Freebit Co., Ltd.TSE: 3843

■ Consolidated Financial Results for the First Quarter of the Fiscal Year Ending April 30, 2025

Sep 17, 2024 at 7:47 AM UTC · Issued by FreeBit Co., Ltd.

NOTE：This document was prepared by machine translation, and no manual modification has been made to the translated contents. This document is to be used only as a reference, and in cases any differences occur between English version and the original Japanese version, the Japanese version shall prevail.

Consolidated Financial Results for the First Quarter of the Fiscal Year Ending April 30, 2025

(Japanese GAAP)

Listed company	FreeBit Co., Ltd.
name

Code No.	3843	URL https://freebit.com/
Representative	Title:	President, CEO and CTO
Contact	Title:	Director and General Manager of
Group Corporate Planning Division

Start Date of Dividend Payout:	-

Supplementary documents available
pertaining to financial results: Yes
Financial results briefing: Yes	(Video streaming only)

September 13, 2024

Listing: Tokyo Stock Exchange

Name: Atsuki Ishida

Name: Ikuko Wada

TEL 03-5459-0522

(all amounts rounded down to the nearest million yen)

Consolidated Financial Results for the First Quarter of the Fiscal Year Ending April 30, 2024 (from May 1, 2024 to July 31, 2024)

(1) Consolidated Operating Results (Cumulative)

(percentages shown represent year-on-year % change)

Quarterly income

Net sales

Operating income

Ordinary income

attributable to owners of

the parent

Millions of

yen

FY2025/04 first quarter

13,291

1,462

1,451

813

FY2024/04 first quarter

14,040

1,664

1,623

863

(N.B.)

Millions

Comprehensive

FY2025/04 first quarter

1,040of yen

(-%)

FY2024/04 first quarter

1,181of yen

(-%)

income

Quarterly net income per

Diluted quarterly net

income per share

Yen

FY2025/04 first quarter

40.75

40.31

FY2024/04 first quarter

43.26

42.80

(N.B.) Consolidated subsidiary

GIGAPRIZE Co., Ltd. and its subsidiaries have changed the date of their fiscal year-end from March

31 to April 30. As the first quarter of the previous fiscal year was a transitional period for changing the date of their fiscal year-

end, percentages representing year-on-year change for the first quarter of the fiscal year ending April 2024 and the first quarter

of the fiscal year ending April 2025 have been omitted.

(2) Consolidated Financial Position

Total assets

Net Assets

Shareholders' Equity

Ratio

Millions of yen

FY2025/04 first quarter

36,322

15,546

32.8

FY2024/04

38,183

15,196

30.5

Reference: Shareholders'

Millions

equity

FY2025/04 first quarter

11,900of yen

FY2024/04

11,628of yen

2. Dividends

Annual dividends

First quarter period

Second quarter

Third quarter period

Year -end

Total

end

period end

end

Yen

FY2024/04

0.00

27.00

FY2025/04

FY2025/04 (forecast)

0.00

30.00

(N.B.) Revisions during this

quarter of dividends

forecast for fiscal year:

None

Forecast of Consolidated Financial Results for the Year Ending April 30,.2025 (May 1, 2024 to April 30, 2025)

(percentages shown represent year-on-year % change)

Net income

Net income per

Net sales

Operating income

Ordinary income

attributable to owners

of the parent

Millions

Yen

of yen

Full year

54,000

5,700

5,500

3,000

150.21

(N.B.) Revisions during

this quarter of previously disclosed consolidated business results projection for FY2024: None

Since we manage our operations on an annual basis, we have omitted the presentation of consolidated earnings forecasts for the

second quarter (cumulative).

For details, please refer to Attachment P.5 "1. Overview of Operating Results and Financial Position (3) Consolidated Financial Results Forecast and Other Forward-looking Information". In the fiscal year ended April 30, 2024, consolidated subsidiary GIGAPRIZE Co., Ltd. and its subsidiaries changed the date of their fiscal year-end from March 31 to April 30. As the fiscal year ended April 2024, the comparative year, was a transitional period for changing the date of their fiscal year-end, percentages representing year-on-year change has been omitted.

