8 May,2024
FOR IMMEDIATE RELEASE
Company name: Digital Arts Inc.
Representative: Toshio Dogu, Representative Director,President and CEO(Securities Code: 2326, TSE Prime Market)
Contact:
Fumihiko Tanizaki, General Manager, Investor
Relations Office
TEL: +81-3-5220-1670

Notice Regarding Formulation of Medium-Term Management Plan (FY March 2025 to FY March 2027)
Digital Arts Inc. and its group companies (the “Group”) have been moving forward with the Medium-Term
Management Plan (FY March 2023 to FY March 2025), the final year of which is March 31, 2025 (the "CurrentFiscal Year"), based on the announcement on May 10, 2022.
As a result of examining recent changes in the external and internal business environment, the Group has come tothe conclusion that further growth is expected to be achieved over the next three years, including the Current Fiscal
Year. It therefore announces a new Medium-Term Management Plan (FY March 2025 to FY March 2027), the firstyear of which reflects its plan for the Current Fiscal Year, or the final year of the Medium-Term Management Plan(FY March 2023 to FY March 2025).

Medium-Term Management Plan
（ From FY March 2025 to FY March 2027 ）May 8, 2024
Digital Arts Inc.
Copyright © Digital Arts Inc.

Contents

01

Revision of Medium-Term Management Plan Formulated in 2022

02

Medium-Term Management Plan
（ From FY March 2025 to FY March 2027 ）03

Three Priority Areas

2

Copyright © Digital Arts Inc.

01

Revision of Medium-Term Management Plan
Formulated in 2022

3

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Revision of Medium-Term Management Plan
We have adopted a new Medium-Term Management Plan, the first year of which reflects
our plan for the final year of the previous Medium-Term Management Plan.
Changes in the business environment•Externalenvironment

Changes in our orientation

Following the increased and continued use of
remote working and cloud technologies, the needfor comprehensive security measures has
increased irrespective of the size of the company
or organization.

• In November 2023, the Japanese cabinet made adecision regarding the budget bill for phase 2 of theGIGA School Concept.
• The GIGA School Concept accelerates the DX ofschool affairs.

Internalenvironment• In March 2024, we transferred shares of Digital
Arts Consulting (DAC), which was previously aconsolidated subsidiary.

4Productareas

Launch new product areas(Develop new solutions in addition to nextgeneration SWGs)

Publicmeasures

Intensively work to hold an even larger share of themarket in the areas of existing products in the public
sector market leveraging phase 2 of the GIGA School
Concept

Priorityareas

Concentrate management resources in priority
areas to accelerate growth as a comprehensive security
provider

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02

Medium-Term Management Strategy（ FY March 2025 - FY March 2027 ）5Copyright © Digital Arts Inc.

Financial Summary
We aim to achieve net sales of 15 billion yen and a three-year CAGR of 17% by the fiscalyear ending March 31, 2027 by undertaking initiatives in three priority areas.
Trend in Net Sales(million yen)

FY March 2024 FY March 2025 FY March 2026 FY March 2027
(Results)

Consolidat（11,512※）ed net9,304
sales(Forecast)(Forecast)

10,72012,55015,000（4,427※）
4,330

5,130

6,150

7,800

Operatingmargin（38.5％※）
46.5%

47.9％

49.0%

52.0%

Ordinary
profit(4,443※）
4,348

5,140

6,150

7,800

292

（Excluding DAC）

360

420

15,000

CAGR17%(Forecast)

OperatingprofitNumber ofemployees

CAGR(million yen)

12,550

17%

450

9,304

10,720FY Mar 2024

FY Mar 2025年

FY Mar 2026

FY Mar 2027

（result）（plan）（plan）（plan）*Sales recorded by Digital Arts Consulting Co., Ltd., for which the share transfer was completed on March 29, 2024, are reflected.

6Copyright © Digital Arts Inc.

