Financial Report
2Q of FYE March 2024

2023.11.9

Table of Contents

Ⅰ. Purpose / Business Model

P 03

Ⅱ．Consolidated Financial Results Highlights

P 07

Ⅲ．Segment Performance Highlights

P 12

Ⅳ．Progress of “DG FinTech Shift” Strategy

P 17

Ⅴ．Sustainability Initiatives and Social
Implementation Track Records

P 23

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2

Ⅰ．Purpose / Business Model

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3

Designing ‘New Context’ for a sustainable society
with technology

Three Core Technologies

Integrating three different technologies with context,
DG Group has established a structure to capture
technological evolution and bring about continuous
business growth.

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5Grand Design of Payment Platform and Next-Generation Businesses
Ⅰ

Linear Development of Payment Platform

Ⅱ

Development of Non-linear Businesses

Ⅱ

Development of
Non-linear Businesses▶Continue “DG FinTech Shift” strategy centered on payment platform and strengthen recurring revenue stream.
▶ Social implementation of next-generation technologies/Development non-linear businesses through Blockchain, Gen AI, etc.

Blockchain / Gen AI

Creation of non-linear global
businesses integrated with payment
with cutting-edge technologies

EC sitedevelopment

MarketingDX
Business

Payment Platform
Investment Incubation

FintechBusiness

Ⅰ

Linear Development ofPayment Platform

Expanding strategic businesses with synergy effect,
centered in the Fintech area, bringing competitiveedge and the growth to the payments business

Payment Platform
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6

Ⅱ. Consolidated Financial Results Highlights

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2Q of FYE March 2024 Financial Results Highlights (Cumulative)
Financial Performance Summary for 2Q• Consolidated profit before tax for 2Q cumulative period of FY24.3 was 8.3B JPY (+14.9B JPY YoY)
• Profit increased significantly due to favorable performance of the current business as well as the reboundfrom the fair value evaluation loss of the investees recorded in 2Q of FY23.3.
• Profit of PS segment and cash generation of GII segment are progressing smoothly toward achieving the
Medium-term Plan.
▶ PS: Driven by the payment business, profit before tax increased by 17.3％ YoY, progressing smoothly toward achieving FY24.3.target.
▶ LTI: “Tabelog” business showed growth surpassing pre-COVID levels, while continued to investment in the internal incubation business.
▶ GII: Cash inflow of 2.5B JPY was generated by steady sales of holding shares and cash distribution from funds.

Main Business Topics✓ System Integrator Corp. has become a subsidiary through a joint investment in the e-commerce site
development business.

▶ Expand the business scope into the EC, which serves as the gateway to the payment business aiming to update to next-generation technologies.

✓ Start to offer the “next-generation payment API” that provides the most payment methods available in the
shortest development period.
▶ By the end of December 2023, more than 30 payment methods will be compatible with the “OpenAPI,” including credit card payment.

✓ Payment service for medical institutions has been jointly developed with Resona Group, DG’s alliance partner.
▶ Accelerating development of next-generation Fintech business based on capital and business alliance.

✓ Komainu Holdings Limited, custody service company for crypto asset invested from Nomura Group, andCrypto Garage formed a capital and business alliance.
▶ Co-business, aiming for the development of crypto asset related services for institutional investors in Japan has been launched.

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8Consolidated Financial Results Highlights – Profit by Segment
・PS, the core business base of the Group, grew steadily driven by the payment business toward achieving FY24.3 growth target of 15% or more.
・LTI continues early-stage investments into new businesses, aiming for medium to long-term growth of the Group.
・GII steadily progressed cash generation and the profit significantly increased due to a rebound from the fair value evaluation loss, recorded in 2Q of FY23.3.

Unit：M JPY

Consolidated
profit before tax

PS

LTI

GII
Others/Adjustments andEliminations

FY23.3 2Q
cumulative-6,642

2,811

988

FY24.3 2Q
cumulative

8,266

3,298

829

YoY

Increase/Decrease+14,908(-%)+486(+17.3%)-159(-16.1%)

-877

5,502

+6,379(-%)-9,564-1,362+8,202(-%)

Overview• Consolidated financial result showed a substantial increase in profit due
to a rebound from the investee’s fair value evaluation loss, recorded in 2Q of
FY23.3.
• Profit before tax of PS and cash generation of GII progressed steadily.
• Profit grew steadily by 17.3%, aiming to achieve FY24.3 growth target of
15% of more.
• Transaction volume increased steadily, accelerating collaboration withmarketing business such as establishment of a new department with the aimof building cross-organizational structure.
• Early-stage investment into new businesses continues, aiming to generate
middle and long-term profit.
• Business development in B2B payment and real-estate areas has been
progressing steadily.
• Cash inflow of 2.5B JPY was generated from the sales of holding shares andcash distribution from funds.
• Profit increased due a rebound from investee’s fair value evaluation loss,
recorded in 2Q of FY23.3.
• Fair value evaluation loss of holding shares by HQ in the Company wasrecorded in 2Q of FY23.3.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

9Highlight - KPIs
・The payment transaction volume grew steadily in both “online payment” driven by travel related businesses and “offline
payment” with successful alliance strategy.
・Cash inflow of 2.5B JPY was generated from the sales of holding shares and cash distribution from funds.

KPIs

Unit

FY23.3 2Q
cumulative

FY24.3 2Q
cumulative

YoY

YoY
% Change

Transaction volume

100M JPY

24,792

29,672+4,880+19.7%

Online Payment

100M JPY

18,767

21,300+2,533+13.5%

Offline Payment

100M JPY

6,025

8,371

+2,347+38.9%

Operational Investment
Securities

M JPY

79,76973,924-5,845-Investment Business
Income *1

M JPY

642

2,509

+1,867-

New Investment *2

M JPY

1,607

736

-871

-

KPIs for Investment-related*1 Investment Business Income: Total of profit from the sales of holding shares and profit distribution from funds.
*2 New investment: New Investments in operational investment securities, excluding business related expenditures.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

10Performance Trend (excluding one-off gains/losses and investment businesses)
・“Performance in core businesses” remained steadily excluding one-off gains/losses and investment businesses.
・PS maintains stable growth, while focusing on creating new business in the LTI segment with the goal of accelerating
growth in the medium term.

Revenue (excluding one-off gains/losses, and investment)
全社/調整額Others/adjustments and eliminations(Unit: M JPY)

(Unit: M JPY)

YoY

YoY

LTI
PS

13,564
1,976

14,5202,407

Profit before Tax (excluding one-off gains/losses and investment)

15,319

+5.5%

2,581

+7.3%

2,239

2,146
11,428

FY22.3 2Q累Cum.

