Financial Results for FY2021 Q3

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.

April 11, 2022

(Millions of yen with fractional amounts rounded down, unless otherwise noted)

1. Consolidated financial results for the first nine months of the fiscal year ending May 31, 2022 (from June 1, 2021 to February 28, 2022)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes.)

Comprehensive incomeNine months ended February 28, 2022: ¥(1,095) million[-%]

Nine months ended February 28, 2021: ¥400 million [-%]

The Company implemented a stock split of common shares at a ratio of 4-for-1 on December 1, 2021. Therefore, basic earnings per share and diluted earnings per share are calculated on the assumption that said splitting of shares had been made at the beginning of the previous fiscal year.

(2) Consolidated financial position

2. Cash dividends

Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending May 31, 2022 (from June 1, 2021 to May 31, 2022)

(Percentages indicate year-on-year changes.)

Notes: 1. Revisions to the earnings forecasts most recently announced: None

2. Although the Company is expecting to record a surplus in both ordinary profit and profit attributable to owners of parent, it is difficult to make a precise forecast. Accordingly, the Company will refrain from disclosing a concrete forecast at this point in time.

* Notes

• (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None

• (2) Application of specific accounting for preparing the quarterly consolidated financial statements: None

• (3) Changes in accounting policies, changes in accounting estimates, and restatement

  • a. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes

  • b. Changes in accounting policies due to other reasons: None

  • c. Changes in accounting estimates: None

  • d. Restatement: None

• (4) Number of issued shares (Common shares)

  a. Total number of issued shares at the end of the period (including treasury shares)

b.

c. Average number of outstanding shares during the period

The Company implemented a stock split of common shares at a ratio of 4-for-1 on December 1, 2021. Therefore, total number of issued shares at the end of the period, number of treasury shares at the end of the period, and average number of outstanding shares during the period are calculated on the assumption that said splitting of shares had been made at the beginning of the previous fiscal year.

* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.

* Proper use of earnings forecasts, and other special matters

Forward-looking statements, including the consolidated forecasts stated in these materials, are based on information currently available to the Company and certain assumptions deemed reasonable. Results may differ materially from the consolidated forecasts due to various factors.

Attached Material

Index

1. Qualitative information on quarterly consolidated financial results ......................................................... 2

(1) Explanation of operating results ............................................................................................................ 2

(2) Explanation of financial position ........................................................................................................... 6

(3) Explanation of consolidated earnings forecasts and other forward-looking statements ........................ 6

2. Quarterly consolidated financial statements and significant notes thereto ............................................... 7

(1) Quarterly consolidated balance sheet .................................................................................................... 7

(2) Quarterly consolidated statements of income and comprehensive income ........................................... 9

Quarterly consolidated statement of income ......................................................................................... 9

Quarterly consolidated statement of comprehensive income .............................................................. 10

(3) Notes to the quarterly consolidated financial statements ..................................................................... 11

(Notes on premise of going concern) ................................................................................................... 11

(Notes on significant changes in the amount of shareholders' equity) ................................................ 11

(Changes in accounting policies) ......................................................................................................... 11

(Segment information, etc.) ................................................................................................................. 12

(Significant events after reporting period) ........................................................................................... 13

1. Qualitative information on quarterly consolidated financial results

(1) Explanation of operating results

Under the mission of Turning encounters into innovation and the vision of Become business infrastructure, the Group is developing services to solve various business issues by using new approaches that combine systems that use technology and data input to digitize analog information with cloud software.

Specifically, the Group is developing services to promote digital transformation (DX) for corporate business activities, invoicing work, contract work, etc. Moreover, as a result of recent changes to working styles due to the spread of COVID-19, new ways of thinking toward DX, and greater attention being attracted to the SaaS (Software as a Service) products, the DX market is forecast to reach ¥5,195.7 billion by 2030 (an increase of ¥3,813.6 billion since 2020) (Note 1.), while the SaaS market in Japan is forecast to reach ¥1,117.8 billion by 2024 (an increase of ¥516.2 billion since 2019) (Note 2.). In addition, as the Company's services have grown, the B2B business card management service market has seen 13-fold expansion from 2013 to 2020, and the Sansan, operated by the Company, holds an 83.1% market share in this market (Note 3.).

Consolidated financial results for the first nine months of the fiscal year ending May 31, 2022 (hereinafter, the "period under review") is as follows.

(Millions of yen)Nine months ended February 28, 2021

Nine months ended February 28, 2022

YoY changeNet sales Gross profit Operating profit Ordinary profit

11,753

14,705

+25.1%

10,321

12,973

+25.7%

823

234

(71.5%)

479

750

+56.7%

Profit attributable to owners of parent

413

575

+39.0%In the third quarter ended February 28, 2022, the Group engaged in initiatives to strengthen the sales structure through strategic hiring, in order to realize continuous growth of net sales. In addition, the Group engaged in efforts such as enhancing the functions of Bill One, an online invoice receiving solution, Sansan, a service for sales DX, and Eight, a business card management app.

Moreover, as announced on October 8, 2021, the Company selected and applied for the "Prime Market" in Tokyo Stock Exchange, Inc.'s new market segments. Accordingly, following the simultaneous transition to the new market segments on April 4, 2022, the Company's shares are listed on the Prime Market.

As a result, net sales increased 25.1% year on year, gross profit increased 25.7% year on year, and gross profit margin was 88.2%, up 0.4 points year on year in the period under review. Although operating profit decreased 71.5% year on year, progress was made in the strategy to achieve medium-to long-term growth of net sales, so in addition to the ¥424 million year-on-year increase in advertising expenses, this was attributed to the ¥1,492 million year-on-year increase in personnel expenses mainly due to the boosted hiring of employees and was in line with the consolidated earnings forecast announced at the beginning of the fiscal year. In addition, although ordinary profit increased 56.7% year on year and profit attributable to owners of parent increased 39.0% year on year, this was mainly the result of recording a gain on sale of investment securities in non-operating income in the first quarter of the fiscal year ending May 31, 2022, as announced on July 19, 2021.

Notes: 1. Based on Market Edition and Vendor Strategy Edition of 2022 Outlook of the Digital

Transformation Market by Fuji Chimera Research Institute

• 2. Based on 2020 New Software Business Markets by Fuji Chimera Research Institute

• 3. Based on Latest Trends in Business Card Management Services in Sales Support DX 2022 (December 2021, survey by Seed Planning, in Japanese)

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