT companies and system integrators, and companies requiring security personnel—organizing these as business domains Target Semi-large and IT companies and Companies requi
Slide 16: Business Lines: Cybersecurity Business
Business Lines: Cybersecurity Business One-stop cybersecurity support for semi-large and medium-sized companies and SMEs Targeted Email Training Services Consulting Services (Management Consulting) Visualizing Building Planning issues systems Over Main services No. 1 share when including 11,000 Info
Slide 17: Business Lines: Security Training Business
Business Lines: Security Training Business Providing training in the security domain for IT companies and system integrators to help them add value to their IT personnel • Improving security standards for engineers IT companies and • Increasing the number of advanced security Security personnel syst
Slide 18: Business Lines: Security Personnel Business
Business Lines: Security Personnel Business GSX, a security training company, has established a business model that meets the security personnel needs of all companies, regardless of size, and provides benefits to both IT companies that have IT personnel and customers that need security personnel IT
Slide 19: Quarterly Net Sales by Business
Quarterly Net Sales by Business Cybersecurity Business Security Training Business Security Personnel Business YoY (Millions of yen) change 1,527 +21.4% UP 1,402 1,258 1,339 1,303 1,147 1,052 1,115 1,122 910 262 +29.6% 226 UP 202 148 182 162 90 158 137 127 404 +36.3% 296 334 341 327 UP 176 188 195 22
Slide 20: Quarterly Gross Profit by Business
Quarterly Gross Profit by Business Cybersecurity Business Security Training Business Security Personnel Business YoY (Millions of yen) change 564 +28.8% UP 437 475 389 416 373 409 308 344 257 133 +48.3% UP 90 63 97 75 85 44 59 69 52 134 +36.1% 99 110 99 84 UP 44 49 50 49 47 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 21: Profit and Loss (First Half)
Profit and Loss (First Half) Continued high growth in both net sales and profit, with operating income margin of 17.7%, up 1.1 percentage points year on year FYE3/2024 1H FYE3/2025 1H (Millions of yen) YoY Change YoY Change (%) Results Results Net sales 3,209 4,007 +797 +24.8% Gross profit 1,062 1,4
Slide 22: B/S
B/S Change from the Change from the (Millions of yen) FYE3/2024 FYE3/2025 End of 1H previous year previous year (%) Current assets 3,713 3,644 -68 -1.8% Cash and deposits 1,233 777 -456 -37.0% Accounts receivable - trade, and 1,486 1,579 +92 +6.2% contract assets Other 993 1,287 +294 +29.7% Non-curr
Slide 23: Management Topics
GSX GLOBAL SECURITY EXPERTS Management Topics
Slide 24: Interim Dividend Payment
I n t e r i m D i vi d e n d P a ym e n t We launched interim dividends from Q2 of the current fiscal year with the aim of increasing shareholder value over the medium to long term and further enhancing opportunities to return profits to shareholders Dividend payout ratio for the full year is set at
Slide 25: New Shareholder Benefit Program
New Shareholder Benefit Program GSX decided to establish a new shareholder benefit program to thank shareholders for their ongoing support and to increase the attractiveness of investing in the Company’s shares Overview of Shareholder Benefit Program Shareholders who hold one unit (100 shares) or mo
Slide 26: President and CEO Becomes Outside Director of BroadBand Security
P r e s i d e n t a n d C E O S h i r o Ao y a g i B e c o m e s a n O u t s i d e D i r e c t o r o f B r o a d B a n d S e c u r i t y, I n c . Creating synergies by cultivating a broad, close, and deep business relationship between the two companies Accelerating BBSec’s business growth and corpor
Slide 27: Benefits from the Headquarter Relocation
Benefits from the Headquarter Relocation An inviting new office, stimulating internal and external communication, and increasing attendance rates August 2 Benefits from GSX Gratitude Headquarter Relocation Festival 2024 (for employees) ✓ Improving employee engagement Creating a facilitative workplac
Slide 28: FYE3/2025 Consolidated Performance Forecast
FYE3/2025 Consolidated Performance Forecast
Slide 29: FYE3/2025 Basic Policy and Consolidated Performance Forecast
FYE3/2025 Basic Policy and Consolidated Performance Forecast Continue to expand net sales and strengthen the Basic Policy management base to support medium- to long-term growth by placing importance on improving profit margins Aim for net sales of +25.7% YoY and an operating income margin of 18.0% F
Slide 30: Progress Toward Full-Year Forecast
P r o g r e s s To w a r d F u l l - Ye a r F o r e c a s t Although operating income’s progress rate is slightly lower than usual due to one-time expenses for headquarter relocation, both net sales and operating income are progressing well Net sales (Millions of yen) Progress rate 45.5% FYE3/2025 1
Slide 31: Forecast of Consolidated Net Sales Composition
Forecast of Consolidated Net Sales Composition Flexibly responding to customer needs through up-selling and cross-selling, leading to expected YoY revenue growth in all businesses Security Training Business Security Training Business Security 11% Personnel Security Business Personnel 10% FYE3/2025 B