11,358

FY23.3 2Q累Cum.

11,966+5.4%

FY24.3 2Q累
Cum.

+4.3%

1,478

FY22.3 2Q累Cum.

FY23.3 2Q累Cum.

FY24.3 2Q累Cum.

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11

Ⅲ. Segment Performance Highlights

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12Performance by Segment – Platform Solution
・As for the payment business, profit before tax for 2Q cumulative period increased by 23.3% due to a steady increase in thepayment transactions of both online and offline.
・Marketing business is driving strategic structural changes to strengthen and integrate with the payment business.

Segment Revenue

Segment Profit(Unit: M JPY)

マーケティング
Marketing

YoY

決済
Payment

11,428

11,358

11,966

+5.4%

6,687

4,742

FY22.3 2Q累
Cum.

6,215

5,143

FY23.3 2Q累
Cum.

-3.2%

5,948

+15.7%

FY24.3 2Q累
Cum.

YoY

決済
Payment

2,662
6,019

(Unit: M JPY)

マーケティング
Marketing

541

2,121

FY22.3 2Q累
Cum.

2,811

3,298

+17.3%

430-11.5%

2,867+23.3%

486

2,325

FY23.3 2Q累Cum.

FY24.3 2Q累Cum.

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13Performance by Segment – Payment Transaction Volume
・Online area: Ensured stable growth due to diversified customer portfolio allowing mitigation of impact from COVID-19.
・Offline area: Grew significantly due to increased number of merchants driven by successful alliance strategy.
YoY(Unit: 100M JPY)
15,023+20.9%

4,399+40.9%

10,550 10,390 10,677 10,624+14.2%

14,135
12,133
10,545
9,768

6,278

Offline 485

6,660
534

Online 5,793

6,126

1Q

2Q

7,281

8,124

8,333

692

1,091

8,962

1,794

1,476

1,688

10,482
1,960

10,1482,746

12,368 12,424
11,585
2,549

2,902

3,584

14,648
13,848

3,457

3,972

3,123

2,219

586

6,695

3Q

FY20.3

7,432

7,242

7,486

4Q

1Q

2Q

8,752

3Q

FY21.3

8,080

8,522

4Q

1Q

7,929

2Q

9,387

3Q

FY22.3

9,036

9,466

9,301

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

14Performance by Segment – Long-term Incubation
・Early-stage investment into new businesses continues, aiming for medium to long-term growth of the Group.
・“Tabelog” and “Kyujin-box” of Kakaku.com, Inc. have been moving smoothly.

Segment Revenue(Unit: M JPY)

一過性収益
One-off revenue
持分法利益Profit from equity method
事業収益
Business revenue

Segment Profit

2,462

YoY
2,621

+6.5%

1,161

815
FY22.3 2Q累
Cum.

783
FY23.3 2Q累
Cum.

YoY

持分法利益
Profit from equity method
事業損益
Business gain/loss
セグメント利益
Segment profit

2,107

1,624

(Unit: M JPY)

一過性損益
One-off gains/losses

1,602

980

-1.4%

+25.2%

922

FY22.3 2Q Cum.

988

FY23.3 2Q Cum.

-692

829

-16.1%

FY24.3 2Q Cum.

-878

FY24.3 2Q累Cum.
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15Performance by Segment – Global Investment Incubation
・Cash inflow of 2.5B JPY was generated from the sales of holding shares and cash distribution from funds, progressing
toward achieving Medium-term Plan.
・The balance on operational investment securities increased by 6.2B JPY compared to the end of FY23.3 due to the fair value
increase by JPY depreciation.

Operational Investment Securities Details of Increase/Decrease
Fair Value(Unit: M JPY)

(impact of foreignexchange)+6,000New
Investment *+736

67,676▲1,375+503

73,924

Fair Value(excluding foreignexchange)▲341

Business
Synergy
Investment

At the end of Mar. 2023

Decrease in bookvalue due to thesales of shares

OthersProceeds fromthe sales

1,424 M JPY

Cash distribution
from funds

1,098 M JPY

Investment
business income

2,522 M JPY* New investments in operational investment securities, excluding business related expenditures.

At the end of Sep. 2023
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16

Ⅳ．Progress of “DG FinTech Shift” Strategy

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17Overview of DG Financial Technology, Inc.
・A wholly-owned subsidiary of DG, managing the DG group’s core payment business・Provide payment solution for various needs of clients, covering both online and offline merchants
Company Profile
CompanyName

DG Financial Technology, Inc.

Head Office

Shibuya-ku, Tokyo

Capital1.06845 B JPY

Business
Areas

Payment Information Processing Service
Agency Payment Service
Money Transfer Service

Registered
Businesses

Electronic Payment Services（Director of the Kanto
Finance Bureau No.25）
Funds Transfer Service Provider（Director of the
Kanto Finance Bureau No00094）
Business Operator for handling Credit Card
Numbers, etc.

Certification

PCIDSS Version3.2.1
ISO/IEC27001
Privacy MarkParticipating
Organizations

PCI Security Standards Council, LLC
Japan Credit Association
Japan Collection Agencies Association
Japan Multi-payment Network Promotion
Association
Japan Payment Service Association
EC Payment Forum

Overview of DGFT’s Payment Business (Business Performance ’22/10－’23/9)
Payment Transaction Volume (JPY)

Yearly Total

5.8T

Offline1.5T

Online

4.2T

Number of Merchants（as of Sep 2023)

FYE Sep. ‘23

1,021K

Non-Face-to-Fac

Offline904K

Online117K

Number of Payment Transactions

Yearly Total

Offline1,079M

Online615M

463M

Status of Systems（FYE Sep 2023）

System Uptime

99.99%# of available
Payment methods# of partnered
Financial Institutions

over

over

40

1,000

Major Subsidiaries and Affiliates

Marketing tools
for e-commerce

Fraud detection India-based
solutions fortech support
Payment& engineering
service

Multi-payment
and mileage
programproviderMulti-payment
solution for
POS

BNLP payment
solutionsShareholder

Shareholder

Toshiba Tec: 51%
DGFT: 49%

Nissen: 51%
DGFT: 49%

Shareholder

Shareholder

Shareholder

Shareholder

DGFT: 100%

DGFT: 100%

DGFT: 100%

ANA: 51%
DGFT: 49%NEW

New Company

Establishment of comprehensive structure for marketing, e-commerce site
development, and payment
Shareholders

DGFT: 60% / System Integrator Corp.: 40%

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18

“DG Fintech Shift” Strategy – Progress and Highlights in 2Q
Ⅰ
Initiatives with
Strategic business
Partners

Ⅱ

Enhancement of
Business
FoundationⅢ

Next-generation
Technologies

Resona Group

Joint development of the payment service specialized in the medical
field, accelerating DX and cashless payments in medical institutions.

