Consolidated Financial Results for the
Fiscal Year Ended March 31, 2021
(From April 1, 2020 to March 31, 2021)
Supplementary Material
May 7, 2021
Digital Arts Inc.
(Securities Code: 2326)
Copyright © 2015 Digital Arts Inc.

Contents
 Consolidated Results Highlights
 Non-consolidated Results Highlights
 By Market
 Full-Year Financial Forecast for the Fiscal Year Ending March 31,2022
 FY03/22 Initiatives
 Return to Shareholders for Fiscal Year Ending March 31, 2022

2

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Consolidated Results
Highlights

3

Copyright © Digital Arts Inc.

Key Points(1) Contracts and net sales for the fiscal year under review hit
record highContracts amounted to 11,469 million yen (up 103.1% year on year).
Consolidated net sales were 6,825 million yen (rising 21.0% year on year).

(2) Operating profit for the fiscal year under review alsoachieved a record high.
•Operating profit reached 2,977million yen (an increase of 27.9% year onyear）.

4

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Consolidated Results Highlights

Contracts

Net sales

Operatingprofit•Orders received for the i-FILTER series
increased in the public sector market, due tothe GIGA School Concept.

(+5,820 million yen / +103.1% YoY)•

Orders received increased as DAC gained
new customers.

6,825 million yen•

The spread of teleworking in the enterprise
sector market helped boost sales.

(+1,183 million yen / +21.0% YoY)•

Sales grew after DAC gained new customers.

•

In cost of sales, labor expenses soared after
DAC increased staff.

•

Among SG&A expenses, advertisingexpenses contracted after the cancellation of
events and expenses declined due to theshift to working from home.

11,469 million yen

2,977 million yen(+649 million yen / +27.9% YoY)

5

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Consolidated Results Summary (Full Year)(Million yen)

FY March 2020

FY March 2021

ChangeYoY

FY March 2021 FullYear Forecast—

Contracts

5,648

11,469+103.1%

Net sales

5,641

6,825

+21.0%

7,500

Cost of sales

1,361

1,946

+42.9%

1,850

Gross profit

4,280

4,878

+14.0%

5,650

Selling, general andadministrative
expenses

1,952

1,900

-2.6%

2,100

Operating profit

2,328

2,977

+27.9%

3,550

Operating margin

41.3%

43.6%

ー

47.3%

Ordinary profit

2,326

2,991

+28.6%

3,550

Profit attributable toowners of parent

1,590

2,059

+29.5%

2,450

EBITDA

3,197

3,908

+22.3%—※ Financial Forecast is the consolidated financial forecast announced on May 8, 2020.
※ EBITDA = Operating profit + Depreciation + Tax expenses included in operating expenses
6

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Consolidated Results Summary (Quarter)

Fourth Quarter(Million yen) FY March 2020

Fourth Quarter
FY March 2021

ChangeYoY

FY March 2020

FY March 2021

ChangeYoY

Contracts

1,639

3,906

+138.3%

5,648

11,469+103.1%

Net sales

1,500

2,074

+38.2%

5,641

6,825

+21.0%

Cost of sales

377

584

+54.7%

1,361

1,946

+42.9%

Gross profit

1,123

1,490

+32.7%

4,280

4,878

+14.0%

Selling, generalandadministrative
expenses

443

485

+9.6%

1,952

1,900

-2.6%

Operating profit

679

1,004

+47.7%

2,328

2,977

+27.9%

45.3%

48.4%

ー

41.3%

43.6%

ー

Ordinary profit

677

1,008

+48.8%

2,326

2,991

+28.6%

Profitattributable toowners of parent

461

696

+50.8%

1,590

2,059

+29.5%

Operatingmargin7

Copyright © Digital Arts Inc.

Trend in Consolidated Contracts
Cloud service products accounted for 53.1% of the total contract
amount, considerably increasing their share.
Trend in Contracts

License sales products/Others(Million yen)

11,469Cloud service products

5,376

46.9%

•

The cloud shift continued, and thepercentage of contracts accounted
for by cloud service type products

5,648

rose from 16.9% the previous fiscal
to 53.1% in the fiscal year under
83.1%

4,694

16.9%

953
FY March 2020

6,092

53.1％

review.

FY March 2021

8

Copyright © Digital Arts Inc.

Trend in Order Backlog
The order backlog grew considerably, reaching 6,439 million yen (an increase of
257.2％), reflecting expansion in the contract share of cloud service products.

