Slide 1: Company Overview and Earning Results for FY08/2025 Q2
Company Overview and Earning Results for FY08/2025 Q2 SHIFT Inc. (TSE Prime Market: 3697) April 10, 2025
Slide 2: Agenda
Agenda 1. FY2025 Q2 Performance 2. FY2025 Q2 Toward Further High Growth 3. Toward “SHIFT 3000” 2
Slide 3: Executive Summary
Executive Summary FY2025 To achieve “SHIFT2000”, increase GPM through operational improvements. Additionally, initiate Business changes to create a high growth rate for net sales of ¥100B or more. This change will elevate Policy the SHIFT Group to a new phase. FY2025 Q2 Consolidated Results ( millio
Slide 4: 1. FY2025 Q2 Performance
SHIFT 1. FY2025 Q2 Performance
Slide 5: Consolidated Income Statement
Consolidated Income Statement Organizational changes and thorough operational improvements have led to improved GPM, establishing a high-profitability structure FY2024 Q2 FY2024 1H Performance Target FY2025 Q2 FY2025 1H Increase Increase ( ¥M ) Results Results FY2025 full year (Decrease) (Decrease)
Slide 6: Quarterly Progress Against Performance Target
Quarterly Progress Against Performance Target To achieve higher net sales growth rate, investments are planned for 2H. Due to strong 1H performance, operating profit is expected to exceed target levels. FY2025 Full Year Performance Targets Consolidated Net Sales Quarterly Progress Rate of Consolidat
Slide 7: Profit, by Quarter
Profit, by Quarter We have steadily resolved issues from FY2024 and achieved the highest GPM ever. We will continue thorough operations to maintain high GPM in the 2H as well. GPM SG&A expense ratio OPM Utilization Rate (Parent) 40.0% 35.5% Q2 34.9% 34.8% 33.4% 34.1% 35.0% 32.1% 32.8% 33.0% 32.2% 32
Slide 8: Sales Per Customer/ No. of Customers
Sales Per Customer/ No. of Customers Enhanced sales and service capabilities have led to an overall increase in customer unit price. Regarding SHIFT (parent), we have overcome the slump from FY2024 and shifted to an upward trend. Monthly Sales per Customer*1*2 Monthly No. of Customers*1*3 (¥K) Paren
Slide 9: Project Unit Price / No. of Project
Project Unit Price / No. of Project We will prioritize increasing monthly project unit prices through deepening relationships with existing customers and cross-selling by strengthening our service capabilities as a key focus area for FY2025 Monthly Project Unit Price Number of Projects ( ¥M ) 4,000
Slide 10: Unit Price for Engineer and No. of Engineers
Unit Price for Engineer and No. of Engineers Utilization rate improvement and expansion of high-unit-price services have led to increased engineer unit cost. We have ended the hiring restraint that continued from the previous year and will expand recruitment from the second half onward. Unit Price f
Slide 11: Performances by Segment
Performances by Segment The SHIFT Group improved GPM across all segments primarily due to enhanced utilization rates throughout the entire group FY2025 1H Cumulative ( ¥M ) Software Testing Related Services Software Development Related Services Other Proximate Services FY2025 1H FY2024 1H FY2025 1H
Slide 12: SG&A
SG&A Due to the continued restraint in recruitment activities from the previous period, which led to lower recruiting expenses, the SG&A ratio improved. FY2025 Q2 FY2024 Q2 FY2025 1H FY2024 1H Increase Increase ( ¥M ) Results % to Net Sales Results % to Net Sales Results % to Net Sales Results % to
Slide 13: Consolidated Balance Sheet
Consolidated Balance Sheet Consolidating funds across the group to minimize external borrowing while steadily building shareholders' equity to secure sufficient investment capacity FY2024 Q2 *1 FY2024 Q4 ROE (Target) *2 FY2025 Q2 FY2025 FY2024 Increase Increase Results Results ( ¥M ) (Decrease) (Dec
Slide 14: 2. FY2025 Q2 Toward Further High Growth
2. FY2025 Q2 Toward Further High Growth 14
Slide 15: Review of Initiatives in FY2024 - FY2025
Review of Initiatives in FY2024 - FY2025 We have been implementing various measures to improve business performance since FY2024 Short-term 1 Acquisition of Large-Scale Projects 1 Sales Capability Enhancement 1 Captain System Initiatives Cumulative Accelerating Accelerating Top Strengthening Contrib
Slide 16: Collaboration Strategy with Vendors