Credit Card
Companies

Steady expansion in B2B payment transaction volume through theinitiatives with business partners.

Expansion to
EC AreaEstablishment of an EC site business “DG Commerce”, a subsidiary company
jointly invested by System Integrator Corp. which is an EC site development
company using cutting-edge technology. (Disclosed on Nov. 9)

Smart
Implementation

Started to offer【Next-generation Payment API】 to enable the wide
variety of payment methods in the shortest development time.

Cross-organizational
Structure

Establishment of cross-organizational structure for accelerating
business development of PS segment.

Crypto AssetManagement
Service

Komainu Holdings Limited, a custody service company for crypt asset invested
by Nomura Group, and Crypto Garage formed a capital and business alliance,
and Komainu and Crypto Garage have been collaborating in the expansion ofdomestic business.

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19

I. Initiatives with Strategic Partners / Progress of New Businesses
Accelerated the alliance strategy through collaboration with the capital and business partners.
Aim to expand the Industry-DX and new Fintech business by leveraging the partners’ assets.

DX in the Medical Industry：Resona GroupB2B Payment：Major Card Companies

Jointly developed the first payment service specialized in the
medical industry in Japan with Bank Group.

Steady expansion in B2B invoice card payment through theinitiatives with business partners.

 Specialized in the medical industry where cashless payment is significantly
behind Substantial reduction of patients’ waiting time at hospitals
 Reduced workload of healthcare professionals by connection with medical
fee payment system

Transaction Volume has been increasing monthly byaccelerating the initiatives with the alliance partners that holdmain international brands and strong customer bases.

CAGR

2.4%

Market Size

45T JPY

Monthly Transaction
Volume in B2B payment

Penetration Rate of Cashless
Payment in Medical Institutions

National Medical Care Expenditure

24.1%

Alliance Partners

CMGR
50% and more(2018)△16.8pt
7.3%(2018)

12 13 14 15 16 17 18 19 20 21
Source of Data：”Overview of National Medical Care Expenditure
in 2021” by the Ministry of Health, Labor and Welfare

Average

Medical Institutions

Source of Data: “Businesses engaged in optimization of
the commerce and service environment in 2020” by METI

11 12
2022

1

2

3

4

5

6

7

8

9

2023
Copyright © 2023 Digital Garage, Inc. All Rights Reserved20II. Enhancement of Business Foundation / Strategic EC Business Company
Made the e-commerce development business of System Integrator Corp.*1 a subsidiary through the joint investment
Expanding to the e-commerce business: a gateway to the payment business, and updating to next-generation technology
Applying
Next-generation Technology

New Company

MarketingBusiness Support
DigitalMarketing

Conversion

e-commerce site
development
EC sitedevelopment

EC siteoperation

Payment Solution
Fraud
detection

Payment

Aiming at multi-layering revenue, recurring business and growth of transaction volume across the Group

Expansion of Business Area

Establishment of
Cross-organizational Structure

Establishment of “DG Commerce,”a new company for e-commerce site
development.

Support business by crossorganizational structure of PS segment.

 Provide comprehensive data analysis andconsulting service ranging from marketing
to payment.

 Provide comprehensive and consistentconsulting service, ranging from marketing,e-commerce site development, andpayment.

Started to offer Nextgeneration payment API
 【OpenAPI】 is available as animplement system of the payment
service on e-commerce site.
 The wide variety of the payment
methods are available in the shortest
development time.
The term required for development of
implementation of payment services in
e-commerce sites will be reduced by

1/10 - 1/15

*2

Payment methods to be
implemented will be

30+ methods*3*1 System Integrator Corp.: A pioneer of e-commerce system business, implementing about 1,100 e-commerce site development packages in the accumulated total.
*2 Compared with the Company’s conventional cases *3 will be supported by the end of Dec 2023
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

21III. Next-Generation Technology / Crypto assets related business
Formed a capital and business alliance with “Komainu,” a Nomura Group custody service company for digital asset
Custody service for crypto and digital assets such as Bitcoin will be offered to companies and institutional investors in Japan,
utilizing the customer bases held by Nomura Group.

Overview of Capital and Business Alliance Investment in Komainu by Digital Garage
 Basic agreement to promote the alliance between Crypto
Garage and Komainu

Subsidiary

Participatedin investment
in Oct. 2021

Participationin Investment

Investment

Contents of Capital and Business Alliance
1. Started to offer Komainu’s custody services for crypto
and digital assets to companies and institutional
investors.
2. Domestic business expansion of the custody service forcrypto and digital assets based on the expertise andauthorized license held by both companies.

Subsidiary

Digital Asset Custody Market in the World
Market Size (Unit: B US$)

Investment

Business
Alliance
Strategic subsidiary of DG Groupin digital asset area

3.57x

CAGR: 23.6% 1,601*

Rapid market growth is expected inaccordance with the increase of digitalassets held by institutional investors.
The market size will grow from 447B US$ in
2022 to 1.6T US$ in 2030. (Source of data:

Capital and business alliance to be announced on November 1

447*Komainu Holdings Limited: Digital asset custody company invested by Nomura
Group, operating its business mainly in Europe and the Middle East.

2022

Proficient Market Insights)

2028

CAGR for 2022-2028 : 23.6%
Source of Data：Proficient Market Insights
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22

Ⅴ. Sustainability Initiatives and Social Implementation
Track Records

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23

Sustainability Initiatives ①
Envisioning the sustainable society through ESG related
startup investment and the portfolio ESG value-adding
ESG investing with Open Network Lab,the first Japanese Seed Accelerator
Open Network Lab, which is established in 2010, hasbeen collaborating with the Earthshot Fund andpromoting ESG investment.
 Supported over 140 companies to date
 Provides the portfolio companies the global standard ESG valueadding programs
 Investment results in numerous ESG-related startups, including
Pirika, the winner of Minister of the Environment Award

New Sustainability-related portfolio

Promoting initiatives for carbon offset andhosting a carbon-neutral event

Hosted Open Network Lab 27th DemoDay
as the DG’s first carbon-neutral event.
 Offset the carbon emission in collaboration with the portfolio startups.

