Digital Arts Inc. · TSE:2326

Digital Arts — FY2026 Earnings Presentation

57 slides from Digital Arts's earnings presentation, May 7, 2026

  1. Slide 1: Consolidated Financial Results of the Fiscal Year Ended March 31, 2026

    From April 1, 2025 to March 31, 2026 Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 May 7, 2026 Digital Arts Inc. Securities Code: 2326

  2. Slide 2: Regarding “Contracts” and “Net sales”

    Regarding “Contracts” and “Net sales” Contracts Net sales The total amount of orders received by the The total of the amount of contracts acquired before the Company from its customers during the current previous period that will be recognized as net sales in accounting period (essentially equivalen

  3. Slide 3: Key Points (FY March 2026)

    Key Points (FY March 2026) Contracts grew sharply (+57.1%) as the project acquisition rate for Phase 2 of the GIGA School Concept was high and project unit prices increased. Contracts Net sales Operating profit 16,604 million yen 10,835 million yen 4,791 million yen YoY +6,033 million yen /+57.1% Yo

  4. Slide 4: INDEX

    01. Consolidated Results Highlights 02. Non-consolidated Results Highlights 03. Status of Each Market and Product INDEX 04. FY03/26 Results of Measures 05. FY03/27 Initiatives 06. FY03/27 Full-Year Financial Forecast 07. FY03/27 Return to Shareholders Copyright © Digital Arts Inc.

  5. Slide 5: 01. Consolidated Results Highlights

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 01. Consolidated Results Highlights Copyright © Digital Arts Inc.

  6. Slide 6: Consolidated Statement of Income

    Consolidated Statement of Income Contracts grew significantly due to extremely strong orders for the Phase 2 of the GIGA School Concept. (Millions of Yen) FY Mar. 2026 FY Mar. 2025 FY Mar. 2026 Change YoY Full-Year Forecast*1 Contracts 10,570 16,604 +57.1% 19,000 Net Sales 9,982 10,835 +8.5% 11,800

  7. Slide 7: Consolidated Contracts and Net sales by Market

    Consolidated Contracts and Net sales by Market Enterprise sector market: Double-digit growth of contracts was achieved as demand for cloud- based security measures was captured. Public sector market: The acquisition of projects for Phase 2 of the GIGA School Concept drove a major increase in contrac

  8. Slide 8: Trend in Consolidated Net sales, Operating profit

    Trend in Consolidated Net sales, Operating profit 1Q 2Q 3Q 4Q DAC (Millions of Yen) 11,512 652 10,835 10,436 384 9,982 2,537 9,051 2,393 2,999 287 2,707 535 2,078 357 2,223 249 2,216 2,842 2,436 1,884 556 4,558 4,791 381 4,413 4,427 4,126 241 2,466 1,448 2,316 1,185 1,304 1,413 1,101 2,603 2,722 2,3

  9. Slide 9: Provision Type Ratio in Consolidated Contracts and Net Sales

    Provision Type Ratio in Consolidated Contracts and Consolidated Net Sales In both contracts and in net sales, the cloud service product ratio increased. Trend in Consolidated Contracts Trend in Consolidated Net Sales (Millions of Yen) (Millions of Yen) License sales products/ Others Cloud service pr

  10. Slide 10: Quarterly Trend in Sales of Cloud Service Products

    Quarterly Trend in Sales of Cloud Service Products Sales of cloud service products of the fiscal year ended March 31, 2026 hit a new high. It is expected that the recurring revenue foundation will continue to expand in the future. (Millions of Yen) +7.2% 1,539 +8.3% 1,347 +6.5% 1,435 1,173 +2.7% 1,2

  11. Slide 11: Trend in Order Backlog

    Trend in Order Backlog Contract balance grew significantly due to extremely strong orders for Phase 2 of the GIGA School Concept and Next-Generation School Affairs DX projects. Trend in Order Backlog (Millions of Yen) Sales from the fiscal year after next Sales from the fiscal year after next (GIGA)

  12. Slide 12: Consolidated Cost of Sales and SG&A Expenses

    Consolidated Cost of Sales and Selling, General and Administrative Expenses While the cost of sales and selling, general and administrative expenses increased year on year due to increased investment in human resources, a cost structure appropriate for the plan was created by deploying AI to advance

  13. Slide 13: Quarterly Trend in Consolidated Cost of Sales

    Quarterly Trend in Consolidated Cost of Sales Labor Depresiation Communication expenses Others Cost of sales Transfer of other accounts 1,527 (Millions of Yen) 1,450 1,340 250 1,235 1,248 270 400 1,244 1,204 332 231 1,161 1,102 229 351 1,084 1,083 239 221 244 220 302 1,027 996 268 365 143 989 201 98