Slide 32: Growth Strategy
GSX GLOBAL SECURITY EXPERTS Growth Strategy
Slide 33: The GSX Group's Business Model
Th e G S X G r o u p ’s B u s i n e s s M o d e l segments Semi-large and medium- Companies requiring Target IT companies and system sized companies, SMEs integrators security personnel (End users) (end users/IT companies/etc.) Full line-up of security Using security training and Amid a shortage of
Slide 34: Accelerating Security Needs of Medium-Sized Companies and SMEs
Ac c e l e r a t i n g S e c u r i t y N e e d s o f S e m i - L a r g e a n d M e d i u m - S i z e d C o m p a n i e s , and SMEs Frequent Security Incidents Social Pressure Acceleration of DX Pressure for security measures from Organizations that have experienced various places Combining DX with
Slide 35: Accelerating Security Training Needs of IT Companies and System Integrators
Ac c e l e r a t i n g S e c u r i t y Tr a i n i n g N e e d s o f I T C o m p a n i e s a n d S ys t e m Integrators GSX Training Course Enrollment (Single Year) Security becomes one quality of IT System Cloud Infrastructure 5,958 development building and services operation 4,217 Adding value to I
Slide 36: Accelerating Needs for Security Personnel SES
Ac c e l e r a t i n g N e e d s f o r S e c u r i t y P e r s o n n e l S E S Shortage of Cybersecurity Personnel in Japan Net Sales Over Time in IT Solutions and SES Businesses Although the number of security personnel has Security SES Business net sales growth: About 1.5x increased, the shortfall
Slide 37: GSX Growth Far Outpaces Security Market Growth
GSX Growth Far Outpaces Security Market Growth Net sales growth rate (CAGR) of 40%, well above the market growth rate of 7.6% Reasons for GSX’s High Growth and Future Prospects FYE3/2024 (expected) Network Dramatic increase in security needs security 722.4 billion yen FYE3/2019 Reason 1 among semi-l
Slide 38: Medium-Term Quantitative Targets
M e d i u m - Te r m Q u a n t i t a t i ve Ta r g e t s 25% annual sales growth in existing businesses Emphasis on improving operating income margin to create a solid management foundation to support sustainable growth Net Sales and Sales Composition Operating Income Operating Income Margin (Millio
Slide 39: Business Strategies
Business Strategies Basic strategy as the foundation for 25% annual sales growth and alliance strategy and fund formation to ensure further growth Alliance Strategy Fund Formation LP Nippon Cyber Expanding Expansion Security Fund 1 Growth sales Security Funding into acceleration Investment Limited c
Slide 40: ESG Initiatives
GSX GLOBAL SECURITY EXPERTS ESG Initiatives
Slide 41: ESG Initiatives
E S G I n i t i a t i ve s We will proactively address ESG and the SDGs with the aim of both realizing a sustainable society and increasing corporate value. In our Internet society, cybersecurity threats are one of the most important social issues that threaten people’s lives and livelihoods. There
Slide 42: Appendix
GSX GLOBAL SECURITY EXPERTS Appendix
Slide 43: About Global Security Experts
Ab o u t G l o b a l S e c u r i t y E x p e r t s A cybersecurity training company that operates throughout the security industry, aiming to improve the self-defense capabilities of companies throughout Japan －Purpose－ To protect all companies from security threats To unwaveringly tell companies wh
Slide 44: Corporate Profile
Corporate Profile A cybersecurity specialist company, established at the dawn of cybersecurity Four businesses: Training, Consulting, Security Solutions, and IT Solutions *CyberSTAR Inc., a wholly owned subsidiary, was established on April 1, 2024 by spinning off the cybersecurity human resources SE
Slide 45: Management Members
Director Management Members General Manager of Sales Division and General Manager of Training Business Division Takayuki Nakamura Apr. 2001: Joined SB Technology Corp. Nov. 2019: Joined the Company, Senior Manager of Sales Division June 2023: Director and General Manager of Sales Division President
Slide 46: History: A Cybersecurity Specialist Company
H i s t o r y: A C yb e r s e c u r i t y S p e c i a l i s t C o m p a n y t h a t H a s E x i s t e d S i n c e t h e D a w n o f C yb e r s e c u r i t y M a r k e t Our founding business is a vulnerability diagnostic service within the Consulting Business. We began providing services at the dawn
Slide 47: Our Origins
Our Origins Predecessor company Hospital Brain Showa Inc. established as a consolidated subsidiary of Business Brain Showa-Ota Inc. In 2000, TIGER TEAM SERVICE was transferred to Hospital Brain Showa Inc. from a Group company, and the Company was reborn as one specializing in cybersecurity, changing
Slide 48: Uniquely Positioned, Primarily Targeting Medium-Sized Companies and SMEs
U n i q u e l y P o s i t i o n e d , P r i m a r i l y Ta r g e t i n g M e d i u m - S i z e d C o m p a n i e s a n d SMEs A large disparity exists between the security needs of large enterprises and medium-sized companies/SMEs. For this reason, other security specialists have continued to focus