Trend in Order Backlog(Million yen)•
Sales to be recorded in thefiscal year after next or later

6,439

Cloud service products cause net sales
deferred to the next fiscal year or later

Sales to be recorded in the next
fiscal year

(order backlog) to go up because theamount of sales recorded in the short period issmall. (See Supplement on p.10.)
4,043•

Since the contracts for cloud service products
are renewable at fixed prices (whereas therenewal price for license sales products is half

1,803
690

the contract price for the first year), thisrecurring revenue business model creates

2,396

a stable profit base.

1,112
End of FYMarch 2020

End of FY March 2021

9

Copyright © Digital Arts Inc.

Supplement）Method of recording sales by product

Equivalent tomaintenancefeeContracts

Equivalent tolicense fee

Licensesales
products

Contract period (n months)＋1 monthOrderbacklog

・・・•

License fees make up alarge proportion of thecontract amount. This
portion is recorded in alump sum as sales in themonth when the contract isobtained.

•

Amount equivalent tomaintenance fee isrecorded on a pro rata
basis over the contract
period.

•Contract amount isrecorded as sales on a pro
rata basis over the contract
period (split into equalmonthly amounts).

•

As the contract amount ofcloud service products
rises, the contract amountthat is deferred (orderbacklog) increases.

Amount equivalent to maintenance fee
is prorated over contract period "n"
Net
sales

Y months（contract months）
Y+1
month

Y+2
month

・・・

Y+n
monthsY+n+1
monthsContract period (n months)

Contracts

Contract amount is prorated overcontract period "n"Cloud
serviceproducts

OrderbacklogNetsales
Y months（contract months）
Y+1
month

・・・

Y+2
month

10

・・・

Y+n-1
month

Y+n
monthsCopyright © Digital Arts Inc.

Trend in Consolidated Net Sales(Million yen)

Net sales for the fiscal year under review reached arecord high after strong performance in theenterprise sector and public sector markets.

6,825（121%）

5,841（114%）

5,058

5,116

（126%）（101%）FY Mar. 2017

FY Mar. 2018

5,641
（97%）

4,000
（118%）

3,402
2,707
2,306

（117%）

2,906

3,027
（104%）（112%）（107%）（105%）FY Mar. 2011

FY Mar. 2012

FY Mar. 2013

FY Mar. 2014

FY Mar. 2015

FY Mar. 2016

FY Mar. 2019

FY Mar. 2020 FY Mar. 2021

* Percentage figures represent comparisons with the preceding year.

11

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Quarterly Trend in Consolidated Net Sales(Million yen)

Sales for the fourth quarter also hit arecord high.

2,074（138%）

1,687

1,674

1,546

（118%）（111%）（107%）

1,514

1,500

（98%）

1,402

1,376

（130%）

1,413（113%）（103%）（105%）

1Q

（90%）

（98%）

1,249

1,217

1,649

（120%）2Q

3Q

FY March 2019

4Q

1Q

2Q

3Q

FY March 2020

4Q

1Q

2Q

3Q

4Q

FY March 2021

* Percentage figures represent comparisons with same period of the preceding year.

12

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Consolidated Cost of Sales and Selling, General and
Administrative Expenses

FY March 2020

FY March 2021

Change
YoY

1,361

1,946

+584

Labor

847

1,192

+344

DAC increased consultants.

Depreciation

754

810

+56

Depreciation of cloud products and othersoftware started from the second quarter of theprevious fiscal year.
Service expenses increased as a result ofsales expansion of cloud products.
Outsourcing expenses soared after DAC
obtained more orders.

(Million yen)

Cost of sales

Other

Main Factors for Change

524

751

+227

Transfer to otheraccounts

-764

-808

-43

Selling, general andadministrative
expenses

1,952

1,900

-51

Personnel expenses

984

1,055

+70

Personnel expenses rose reflecting theemployment of new graduates.

Advertising expenses

207

168

-39

Decrease due to the voluntary decision torefrain from holding the Partner Conference
and other events

Other

760

677

-82

Transportation expenses fell for reason ofworking from home and online sales activities.

13

Transfer to software in progress increased asa result of the increase in development
projects.

Copyright © Digital Arts Inc.

Quarterly Trend in Consolidated Cost of Sales
Labor expenses swelled after DAC increased consultants.
(Million yen)

Other expenses grew due to cloud server expenses associated with sales expansion of cloud service
products.