Initiatives to reduce CO2 emissions

Initiatives for Offset

Electricity saving

DG used the service of our portfolio
startup, Linkhola Inc., to visualize
and reduce the CO2 emissions
generated in commuting and offset
0.5 ton of assumed CO2 emission of
the event.

Waste reduction
Utilization of sustainableproducts

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

24Sustainability Initiatives ②
Identification of Materiality (Key Issues)
Initiated the process for identification of materiality to accelerate
sustainability management of the DG Group
Identification Process of Materiality
STEP1
STEP2

Understanding the current situation
Listing-up potential materiality items
Impact assessment by the Company

Action Plans
Guidelines

Laws/Regulations

・GRI Standards
・SASB Standards
・SDGs ・ISO26000

・Corporate
Governance Code・Securities Report

Assessments
・CDP
・S&P Global CSA

Impact/Risk assessment of our business

Understanding stakeholders’ interest and expectations

STEP3

Assessment by stakeholders

STEP4

Priority assessment by the Company

STEP5

Finalizing the Materiality▶ STEP1 Understanding the current situation

Sustainability data is disclosed on the following web site.
https://www.garage.co.jp/en/sustainability/

Alignment withManagement Plan

Sustainability Management Structure
President, Executive Officer
Management
Committee

Consult
ReportSustainability Committee
Sustainability Management Office

Management
OfficeCopyright © 2022 Digital Garage, Inc. All Rights Reserved25Track Records of the Contextual Design and Social Implementation
Since its establishment in 1995, DG has been developing the latest Internet business deploying cuttingedge technologies based on marketing and payment. From here, DG will focus on Gen AI / web3, etc.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved26

Reference Materials

ご参考資料
Reference Materials①: Supplementary Data

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

28

Segment Classification after FYE March 2024
・Consolidated business segments to further accelerate its business strategy, integrating payments and data as well as marketing.
・Consolidated new businesses and next-generation media business, aiming for vertical launch by leveraging DG Group’s businessassets as strategic businesses for enhancement of its corporate value in five years.

New Segments

Until Last Fiscal Year

Financial Technology

Platform Solution
(PS)

•
•

Integration of payment and marketing businesses
Thoroughly strengthening cross-selling andestablishing recurring revenue model•

Incubation and new strategic businesses
leveraging the Group synergy with Kakaku.com
Developing commerce and Fintech productservices that contribute to multi-layering andrecurring revenues, mainly in Japan

Marketing Technology

Long-term Incubation

Headquarters Costs
New Business

Incubation Technology

Long-term
Incubation(LTI)

Global Investment
Incubation
(GII)

•

•
•

Global startup investments
Have a reach to the technology and services by
the alliance with startups having an
overwhelming speed

Copyright © 2023 Digital Garage, Inc. All Rights Reserved29Quarterly Performance Trend (excluding one-off gains/losses and investment businesses)
・“Performance in recurring businesses” remained steadily excluding one-off gains/losses and investment businesses.
・PS maintains continuous and stable growth, while focusing on creating new business in the LTI segment with the goalof accelerating growth in the medium-term.

Revenue (excluding one-off gains/losses, and investment)(Unit: M JPY)

全社/調整額Others/adjustments and eliminations

6,696
941

6,868
1,035

7,651 7,668
7,449 7,615 7,319
7,446
7,307
7,201
1,412

1,166

1,478 1,054
1,264 1,143

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3

YoY

1,300

+6.5%

+20.5%
1,204 1,377

6,197
6,092 6,292 5,947 6,020
5,695 5,733 5,885
5,595 5,763

1Q(Unit: M JPY)

YoY

LTI
PS

Profit before Tax (excluding one-off gains/losses and investment)

1,199

1,186

1,055

1,039

1,155
1,008

947

1,084 +14.5%

439

+4.5%

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved30Platform
Solution

Performance by Segment (Quarterly) – Platform Solution

・Profit before tax in payment business increased by 15.9% in 2Q, growing steadily in both online and offline payments.
・Marketing business is driving efforts to strengthen and integrate with the payment business.

Segment Revenue

Segment Profit(Unit: M JPY)

マーケティング
Marketing

YoY

決済
Payment
5,695 5,733

5,885

6,197
5,595

5,763

6,092

6,292

5,947 6,020

3,298 3,673

3,113

3,103

-2.0%

YoY
1,796 +12.4%

+4.5%

1,597
1,334 1,328

3,403 3,283

1,949

決済
Payment

1,450

3,186 3,522 2,977 3,041(Unit: M JPY)

マーケティング
Marketing

292

219

249

1,042 1,079

1,361

341

1,644
1,502
512

1,214
330

1,231

509

339

-0.4%

91

146

1,031 1,068

1,257

1,411 1,456 +15.9%

1,440
1,132

2,906 2,769 2,969 2,979 +12.0%
2,587 2,524 2,483 2,660
2,292 2,450

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

31Platform
Solution

Payment Transaction Volume – Trends for Online and Offline Payments

・Online area: Kept stable growth due to diversified customer portfolio with less impact from COVID-19
・Offline area: Grew significantly due to increased number of merchants driven by successful alliance strategy
YoY(Unit: 100 M JPY)
14,135
12,133

GRP

10,545
0.30%

9,768

0.30%
0.27%

6,278

Offline 485

6,660
534

Online 5,793

6,126

1Q

2Q

7,281

8,124

8,333

692

1,091

8,962
1,476

0.22%

586

6,695

3Q

FY20.3

1,794

7,432

7,242

7,486

4Q

1Q

2Q

8,752

3Q

FY21.3

1,688
0.22%

10,482
1,960

10,1482,746

12,368 12,424
11,585
2,549

2,902

15,023+20.9%

3,972

4,399

+40.9%

0.20%

0.20%

14,648
13,848

3,584

3,457

0.21%

0.20%

3,123

2,219
0.24%

0.22%

8,080

8,522

4Q

1Q

0.21%

7,929

2Q

9,387

3Q

FY22.3

0.22%

0.20%

0.21%

9,036

9,466

9,301

4Q

1Q

2Q

10,550 10,390 10,677 10,624

3Q

FY23.3

4Q

1Q+14.2%

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

32Platform
Solution

Payment Transaction Volume – Trends for Merchandise and Services

・Service area: Grew significantly from FY23.3 despite a temporary stagnation in travel industry due to COVID-19
・Merchandise area: Continued to acquire merchants successfully, especially general retail (supermarkets and department
stores, etc.) by alliance strategy
YoY(Unit: 100 M JPY)
14,135
12,133
10,545
9,768
8,124
6,278

6,660

8,333

10,482

14,64815,023

13,848+20.9%+25.8%

12,368 12,424
11,585

10,148+15.2%

8,962

7,281

OthersMerchandise+25.0%

Services
1Q

2Q

3Q

FY20.3

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

33Platform
Solution

Payment Transaction Volume: Increase / Decrease by Sector

・Transactions in travel and food services recovered due to containment of COVID-19.
・The number of new merchants increased due to successful alliance strategy, including with Toshiba Tec.

