Slide 1: Financial Results Briefing Material 8th term, Q2 ended June 30, 2025
Update the world for a better tomorrow Financial Results Briefing Material 8th term, Q2 ended June 30, 2025 Neural Group Inc. August 8, 2025 Copyright © Neural Group Inc. All Rights Reserved. 0
Slide 2: Highlights of the FY2025 interim financial results and strategic direction
Highlights of the FY2025 interim financial results and strategic direction Review of FY2025 • In FY2025, we expect to leverage the technological capabilities we have built to date to generate an operating profit of business strategy 160 million yen for the full year, as well as to post a net profit
Slide 3: Agenda
• Company overview Overview of our business model – Overview of our business model About the Innovations Domain – About the Innovations Domain About the Core Services Domain – About the Core Services Domain Growth strategy for the Core Services • Growth strategy for the Core Services Highlights of t
Slide 4: Introduction to Neural Group
Introduction to Neural Group – Our Mission – “Update the world for a better tomorrow” We named our company "Neural Group" to express our desire to provide inspiring services that transcend boundaries across a wide range of fields through the development of cutting- edge technologies, including AI. W
Slide 5: History of the Neural Group
History of the Neural Group Since founding in 2018, we have launched various AI services and expanded our business domains through two M&As. Integrated signage businesses into Neural Marketing Inc. Launch of AIMD for fashion trend analysis Development of “DigiPark” Announced proprietary service for
Slide 6: Our core competence
Our core competence Listed on TSE in Strong in Video AI, AI Agent utilizing our August 2020, 2.5 Audio AI, LLMs, proprietary 32-billion- years after founding. and AI Agents. parameter LLM＊ Sapporo Sendai Nagoya Osaka Neural Group HQ in Tokyo Hiroshima Fukuoka Neural Marketing Tokyo HQ Miyazaki Takam
Slide 7: Management team – driving the social implementation of AI technologies
Management team – driving the social implementation of AI technologies Founder & CEO, Roi Shigematsu, Advisor, Yutaka Matsuo • Partner at McKinsey & Company. • Professor, Artificial Engineering Research Center, • Led private equity investments at Bain Capital. Graduate School of Engineering, The Uni
Slide 8: Capital alliances with major operating companies have been formed to create business synergies
Capital alliances with major operating companies have been formed to create business synergies. Sony Corporation Kyodo News CROSS PLUS Tie-up April December December announcement 2023 2023 2023 Details of • Exchange of • Subsidiary Kyodo • Collaboration in the cooperation personnel, services News Di
Slide 9: Agenda
Company overview • Company overview – Overview of our business model About the Innovations Domain – About the Innovations Domain About the Core Services Domain – About the Core Services Domain Growth strategy for the Core Services • Growth strategy for the Core Services Highlights of the FY2025 inte
Slide 10: Business model at the time of IPO in August 2020
Business model at the time of IPO in August 2020 Business model at IPO: New technology and business development centered on Edge AI Develop advanced technologies in-house with a focus on Edge AI Provide AI licenses Accumulate feedback Research general societal Large companies and experiences needs b
Slide 11: After the IPO, we adapted to changes in the market environment and transformed
After the IPO, we adapted to changes in the market environment and successfully transformed our business model. Business model based on AI Business model based on in- licensing revenue house AI service revenue Marketing support HR support Other support AI licensing and New service 1 contracted devel
Slide 12: 4 years after IPO, the business model has evolved to the next stage
4 years after IPO, the business model has evolved to the next stage. 【Continuous Innovations】 【Scaling Core Services】 Extend AI research capabilities to ＋ Take the lead in providing Secure LLMs and AI Agents. AI services to society. In addition to • Scaling up with Edge AI, focusing our sales networ
Slide 13: Our two business pillars – Innovations and Core Services
Our two business pillars – driving growth through both “Innovations” and “Core Services”. Innovations Core Services （AI algorithm research） （Social implementation of AI） closely collaborate ▪ Drive joint research on AI Agents ▪ Sell proven AI technologies and and LLMs with partners services ▪ Align
Slide 14: Elevating technologies in the Innovations Domain into the Core Services Domain
Elevating a diverse range of technologies in the Innovations Domain into the Core Services Domain. FY2024 revenue breakdown by domain (100% = 3,564 million JPY) Innovations Domain Proprietary large language model 22% Smart city services using AI cameras Fashion trend analysis service using AI 78% Si
Slide 15: Agenda
Company overview • Company overview Overview of our business model – Overview of our business model – About the Innovations Domain About the Core Services Domain – About the Core Services Domain Growth strategy for the Core Services • Growth strategy for the Core Services Highlights of the FY2025 in
Slide 16: AI technology is evolving along with the industry's growth
AI technology is evolving along with the industry’s growth Cloud AI edge AI • High costs and energy • Low cost and energy- consumption efficient • Requires attention to • Enhances privacy privacy protection Copyright © Neural Group Inc. All Rights Reserved. 15