793（140%）

723（132%）

Other

Transfer to other accountDepreciation

Cost of sales

Labor

452
（110%）

114

464（112%）

163

125%

1Q

470

（105%）

188

229
163

236

185 101%

2Q

443（113%）

123

92%

3Q

FY March 2019（117%）

144

195

183

250

179 83%

4Q

99%

1Q

151%

221

216

2Q

166 175
206

202
584

3Q

FY March 2020

4Q

130%

149%

262

155%

486

447

427

377

125%

145%

237

198

353

212

201

198

198

343

286

197

183

203
192

（118%）

189

196
194
165

（126%）

238 210622（128%）

146

134

122

（98%）

141

282

183

482

（107%）

120

124

154

289

191

526

125

147

548

565

609

138%

349

324

254

1Q

2Q

3Q

4Q

FY March 2021

* Percentage figures represent comparisons with the same period a year earlier.

14

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Quarterly Trend in Consolidated Selling, General and
Administrative Expenses
Advertising expenses contracted due to voluntary restraint of the Partner Conference and other outside events.
Decrease in transportation expenses due to shift to working from home and online sales activities to work to control
COVID-19
Personnel expenses

Advertising expenses

Other

Overseas expenses(Million yen)

632

（111%）

94

568

548

（112%）

69

482
（90%）

42

190
200

164
109

59

46

237

240

228

1Q

2Q

3Q

FY March 2019

469

（87%）
13

（98%）

12

167

70

501
443

179

46

190

230

246

4Q

1Q

2Q

3Q

FY March 2020

（85%）

153

161

44

32

210

4Q

（109%）

166

58

34

43

262

（105%）

485

414

195

47

253

499

（91%）

（94%）

211

156

57

473

（85%）

（89%）

25

487

272

1Q

301
218

2Q

3Q

262

4Q

FY March 2021

* Percentage figures represent comparisons with same period of the preceding year.

15

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Summary of Consolidated Balance Sheet
Capital efficiency was good, with improvement in both ROE and ROA.
Although the equity ratio fell due to an increase in advances received, strong financial
health was maintained.
As of end of FY March2020

As of end of FY March
2021

Current assets

8,733

12,725+45.7%(Cash and deposits)

7,651

11,382+48.8%

Non-current assets

2,118

2,130

+0.6%

Total assets

10,852

14,856+36.9%

Current liabilities

2,125

4,743

+123.2%（Advanced received）

1,229

3,370

+174.1%

Non-current liabilities

46

50

+7.7%

Equity capital

8,652

10,041+16.1%Net assets

8,680

10,062+15.9%

Equity ratio

79.7%

67.6%

—

ROE

19.4%

22.0%

—

ROA

15.4%

16.0%

—

(Million yen)

16

% Change

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Non-consolidated Results
Highlights

17

Copyright © Digital Arts Inc.

Summary of Non-consolidated Results (Full-Year)(Million yen)

FY March 2020

FY March 2021

ChangeYoY

FY March 2021 FullYear Forecast

Contracts

5,376

10,693+98.9%—Net sales

5,336

6,074

+13.8%

7,000

Cost of sales

1,098

1,273

+16.0%

1,450

Gross profit

4,238

4,801

+13.3%

5,550

Selling, general andadministrative
expenses

1,881

1,854

-1.4%

2,050

Operating profit

2,357

2,947

+25.0%

3,500

Operating margin

44.2%

48.5%

—

50.0%

Ordinary profit

2,359

2,964

+25.6%

3,500

Profit

1,613

2,044

+26.7%

2,420*Financial Forecast is the non-consolidated financial forecast announced on May 8, 2020.
18

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Summary of Non-consolidated Results (Quarterly)

Fourth Quarter(Million yen) FY March 2020

Fourth Quarter
FY March 2021

ChangeYoY

FY March 2020

FY March 2021

ChangeYoY

Contracts

1,523

3,687

+142.0%5,376

10,693+98.9%Net sales

1,346

1,856

+37.9%

5,336

6,074

+13.8%

Cost of sales

237

355

+49.5%

1,098

1,273

+16.0%

Gross profit

1,109

1,501

+35.4%

4,238

4,801

+13.3%

Selling, generalandadministrative
expenses435

487+12.0%

1,881

1,854

-1.4%

Operating profit

673

1,013

+50.5%

2,357

2,947

+25.0%

50.0%

54.6%

ー

44.2%

48.5%

ー

Ordinary profit

671

1,018

+51.6%

2,359

2,964

+25.6%

Profit450696+54.5%

1,613

2,044

+26.7%

Operatingmargin19

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

By Market

20

Copyright © Digital Arts Inc.

