Digital Arts Inc. · TSE:2326

Digital Arts — H1 FY2026 Earnings Presentation

48 slides from Digital Arts's earnings presentation, Oct 30, 2025

  1. Slide 1: Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026

    Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. From April 1, 2025 to September 30, 2025 Consolidated Financial Results for the Firs

  2. Slide 2: Product Lineup

    Product Lineup NEW Equipped with multi-factor Supporting the achievement authentication to help ensure the File SSE of simple and strong network IDaaS secure management of IDs for security cloud services File encryption and remote deletion solutions Helping users securely Helping users securely send

  3. Slide 3: 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 Company from its customers during the current the previous period that will be recognized as net accounting period (essentially equivalent to sale

  4. Slide 4: Key Points

    Key Points Contracts Net sales Operating profit 6,629 million yen 4,992 million yen 2,021 million yen YoY ＋2,112 million yen /＋46.8% YoY ＋154 million yen /＋3.2% YoY -31 million yen /-1.5% Net sales experienced only a Operating profit decreased as a Contracts grew significantly due modest increase du

  5. Slide 5: Shift in our business model

    Based on the results for the six months ended September 30, 2025, we have recognized a shift in our business model. The increase in contracts centered on our cloud-based services is not a short-term fluctuation in earnings, but rather a structural transformation toward expanding our foundation for m

  6. Slide 6: Revisions to Consolidated Financial Results Forecasts for FY Ending March 31, 2026

    Revisions to Consolidated Financial Results Forecasts for the Fiscal Year Ending March 31, 2026 Contracts Net sales Operating profit 19,000 million yen 11,800 million yen 5,607 million yen Change from the Previous Forecasts ＋2,525 million yen /＋15.3% Change from the Previous Forecasts -750 million y

  7. Slide 7: Revisions Forecast for Contracts and Net Sales

    Revisions Forecast for Contracts and Net Sales (Millions of Yen) 3,760 20,000 19,000 upward revision ＋2,525 -10,960 15,000 downward revision -750 10,000 16,475 11,800 5,000 0 Contracts Sales Defferred contracts*2 Consolidated financial forecast for FY Mar. 2026 carried over*1 for FY Mar. 2026 *1：Sal

  8. Slide 8: INDEX

    01. Consolidated Results Highlights 02. Non-consolidated Results Highlights 03. Status of Each Market and Product 04. FY03/26 Initiatives INDEX 05. FY03/26 New Products 06. FY03/26 Expanding sales from case studies 07. FY03/26 Full-Year Financial Forecast 08. Return to Shareholders 8 Copyright © Dig

  9. Slide 9: 01. Consolidated Results Highlights

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 01. Consolidated Results Highlights Copyright © Digital Arts Inc.

  10. Slide 10: Consolidated Statement of Income

    Consolidated Statement of Income (Millions of Yen) FY Mar. 2025 FY Mar. 2026 FY Mar. 2026 First 6 mos. First 6 mos. Change YoY Full-Year Forecast*1 Contracts 4,516 6,629 +46.8％ 16,475 Net Sales 4,838 4,992 +3.2％ 12,550 Cost of Sales 1,482 1,559 +5.2% 3,290 Gross profit 3,355 3,433 +2.3% 9,260 Sellin

  11. Slide 11: Consolidated Contracts by Market

    Consolidated Contracts by Market The enterprise sector market is growing steadily, and the public sector market is experiencing significant growth. Trend in Consolidated Contracts by Market (Millions of Yen) Enterprise Public Consumer Enterprise sector market 6,629 +46.8%  The needs for a wide rang

  12. Slide 12: Consolidated Net Sales by Market

    Consolidated Net Sales by Market Net sales for the enterprise sector market is growing steadily. However, net sales for public sector market decreased slightly because the growth of contracts is attributed mainly to cloud service products, and therefore net sales do not immediately reflect this grow

  13. Slide 13: Provision Type Ratio in Consolidated Contracts

    Provision Type Ratio in Consolidated Contracts Consolidated contracts grew 122.8% year on year to 4,388 million yen due to high growth in cloud service products. Trend in Consolidated Contracts (Millions of Yen) Cloud service products License sales products/ Others Cloud service products 6,629  In

  14. Slide 14: Provision Type Ratio in Consolidated Net Sales

    Provision Type Ratio in Consolidated Net Sales Consolidated net sales grew 15.9% year on year to 2,591 million yen due to high growth in cloud service products. Trend in Consolidated Net Sales Cloud service products (Millions of Yen) License sales products/ Others Cloud service products  In the ent

  15. Slide 15: 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 for the next fiscal year Sales for the next fiscal year (GIGA) Sales for the

  16. Slide 16: Consolidated Cost of Sales and Selling, General and Administrative Expenses

    Consolidated Cost of Sales and Selling, General and Administrative Expenses Although there was an increase compared to the same period last year due to enhanced investment in human resources, we were able to contain it compared to our projections. (Millions of Yen) FY Mar. 2025 FY Mar. 2026 Change M