Slide 49: Differences in Security Needs and Service Optimization
D i f f e r e n c e s i n S e c u r i t y N e e d s a n d S e r vi c e O p t i m i z a t i o n Large enterprises seek security measures to completely eliminate threats, while medium-sized companies and SMEs seek the minimum necessary security measures to eliminate reputational risk to their business
Slide 50: Barriers to Entry in the Security Market for Medium-Sized Companies/SMEs
Barriers to Entry in the Security Market for Medium -Sized Companies/SMEs Structural challenges exist for competitors attempting to enter the market for medium-sized companies and SMEs The market environment is not conducive to earning short-term revenue, and in order to continue to be customers’ pr
Slide 51: Lineup That Can Provide Appropriate Services Tailored to the Customer's Situation
L i n e u p t h a t C a n P r o vi d e Ap p r o p r i a t e S e r vi c e s Ta i l o r e d t o t h e C u s t o m e r ’s Situation A structure that facilitates long-term transactions by providing optimal services tailored to the situation Large number of Incident* countermeasures Normalcy incidents* (
Slide 52: GSX's Sales and Capacity Strategies
G S X ’s S a l e s a n d C a p a c i t y S t r a t e g i e s ( B u s i n e s s E x p a n s i o n M o d e l ) Increasing the number of customers and ARPU by implementing different approaches to new and existing customers Carrying out capacity strategy by cultivating security personnel in IT companies
Slide 53: Sales Strategy — Existing Customers: Up-Sell/Cross-Sell
Sales Strategy — Existing Customers: Up-Sell/Cross-Sell Cross-selling and up-selling through multi-faceted service offerings. ARPU* of existing customers is higher than that of new customers, and we have achieved efficient business expansion through ongoing transactions Efficient Business Expansion
Slide 54: Sales Strategy: Become a Sales Partner for IT Companies Throughout Japan
S a l e s S t r a t e g y: B e c o m e a S a l e s P a r t n e r f o r I T C o m p a n i e s Th r o u g h o u t Japan Leveraging the customer base and presence of IT firms to open up markets that had previously been untapped opportunities By partnering with GSX, IT companies can expand their securit
Slide 55: Capacity Strategy: Developing Delivery Partner Companies
C a p a c i t y S t r a t e g y: D e ve l o p i n g D e l i ve r y P a r t n e r C o m p a n i e s Expanding order capacity by leveraging highly specialized training content to cultivate security personnel in IT companies, partnering with and fostering industry peers, and developing a large number o
Slide 56: Sales Strategy — New Customers: Strengthening Digital Marketing
Sales Strategy — New Customers: Strengthening Digital Marketing Strategy For new customer acquisition, implementing digital marketing measures that lead to orders and shifting to an efficient and effective digital marketing focus to acquire high quality leads Selecting media that specialize in secur
Slide 57: Why GSX is Preferred by Medium-Sized Companies and SMEs
Why GSX is Preferred by Medium -Sized Companies and SMEs Positioning Expanding net sales through cross-selling Wide-ranging and Capturing the High profits diverse issues needs of many customers + thanks to GSX-unique offerings Medium-sized companies/SMEs and up-selling Alliances with ✓ Large number
Slide 58: Capital and Business Alliances With 25% Annual Sales Growth
C a p i t a l a n d B u s i n e s s Al l i a n c e s W i t h 2 5 % An n u a l S a l e s G r o w t h a n d Confidence in Further Growth Alliance strategy to achieve 25% annual sales growth and ensure further growth as stated in the medium-term management plan Capital and business alliances with strat
Slide 59: Security Environment
S e c u r i t y E n vi r o n m e n t With the promotion of DX, including the use of IoT and cloud computing, and the increase in telecommuting, the number of connections with other entities has increased, internal and external threats in organizations have changed, and a variety of incidents have oc
Slide 60: Market Environment for the Domestic Cybersecurity Market
M a r k e t E n vi r o n m e n t f o r t h e D o m e s t i c C yb e r s e c u r i t y M a r k e t In the cybersecurity market, demand for countermeasures is on the rise. In addition, the rapid shift of companies to digital technologies in the wake of the COVID-19 pandemic is a tailwind for growth in
Slide 61: Financial Highlights
Financial Highlights Fiscal Period FYE3/2019 FYE3/2020 FYE3/2021 FYE3/2022 FYE3/2023 FYE3/2024 Net sales (Thousands of yen) 1,302,976 1,616,613 2,948,871 4,391,317 5,558,022 7,002,941 Ordinary income (Thousands of yen) 37,096 73,103 239,370 414,331 737,512 1,104,319 Net income (Thousands of yen) 28,
Slide 62: Precautions
Precautions This document contains forward-looking statements about Global Security Experts, Inc.’s financial results, business operations, and industry trends that are based on Global Security Experts, Inc.’s current plans, estimates, forecasts or projections. Various risks and uncertainties are in
Slide 63: GSX Global Security Experts
GSX GLOBAL SECURITY EXPERTS
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