Initiatives for 1 Performance Improvement Collaboration Strategy with Vendors Parent Building a track record with top vendors, aiming to become a prime partner by gaining experience with large-scale projects Sales Enhancement FY2025 Q1 ～ Sales Enhancement Strengthening vendor collaboration to expand
Slide 17: Expansion and Enhancement of Sales Capability
Initiatives for 1 Performance Improvement Expansion and Enhancement of Sales Capability Parent Concentrating sales resources on existing customers to stabilize the customer base while improving the level of future pipeline development Promoting cross-selling to existing customers Improvement in Stea
Slide 18: Captain System Implementation
Initiatives for 1 Performance Improvement Captain System Implementation Parent Number of captains and contribution sales both reached record-high. We have also begun optimizing incentives, aiming for further system improvements. Captain Contribution Sales Net Sales Contribution Ratio Comparison 1,47
Slide 19: Industry Division System
Initiatives for 1 Performance Improvement Industry Division System Parent Business unit structure has further evolved, improving strategic clarity. Roles of managers have been reorganized to prepare for growth in 2H and beyond. 2 NEW From the beginning Sales FY2025 Q1 ～ 1 Restructuring business of F
Slide 20: Utilization Rate Improvement
Initiatives for 1 Performance Improvement Utilization Rate Improvement Consoli- Thorough assignment management to achieve high utilization rates dated has significantly improved utilization. This will be continued in the 2H, as well FY2024 Improvements Thorough Improvement to FY2025-Q2 Average Utili
Slide 21: SHIFT in Recruitment Portfolio
Initiatives for 1 Performance Improvement SHIFT in Recruitment Portfolio Prioritizing “high-skilled recruitment” over “expanding recruitment numbers,” leading to significant increase in the proportion of professional and high-level talents with annual income of ¥8 million or more" Senior Hiring Secu
Slide 22: Acceleration of New Grads Hiring
Initiatives for 1 Performance Improvement Acceleration of New Grads Hiring New graduate hiring numbers have reached a record high. We will further focus on recruiting new graduate who will be the key players of IT Industry, aiming to hire 1,000 people. New graduates in April 2025 Recruit ment Compre
Slide 23: Initiatives of FY2025 Q2
Initiatives of FY2025 Q2 In addition to our ongoing performance improvement initiatives, we will accelerate preparations with "SHIFT3000" in mind Short- Theme Review of Performance Improvement term 1 Initiatives Activities of FY2025 1H Theme Cultivating SHIFT’s Future 2 Service Evolution (Consulting
Slide 24: SHIFT Service Overview: Service Evolution
SHIFT Service Overview Opening the Future of SHIFT 2 Service Evolution Consol idated Steadily evolving each business toward “SHIFT 3000" STEP2 Business STEP1 STEP3 STEP4 Large-scale Evolution Business Seeds Advanced Industry-leading Acquisition Business Evolution 2009 2013 2018 Software Large-Scale
Slide 25: Evolution of Consulting Business
Evolution of Consulting Business Cultivating SHIFT’s Future 2 Service Evolution Parent Shift toward upstream consulting processes is progressing, establishing an end-to-end structure for acquiring and delivering projects that include development Annual ¥ 8 billion Major Consulting business Major SIe
Slide 26: Business Expansion in the Consulting Domain
Business Expansion in the Consulting Domain Cultivating SHIFT’s Future 2 Service Evolution Consoli Formed capital and business alliance with rise consulting group dated aiming for horizontal expansion of one-stop model by increasing upstream entry points "SHIFT" × "Rise Consulting Group" Synergy Mod
Slide 27: Security Business Evolution
Security Business Evolution Cultivating SHIFT’s Future 2 Service Evolution Consol Security construction and operation services grew significantly. idated Established a comprehensive service delivery system ¥5 bn. from upstream to downstream. Business Scale /year Service Evolution Core KPI Net sales
Slide 28: Business Evolution to BPO 2.0 Based on Wasurenai
2 Cultivating SHIFT’s Future Business Evolution to BPO 2.0 Based on Service Evolution “Wasurenai” Parent Continued expansion in the number of companies adopting our free services. Established BPR consulting to further accelerate BPO Made all functions free of Through the establishment of BPR charge.