  14. Slide 14: Quarterly Trend in Consolidated SG&A Expenses

    Quarterly Trend in Consolidated Selling, General and Administrative Expenses Personnel expenses Advertising expenses Others (Millions of Yen) 735 669 675 648 646 643 654 633 609 609 597 608 597 578 574 558 307 213 215 248 219 238 250 214 244 229 224 223 216 232 204 219 44 66 74 54 80 106 66 78 60 77

  15. Slide 15: Consolidated Balance Sheet

    Consolidated Balance Sheet Advances received increased due to the significant growth in contracts. (Millions of Yen) As of end of As of end of Change from end Main Factors for Changes FY Mar. 2025 FY Mar. 2026 of FY Mar. 2025 Increase in cash and deposit (+5,131M), decrease in suspense payments that

  16. Slide 16: 02. Non-consolidated Results Highlights

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 02. Non-consolidated Results Highlights Copyright © Digital Arts Inc.

  17. Slide 17: Summary of Non-consolidated Results

    Summary of Non-consolidated Results Contracts grew significantly due to extremely strong orders for the Phase 2 of the GIGA School Concept. (Millions of Yen) FY Mar. 2026 FY Mar. 2025 FY Mar. 2026 Change YoY Full-Year Forecast*1 Contracts 10,561 16,598 +57.2% 18,995 Net Sales 9,972 10,828 +8.6% 11,7

  18. Slide 18: 03. Status of Each Market and Product

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 03. Status of Each Market and Product Copyright © Digital Arts Inc.

  19. Slide 19: Trend in Consolidated Contracts by Market

    Trend in Consolidated Contracts by Market Contracts for the full year reached a record high. (Millions of Yen) Enterprise Public Consumer DAC *1 16,604 400 Consumer 11,469 10,838 [10,723] 10,190 [8,641] 10,570 745 430 9,210 [8,748] 408 10,639 Public [8,168] 1,441 2,196 1,042 433 418 445 5,146 5,648

  20. Slide 20: Trend in Consolidated Net Sales by Market

    Trend in Consolidated Net Sales by Market Net sales for the full year reached a record high. (Excluding DAC ) *1 (Millions of Yen) 11,512 Enterprise Public Consumer DAC [9,315] 10,436 10,835 [8,994] 2,196 9,982 402 Consumer 9,051 1,441 409 [8,009] 418 433 1,042 6,825 444 5,256 Public [6,079] 4,788 5

  21. Slide 21: Contracts and Net Sales in Market by Product: Enterprise

    Contracts and Net Sales in Market by Product Enterprise Sector Market i-FILTER: Contracts and net sales were buoyant as demand for cloud-based web access security measures was steadily captured. m-FILTER: A high growth rate was maintained as demand for measures against threats such as spoofed email,

  22. Slide 22: Contracts and Net Sales in Market by Product: Public

    Contracts and Net Sales in Market by Product Public Sector Market i-FILTER: Continued to grow fast mainly due to the acquisition of projects for the GIGA School Concept and large-scale projects for public-sector organizations. m-FILTER: Decreased due to the absence of the projects for improvements S

  23. Slide 23: Achievements in Phase 2 of GIGA School Concept

    Public Sector Market Achievements in Phase 2 of GIGA School Concept i-FILTER secured a market share that was larger than in Phase 1 of the GIGA School Concept. In addition, the order unit prices was approximately 30% higher than in Phase 1 of the GIGA School Concept. Introduction of filtering under

  24. Slide 24: 04. FY03/26 Results of Measures

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 04. FY03/26 Results of Measures Copyright © Digital Arts Inc.

  25. Slide 25: Product Lineup — New Product Releases

    Product Lineup — New Product Releases The new product releases expanded the scope of network security and authentication security offerings. NEW Equipped with multi-factor NEW Supporting the achievement of authentication to help ensure File SSE simple and strong network security Authentication the s

  26. Slide 26: Reference: Product Price

    Reference: Product Price NEW *2 Reference Price (monthly): 500 yen Reference Price (monthly): 250 yen Reference Price (monthly): 150 yen (for purchases of 500 licenses) Reference Price (monthly): ZTNA @1,000 yen Reference Price (monthly): 250 yen Reference Price (monthly): 300 yen SWG @1,500 yen Ref