Slide 17: We incorporate the latest developments in edge AI into our existing services
We incorporate the latest developments in edge AI into our existing services contributing to building further barriers to entry Image Generation AI Multi-tasking AI model AI accuracy research • The latest edge AI technology is rapidly implemented and incorporated into our commercial services through
Slide 18: Services for smart city development using AI cameras
Providing services for smart city development using AI cameras. For outdoor flat parking lots, a single camera can capture over 100 parking spaces. Congestion analysis based on line counting at parking lot entrances and exits is also available. 1 Real-time availability management 2 3 Guiding drivers
Slide 19: Condominium signage media reaching over 200,000 affluent individuals
Operate a condominium signage media that reaches AI MEDIA PROVIDER over 200,000 affluent individuals Premium signage media Edge AI camera Edge AI camera Display SIM card Power マンションサイネージ広告 業界1位 supply 1 Automatically analyze viewing results 2 Centrally manage distributed ads 3 View ads as local info
Slide 20: NEURAL.LLM in action
NEURAL.LLM in action (Announced on April 25, 2025) Demo URL: https://youtu.be/QzmVgvwmilg Copyright © Neural Group Inc. All Rights Reserved. 19
Slide 21: Why we excel in LLM development and implementation
Why we excel in LLM development and implementation Edge devices for AI cameras Compact servers for NEURAL. LLM NVIDIA JETSON series NVIDIA A100 Rolling-out our strength • Started developing and operating Edge AI • Differentiated from overheated global LLM technologies ahead of the curve in 2018. inv
Slide 22: Why a standalone LLM is needed
Why a standalone LLM is needed • When using LLMs or AI Agents in a corporate setting, it is necessary to input highly confidential information related to sales, finance, technology, and HR into the AI. • With cloud-based LLMs, it is difficult to use the most critical internal data for analysis due t
Slide 23: AI agent using our LLM, adopted by Okinawa City
Successful development of AI agent using our LLM, adopted by Okinawa City Reasoning process of the AI agent using Announcement of adoption of our AI agent by NEURAL.LLM Okinawa City (announced on June 6, excerpt) The AI agent equipped with NEURAL.LLM (32 billion parameters) automatically analyzes ur
Slide 24: Agenda
Company overview • Company overview Overview of our business model – Overview of our business model About the Innovations Domain – About the Innovations Domain – About the Core Services Domain Growth strategy for the Core Services • Growth strategy for the Core Services Highlights of the FY2025 inte
Slide 25: Outdoor LED vision services nationwide using AI content generation
Providing outdoor LED vision services nationwide using AI content generation technologies Extensive installation nationwide 9.6m 7.2m 69.1m2 Football stadium World cup basket ball Stores Police offices Sport facility 1 2 3 Content using generative AI Integration with AI cameras Media representative
Slide 26: 1-on-1 support services in collaboration with Sony
Providing 1-on-1 support services in collaboration with Sony to enhance employee well-being and accelerate their growth. 1-on-1 support services Examples of Customers KizunaNavi uses state-of-the-art AI analysis technology to improve the quality of 1-on-1 meetings. M1＋ By facilitating effective 1-on
Slide 27: Expanding AI-driven web businesses with ChatGPT
Expanding AI-driven web businesses with ChatGPT. Generative Web powered by ChatGPT Feature 1 Automatic Blog Feature 2 Multilingual Generation Conversion Function 3: Word-of-mouth Feature 4 SEO auto-reply Automation Copyright © Neural Group Inc. All Rights Reserved. 26
Slide 28: Agenda
Company overview • Company overview • Growth strategy for the Core Services Highlights of the FY2025 interim financial results • Highlights of the FY2025 interim financial results Copyright © Neural Group Inc. All Rights Reserved. 27
Slide 29: Exceptional AI company with nationwide sales and large customer network
Exceptional AI company with nationwide sales and a large-scale customer network. Sapporo Sendai Nagoya Osaka Neural Group HQ in Tokyo Hiroshima Fukuoka Neural Marketing Tokyo HQ Miyazaki Takamatsu Neural Marketing Osaka HQ 12 locations 251employees *1 Japan and overseas group headcount Neural Group
Slide 30: Deployed across more than 12,000 private, public, and government locations
Our AI and services have been deployed across more than 12,000 private, public, and government locations. Examples of installation locations private Commercial facilities Logistics facilities Retail stores Residentials Office buildings Parking lots Soccer stadiums Sports facilities Expressways Airpo
Slide 31: Rapid expansion of the customer base enables sequential provision of Core Services
Rapid expansion of the customer base enables sequential provision of AI- powered Core Services 【Value proposition of our Core Services】 Using AI technology, we provide broad support for marketing and talent utilization to a wide range of clients from large corporations to small and medium-sized ente
Slide 32: Towards scaling Core Services – 1: Enhancing LED signage value through AI