Consolidated Net sales by Market

6,825(Million yen)(+21.0%)

432

5,641

Consumer
•

-3.0%

445

In the enterprise sector market, net sales were up 699
million yen or 21.3% due to orders received for i-FILTER

2,408

series and the growth of DAC.

Public•+26.0%

1,911

In the public sector market, net sales were up 497 million
yen or 26.0% due to orders received for the i-FILTER
series as the government furthered the GIGA School
Concept.

•

3,284

FY March 2020

+21.3%

3,984

Enterprise

In the consumer sector market, net sales were down 13
million yen or 3.0% due to reduction in prices for carriers
despite a rise in the introduction of filtering among
young people.

FY March 2021

21

Copyright © Digital Arts Inc.

Trend in Consolidated Net Sales by Market
Record-setting net sales were attained with bullish performances in(Million yen)

the enterprise sector and public sector markets, favored by theincrease in teleworking and advances in ICT education in schools.
516
359

375
2,191

342
362
280
260

997

318
1,152

361

2,125

1,205

1,436

Consumer

2,408

Public3,984Enterprise

1,911

1,732

1,418

1,140
1,028

840

1,429

445

432

1,637

1,899

2,240

2,573

3,009

3,133

3,284

FY Mar. 2011 FY Mar. 2012 FY Mar. 2013 FY Mar. 2014 FY Mar. 2015 FY Mar. 2016 FY Mar. 2017 FY Mar. 2018 FY Mar. 2019 FY Mar. 2020 FY Mar. 2021

22

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Quarterly Trend in Consolidated Net Sales by Market

Net sales for the fourth quarter reached a record high.

(Million yen)

104

139
115

114
141

120

546

115

90

699

Consumer

785

Public

100

536
140

103

109

597

426

587

574

451

515

383

408

1,179
998
688

731

715

1Q

2Q

3Q

FY March 2019

725

4Q

1Q

975

813

770

2Q

3Q

FY March 2020

23

4Q

847

1Q

985

971

2Q

3Q

Enterprise

4Q

FY March 2021

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Enterprise Sector

24

Copyright © Digital Arts Inc.

Net Sales in Enterprise Sector Market by Producti-FILTER series

m-FILTER series

FinalCode

DAC

Other

3,984
(+21.3%)(Million yen)

•

13

3,284
48

256
237
596

+191.6%(rising 221 million yen or 10.3%),745-20.0%

190+11.8%

666

Sales of i-FILTER@Cloud were strong

reflecting growing cyber security
demand among enterprises due toincreased teleworking.
•

DAC made good progress acquiring newclients and achieved substantial sales
growth (up 489 million yen or 191.6%),

2,146+10.3%

2,367

reflecting growing DX needs anddemand for security measures among
enterprises.

FY March 2020

FY March 2021

25

Copyright © Digital Arts Inc.

Net Sales Growth and Expansion of DAC on a Nonconsolidated Basis

Number of consultants(Persons)

55

Consulting sales*(Million yen)21

FY March 2020

780

(Million yen)

58

302

19

FY March 2020

FY March 2021
FY March 2020•

Solution sales*

DAC actively hired talent,focusing on those from leading
consulting firms and leading
systems integrators.

FY March 2021

FY March 2021•

Consulting sales grew 258%
year on year, reflecting thedevelopment of new clients.

•

DAC steadily met DX demandand demand for cyber security
measures.

•

Sales of solutions
incorporating Digital Arts
products also soared,
increasing 298% year on year.

*：DAC's non-consolidated net sales

26

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Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Public Sector

27

Copyright © Digital Arts Inc.

Net Sales of Public Sector Market by Producti-FILTER series

m-FILTER series

FinalCode

Other

2,408

(Million yen)(+26.0%)
13

56

1,911

-0.3%

56

-5.5%

402

• Sales of i-FILTER series grew 507
million yen (up 35.5%) due to orders

425

received in connection withpromotion of ICT education in line
+35.5%

with the GIGA School Concept.

1,936

1,429

FY March 2020

FY March 2021

28

Copyright © Digital Arts Inc.