  27. Slide 27: Track Record of White Operation

    Track Record of White Operation® Number of White Operations® users 14.97 million 0 reports of malware infection*1 NEW *1: The number of reports on damage due to malware infection from users of i-FILTER Ver. 10, m-FILTER Ver. 5, i-FILTER@Cloud and m-FILTER@Cloud as of March 2026 (Source: Digital Arts

  28. Slide 28: Reference: White Operation - our unique model for security measures

    Reference: White Operation® -our unique model for security measures Conventional security measures mainly involve "detection and response" based on the premise of being attacked. However, as cyber attacks become more sophisticated and it becomes increasingly difficult to completely prevent damage us

  29. Slide 29: Release of Z-FILTER

    New Product Release Release of Z-FILTER It creates an environment for conveniently and securely connecting to websites, SaaS products and internal systems from anywhere. 01 02 03 Only providing necessary Also provides security Simple and secure without personnel with necessary measures for the use o

  30. Slide 30: Difference Between i-FILTER and Z-FILTER

    New Product Release Difference Between i-FILTER and Z-FILTER Z-FILTER includes all of the functions of i-FILTER, and further, it includes ZTNA and cloud FW. It is therefore capable of controlling all communications. In addition, it also permits secure user authentication using IDaaS. i-FILTER covers

  31. Slide 31: Release of a-FILTER

    New Product Release Release of a-FILTER By replacing the cumbersome entry of passwords with a single tap on a smartphone, this new product reduces burdens borne by employees and the management workload at the same time, and it mitigates risks related to the leak of IDs and passwords and the unauthor

  32. Slide 32: Launch of School Education Business

    Entry into New Fields Launch of School Education Business An online learning system that supports learning using knowledge cultivated in GIGA School Concept projects i-FILTER@Cloud GIGA School Edition, a free service for a limited number of users Helping children solidify their foundational understa

  33. Slide 33: 05. FY03/27 Initiatives

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 05. FY03/27 Initiatives Copyright © Digital Arts Inc.

  34. Slide 34: Final Fiscal Year of Medium-Term Management Plan

    Final Fiscal Year of Medium-Term Management Plan (From FY March 2025 to FY March 2027) Aim for net sales of 12 billion yen and operating profit of 5.4 billion yen with a focus on recurring revenue Trend in Net Sales (Millions of Yen) 12,000 10,835 FY Mar. 2027 9,982 FY Mar. 2024 FY Mar. 2025 FY Mar.

  35. Slide 35: Medium-Term Management Plan

    Fiscal Year Ending March 31, 2027: Final Fiscal Year of Medium-Term Management Plan The next fiscal year is the final fiscal year of the plan. It is defined as the fiscal year for establishing a foundation for the enterprise sector market and accelerating the implementation of AI in the new era. The

  36. Slide 36: Priority Area Initiatives

    Priority Area Initiatives The Group will continue its initiatives in three priority areas to achieve its financial targets. Priority areas Summary of initiatives - Implement high-touch sales to end users to upgrade the sales structure - Acquire orders from steadily growing Z-FILTER projects and gene

  37. Slide 37: Implementation of High-Touch Sales to End Users

    Implementation of High-Touch Sales to End Users Increase the proposal capabilities of sales personnel and increase points of contact with customers to increase sales power In parallel, construct a structure for providing end user feedback directly to development teams to improve development capabili

  38. Slide 38: Plan for Z-FILTER Offering — New Plan Added

    Plan for Z-FILTER Offering — New Plan Added A new plan for introducing ZTNA alone was launched to fulfill the need to address vulnerabilities, setting errors and discontinued support regarding virtual private networks (VPNs), which have been the riskiest paths for ransomware intrusions in recent yea

  39. Slide 39: Response to Cybersecurity Policies

    Response to Cybersecurity Policies To adapt to cybersecurity policies, including the Security Measures Evaluation System to Strengthen Supply Chains, the Company will address any areas where its current solutions are insufficient through in-house development or in collaboration with other companies.

