Summary of Consolidated Financial Results for the Fiscal Year Ended June 30, 2024

(All amounts are rounded off to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2024 (July 1, 2023 – June 30, 2024)

Fiscal year ended June 30, 2023: 336 (-41.1 %)

3. Consolidated Forecast for the Fiscal Year Ending June 30, 2025 (July 1, 2024 – June 30, 2025)

* Notes

1. Significant changes in the scope of consolidation during the period: None
2. Changes in accounting policies and accounting-based estimates, and restatements

(3) Number of shares outstanding (common shares)

Reference: Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended June 30, 2024 (July 1, 2023 – June 30, 2024)

Note: The Company has not disclosed diluted net income per share for the fiscal year ended June 30, 2024, as the Company recorded a net loss

for the year.

(2) Non-consolidated financial position

• The current summary report is not subject to audit by certified public accountants or auditing corporations.
• Cautionary statement with respect to forecasts and other matters

• Earnings forecasts and other forward-looking statements in this report are based on assumptions judged to be valid and information available to the Company at the time of this report’s preparation. Actual performance may differ significantly from these forecasts for a number of reasons. For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, please refer to “1. Operating Results and Financial Position (4) Future Outlook” on page 6 in the accompanying material.
• The Company is scheduled to hold a briefing for analysts and institutional investors on August 16, 2024.

• This financial report is solely a translation of the original Japanese “Kessan Tanshin” document, which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation.

Accompanying Materials – Contents

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1. Operating Results and Financial Position

(1) Summary of Operating Results

COVID-19 was reclassified as Category 5 under the Infectious Diseases Act, and consumption trends in the cosmetics market in Japan recovered as a result of the increased opportunities to travel outside the home. Foreign tourists began returning to Japan, contributing to the recovery in demand.

(Reference) Changes in segment names and segments in which certain services are recorded

istyle Inc. (“istyle,” “we,” or the “Company”) consolidated operating performance for the fiscal year ended June 30, 2024 (“fiscal 2024”) was as follows.

Net sales increased 30.8% year on year, driven by the Marketing Solution segment and Retail segment in Japan. Retail segment sales rose a significant 44.2%. We opened a large @cosmeOSAKA flagship store in September 2023 while existing stores also performed well. In EC, the @cosme BEAUTY DAY and @cosme SPECIAL WEEK events proved to be a success. Sales from the @cosme SHOPPING opened on Amazon.co.jp in November 2023 also made a positive contribution. The Marketing Solution segment saw a 11.9% year-on-year increase.

Operating income increased a significant 137.4%, as higher sales in the Marketing Solution segment and Retail segment profit growth offset increased personnel expenses across the board and expenses incurred from the promotion of @cosme BEAUTY DAY EC events and app download promotions.

As a result, consolidated operating performance for fiscal 2024 was as follows:

As a result, consolidated operating performance for fiscal 2024 was as follows:

4) Others

The Others segment consists of a temporary staffing agency for beauty consultants, BtoC subscription service, and investment and consulting projects for companies in various stages of development, including new startups.

Net sales declined due to a shortage of temporary staff in the temporary staffing agency business.

Operating income increased in the temporary staffing agency business due to the acquisition of highly profitable projects.

As a result, consolidated operating performance for fiscal 2024 was as follows:

(2) Summary of Financial Position

(Assets)

Total assets at the end of the consolidated fiscal year under review amounted to 28,141 million yen, an increase of 3,840 million yen compared with the end of the previous consolidated fiscal year.

Current assets amounted to 16,484 million yen, an increase of 1,254 million yen compared with the end of the previous fiscal year. This result was mainly due to a 961 million yen decrease in cash and deposits, and a 497 million yen increase in notes and accounts receivable – trade and contract assets, and a 1,272 million yen increase in merchandise.

Fixed assets as of June 30, 2024, were 11,656 million yen, an increase of 2,586 million yen from June 30, 2023. This result was mainly due to an increase of 174 million yen in tangible assets as well as an increase of 2,558 million yen in investment securities, mainly due to the acquisition of new shares of Trenders, Inc. during the nine months ended March 31, 2024.

(Liabilities)

Total liabilities at the end of the consolidated fiscal year under review amounted to 15,953 million yen, an increase of 2,343 million yen compared with the end of the previous consolidated fiscal year.

Current liabilities as of June 30, 2024, were 8,237 million yen, an increase of 1,866 million yen from June 30, 2023. This result was mainly due to an increase of 667 million yen in notes and accounts payable trade, an increase of 711 million yen in accounts payable-other and an increase of 203 million yen in the current portion of long-term debt.