Forecasts of Security Products Market Growthand Our Sales Growth
We expect to achieve sales growth in line with market growth rates by securing a certain
market share that is commensurate with market growth.
【Forecast of growth in the network security market that we will operate within】
Current market size

Market size in FY March 2027= Share of ournet sales

CAGR
17%

obtain acertainmarketshare96.7 billion yen(※2)••••••FY March 2027

15.0 billion yen
CAGR
17%7155.5 billion yen(※2)

Web filtering
E-mail filtering
Integrated SWG
CASB
IDaaS
EDR

Forecast of netsales growth

FY March 2024

9.3 billion yen (※1)(※1) Sales recorded by Digital Arts
Consulting Co., Ltd., for which
the share transfer was completed
on March 29, 2024, are notreflected.
(*2) Our estimates based on various
kinds of information

7Copyright © Digital Arts Inc.

Medium-Term Management StrategyWe have established three new priority areas that we will address to achieve sales targets.
［Three priority areas to be addressed］
01
••02
••
03
••

FY Mar. 2025

Growth of security business

FY Mar. 2027

FY Mar. 2026

(billion yen)

Cultivation of new customers, cross-sellingand upselling
Enrich of security solutions

15.0

Sales
CAGR
17%

Increase public sector market share

10.7

Increase market share during phase 2 of theGIGA School Concept
Provision of security measures that support
the DX of school affairs

12.5
Increase publicsector market share

9.3※Growth of security business

Investment in personnel to carry out
new measures

Implementation of a personnel strategy to increase
the number of employees
Introduction of incentives to increase productivity

Investment in personnel to carry out new measures* Sales recorded by Digital Arts Consulting Co., Ltd., for which the sharetransfer was completed on March 29, 2024, are not reflected

8Timing
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Growth in Sales in Each Market
We aim to achieve sales growth in each market by facilitating initiatives in the priority areas.
Growth in sales (million yen)

Summary of growth•Enter
prise

Growth of security
business••
PublicConsumer

Increase public
sector market share

Expanding a newservice••‘24/03‘27/03

CAGR

Secure new projects through improved
partner sales and inside sales
Promote cross-selling and upsellingthrough high-touch sales and customer
successes

4,248

7,558

21%

Secure upgrade projects and newprojects during phase 2 of the GIGA
School Concept
Win new orders for next-generation DX
projects

4,637

6,892

14%

Expand targets by rolling out newservices and aim to secure new projects

418

550

10%

9Copyright © Digital Arts Inc.03

Three Priority Areas(1) Growth of security business(2) Increase of public sector market share(3) Investment in personnel to carry out new measures

10

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Priority Area (1)Growth of security business・Product Strategy
・Carry out upselling and cross-selling

11

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Product Strategy
In view of the rate of growth of the product market and our advantages, we will increase solutionsin promising areas and investment areas to maximize synergy with our mainstay solutions.

HighInvestment areas

Future core areas(stable areas)

Promising areas

28.2%

XDR
CSPM/CWPP

Marketgrowthrate

Future promising areas

SASE

19.5%

Vulnerabilityassessment
(VA)

15.2%




Authentication

17.8%
14.5%

Unified endpointmanagement(UEM) tools

IDaaS

26.7%
SWG
33.0%
ZTNA
CASB
8.3%
FWaaS and22.9%
othersLow

Improvement
domainLow

Our main solutions

4.4%
3.1%

Gateway security
 Security monitoring tools
 FW-, VPN- and UTM-related
products

Increase in the numberof solutions inpromising areas andinvestment areas

20.3%

Web access security

EDR・NDR

2.2%
2.2%

Implementation of downsizing,
withdrawal and collaboration
with other companies

Areas for acquisition ofstable revenue

Our advantage
12＝ Market growth rates

Web filtering
Mail Security(including fileencryption)

Stable areasHigh

Our estimates based on various kinds of information
Copyright © Digital Arts Inc.

Carry out upselling and cross-selling
We will promote cross-selling and upselling for White Operation customers.

PPAP countermeasures

Anti-malware measures
Enhanced anti-infection protection to protect
against threats from the internet and from email

File transfer and file encryption

ID management

Threat detection

Multi-factor authenticationand single sign-on (SSO)

Detecting attacks fromthe internet and email toissue alerts and reports

White Operationclients
13

D Alert Reporting ServiceCopyright © Digital Arts Inc.