Notes

Significant changes in the scope of consolidation during the quarter under review: None
Special accounting treatments used in preparation of the quarterly consolidated financial statements: None
Changes① in accounting policies and changes or restatement of accounting estimates
- Changes in accounting policies due to revisions① to accounting standards, etc.: None
- Changes in accounting policies other than : None
- Changes in accounting estimates: None
  Restatement of revisions: None

(4) Number of shares outstanding (common shares)
Number of shares outstanding at the end of
① the period (including treasury stock)	FY2025/04 1Q	23,414,000Shares	FY2024/04	23,414,000Shares
Number of treasury stock at the end of the
② period	FY2025/04 1Q	3,441,941Shares	FY2024/04	3,441,941Shares
Average number of shares outstanding
③ during the period (quarterly cumulative)	FY2025/04 1Q	19,972,059Shares	FY2024/04 1Q	19,960,259Shares

Review of the accompanying quarterly consolidated financial statements by a certified public accountant or an auditing firm: None
Explanations and other special notes concerning the appropriate use of business performance forecasts

(Notes on forward-looking statements)

The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed to be reasonable, and do not constitute guarantees by the Company of future performance. Actual results may differ materially from the forecast depending on a range of factors. Please refer to Attachment P.5 "1. Overview of Operating Results and Financial Position (3) Consolidated Financial Results Forecast and Other Forward- looking Information".

(Method of obtaining supplementary material on financial results and details of financial results briefing session)

Supplementary materials will be disclosed on TDnet on the same day and will also be posted on our website.
The financial results briefing will be posted promptly on our website with the recorded videos.

○Table of Contents

1. Overview of Operating Results and Financial Position ･･････････････････････････････････････････････････････	2
(1)	Overview of Operating Results for the Current Quarter･･･････････････････････････････････････････････････	2
(2)	Overview of Financial Position for the Current Quarter ･･････････････････････････････････････････････････	5
(3)	Explanation of Consolidated Earnings Forecasts and Other Forecast Information ･･････････････････････････････	5
2. Quarterly Consolidated Financial Statements and Major Notes ･･･････････････････････････････････････････････	6
(1)	Quarterly Consolidated Balance Sheets･･･････････････････････････････････････････････････････････････	6
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ･････	8
(3)	Notes to Quarterly Consolidated Financial Statements ･･･････････････････････････････････････････････････	10
	(Notes on Segment Information) ･･･････････････････････････････････････････････････････････････････	10
	(Notes on Significant Changes in the Amount of Shareholders' Equity) ･････････････････････････････････････	11
	(Notes on Going Concern Assumptions) ･････････････････････････････････････････････････････････････	11
	(Notes to Quarterly Consolidated Cash Flow Statements)････････････････････････････････････････････････	11

- 1 -

1. Overview of Operating Results and Financial Position

(1) Overview of Operating Results for the Current Quarter

Forward-looking statements in the text are based on judgments as of the end of the current quarterly period.

The consolidated subsidiary GIGAPRIZE Co., Ltd. ("GIGAPRIZE") and its subsidiaries has changed the date of their fiscal year-end from March 31 to April 30, which is the same as our consolidated fiscal year-end, from the previous first quarter. As a result, the consolidated subsidiaries in the previous fiscal year has an irregular settlement of accounts for the 13-month period from April 1, 2023 to April 30, 2024. In the first quarter of the previous fiscal year, the four-month period from April 1, 2023 to July 31, 2023 has been incorporated into the consolidated settlement.

The official names and explanations of the names used in [Overview of Operating Results for the Current Quarter] are as follows.