Payment Transaction Volume: Increase/Decrease by Sector(Unit: 100M JPY)※% compared to FY23.3

Telecommunication

Eating Out

General Retail +53.4%

Public Fund+36.1%+13.1%

Food+33.8%

Others

29,672+31.2%

Travel+60.4%

24,792Cum.

Cum.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

34

Platform
Solution

Payment Transaction Volume – in online and offline payments by Industry

・Online area: Transaction volume increased in wide range of industries, centered on travel industry, in which the Company has strength
・Offline area: Transaction volume mainly in general details increased as well as food and facility use-related due to containment of COVID-19

Online Payment(Unit: 100M JPY)

その他
Others21,300

エンタメ・ホビー
Entertainment, Hobby
Home appliances,
家電・家具インテリア
Furniture, Interior

施設・チケット予約
Facilities, Ticket booking

Offline Payment
YoY+13.5%(Unit: 100M JPY)

その他
OthersYoY

施設・チケット予約
Facilities,
Ticket booking

8,371

外食 OutEating

18,767+38.9%

車関連
Automobile-related

公金
Public Fund

旅行系
Travel-related

情報通信・ASP
Telecommunication, ASP

総合小売
Generalretail

6,025+106.7%+2.0%

旅行系
Travel related+60.5%+36.1%+33.1%+13.1%+60.4%
FY23.3 2Q累Cum.

FY24.3 2Q累Cum.

FY23.3 2Q累Cum.

FY24.3 2Q累Cum.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

35Platform
Solution

Payments related to Inbound Tourism

・Though the number of foreign visitors is on recovery, Chinese visitors with high consumption remains around 50%
of pre-COVID level.
・High potential for recovery is expected in Alipay/WeChat Pay services that the Group is dealing with.

The Number of Visitor Arrivals to Japan (by area)
Source of data：JNTO

Transaction Amount in Offline Payment(Unit: 100M JPY)

その他
Other countries
欧州
Europe北米
North America
Other Asian countries
その他アジアChina,
中国・香港
Hong Kong

QR Code payment by Inbound Visitors
インバウンド関連QRコード決済

246

Other offline payments
その他対面決済

126
43

17

31

48

35

22

15
21
17

23
24

13

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9
2017

2018

2019

2020

2021

2022

2023

306 287

292

1Q

3Q

2Q

FY20.3

159

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

36Platform
Solution

Capital Expenditures and Depreciation related to Payment Business・Continue to invest in payment systems to ensure stable 24/7 operations and enhance robustness of security.
・It is expected that fixed costs may show gradual increase due to redundancy of system operations and marginal profit ratio
remains at a current level.

Payment-related Expenditures・Depreciation(Unit: M JPY)

設備投資額
Capital expenditures
減価償却費
Depreciation

Payment-related Costs・Marginal Profit Ratio(Unit: M JPY)

限界利益率
Marginal profit ratio

一過性費用
One-off cost
変動費
Variable cost
固定費
Fixed cost

264

275

293

297

302

293

302

302

88.0%
288

288

1Q

321

2Q

89.1%

85.0%

88.1% 88.7% 88.2% 87.2%
85.9% 87.3%

142

275

398
331

85.5%

349

344

3Q

FY22.3

297

294

282

4Q

1Q

2Q

3Q

FY23.3

4Q

355

281

378

297

301

344

356

419

377

336
254

1Q

2Q

FY24.3974

1,115 1,118 1,103 1,122 1,139 1,139 1,145
1,017 1,075

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

37Platform
Solution

Profit in Marketing Business・Transaction Volume in Digital Advertising

・Digital Advertising, the main stay of the Company’s business, continues to transit steadily despite quarterly fluctuation inboth profit and transaction volume of the advertisement.
・Transaction volume of digital advertisement in the financial area in 2Q decreased due to clients’ budgetary austerity.

Profit in Marketing BusinessTransaction Volume in Digital Advertising(Unit: M JPY)

不動産広告
Real estate

YoY

EC支援/CRM
EC support/ CRM
デジタルアドDigital advertising
3,403

993

3,673

3,283 3,298

1,025 1,154

3,113 3,103 3,186

1,326
916

966

1,202

2,977 3,041

-2.0%

1,009

+4.5%

+2.9%

1,153
921

962

1,124 1,034 1,088 1,064 1,200 1,063 1,120

1Q

3Q

4Q

FY22.3Financial area
金融領域

3,522

1,105 1,101

2Q

金融領域以外
Non-financial area

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.31Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY16.6

FY17.3

FY18.3

FY20.3

FY20.3

FY21.3

FY22.3

FY23.3

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved38

Long-term
Incubation

Performance by Segment (Quarterly) – Long-term Incubation

・Early-stage investment into new businesses continues, aiming for medium to long-term growth.
・“Tabelog” and “Kyujin-box” of Kakaku.com grow steadily.
Segment Revenue

Segment Profit(Unit: M JPY)

4,168

一過性収益
One-off revenue

revenue

1,422

1,389 +19.4%

1,324 1,299
1,072

558

383

1Q

1,233

1,163

1,040
801

603

841

868

2Q

429

3Q

FY22.3

365
4Q

423

1Q

2Q

434

423

380

449

+3.4%

733

783

360

553

+10.9%

661
1Q
-190

433

YoY

717
499

1,056

1,035
984

3,263

YoY

持分法利益
Profit from equity method
Business
事業収益(Unit: M JPY)

438

394

471

509

+41.3%

2Q
3Q-179
FY22.3-276

一過性損益
One-off gains/losses
Profit from equity
持分法利益

4Q

1Q

-301

-323

-584

2Q

3Q

FY23.3
-369
-467

4Q

1Q

2Q

FY24.3
-438
-503

-447

-431

method3Q

FY23.34Q

1Q

2Q

FY24.3

事業損益
Business gain/loss
セグメント利益
Segment Profit
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

39Trends in Operational Investment Securities / by Currency and Area

Global Investment
Incubation

・Fair value of operational investment securities denominated in foreign currency increased due to JPY depreciation.
・Fair value of operational investment securities at the end of September 2023 was 73.9 B JPY. (+6.2B JPY comparedto the end of FY23.3.)