Acquisition of ISO 27017
DigitalArts@Cloud received ISO certification as a cloud service which meetsthe ISO criteria.
FY2019FY2020

FY2021ISMAP = Aiming for registration
Action forregistration as
an ISMAP
Acquisition of
ISO27017
certification

as a system (cloud service) thatsatisfies the Japanese
government's security
requirements

Acquisition of
ISO27001
certification

Acquisition of ISO27017, which
can also be described as thebaseline for an ISMAP, wascompleted.
29

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Consumer Sector

30

Copyright © Digital Arts Inc.

Net Sales of Consumer Sector Market by Product(Million yen)

For mobile terminals, otherFor computers

432

445

(-3.0%)•

192

Sales of products for mobile terminals fell due tothe price cut for carriers made in the second

+8.7%

208

quarter of the previous fiscal year in connection
with the introduction of free filtering services forend users by carriers.
•

In products for computers, sales of multiple-year
package products and i-FILTER® for Multi-Device,253

FY March 2020

which can be available on multiple terminals,-11.8%

223

were sluggish.

FY March 2021

31

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Full-year Financial Forecast
for the Fiscal Year Ending
March 31, 2022

32

Copyright © Digital Arts Inc.

Full-Year Financial Forecast for the Fiscal Year Ending March 31,
2022 (Consolidated)(Million yen)

FY March 2021 FullYear Results

Forecast for FY
March 2022

% Change

Net sales

6,825

8,700

+27.5 %

Cost of sales

1,946

2,700

+38.7 %

Gross profit

4,878

6,000

+23.0 %

Selling, generaland administrative
expenses

1,900

2,300

+21.0 %

Operating profit

2,977

3,700

＋24.3 %

Ordinary profit

2,991

3,700

+23.7 %

Profit attributableto owners of parent

2,059

2,550

＋23.8 %

33

Copyright © Digital Arts Inc.

Full-Year Financial Forecast for the Fiscal Year Ending March 31,
2022 (Non-consolidated)(Million yen)

FY March 2021 FullYear Results

Forecast for FY
March 2022

% Change

Net sales

6,074

7,450

+22.6 %

Cost of sales

1,273

1,700

+33.5 %

Gross profit

4,801

5,750

+19.8 %

Selling, generaland administrative
expenses

1,854

2,150

+15.6 %

Operating profit

2,947

3,600

＋22.2 %

Ordinary profit

2,964

3,600

+21.5 %

Profit

2,044

2,450

＋19.8 %

34

Copyright © Digital Arts Inc.

Status of Consolidated Net Sales(Million yen)•

Net sales carried over will increase due to theimpact of the amount of contracts acquired in
the public sector market the previous fiscal year
in connection with the GIGA School
Concept. (See page 9.)•

New contracts of DAJ are expected to amount to6,954 million yen due to expansion of sales tothe enterprise sector market and orders received
for the public sector market in connection with
the GIGA School Concept.

•

As in the previous fiscal year, DAC will increase
the number of consultants and is expected tocontinue growing through the acquisition of newclients.

*１: Sales recorded from the order backlog of contracts acquired inprevious fiscal years*２：Sales deferred to subsequent fiscal years (order backlog)
*1

*2

35

Copyright © Digital Arts Inc.

Status of Consolidated Net Sales
8,700(+27.5%)(Million yen)

450

6,825

•
Consumer

We will further develop existing clients bypromoting the cross-utilization of Digital Arts
products as security measures for enterprises and+4.1%

acquire new clients by strengthening products.

432

3,400

Public•We will expand orders received by proposing Digital+41.2%

Arts products to DAC's clients.
2,408

•

Part of the amount of contracts acquired theprevious fiscal year in the public sector market inconnection with the GIGA School Concept will bedeferred and recognized as sales in FY March 2022.

Enterprise+21.7%

4,850

3,984

•

We will expand our market share in the latter half of
the GIGA School Concept and win orders bymeeting needs for enhancement of the resilience ofmunicipal information systems.

Results for FY March 2021

Forecast for FY March 2022

36

Copyright © Digital Arts Inc.

Consolidated Cost of Sales and Selling, General and
Administrative Expenses

Results for FY
March 2021

Forecast for FY
March 2022

Change
YoY

1,946

2,700

+38.7%

1,192

1,480

+24.1%

DAC increased consultants.

Depreciation

810

850

+4.8%

Depreciation of software for cloud products will
start.

Other

751

1,170

+55.7%

Cloud server expenses will rise as a result ofsales expansion of cloud products.