Name in use	Official name	Explanation

		Concept of the next-generation distributed Internet, which enables
web3	web3	users to exchange data and content directly with each other without
		going through a huge platform former
		A form of the Internet that allows users to share and distribute
Web2.0	Web2.0	content generated on the Internet through centralized platforms such
		as SNS
AI	Artificial Intelligence	Techniques that use computers to study or conduct human
intellectual behavior

DX	Digital Transformation	Reforming products, services, business models, etc. by utilizing data
and digital technologies

5G	5th Generation	Abbreviation for 5th Generation Mobile Communications System,
which is one of the next generation communications standards

MVNO	Mobile Virtual Network Operator	Virtual mobile operator

		A system that enables automatic identification and automated
IoT	Internet of Things	control without human intervention by having a communication
		function to communicate with each other.
MVNE	Mobile Virtual Network Enabler	MVNO support provider

The businesses of each reportable segment are as follows.

Reportable Segment	Main services

	･ Business support services for ISP
5G Infrastructure Support Business	･ Business support (MVNE) services for MVNO
	･ Cloud services for corporate customers

	･ Mobile communications-related services for individuals
	･ Internet connection-related services for individuals
5G Lifestyle Support Business	･ Internet access services for apartment complexes
	･ Real estate-related services
	･ Web3 related platforms

Corporate and Creator 5G DX Support	･ Internet marketing-related services
･ Ad-Tech Services
Business
･ Support platform for creators

Our group promotes corporate management with a view to the 10-year plan from 2021 to 2030. We have started the three- year medium-term management plan [SiLK VISION 2027] that ends in the fiscal year ending April 2027 from the current fiscal year. The theme of the Medium-Term Management Plan [SiLK VISION 2027] is to pursue [the location of creditability], a requirement to resolve the social issues facing us on a global scale. Based on the belief that it is important to create a state of trust against the fact that the environment surrounding us is flooded with uncertain information, we will work to realize this by utilizing our patented technologies, including web3.Through combining our accumulated know-how in the telecommunications field with our proprietary Layer 1 blockchain technology, and gradually and complementarily operating Web2.0 and web3 in a hybrid manner, we will transform ourselves into [a communications-born web3 implementing company] through [Trust] of a variety of goods, and aim to solve social issues. The consolidated performance targets for the fiscal year ending April 2027, the final year of the medium-term management plan [SiLK VISION 2027], will be net sales of 63 billion yen to 70 billion yen and operating income of 8 billion yen, and we will expand our business area with the aim of using our entire group to expand beyond the telecommunications category.

- 2 -

In the first quarter of the fiscal year under review, despite concerns about the impact of unstable international conditions and price increases on the economy, investment in AI-related products and the acceleration of DX continued to grow and the domestic IT market environment remained firm. In addition to the spread of 5G, a communications standard, new concepts have emerged in Internet services, from the conventional Web 2.0 (centralized) to web3 (decentralized), and new businesses are emerging from this concept.

In this environment, in the current consolidated fiscal year, the first year of the medium-term management plan [SiLK VISION 2027] we will strategically utilize the operating cash flows created in existing businesses while responding to accelerating technological and other changes, and implement capital allocation with the aim of enhancing corporate value through continuous growth. As a result, we will promote business and human investments based on our growth strategy while balancing investment and return, and expand our strategic business portfolio.

The operating results of each reportable segment are as follows.

From the first quarter of the current fiscal year, the classification of reportable segments has been partially changed. For the same quarter comparison of the previous fiscal year, the figures for the same quarter of the previous fiscal year are compared and analyzed by reclassifying the figures for the same quarter of the previous fiscal year into the new segment

① classification.

5G Infrastructure Support Business

In the fixed-line network, the use of many services via the Internet continues to increase due to an increase in online video viewing at home and the use of rich contents and SNS, including games, along with changes in working styles and lifestyles, and the generalization of online-format conferences and learning associated with the spread of telework and home-based learning. As a result, network costs remain on a high trend as the amount of line usage increases.

In the mobile network business, the provision of inexpensive plans by major mobile telecommunications carriers and the deployment of these plans under sub-brands continue to affect the growth of proprietary MVNO service providers, but we believe that the growth of the mobile market as a whole continues and will expand in the future, including the expected increase in use for IoT and inbound tourists.