  40. Slide 40: Initiatives for Phase 2 of the GIGA School Concept

    Initiatives for Phase 2 of the GIGA School Concept It is expected that projects in Phase 2 of the GIGA School Concept will be renewed continually. The Company aims to further increase its market share and the order unit prices in this area. GIGA device replacement timing % of device replaced (result

  41. Slide 41: The Company's Business Opportunities in the AI Era

    The Company's Business Opportunities in the AI Era The Company's position A cybersecurity company enabling the safe use of AI Since the use of AI has become widespread, businesses have encountered new risks such as the risk of information leaks, malfunctions, the automatic execution of tasks and acc

  42. Slide 42: New Threats in the AI Era

    New Threats in the AI Era Malfunctions and improper output Leaks of confidential information The risk of AI generating unexpected output Unintended outflow of confidential data and impacting business decision making entered into and output from AI products Risk of AI agents Visualization of decision

  43. Slide 43: Using the Company's Strengths to Address New Risks in the AI Era

    Using the Company's Strengths to Address New Risks in the AI Era Visualization Monitoring of communication and utilization and preparing for audits Using the Company's existing technologies, and the provision of explanations databases and operational track record to provide solutions to address the

  44. Slide 44: Security Measures for Using Generative AI (Patented)

    Security Measures for Using Generative AI (Patented) In addition to ensuring the security of generative AI responses, this technology evaluates the data users enter into generative AI products to protect the entire AI utilization process. Dual protection by evaluating both the responses generated an

  45. Slide 45: Using AI Internally

    Advancement and Streamlining of Operations Using AI Internally Individual departments incorporate AI into their practical operations with a view to investing in growth and enhancing profitability. Integration of AI into individual business processes to construct a highly efficient foundation for the

  46. Slide 46: 06. FY03/27 Full-Year Financial Forecast

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 06. FY03/27 Full-Year Financial Forecast Copyright © Digital Arts Inc.

  47. Slide 47: Full-Year Financial Forecast for FY Ending March 31, 2027 (Consolidated)

    Full-Year Financial Forecast for the Fiscal Year Ending March 31, 2027 (Consolidated) The Group expects that by increasing sales of new products, investing in human resources and enhancing products, net sales and operating profit will increase as it meets the growing demand for security and new gove

  48. Slide 48: Full-Year Financial Forecast for FY Ending March 31, 2027 (Non-Consolidated)

    Full-Year Financial Forecast for the Fiscal Year Ending March 31, 2027 (Non-Consolidated) The Group expects that by increasing sales of new products, investing in human resources and enhancing products, net sales and operating profit will increase as it meets the growing demand for security and new

  49. Slide 49: Status of Consolidated Net Sales

    Status of Consolidated Net Sales Consolidated net sales are forecast as follows: Net sales for the current fiscal year Status of Consolidated Net Sales (Millions of Yen)  For FY Mar. 2027, the Group will construct a foundation in the 20,000 enterprise sector market and accelerate implementation in

  50. Slide 50: Status of Consolidated Net Sales by Market

    Status of Consolidated Net Sales by Market Consolidated contracts by market are forecast as follows: Trend in Consolidated Contracts by Market (Millions of Yen) Enterprise sector market Enterprise Public Consumer  In the enterprise sector market, the Group will continue to 12,000 expand sales of it

  51. Slide 51: Consolidated Cost of Sales and SG&A Expenses Forecast

    Consolidated Cost of Sales and Selling, General and Administrative Expenses The Group will continue to build a foundation in the enterprise sector market and invest in growth to accelerate implementation in the AI era. It is projected that the cost of sales and selling, general and administrative ex

  52. Slide 52: Status of Consolidated Cost of Sales

    Status of Consolidated Cost of Sales Depreciation is expected to increase due to investments in personnel for the development of new products and new functions and the development and improvement of software. Communication expenses are forecast to increase slightly after implementation of fundamenta

  53. Slide 53: Status of Consolidated SG&A Expenses

    Status of Consolidated Selling, General and Administrative Expenses Personnel expenses and hiring expenses are expected to increase for increasing investment in personnel, which is a priority area in the Medium-Term Management Plan. Status of Consolidated Selling, General and Administrative Expenses

  54. Slide 54: 07. FY03/27 Return to Shareholders

    Consolidated Financial Results of the Fiscal Year Ended March 31, 2026 07. FY03/27 Return to Shareholders Copyright © Digital Arts Inc.

  55. Slide 55: Shareholder Return Policy

    Shareholder Return Policy Major policy  Implementation of progressive dividends and a total return ratio target of 50% or more Shareholder Return Policy Dividends of 100 yen per share. It is expected that dividends will increase for the 13th Dividends  for FY Ending consecutive fiscal year. Mar. 2

  56. Slide 56: Notes on Descriptions

    Notes on Descriptions  Among the descriptions of plans, strategies and financial forecasts in this presentation material, those that are not historical facts are forward-looking statements.  They reflect judgments made by the management of Digital Arts Inc. based on information currently available

  57. Slide 57: For internet convenience, safety and security

    - For internet convenience, safety and security -

Digital Arts — FY2026 Earnings Presentation on 6ix