Transfer to otheraccounts

-808

-800

-1.0%

Selling, general andadministrative
expenses

1,900

2,300

+21.0%

Personnel expenses

1,055

1,330

+26.1%

Personnel expenses rose reflecting theemployment of new graduates.

168

200

+19.0%

Advertising in newspapers and other media will
increase.

+13.6%

Assuming that the effects of COVID-19 willlessen, travel expenses will increase.
Server expenses will increase as a result ofcloud products trials.

(Million yen)

Cost of sales
Labor

Advertisingexpenses

Other

677

770

37

Main Factors for Change

Copyright © Digital Arts Inc.

Status of Consolidated Cost of Sales
Labor costs are expected to rise because DAC will increase the number of consultants.
Higher cloud server expenses under "Other" are forecast as a result of sales expansion of cloud
products.
(Million yen)38

Copyright © Digital Arts Inc.

Status of Consolidated SG&A Expenses
Higher personnel expenses are forecast as a result of an increase instaff.
(Million yen)

39

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Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

FY03/22 Initiatives

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Copyright © Digital Arts Inc.

Further Development of Exiting Clients
We will promote cross-utilization of Digital Arts products as a security measures toaddress the issued facing many clients.

Web security

Protection against unknown threats
Realization of "white operation" to prevent
malware infections via the web or emails

Promotion of "v15" and updating ofversions

Mail Security
Enhancement of features of ＠Cloud

PPAP (process of sending an encrypted file(with password) attachment in an email andthen sending the password to unzip the file in asecond email) countermeasures
Realization of efficient, more secure filetransferProtection against information leaks

Elimination of need for file passwords

File Security

Proposals for the elimination of e-mailattachments

WEB conferencing

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Copyright © Digital Arts Inc.

Enhancement of products to acquire new client base
Entry of i-FILTER to Secure Web Gateway (SWG) Market
Entry to SWG
We will enhance product value by strengthening
features to meet the needs of clients not captured
before.

Web security

CASB
Enhancement offeaturesAnti-virus
Sandbox
DLP

Undisputed quality and recognition in web
security market

Coexistence with adjacent market products
We will acquire a new client base by enhancing
integration features and promoting value to usersof adjacent market products.
UTM

Provision of "white
database"

SIEM

Enhancement of log
output features

Enhancementof integration

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Copyright © Digital Arts Inc.

Enhancement of products to acquire new client baseWe will aim to acquire a wider range of clients by strengthening features for PPAP
measures and measures to enhance the resilience of municipal information systems,
to more reliably meet file sanitization needs.

Integration with file transfer solution

Mail Security

No. 1 Installed E-mail Security Software*

Integration with file sanitization solution*Source: MIC Research Institute Ltd. "Information Security Solutions Market: Status and Outlook 2020 - Internal
Information Leakage Prevention Solutions (https://mic-r.co.jp/mr/01910/)" Email Filtering/Archive Market: Vendor
Share (by shipment) (FY2019) (Published December 2020).

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Copyright © Digital Arts Inc.

Enhancement of products to acquire new client baseWe will elevate Desk@Cloud from a tool used internally to a web conferencing systemthat is equal to a video distribution platform in terms of video performance and far
superior in terms of security.
Enhancement of communication with externalusers

WEB conferencing

Release of webinar features
 To enable large-scale web conferences tobe held

Automatic file encryption (integration with FC)
A secure communications platform createdby a security expert
Meeting needs for confidential online meetings

Enhanced authentication of users participating inmeetings

Utilization of multi-factor authentication
technology

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Copyright © Digital Arts Inc.

GIGA School Concept（Latter Half)

Target in Latter Half of GIGA School Concept*1•

Filtering measures
yet to be taken

18%

is the potential target in the second half.
•

Free filtering used

Around 40% of the total number of school boards

11%

As leader in the GIGA School Program market*2, we
aim to expand our market share on the basis of the far

Filtering measures already taken

greater value we provide (product value, convenience71%

and cost).
•

Schools using DNS filtering(approx. 10%)

We will appear at outside seminars to stress the need for
filtering and the superiority of our products.

*1：Based on interviews with 651 school boards responsible for more than 3,000 pupils and students (According to our research in March 2021)*2：According to our research in March 2021

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Copyright © Digital Arts Inc.