Balance of Operational Investment Securities

印ルピー
INR

722
667

米ドル
USD

363

798

780

日本円
JPY

406

(Unit: 100M JPY)

866

その他
OthersInvestees by Area (%)

726 739677

Europe0.1%

Others

14.8%

615

438

472

508

North America

Japan

45.3%

17.4%

Asia

22.3%
1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.34Q

1Q

2Q

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

40

Global Investment
Incubation

Trends in Top 5 Companies by Balances in Investment

・Have diversified portfolio of 200 or more startups mainly in seed and early stages besides LP・Investment balance is expected to gradually decrease in five years due to cash generation by investment exit and strategic
selection of new investees.

Shares of Top 5 Portfolio Companies
86,565
77,950(Unit: M JPY)

79,76972,19367,676

72,59473,924Top 5
companies

Others

56.0 %

56.0 %

65.1 %

65.1 %

63.9 %

63.5 %

63.1 %

22.3

22.6

22.9

22.12

23.3

23.6

23.9

FY22.3

FY23.3

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

41

ご参考資料
Reference Materials②: Business Model

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

42

The Structure of Transactions by Credit Card
Contract
Brand membership contract

International brands

Money
お金

Brand membership contract

VISA/MASTER/AMEX/DINERS/JCB
Pay feePay fee
Payment

IssuerIssue credit cards

Pay on behalf（fee cost deducted）

Representative
contract

Payment Service
ProviderPay on behalf（fee deducted）
Purchase goods & services

Payment
agencycontract

Merchant contract（ Direct contract）

ConsumerAcquire and manage merchants（ fee deducted）
Payment

Credit card payment

Credit card contract

Credit card member

Acquirer

Pay feeMerchant
E-commerce & In-store businesses

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

43Commercial Distribution of Payment Service Provider
A service that acts as an intermediary between e-commerce site operators and offline merchants and payment service providers
such as credit card companies and convenience stores, enabling the introduction of a number of payment methods, including
credit card payments, through a single contract and system.
Electronic message
Money

Consumer

Payment service
providerMerchant

Payment
networks
Credit Card Companies① Order

EC website② Settlement
information③ Settlement
information

Bank Payment
Convenience Stores Payment
E-money Payment⑦ Offer goods⑤ Notify result④ Notify result

Real storesTelecom Carriers Payment
ID Payment⑨ Pay theamount lessthe settlement
agent's fees

⑧ Pay sales
proceeds
less fees

International Payment
QR Code Payment
BNPL (Buy Now Pay Later)⑥ Payment

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

44

Contract Type of Payment Service Provider
Storage agency type （Representative
contract）(Representative contract)
Acting as an all-in-one agent for contracting
procedures with various payment settlement
institutions and payment of sales amounts

Merchant
contract• Single point of contact for payment• Streamline operations such as payment management andconfirmation

Payment dataprocessing

Payment dataprocessing

Monthly fee
Pay sales
proceeds lessfees

Pay the amountless thesettlement
agent's fees

Payment
institutions• Monthly sales proceeds are deposited to the merchant in a lump-sum
payment from our company

Merchant• We handle all contracting procedures with payment providers such as
credit card companies and financial institutions

Payment
service provider

type (Direct contract)
Payment data processing type（Directcontract）• Merchants sign contracts directly with credit card companies• Provide the necessary software and transaction management tools• Also provide support for software installation

Electronic
message
Money

Payment dataprocessing

Payment
service provider

Payment dataprocessing

Monthly fee,
Processing fee
Merchant contract
Pay sales proceeds less fees

Payment institutions• Provide payment systems and automate card payment processing

Data processing
contract

Merchant

Based on the merchant agreements with credit cardcompanies signed by the merchants, credit card
payment processing is automated through theintroduction of a payment system provided by PSP

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

45Market Size of Payments for B2C Consumers
Cashless payment markets are expected to grow significantly in both online and offline.
Private final consumption
expenditure
304

291

294

(Unit: T JPY)

309

Target by Japanese
Government
Cashless rate
～80％

Room for cashless payment(Cash payment, etc.)

86

96

106

116

Offline cashless payment
market65

73

EC payment market

21

23

25

27

29

30

’18
18年

’20
20年

’21
21年

’22
22年

’23 (Forecast)
23年(予想)’24 (Forecast)
24年(予想)’25 (Forecast)
25年(予想)

’19
19年

after
’26
26年以降

Calculated by the Company with referent to the following materials as source of data.
“National Accounts 2022” by Cabinet Office/ “Status of Domestic Cashless Payment Markets and Forecast” by Yano Research Institute Ltd./ “Cashless Roadmap 2023” by METI
“e-commerce Market Survey 2022” by METI / Deloitte Tohmatsu Consulting LLC / MIC Research Instituite “Current Status and Future Prospect for Internet Payment Service Providers in EC”
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

46About DG Financial Technology, Inc.

Innovation across Payment
DG Financial Technology, Inc. (DGFT), a wholly-owned subsidiary of Digital Garage managing the group’s core
payment service, was formed in Feb. 2021 through reorganization of VeriTrans and ECONTEXT.
Leveraging its highly available, functional and stable payment platform, DGFT will strive to design ‘New Context’ fora sustainable society and lead the creation of a new Fintech-based financial ecosystem.

Development（Offshore）
Recommendation

OnlinePayment

OfflinePayment

BNPL

Remittance

Security

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

47

Overview of DG Financial Technology, Inc.
・A wholly-owned subsidiary of DG, managing the DG group’s core payment business・Provide payment solution for various needs of clients, covering both online and offline merchants
Company Profile
CompanyName

DG Financial Technology, Inc.

Head Office

Shibuya-ku, Tokyo

Capital1.06845 B JPY

Business
Areas

Payment Information Processing Service
Agency Payment Service
Money Transfer Service

Registered
Businesses

Electronic Payment Services（Director of the Kanto
Finance Bureau No.25）
Funds Transfer Service Provider（Director of the
Kanto Finance Bureau No00094）
Business Operator for handling Credit Card
Numbers, etc.