Against this backdrop, 5G Infrastructure Support Business recorded sales of 2,547,124 thousand yen (up 4.9% year on year) and segment profit of 325,094 thousand yen (down 29.7% year on year), as a result of increases in one-time expenses and personnel expenses due to network facility upgrades, despite solid growth in the size of MVNE's business support services for MVNO.

5G Lifestyle Support Business

As explained in [5G Infrastructure Support Business] above, network costs are rising in the fixed-line network services market, but the market for 5G Homestyle (Internet Services for Collective Housing) is expected to steadily grow in the future as the high-speed broadband environment aimed at improving the asset value of buildings and occupancy rates is being standardized, and the use of telework, online learning, video content viewing, and other services has been recognized as normality. As a result, the market size of these services is expected to steadily grow in the future. In view of this business environment, in addition to Internet services for apartment buildings and services for detached houses, we expanded the scope of our services, including security-related services such as crime prevention cameras, and further expanded our earnings base.

In 5G Lifestyle (mobile communications services for individuals and Internet-related services), we are expanding the number of targeted smartphone models to 160 and promoting further increases in users in accordance with our [TONE IN] strategy, which allows us to deploy the technologies and services cultivated in smartphone services [Tone Mobile] utilizing the proprietary technologies offered by our group in smartphones and a wide range of devices other than our own, and deploys them in other fields, including IoT.

In addition, in the web3-related platform business, which is an incubation area, on May 20, 2024, we concluded a basic agreement on joint research and development with Fujita Gakuen, a school corporation that possesses the largest scale of medical big data in Japan, and began efforts to utilize web3 in the medical/healthcare area. This joint R&D will aim to build services incorporating the conceptual design of [Medical DX] and [Trusted Web Concept] based on [Medical DX Reiwa Vision 2030] promoted by the Japanese government. We will establish data-management basic technologies that ensure the reliability and safety of medical information, and contribute to solving the national issue of promoting the health of the people and improving the quality of medical services. In addition, we aim to build a system that can securely and efficiently collaborate medical information among individual patients, hospitals, research institutions, the national government, and local governments. Along with the view of [TONE IN] strategy for social implementation of 5G/web3, we will broadly deploy the technologies and services we have cultivated in Tone Mobile in the medical field as well, and

- 3 -

promote the provision of cutting-edge technologies.

Against this backdrop, in 5G Lifestyle Support Business, net sales were 6,213,965 thousand yen and segment income was 769,109 thousand yen, mainly as a result of steady performance in the number of units offered as services mainly in 5G Homestyle (Internet Services for Collective Housing). Consolidated subsidiary GIGAPRIZE and its subsidiaries have changed the date of their fiscal year-end from March 31 to April 30 from the previous first quarter. As the first quarter of the previous fiscal year was a transitional period for changing the date of their fiscal year-end, percentages representing year-on-year change has been omitted.

Corporate and Creator 5G DX Support Business

In the Internet marketing and ad technology services offered by consolidated subsidiary Full Speed Co., Ltd. and its subsidiaries, demand for advertising continued to increase along with the acceleration of digital measures due to the diversification of society and work styles triggered by the COVID crash amid the ongoing digital shift of consumers. Against this backdrop, demand for ad technology services in the affiliate business both domestically and overseas remained strong, and we worked to operate our business efficiently by implementing cost-cutting measures.

In addition, the number of creator platforms [StandAlone] offered by services grew, which allows creators to disseminate information themselves without going through major platforms and maximize the value of such information. This is intended to expand the formation of fan communities and creator economies in 5G/web3 era (economic zones in which creators make monetization through their own skills).

Against this backdrop, in the Corporate and Creator 5G DX Support Business, net sales were 5,161,859 thousand yen (up 10.6% year on year) and segment income was 373,414 thousand yen (up 87.7% year on year), due to solid performance mainly in the Affiliate Business.

As a result of the above, net sales were 13,291,005 thousand yen, operating income was 1,462,871 thousand yen, ordinary income was 1,451,325 thousand yen, and quarterly income attributable to owners of parent was 813,933 thousand yen. Consolidated subsidiary GIGAPRIZE and its subsidiaries have changed the date of their fiscal year-end from March 31 to April 30 from the previous first quarter. As the first quarter of the previous fiscal year was a transitional period for changing the date of their fiscal year-end, percentages representing year-on-year change has been omitted.