Measures to enhance resilience of municipal information
systems
FY2022 will be the main battleground for dealing with security cloud projects and projects
to enhance resilience but some projects are expected to be put out to tenderduring FY2021.
Public Project Roadmap
Item

TargetGovernment

Centralministries
and agencies

FY2016FY2017FY2018FY2019FY2020ISMAP
Introducti
on of
ISMAP

FY2021

FY2022

FY2023

FY2024FY2025

Action to address each project
Budgeting
Bidding/Re
newal
2.1 billion yen transitionbudgetSecuritycloud

Enhancemen
t of resilience

Prefectures

7.1 billion
yen

Extension
Revisionofprocurement
guidelines

Prefectures
Municipalities

16.4 billion
yen

46

Renewal

Budgeting
Bidding/Renewal
Budget TBD
Extension

Renewal

Budgeting

Bidding/Re
newal

Copyright © Digital Arts Inc.

Measures to enhance resilience of municipal information systems
Based on the December 2020 revisions to the procurement guidelines, we must enhance efficiency andconvenience, while maintaining information security, to meet the needs of the times including the digitizationof government processes and increased teleworking.
Overview of Solutions for Municipal Information Systems

Outline ofcountermeasures

Review of "three layers of protection"(α model protection and above)

Remote access security（protection against malware, etc.)

Measures for shift away from PPAP (processof sending an encrypted file (with password)
attachment in an email and then sending the
password to unzip the file in a second email)File encryption

All solutions shown in the outline of countermeasures are
possible using combinations of Digital Arts products.
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Copyright © Digital Arts Inc.

Acceleration of Synergies within the GroupWe will expand the enterprise sector market by proposing DA products to DAC's consulting clients.
By combining the strengths of Digital Arts and DAC, we will offer one-stop shop solutions covering
everything from "detection" to "recovery."Consulting services
Clients in the enterprise sector
marketProposal of DA products as
Large“White operation" clientssecurity measures to leading
medium-sized enterprises,

MediumExpansionofenterprise
sectormarketSmall

who are the main consulting
clients

Stepping-up of
security
measures

Follow-up services
Provision of charged services dealing with everything

Website tampering
Incident detection enterprise (D Alert feature）

from the detection of website tampering to recovery andprevention.

Everything fromdetection torecovery dealt
with within the
Group
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Investiga
tion

ActionRecoveryPreventionCopyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the Fiscal Year Ended March 31, 2021

Return to Shareholders for
Fiscal Year Ending March 31,
2022

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Copyright © Digital Arts Inc.

Return to Shareholders for Fiscal Year Ending March 31,
2022

We are planning to pay dividends as follows to return a portion of our earnings to ourshareholders.
Target payout ratio for fiscal year ending March 31, 2022: 35.8% (of consolidated net profit)
Annual dividends of surplus forecasted for fiscal year ending March 31, 2022: 65.00 yen per share
We expect to increase the annual dividend by 10.00 yen per share.

Dividend (in yen) per share
2Q-endFY March 2021
FY March 2022
(forecast)Year-end

AnnualConsolidated
payout ratio

25.00

30.00

55.00

37.4%

30.00

35.00

65.00

35.8%

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Copyright © Digital Arts Inc.

Notes on Descriptions

Among the descriptions of plans, strategies and financial forecasts in this presentation material,
those that are not historical facts are forward-looking statements.
They reflect judgments made by the management of Digital Arts Inc. on the basis of information
currently available to it. They may be subject to considerable change depending onchanges in the environment and other factors, and the Company does not in any way
guarantee the achievement of the projections.
Digital Arts Inc. will disclose any significant changes that occur in the future as appropriate.
With some exceptions, the basic figures in this presentation are rounded down to the nearest
million yen.

•

デジタルアーツ, DIGITAL ARTS, i-FILTER, info board, Active Rating System, D-SPA, NET FILTER, SP-Cache, White Web, ZBRAIN, mFILTER, m-FILTER MailFilter, m-FILTER Archive, m-FILTER Anti-Spam, m-FILTER File Scan, Mail Detox, FinalCode, i-FILTER,
DigitalArts@Cloud, Desk@Cloud, D-Alert and D-Content, and other names, logos, icons, designs, etc. related to Digital Arts Inc. and its
products are registered trademarks or trademarks of Digital Arts Inc.

•

Apart from this, the names of companies and products stated herein are trademarks or registered trademarks of their respective
companies.

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Copyright © Digital Arts Inc.

-For internet convenience, safety and security -Copyright © 2015 Digital Arts Inc.