  17. Slide 17: Quarterly Trend in Consolidated Cost of Sales

    Quarterly Trend in Consolidated Cost of Sales Labor Depresiation Communication expenses Others Cost of Sales Transfer to other accounts 1,527 (Millions of Yen) 1,450 1,340 250 1,204 1,235 1,248 332 270 400 231 1,102 229 351 1,084 1,083 239 221 244 220 302 1,027 996 989 201 984 968 145 247 220 345 35

  18. Slide 18: Quarterly Trend in Consolidated SG&A Expenses

    Quarterly Trend in Consolidated Selling, General and Administrative Expenses Personnel expenses Advertising expenses Others (Millions of Yen) 735 669 675 648 646 633 609 609 597 608 597 578 574 558 307 213 215 248 238 214 244 229 224 223 216 232 204 219 44 66 74 80 106 78 60 77 86 92 74 67 79 49 416

  19. Slide 19: Consolidated Balance Sheet

    Consolidated Balance Sheet Cash and advances received increased due to the significant growth in contracts. (Millions of Yen) 連結貸借対照表 As of end of 2Q As of end of As of end of 2Q Change from end of Main Factors for Changes FY Mar. 2025 FY Mar. 2025 FY Mar. 2026 FY Mar. 2025 Increase in cash and depo

  20. Slide 20: 02. Non-consolidated Results Highlights

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 02. Non-consolidated Results Highlights Copyright © Digital Arts Inc.

  21. Slide 21: Summary of Non-consolidated Results

    Summary of Non-consolidated Results (Millions of Yen) FY Mar. 2025 FY Mar. 2026 FY Mar. 2026 First 6 mos. First 6 mos. Change YoY Full-Year Forecast*1 Contracts 4,511 6,625 +46.8% 16,470 Net Sales 4,833 4,988 +3.2% 12,545 Cost of Sales 1,481 1,558 +5.2% 3,290 Gross profit 3,351 3,430 +2.3% 9,255 Sel

  22. Slide 22: 03. Status of Each Market and Product

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 03. Status of Each Market and Product Copyright © Digital Arts Inc.

  23. Slide 23: Trend in Consolidated Contracts by Market

    Trend in Consolidated Contracts by Market Contracts for the first six months reached a record high. (excluding DAC) (Millions of Yen) 6,629 Enterprise Public Consumer DAC 205 Consumer 4,737 4,976 4,505 [3,968] [4,037] [4,000] 4,516 3,748 505 700 1,008 202 4,126 Public [3,447] 229 224 212 301 2,609 2

  24. Slide 24: Trend in Consolidated Net Sales by Market

    Trend in Consolidated Net Sales by Market Net sales for the first six months reached a record high. (excluding DAC) (Millions of Yen) 5,563 Enterprise Public Consumer DAC [4,554] 5,084 [4,384] 4,992 4,552 1,008 4,838 207 Consumer [4,047] 700 202 211 505 224 229 3,101 2,361 2,353 Public [2,800] 2,337

  25. Slide 25: Enterprise Market: Contracts by Product

    Enterprise Sector market Contracts in Market by Product Contracts grew steadily because of by strong sales of f-FILTER integration options for m-FILTER customers and the capturing of needs for a wide range of email security measures using m- FILTER. i-FILTER series Trend in Contracts in Market by Pr

  26. Slide 26: Enterprise Market: Net Sales by Product

    Enterprise Sector market Net Sales in Market by Product The need for a wide range of email security measures was captured. Additionally, sales of f-FILTER integration options for m-FILTER customers remained strong. Further, net sales from project orders that were received in the previous fiscal year

  27. Slide 27: Public Sector Market: Contracts by Product

    Public Sector market Contracts in Market by Product Contracts grew significantly due to extremely strong orders for Phase 2 of the GIGA School Concept. Trend in Contracts in Public Sector Market by Product (Millions of Yen) i-FILTER series i-FILTER series m-FILTER series Other products  Thorough pr

  28. Slide 28: Public Sector Market: Net Sales by Product

    Public Sector market Net Sales in Market by Product Contracts grew significantly due to extremely strong orders for Phase 2 of the GIGA School Concept and Next-Generation School Affairs DX projects. However, net sales grew only slightly because the growth of contracts is attributed mainly to cloud s

  29. Slide 29: Increase in Public Share during Phase 2 of the GIGA School Concept

    Increase in Public Share growth during the Phase 2 of the GIGA School Concept Sector Market Share A market share of 93% or higher has been maintained by broadly advertising i-FILTER, a product that has a competitive advantage, through sales and marketing activities. Introduction of filtering under t

  30. Slide 30: Consumer Market: Net Sales by Product

    Consumer Sector market Net Sales Market by Product Growth was achieved as a result of the strengthening of promotional efforts regarding MVNO distribution channels and multi-year package products. We also aim to ensure that individuals (from children to older users) can use the internet safely by pr

  31. Slide 31: 04. FY03/26 Initiatives

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 04. FY03/26 Initiatives Copyright © Digital Arts Inc.