Slide 29: Initiatives of FY2025 Q2
Initiatives of FY2025 Q2 In addition to our ongoing performance improvement initiatives, we will accelerate preparations with "SHIFT3000" in mind Short- Theme Review of Performance Improvement term 1 Initiatives Activities of FY2025 1H Theme Cultivating SHIFT’s Future 2 Service Evolution (Consulting
Slide 30: Human Capital Management and Thorough Utilization of AI
Cultivating SHIFT’s Future 3 Human Capital Management and Human Capital Management and Thorough Thorough Utilization of AI Utilization of AI Implementing various initiatives to maximize human capital performance SHIFT's Human Capital Management Maximize Minimize CPA LTV Churn rate Hiring Resignation
Slide 31: Motivation Initiatives Utilizing Office Space
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Motivation Initiatives Utilizing Office Space Maximizing the Use of Our Headquarter to Boost Employee Motivation Since April 1: Office Utilization Enhances Employee Motivation Contents Utilization of the facility Cu
Slide 32: Thorough Utilization of AI: Hiring AI Engineers
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Thorough Utilization of AI -Hiring AI Engineers- Parent SHIFT has approx. 500 AI engineers. AI engineers are recruited and assigned across the entire group for both external sales and internal development SHIFT’s cu
Slide 33: Thorough Utilization of AI: Evolution of AI Business
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Thorough Utilization of AI -Evolution of AI Business- Parent Demonstrating dramatic productivity improvements through in-house AI implementation. Accelerating offering to customers and implementation support FY2024:
Slide 34: Thorough Utilization of AI: Case 1 Delivery
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Thorough Utilization of AI Case 1 825 business processes are now applied with generative AI. Utilization of Generative Usage rate of generative AI is 84%, AI expecting cost reduction effects of ¥15 million per month
Slide 35: Thorough Utilization of AI: Case 2 Human Resources
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Thorough Utilization of AI Case 2 Dedicated AI tool developers are assigned to HR. Human Resources Integrated in-house AI tools into the recruitment process Area in preparation for future increases in hiring numbers
Slide 36: Thorough Utilization of AI: Case 3 Sales
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Thorough Utilization of AI From accumulated sales data, Case 3 Sales Area we are moving to a new sales model and business transformation, beyond sales efficiency STEP1: STEP2: STEP3: Accumulation of activity logs An
Slide 37: Thorough Utilization of AI: Case 4 Administrative
Cultivating SHIFT’s Future 3 Human Capital Management and Thorough Utilization of AI Thorough Utilization of AI Case 4 From a governance perspective, we are appropriately utilizing generative AI Administrative to achieve more efficient discussions, Area while actively conducting discussions focused
Slide 38: Initiatives of FY2025 Q2
Initiatives of FY2025 Q2 In addition to our ongoing performance improvement initiatives, we will accelerate preparations with "SHIFT3000" in mind Short- Theme Review of Performance Improvement term 1 Initiatives Activities of FY2025 1H Theme Cultivating SHIFT’s Future 2 Service Evolution (Consulting
Slide 39: M&A Status
M&A Status Cultivating SHIFT’s Future 4 M&A Initiatives Consol Large-scale project sourcing and establishment of response capabilities idated are progressing steadily. We are also considering mid-to-long term investment through business and capital alliances M&A / PMI Structure 1 2 Sourcing Scaled U
Slide 40: Reorganization to Enhance Group Synergies
Reorganization to Enhance Group Synergies Cultivating SHIFT’s Future 4 M&A Initiatives Consol Two companies are reorganized within software development related segments. idated Progressing toward a more competitive corporate structure Net Sales of Software Strong Sales Capability / Development Relat
Slide 41: 3. Toward SHIFT3000
SHIFT 3. Toward "SHIFT3000"
Slide 42: FY2025 Full Year Target
FY2025 FULL YEAR TARGET FY2024 FY2025 Full Year Actuals Performance Target This Year's SHIFT Theme Annual Sales Growth M&A transformation: 150 bn. yen Net Sales Net Sales Internal M&A Sales Increase Net Sales transformation transformation From M&A ¥110.6 bn. ¥130.0 bn. ¥140 bn. ¥150 bn. Organic Sale
Slide 43: Pathway to SHIFT3000