(Reference 1)

Net sales based on a comparison of the previous first quarter and the current first quarter with the three-month period excluding the impact of the change in the fiscal year-end of GIGAPRIZE and its subsidiaries

				(Thousands of yen)
Segment	(Reference)	FY2025/04 first		Percentage
FY2024/04 first	Change
quarter	increase/decrease
	quarter

5G Infrastructure Support Business	2,427,533	2,547,124	119,591	4.9

5G Lifestyle Support Business	5,868,896	6,213,965	345,068	5.9

Corporate and Creator 5G DX Support	4,668,227	5,161,859	493,631	10.6
Business

Adjusted amount	△656,024	△631,943	24,080	-
Total	12,308,633	13,291,005	982,372	8.0

(N.B.) The figures for the first quarter of the fiscal year ending April 2024 are unaudited reference figures calculated for purposes of comparing net sales.

(Reference 2)

Operating income by comparing the previous first quarter of the three months before the change in the fiscal year-end of GIGAPRIZE and its subsidiaries with the current first quarter of the

					(Thousands of yen)

Segment	(Reference)		FY2025/04 first		Percentage
FY2024/04 first		Change
	quarter	increase/decrease
	quarter

5G Infrastructure Support Business	462,705		325,094	△137,611	△29.7
	- 4 -

5G Lifestyle Support Business	610,537	769,109	158,572	26.0

Corporate and Creator 5G DX Support	198,947	373,414	174,467	87.7
Business

Other	△5,381	△5,438	△56	-
Adjusted amount	△228	690	919	-
Total	1,266,580	1,462,871	196,290	15.5

(N.B.) For the first quarter of the year ending April 30, 2024, these figures are unaudited reference figures calculated for purposes of comparing operating income.

	Net Sales and Segment Income (Loss) by Segment (Thousands of yen)
	Classification	Net sales	Segment income (△)
5G	Infrastructure Support Business	2,547,124	325,094

5G	Lifestyle Support Business	6,213,965	769,109

Corporate and Creator 5G DX Support Business	5,161,859	373,414

Other	-	△5,438
Adjusted amount	△631,943	690
	Total	13,291,005	1,462,871

(2) Overview of Financial Position for the Current Quarter

Total assets at the end of the first quarter of the fiscal year under review were 36,322,468 thousand yen, a decrease of 1,861,121 thousand yen from the end of the previous fiscal year. This was mainly due to a decrease of 1,935,491 thousand yen in cash and deposits.

Liabilities were 20,775,866 thousand yen, a decrease of 2,210,896 thousand yen from the end of the previous fiscal year. This was mainly due to decreases of 258,551 thousand yen in current portion of long-term loans payable, 815,041 thousand yen in income taxes payable, 100,414 thousand yen in provisions, and 899,887 thousand yen in long-term loans payable and 106,531 thousand yen in lease obligations (non-current).

Net assets increased 349,775 thousand yen from the end of the previous fiscal year to 15,546,602 thousand yen due to an increase in retained earnings, etc., and as a result, the equity ratio was 32.8%.

(3) Explanation of Consolidated Earnings Forecasts and Other Forecast Information

There is no change in the full-year forecast for the year ending April 2025 from the figure announced on June 14, 2024, as the results for the first quarter of the fiscal year under review have generally remained in line with forecasts.