Fixed liabilities at the end of the consolidated fiscal year under review amounted to 7,717 million yen, an increase of 477 million yen compared with the end of the previous consolidated fiscal year. This result was mainly due to an increase of 279 million yen in long-term debt.

(Net Assets)

Net assets at the end of the consolidated fiscal year under review amounted to 12,187 million yen, an increase of 1,497 million yen compared with the end of the previous consolidated fiscal year.

This result was mainly due to an increase of 1,214 million yen in retained earnings and 574 million yen in subscription rights to

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shares, despite a 1,148 million yen decrease in capital surplus due to the acquisition of additional shares of consolidated subsidiary Glowdayz, Inc. This result was also due in part to shares issues with the exercise of stock acquisition rights during the nine months ended March 31, 2024, resulting in a 251 million yen increase in common stock and capital surplus, respectively.

(3) Status of Cash Flows

Cash and cash equivalents (“Cash”) at the end of the consolidated fiscal year under review amounted to 5,787 million yen, which was a decrease of 972 million yen compared with the end of the previous consolidated fiscal year.

The status of cash flows by type and primary contributing factors during the current fiscal year are as follows.

(Net cash provided by (used in) operating activities)

In the fiscal year ended June 30, 2024, funds provided by operating activities totaled 3,336 million yen (2,942 million yen provided in the previous fiscal year).

This result was mainly due to the posting of income before income taxes of 1,589 million yen, the posting of depreciation and amortization (non-cash items) of 1,854 million yen, 579 million yen in stock-based compensation expenses, 208 million yen in goodwill amortization, trade payables of 554 million yen, and account payable–other of 267 million yen. These amounts were offset in part by increases in inventories of 1,132 million yen and trade receivables of 396 million yen.

(Net cash provided by (used in) investing activities)

Net cash used in investing activities for the current consolidated fiscal year amounted to 4,569 million yen (1,247 million yen in the year-ago period).

This result mainly reflects purchases of investment securities of 2,673 million yen related to the acquisition of Trenders, Inc. shares, 1,131 million yen in purchases of intangible assets, 641 million yen in purchases of tangible assets, and 136 million yen used in the purchase of shares of subsidiaries resulting in scope of consolidation.

(Net cash provided by (used in) financing activities)

Net cash provided by financing activities for the current consolidated fiscal year amounted to 160 million yen (612 million yen used in the year-ago period).

This result was mainly due to proceeds of 1,200 million yen from long-term borrowings and 498 million yen from the issuance of stock. These amounts were offset in part by outlays of 761 million yen for repayments of long-term borrowings, 478 million yen in the purchase of shares in subsidiaries not resulting in change in scope of consolidation, and 250 million yen repayments of lease obligations.

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(Reference) Cash Flow Indicators

Notes: 1. All figures calculated using consolidated financial figures.

1. Market capitalization calculated by multiplying the closing stock price at the end of the fiscal year by the total number of shares issued and outstanding (excluding treasury stock) at the end of the fiscal year.
2. Cash flows refer to operating cash flows.
3. Interest-bearingdebt refers to all debt posted in the consolidated balance sheets for which interest is paid. Convertible bond- type bonds with share acquisition rights are not included in interest-bearing debt because they are interest-free.
4. As operating cash flow was negative for the fiscal year ended June 30, 2020, the ratio of cash flow to interest-bearing debt
1. is not presented. Additionally, as operating income was negative for the fiscal year ended June 30, 2020, the fiscal year ended June 30, 2021, and the fiscal year ended June 30, 2022, interest coverage ratios (times) are not presented.
1. Future Outlook

We plan to accelerate the opening of new Retail segment (EC, brick-and-mortar, etc.) stores in Japan during the fiscal year ending June 30, 2025, to increase user experiences with our brands and more points of contact with users.

We will seek to increase sales and profits in the Marketing Solution segment by leveraging the sales, promotional capabilities, and data cultivated in the businesses described above. We will also strengthen platform collaborations outside of @cosme (social media, etc.) with Trenders Inc., with whom we have formed a capital and business alliance.

Based on the preceding, we have prepared the following consolidated operating performance forecast for the fiscal year ending June 30, 2025:

owners of the parent company:

2. Basic Rationale Regarding the Selection of Accounting Standards

For the time being, the Company will prepare consolidated financial statements based on Japanese accounting standards from the standpoint of consolidated financial statement comparability between periods and between companies.

The Company will consider the adoption of international accounting standards, considering factors including the ratio of foreign shareholders and trends regarding the adoption of International Financial Reporting Standards (IFRS) by industry peers of the Company.

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3. Consolidated Financial Statements and Relevant Notes

(1) Consolidated Balance Sheets

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