Certification

PCIDSS Version3.2.1
ISO/IEC27001
Privacy MarkParticipating
Organizations

PCI Security Standards Council, LLC
Japan Credit Association
Japan Collection Agencies Association.
Japan Multi-payment Network Promotion
Association
Japan Payment Service Association
EC Payment Forum

Overview of DGFT’s Payment Business (Business Performance ’22/10－’23/9)
Payment Transaction Volume (JPY)

Yearly Total

5.8T

Offline1.5T

Online

4.2T

Number of Merchants（as of Sep 2023)

FYE Sep. ‘23

1,021K

Non-Face-to-Fac
Offline904K

Online117K

Number of Payment Transactions

BOffline
463M

Yearly Total

1,080M

Online620M

Status of Systems（FYE Sep 2023）

System Uptime

99.99%

Number of available
Payment methods# of partnered
Financial Institutions

over

over

40

1,000

Marketing tools
for e-commerce

India-basedtech support& engineering
service

Fraud detection
solutions for
Payment

Multi-payment
and mileage
programproviderMulti-payment
solution for
POS

BNLP payment
solutionsShareholder

Shareholder

Shareholder

Shareholder

Shareholder

Shareholder

DGFT: 100%

DGFT: 100%

DGFT: 100%

ANA : 51%
DGFT: 49%

Toshiba Tec: 51%
DGFT: 49%

Nissen: 51%
DGFT : 49%

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

48

Payment Methods and Major Payment Products
・Handle over 40 major payment methods, raging from credit cards to convenient-store payments
・Address the needs of clients with payment products designed for different industries and use cases
Payment Methods
Credit Cards

JCB, VISA, Mastercard, American Express,
Diners Club

ConvenientStoresSEVEN-ELEVEN, Lawson, FamilyMart,
Seicomart, MINISTOP, Daily YAMAZAKI

ID/QR

au PAY, Amazon Pay, Bank Pay, J-Coin Pay,
Rakuten Pay, d payment, LINE Pay, PayPay,
Smart Code, merpay, FamiPay, Apple Pay,
Google Pay, EPOS payment, COIN+

Carrier
Payments

au Easy Payment, d payment, Softbank Payment

Banks

Pay-easy, Rakuten Bank, SBI Sumishin Net Bank,
PayPay Bank

Electric Money

Rakuten Edy, Suica, nanaco, WAON

Overseas

Alipay, Alipay＋, WeChatPay, PayPal, Union Pay

Web AccountTransfers

About 290 Financial institutions in Japan（Major banks, Internet banks, Local banks, andShinkin banks）

OthersVeriTrans BNLP, Credit cards for multi-currency,
Eikyufumetsu Point System

Major Payment Products

Patent-pending

Multi-payment service foronline merchants

Multi-QR Code payment
service for offline merchants

QR Code multi-payment
service for offline merchants

HotelPay
Account transfers overemails and cash receipt at
Lawson stores

Payment services for hotels &hospitality industry, integrated
reservation systems

Credit card payment solution
for real estate industry(rents and initial fees)

セレモニーPAY

IVR Paymente-mail link payment(Ceremony Pay)

Patented

Payment and financial
solutions specificallydesigned for funerals

Credit card payment solution for
telephone ordering

Payment solution to provide
payment URLs by emails.

Barcode payments for
PoS

OmniPAY

Fraud-detection Service

One-stop installation of
ID Payment to PoS terminals

One-stop payment solution
to manage both online andoffline payments

Security solutions forfraud prevention and detection（ACI, ReD Shield, Sift, etc.）

Copyright © 2023 Digital Garage, Inc. All Rights Reserved49Overview of Payment System
・Manage IT system risk through redundancy (2 data centers) with in-house system monitoring and operation
・Achieve agility and cost competitiveness by building in-house engineering team and utilizing development base
System Overview
1

Active-Active Configuration

 2 d a ta c e n te rs w ith e q u iva le n t
c a p a b ilitie s in d iffe re n t lo c a tio n s Ove r 8 0 0 k m d is ta n c e b e tw e e n th e
2 d a ta c e n te rs in c re a s e s
to le ra n c e to n a tu ra l d is a s te r a n d
BCP2

 S ta b le o p e ra tio n w ith n o d o w ntime
if o n e o f th e 2 d a ta c e n te rs
re ma in s u p a n d ru n n in g

3

Merchants

Merchants

Merchants

Merchants

Data Center 1（Kanto）

Data Center 2（Kyusyu）

Servers

Servers

Database 1

Bi-directional data Sync

 B i-d ire c tio n a l d a ta s yn c b e tw e e n
th e 2 d a ta c e n te rs (e ve ry 1 -1 0 s e c .)Operation Overview

Overview of DGFT Payment System

Storage①

Data
10秒以内にSynchronization
データを同期
every ten seconds

Database 31

 2 4 /7 s ys te m mo n ito rin g a n do p e ra tio n fro m in J a p a n a n d In d ia
 Ac h ie ve q u ic k re s p o n s e time a n d
c o s t c o mp e titive n e s s b y b u ild in g
in -h o u s e e n g in e e rin g te a m a n d
a ls o u tiliz in g o ffs h o re lo c a tio n2
Storage①

Storage②

Storage②

Storage③

Storage③

BackupBackupDatabase2

Database 4

Storage①

Storage①

Storage②

Storage②

Storage③

Storage③

System Operation Structures

Monitoring System

 Au to ma te d re a l-time mo n ito rin go f e n tire p a yme n t s ys te ms
 Qu ic k c h a n g e o ve r to ma n n e dre s p o n s e s o n c e s u rve illa n c e a le rtis d e te c te dMulti-layered Redundancy

 D a ta -tire w ith 1 2 -la ye r mirro rs
s tru c tu re （ D B : ４ u n its ×S to ra g e : 3
u n its fo r e a c h ） R e d u n d a nc y s tru c tu re tomin imiz e s ys te m in c id e n t a n do u ta g e

System Operation and Monitoring（Japan）（two-location system)（India）<System Downtime for FYE 23. 3>

Achieved the lowest industry rate due torobust structure with well-controlled
operations and monitoring system

20 seconds per year
（Uptime:99.9994%）

Copyright © 2023 Digital Garage, Inc. All Rights Reserved50Capital and Business Partners / Partner Companies
・Create strong partnerships with leading payment, financial, and retails companies in Japan・Jointly develop efficient sales partnership and new businesses to address emerging market needs
Strategic Partners（Capital Alliance Partners）