- 5 -

2. Quarterly Consolidated Financial Statements and Major Notes

Quarterly Consolidated Balance Sheets

				(Thousands of yen)
		Previous Consolidated Fiscal Year	First quarter of the current fiscal
		As of April 30, 2024	year
		As of July 31, 2024

Assets
Current Assets
Cash and deposits	18,722,373	16,786,882
Negotiable instruments receivable, accounts	8,506,073	8,655,313
receivable, and contract assets

Merchandise and finished goods		83,453	161,853
Work in process	195,266	243,856
Raw materials and supplies	1,982,762	1,949,386
Other	2,381,374	2,217,319
Allowance for doubtful accounts		53,727		54,274
		31,817,576	29,960,336
Total current assets	△		△
Fixed Assets
Property, plant, and equipment	3,037,524	3,035,042
Intangible fixed assets
Goodwill		2,406		1,978
Software	248,223	474,972
Other	334,503	219,858
Total intangible assets	585,132	696,808
Investments and other assets
Increase in loss on valuation of investment	989,025	978,264

securities

Long-term loans receivable	1,496,914	1,498,414
Guarantee deposits	482,037	485,784
Other	1,506,984	1,399,680
Allowance for doubtful accounts	1,731,604	1,731,863
Investments and other assets	△2,743,356	△2,630,280
Total fixed assets	6,366,013	6,362,132
Total assets	38,183,589	36,322,468
Liabilities
Current liabilities
Negotiable instruments payable and accounts	352,019	262,403

payable

Short-term Debt	300,000	400,000
Current portion of long-term debt	4,948,783	4,690,232
Accounts payable-other	5,272,919	5,325,838
Income tax payable	1,131,940	316,899
Allowance	361,624	261,210
Other	1,782,580	1,701,984
Total current liabilities	14,149,868	12,958,567
Long-term liabilities
Long-term Debt	7,629,384	6,729,497
Lease obligations	708,750	602,219
Reserve for retirement benefits for directors		60,527		60,527
Obligations for retirement pay		66,206		68,866
Other	372,025	356,188
Total long-term liabilities	8,836,893	7,817,299
Total liabilities		22,986,762	20,775,866

- 6 -

			(Thousands of yen)
		Previous Consolidated Fiscal Year	First quarter of the current fiscal
		As of April 30, 2024	year
		As of July 31, 2024

Net assets
Shareholders' equity
Common stock	4,514,185	4,514,185
Capital Surplus	1,496,844	1,499,922
Retained earnings	8,693,075	8,967,762
Treasury stock	3,240,129	3,240,129
		△11,463,975	△11,741,740
Total owners' equity
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities	174,924	169,440
Foreign Currency Translation Adjustments	10,015	11,143
		△164,909	△158,296
Total other accumulated comprehensive income
Stock purchase warrants	133,359	145,647
Stock acquisition right	780	780
Non-controlling shareholders' equity	3,433,802	3,500,137
Total net assets	15,196,827	15,546,602
Total liabilities and net assets		38,183,589	36,322,468

- 7 -

Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income (Quarterly Consolidated Income Statement)
(First Quarter Consolidated Cumulative Year)

			(Thousands of yen)
		Previous first quarter consolidated	First quarter of the current fiscal
		cumulative period	year
		(May 1, 2023-July 31, 2023)	(May 1, 2024-July 31, 2024)

Net sales	14,040,063	13,291,005
Cost of goods sold	9,915,733	9,341,751
Gross profit	4,124,329	3,949,253
Selling and general administrative expenses	2,459,641	2,486,381
Operating income	1,664,687	1,462,871
Non-operating income
Interest and dividend income	472	418
Equity in earnings of affiliates	2,078	80
Profit on currency exchange	7,550	-
Gain on sales of investment securities	-	10,552
Penalty income	7,562	6,492
Other	3,067	3,247
Total non-operating income	20,731	20,791
Non-operating expenses
Interest expense	29,741	23,589
Other	31,933	8,747
Total non-operating expenses	61,674	32,337
Ordinary income	1,623,744	1,451,325
Extraordinary losses
Loss on disposal of fixed assets	2,023	-
Total extraordinary loss	2,023	-
Quarterly income before income taxes and minority	1,621,720	1,451,325
interests

Income taxes	385,981	288,284
The Deferred Corporation Tax, etc.	55,287	115,556
Total income taxes	441,269	403,840
Quarterly net income	1,180,451	1,047,484
Quarterly net income attributable to non-controlling	316,959	233,551

interests

Quarterly income attributable to owners of the parent		863,491	813,933

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Company analysis