【Towards scaling Core Services – 1】 Enhancing the value of LED signage through AI Integration with our generative AI content Integration with our AI cameras (announced on June 24, excerpt) (announced on June 9, excerpt) June 9, 2025 June 24, 2025 Neural Group Inc. Neural Marketing Inc. “Neural Virtu
Slide 33: Towards scaling Core Services – 2: Partnership with Kaonavi
【Towards scaling Core Services – 2】 Partnership with Kaonavi for 1-on-1 support services Announced partnership with kaonavi 1-on-1 SaaS “KizunaNavi” powered by AI (announced on July 22, excerpt) 1-on-1 support services Formed business alliance with kaonavi in the field of 1-on-1 support services Aim
Slide 34: The Core Services area continues to maintain a steady growth rate
The Core Services area continues to maintain a steady growth rate Core Services area revenue growth rate (Year-over-Year) Solid customer demand and expansion across industries and regions have driven continued revenue growth for ten consecutive quarters. 150% 138% 139% 140% 140% • From Q3 onward, we
Slide 35: FY2025 performance forecast and mid-term revenue outlook
FY2025 performance forecast and mid- term revenue outlook Revenue trend by business domain Strategic direction (JPY Millions) 1. The Innovations Domain will continue to maintain its 2025 3,700 business scale and 3,564 serve as a growth 3,178 634 driver to accelerate 778 2,878 Core Services. 885 Inno
Slide 36: Agenda
Company overview • Company overview Growth strategy for the Core Services • Growth strategy for the Core Services • Highlights of the FY2025 interim financial results Copyright © Neural Group Inc. All Rights Reserved. 35
Slide 37: Consolidated financial results for the First Half ended June 30, 2025 – YoY
Consolidated financial results for the First Half ended June 30, 2025 – YoY FY2024 FY2025 Increase/ Change in (JPY Millions) H1 Actual H1 Actual Decrease Percentage Revenue 1,660 1,712 +51 +3.1% EBITDA -31 75 +107 - Percentage of revenue - 4.4% Operating profit -105 1.3 +106 - Percentage of revenue
Slide 38: First-half operating profit trend – Returned to profitability
First-half operating profit trend – Returned to profitability for the first time in four periods (JPY Millions) Licensing AI algorithms Shifted our business model to focus We achieved profitability to large companies on providing our proprietary AI services in our AI services. • Incurred a temporary
Slide 39: Consolidated financial results for the First Half – by domain
Consolidated financial results for the First Half ended June 30, 2025 – by domain*1 (JPY Millions) FY2024 FY2025 Increase/ Change in Domain H1 Actual H1 Actual Decrease Percentage Innovations 349 284 -64 -18.5% Core 1,311 1,428 +117 +8.9% Services Total 1,660 1,712 +52 +3.1% *1 Revenue derived from
Slide 40: Historical First Half revenue by domain
Historical First Half revenue by domain ＊ (JPY Millions) Core Services Innovations 1,712 1,660 Uncategorized 284 349 1,375 • In the first half of FY2025, efforts were focused on 1,153 expanding core services 433 and launching new businesses. 441 • Revenue growth 1,428 progressed as planned 1,311 490
Slide 41: FAQs at IR meetings
FAQs at IR meetings Questions Answers 1. In recent years, there has been a cyclical trend in which 1. Our core services support the marketing activities of over 12,000 both revenue and operating profit rise from the first half primarily small- to medium-sized businesses. These businesses to the four
Slide 42: FAQs at IR meetings
FAQs at IR meetings Questions Answers 4. What is the positioning of FY2025 in 4. In 2025, we aim to distinguish between Core Services and Innovations, and to relation to future revenue growth? establish a foundation for business growth from 2026 onward. In the second How are you planning the revenue
Slide 43: APPENDIX
APPENDIX Copyright © Neural Group Inc. All Rights Reserved. 42
Slide 44: Promoting capital and business alliances while ensuring share liquidity
Promoting capital and business alliances with operating companies while ensuring share liquidity by expanding floating shareholders Note: Based on shareholders' register as of June 30, 2025 General shareholders General shareholders floating shares*1 General shareholders floating shares floating shar
Slide 45: FY2025 Q2 – Balance Sheet
FY2025 Q2 – Balance Sheet (JPY Millions) FY2025 June 30 Current Asset 1,559 of which, 847 Cash and Deposits Fixed Assets 1,394 Total Assets 2,953 Total Liabilities 2,359 of which, 1,988 interest-bearing debt Net Assets 593 Copyright © Neural Group Inc. All Rights Reserved. 44
Slide 46: Cost structure & sales comparison – SG&A and CoGS ratio
Cost structure & sales comparison – SG&A and CoGS ratio • CoGS ratio has remained stable at below 40% (gross margin of 60% or higher). • SG&A expenses include fixed costs such as personnel expenses, so the SG&A ratio tends to decrease from Q1 to Q4 as revenue increase. 150％ 136% 129% 123% 113% 103%
Slide 47: Historical performance data
Historical performance data （JPY Millions） FY2023 FY2024 FY2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 % of % of % of % of % of % of % of % of % of % of Actual revenue Actual revenue Actual revenue Actual revenue Actual revenue Actual revenue Actual revenue Actual revenue Actual revenue Actual revenue Revenu
Slide 48: Disclaimer
Disclaimer Handling of the material This document contains forward-looking statements. These statements are based solely on the information available at the time the statements were made. Furthermore, such statements are not guarantees of future results and are subject to risks and uncertainties. Ac