Resona Holdings

Toshiba Tec Corporation

Capital and Business Alliance

Capital and Business Alliance

Capital and Business Alliance

Capital and Business Alliance

Sales collaboration and joint
development of new payment services(Holding 5% of DG shares)

Provide payment service on an OEM
from DGFT and joint-development of
new payment services(Holding 2% of DG shares)

Operate “TD Payment,” an online
payment service joint venture(Mutual holding 2% of shares)

Joint-development of new payment
services such as “Ceremony Pay”
(Holding 1.4% of DG shares)

JV Partners

Business Partners

JV Partner

JV Partner

Business Partner

Business Partner

Business Partner

Business Partner

Jointly operate payment
JV for hospitality Industry

Jointly operate BNPL
JV for EC businesses

Promoting collaboration
on “DGFT Invoice Card
Payment,” a payment
service for B2B

Provide payment
service on an OEM
from DGFT

Provide payment
service on an OEM from
DGFT, jointly provide
B2B payment services

Provide ID/QR code
Payment to “AirPAY”,
offline payment service

Copyright © 2023 Digital Garage, Inc. All Rights Reserved51

Partnerships with Major Overseas Payment Companies
・Provide Japan-local payment solution to leading global 12 PSPs and support global firms’ entry to Japan・Plan to expand DGFT’s businesses globally by leveraging the partnership with the leading PSPs
Support global companies’ Japan entry by partnering with the world’s

12 leading payment service providers(PSPs)

Europe3

North America
Asia

companies

53

companies

companies
Market Size of Payment Orchestration（M USD）
<Source: 360i Research>

The world

6,624.1

Japan

CAGR
The world

South America+17.2%
Japan

1,861.8
259.4

64.3
2022
Actual result

2023

2024

2025

2026

2027

2028

2029

+19.0%

1company2030

Forecast

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

52

Business Model: Marketing Business・Support client business growth through a comprehensive digital marketing service
・Provide solutions utilizing CRM and data, and Fintech solutions which connect with the payment business
Promoting interest and purchaseintent in all touchpoints with consumers

Clients

Marketing business

Bank/Card
Securities/Payment/
Other financial services

Outsource

RetailOthers (HR/Public
transportation/Hotels/Travel, etc.)

Customer databasedevelopment and analysis
Application
development

App/Game/E-book/Contents services
Real estate developer

Consumer

Overall internet advertising(Purchase promotion/customer
attraction/brand recognition)

Cosmetic/Consumer goods
manufacturer
e-commerce

Contact points

Work
togetherin DX area

Web media

SNS

Search engine

App

Mass media

Store

Media
development

AI solutions

Competing platforms for GAFA

Joint projects in DX and IT

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

53

Multi-layered Businesses and Profit Opportunities based on Payment Business・Establish the platform to continuously generate stable profits from payment business・Aim to generate multi-layered profit opportunities from the existing businesses as well as DX, Fintech,and next-generation media, etc.

AcquiringMembers
Opening
Accounts
・Credit Cards
・e-Money・Bank・QR payment
etc.

Payment Partners

Platform
Solution
Marketing Services

Marketing Service

Products for DX/ Cashless

Co-development of
New services

Payment

Payment Platform

Long-term
Incubation

B2B Payment
Improvement of cash flow
Next-generation media

Business
Operators(Merchants)

DX
Cashless

Attracting
customers

Consumers

Payment
Companies
Financial
Institutions

Consumer Behavior Data
from awareness to purchase

B2B transactions

Wholesalers
MakersData for Payment
and Purchase
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

54

ご参考資料
Reference Material③:
Cash Flow Allocation / Shareholder Returns

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

55

Definition of Business Cash Flow
Formula for Calculation from Base Business Cash Flow

Base Business
Cash Flow

Cash Flow fromPS Segment※※Excluding profit from equity
method and one-off profit/loss
from EBITDA

Cash Flow from
New Business (LTI)

Dividend Income
from Associates

HQ Costs

If the cash flow from new businesses ispositive, it will be added to base businesscash flow.

Formula for Investment Business Cash Flow

Investment
Business
Cash Flow

Income from
Investment
Business
・Proceeds from the salesof securities
・Distribution income
from funds
・Dividend Income

Costs forInvestment
Business,
Corporate Tax, etc.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved56

Cash Flow Allocation
・Segregate resources into recurring cash flow from base business and investment business cash flows
・Plan to allocate resources, considering growth opportunities and financial situations
Cash Flow Allocation
Investment in Existing Business －Maintain and expand revenue base
GrowthBase Business
Cash Flow

Investment in New Business
GrowthImprovement of Financial
Structure
Shareholder Returns

Investment
Business
Cash Flow－Develop next-generation businesses that create
corporate value－5Y dividends total at least 10B JPY－Dividend payout ratio of at least 20% or more ofbase business cash flow

Investment in Growth /－Decide strategically, considering business environment
and investment opportunities
Additional Shareholder Returns
Investment in Startups－Up to 30% of investment business income

Strategic Investments(M&A・Capital Alliance, etc.)

Copyright © 2023 Digital Garage, Inc. All Rights Reserved57

Shareholder Return Policy・Dividend Policy: Aim for additional dividend distribution from new businesses in addition to stable dividend from PS cash flow
・Additional shareholder returns (special dividends･acquisition of treasury stock, etc.) from investment business CF will beconsidered positively

Shareholder Return Policy

Shareholder Return based on Base Business CF

Additional Returnfrom Investment
Business

2nd Layer

Additional dividend
from new businesses(LTI)

businesses)

Base Business CF

Stable divided from CF from PS Segment, etc.

(New

Investment for growth or additional shareholder returns
will be determined, considering business environment
and investment opportunities

Aim to increase dividends bygenerating cash flow throughlaunch of strategic businesses
Annualsingle-year Policy

1st layer(PS)

Plan to pay stable dividends
from cash flow of PS Segment,
which is expected ascontinuous profit growth

Dividend
payout ratio

20% or more

10B JPY or more
FY24.3Medium-term Plan

FY28.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved58

Please note that the business forecasts and strategies covered in today’s presentation are based on our current evaluation and future results may vary significantly depending on unforeseeable
events or circumstances. This announcement is solely for the purpose of the investors relationship and is not for making any solicitation for investment in any securities. This announcement does
not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of any such jurisdiction. Any securities of our consolidated subsidiaries have not been registered under the U.S. Securities Act of 1933, as
amended (the “U.S. Securities Act”) and may not be offered or solid in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.
Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer andits management and financial statements.