PATHWAY TO “SHIFT3000” Feasibility AI “SHIFT2000” is in sight “SHIFT3000” Utilization “SHIFT1000” SHIFT1000 Estimated Change Reconsidering Target Year:FY2024 achievement for the timeline 想定達成:FY2024 Target Year:FY2027~FY2028 Target Year :FY2030~ this fiscal year GPM 32~34％ GPM 35％( FY2025 1H 34.4％)
Slide 44: SHIFT's Goals
SHIFT's Goals Strengthen International Reducing Environmental Resolving the Division of Labor Competitiveness Create Job Massive in Development with High Labor Load Earn Foreign “SHIFT3000” and Testing Productivity through Currency Opportunities for Shortage DX and through Non-IT of IT Workplace Bus
Slide 45: (Reference) Other Topics
SHIFT (Reference) Other Topics
Slide 46: Sales by Customer Category (Q2)
SALES BY CUSTOMER CATEGORY (Q2) Parent Continuously cultivated Loyal Customers through sales and service capabilities enhancement Net Sales by Customer Trading Average Monthly Customer Sales* Category*1*2 Companies*1*2 (Excludes sales from customers that are less than 600,000 yen, such as Hinshitsu
Slide 47: Industry Expansion
INDUSTRY EXPANSION * Due to Organizational Restructuring Industry Classification Change from FY2025 Consol idated Mobility, communication and media, government agencies grew steadily Banks and Financial Institutions Automobiles and Auto Parts Social / Consumer Game Entertain- Mobility Bank FY2024-Q2
Slide 48: Unit Price Status
Initiatives for 1 Performance Improvement Unit Price Status Parent Participation in large-scale or core system projects is progressing, steadily increasing unit price per engineer. We will continue to increase unit prices, focusing on services with growth potential Ave. unit price of Benchmark Bench
Slide 49: Strategic Locations
Strategic Locations 2025 June: Planning to open Sapporo a new Hamamatsu office to develop local customers and acquire talent Objectives of the New Office Parent Office Locations Capturing further opportunities with large manufacturing customers Sendai Niigata Accelerating recruitment of engineers in
Slide 50: External Evaluations: MSCI ESG Rating AAA
External Evaluations We Kept the Highest MSCI ESG Rating “AAA" MSCI ESG RATINGS Companies That Have Acquired the AAA Rating March 27 th, 2025 All Japanese listed companies (TSE) 3,962 companies *1 Of the 250 MSCI Japan ESG Select Leaders Index Constituents Only 52 companies *2 In 2025, SHIFT receive
Slide 51: (Reference) Company Overview
(Reference) Company Overview 51
Slide 52: Company Overview
COMPANY OVERVIEW Centered on Software “quality assurance,” SHIFT Group Support Its Customers in Creating Services Three key Rapid growth in “5.5 trillion JPY” points blue ocean market about ◼ Potential of more than 1 trillion JPY in sales SHIFT ◼ Achieved high growth since the service launched Found
Slide 53: Representative
| REPRESENTATIVE SHIFT March, 2000 -Kyoto University Graduate School of Engineering Department of Mechanical Engineering and Science April, 2000 —Jun, 2005 +INCS Inc. Consulting Dep. Obtained a patent for process technology “Shortened manufacturing lead time for molds from 2 months to 2 days” “Acqui
Slide 54: SHIFT's Strength
SHIFT’S STRENGTH Best Performance Carried Out by Best Talents in Thoroughly-Structured Teams Developed de facto standard of software quality assurance Created a market that non-engineers Talents can be successful in 126,000 candidates have taken CAT Exam, pass rate is 6% (As of April, 2025) Knowledg
Slide 55: Vast Market for IT and DX
Business and Market Scale Vast Market for IT and DX Organic Growth Of the 15,000 companies, 5,000 ① Testing are run by presidents over the age of 60. 15.9 *2 Cost Efficient Testing Services The lack of successors makes for trillion x a potential market. Strong Recruitment Software Testing Capabiliti
Slide 56: Group Companies
GROUP COMPANIES We have Built up a ONE-SHIFT Service, Under which Group Companies Collaborate to Support all Aspects from Service Launch to Operation 56
Slide 57: Medium- to Long-Term Growth Strategies
MEDIUM- TO LONG-TERM GROWTH STRATEGIES Be a Company Continuously Trying to Change Ourselves to Reach “Attainment of a Smart Society without Unnecessary Disruption” *Assumption made in 2017 57
Slide 58: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The forecasts, objectives, plans, and strategies of the Company and its consolidated subsidiaries on this web site include forward-looking statements. These forward-looking statements are based on judgments and assumptions made in accordance with