  32. Slide 32: Summary of Actions for the First 6 Months

    Summary of Actions for the First 6 Months Upsell/Cross sell Public Sector Market Excluding GIGA School Concept for Enterprise Sector Market the GIGA School Concept Status in the First 6 Months Status in the First 6 Months Status in the First 6 Months The results were weak because a lot Contracts for

  33. Slide 33: 05. FY03/26 New Products

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 05. FY03/26 New Products Copyright © Digital Arts Inc.

  34. Slide 34: Z-FILTER, a new product, to be released on November 4

    Product & Sales Strategy Z-FILTER, a new product, to be released on November 4 White Operation type SSE + IDaaS Domestically produced security infrastructure covering authentication to communication which supports the realization of a zero trust environment Third party Anti-malware Authentication me

  35. Slide 35: Reference: Difference Between i-FILTER and Z-FILTER

    Reference: 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: Z-FILTE

  36. Slide 36: Reference: Plan for Z-FILTER Offering

    Reference: Plan for Z-FILTER Offering SWG SWG ID SSE 500 yen / months 1,500 yen / months 1,750 yen / months 2,000 yen / month (excluding tax) (excluding tax) (excluding tax) (excluding tax) ZTNA ー ー ー ● IDaaS *1 ー ー ● ● URL filtering ● ● ● ● DNS security ー ● ● ● CASB ● ● ● ● Cloud Firewall ー ● ● ● I

  37. Slide 37: i-FILTER 10, a comprehensive security product for individual customers

    Product & Sales Strategy i-FILTER 10, a comprehensive security product for individual customers In August, we released i-FILTER 10, a comprehensive security product for individual customers equipped with security features that are needed in each setting where smartphones or PCs are used and White Op

  38. Slide 38: 06. FY03/26 Expanding sales from case studies

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 06. FY03/26 Expanding sales from case studies Copyright © Digital Arts Inc.

  39. Slide 39: Case study (1)

    Case study (1) Cross-selling that resulted in the introduction of three products: m-FILTER@Cloud, f-FILTER, and StartIn Introduction of m-FILTER@Cloud, f-FILTER, and StartIn at InfoFarm Co., Ltd. InfoFarm Co., Ltd. is a locally based company that provides This has enabled features that protect again

  40. Slide 40: Case study (2)

    Case study (2) An example of customer information being protected from a ransomware attack Introduction of FinalCode at Hoei Co., Ltd. Hoei Co., Ltd. is a locally based company that engages in All internal files were encrypted, which resulted in an insurance agency operations for corporate and indiv

  41. Slide 41: 06. FY03/26 Full-Year Financial Forecast

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 06. FY03/26 Full-Year Financial Forecast Copyright © Digital Arts Inc.

  42. Slide 42: Full-Year Financial Forecast (Consolidated)

    Full-Year Financial Forecast for the Fiscal Year Ending March 31, 2026 (Consolidated) (Millions of Yen) FY Mar. 2025 FY Mar. 2026 Change % Change Full-Year Results Full-Year Forecast Contracts 10,570 19,000 +8,429 +79.7% Net sales 9,982 11,800 +1,817 +18.2% Cost of sales 2,948 3,296 +348 +11.8% Gros

  43. Slide 43: Full-Year Financial Forecast (Non-Consolidated)

    Full-Year Financial Forecast for the Fiscal Year Ending March 31, 2026 (Non-Consolidated) (Millions of Yen) FY Mar. 2025 FY Mar. 2026 Change % Change Full-Year Results Full-Year Forecast Contracts 10,561 18,995 +8,433 +79.9% Net sales 9,972 11,795 +1,822 +18.3% Cost of sales 2,945 3,295 +349 +11.9%

  44. Slide 44: Consolidated Cost of Sales and SG&A Expenses

    Consolidated Cost of Sales and Selling, General and Administrative Expenses (Millions of Yen) FY Mar. 2025 FY Mar. 2026 Change % Change Full-Year Results Full-Year Forecast Cost of Sales 2,948 3,296 +348 +11.8% Labor 1,040 1,215 +175 +16.8% Depreciation 865 929 +64 +7.4% Communication expenses 1,505

  45. Slide 45: 07. FY03/26 Return to Shareholders

    Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2026 07. FY03/26 Return to Shareholders Copyright © Digital Arts Inc.

  46. Slide 46: Return to Shareholders for the Fiscal Year Ending Mar. 2026

    Return to Shareholders for the Fiscal Year Ending Mar. 2026 Starting FY March 2026, we will change our shareholder return policy as follows to strengthen our stance on returning profit to shareholders. Under the new policy, we plan shareholder returns for the fiscal year ending March 31, 2026 as fol

  47. Slide 47: 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

  48. Slide 48: For internet convenience, safety and security

    - For internet convenience, safety and security -

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