Priority Area (2)Increase public sector market share・Initiatives in Phase 2 of GIGA School Concept
・Initiative for Next-Generation School Affairs DX

14

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Initiatives in Phase 2 of GIGA School Concept
We will work proactively to ensure the renewal of existing contracts as well as
receive new contracts to increase our market share.
【Our share of the GIGA School Concept market】
Phase 2 of GIGA School Concept

Phase 1 of GIGA School Concept
2019

2020

2021

Earning themarket's trust

2022

2023

2024

2025

2026

2027

2028

The filtering market is expected
to grow under the GIGA SchoolConcept.

Share ofi-FILTER The shift from free filtering tocharged filtering will accelerate.

53%

Strengthening of functions,increase of product value andproper unit pricing

Newcontracts

Increaseof ourmarket
sharethe renewal ofexisting contracts
15Copyright © Digital Arts Inc.

Initiative for Next-Generation School Affairs DXOur products are applicable in many different areas to ensure security. We will proactively
advertise the value of our products.
＝ Scope of supports

Security support map with our products

Overview diagram of security measures in school affairs DX
Internet public cloudInternet public cloud

Automatic data encryption

Automatic
data encryption
File encryption

SchoolAffairs
systemMulti-factor
authentication

Multi-factor
authentication

Risk-based
authentication

Risk-based
authentication

Single sign-on

Single sign-on

Teaching staff’s
terminals
Mobile device
management

Data encryption

Antivirus

EDR

SchoolAffairs
systemLearningsystem

Teachers

Students

Encryption of communicationpath

Web filtering

Learningsystem

Multi-factor
authentication

Multi-factor
authentication

Risk-based

Teaching staff’s
terminals

Schoolchildren and students'
terminals
Mobile device
management

Data encryption

Antivirus

EDR

Mobile device
management

Antivirus

Risk-based

authentication
Authentication

authentication
Authentication

Single sign-on

Single sign-on

Teachers

Data encryption

Dataencryption/
EDR
EDR

Students

Encryption of communication
pathWeb
filtering
Filtering

Schoolchildren and students'
terminals
Mobile device
management

Antivirus

Data encryption
Dataencryption/
EDR
EDR

Measure to prevent erroneous emailtransmission

Business trip destination, etc.

Schools

Business trip destination, etc.

Schoolchildren and students'
home, etc.

16

Schools

Schoolchildren and students'
home, etc.

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Priority Area (3)Investment in personnel to carry out newmeasures
・ Increase the employee count・ Boost Productivity

17

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Investment in personnel to carry out new measures
We will implement strategies based on the ideas of boosting employee count and raisingproductivity, as investment in personnel to carry out new measures for sales growth.
Investment in personnel to carryout new measures[Sales growth (FY March 2024 to FY March 2027)]

Three strategies to increase the employee countAt least 1.5fold sales
growth

15.0 billion yen

19.3 billion yen※

We will make investments based on threestated strategies: the hiring, development andretention of human resources.
Introduction of incentives to increase productivity

2
FY Mar 2024

We will newly introduce incentive plans ineach department, operated separately fromwage systems.

FY Mar 2027

*Sales recorded by Digital Arts Consulting Co., Ltd., for which the sharetransfer was completed on March 29, 2024, are not reflected

18Copyright © Digital Arts Inc.

Notes on Descriptions
Among the descriptions of plans, strategies and financial forecasts in this presentation material, thosethat 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 on changes in the environmentand 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, i-FILTER Anti-Virus & Sandbox, i-FILTER@Cloud Anti-Virus & Sandbox, i-FILTER@Cloud Dアラート発信レポートサービス, info board,
Active Rating System, D-SPA, Anti-Virus & Sandbox for D-SPA, NET FILTER, SP-Cache, White Web, ZBRAIN, クレデンシャルプロテクション, ホワイト運用, m-FILTER, m-FILTER
MailFilter, m-FILTER Archive, m-FILTER Anti-Spam, m-FILTER Anti-Virus & Sandbox, m-FILTER@Cloud Anti-Virus & Sandbox, m-FILTER@Cloud Dアラート発信レポートサービス,m-FILTER File Scan, Mail Detox, m-FILTER EdgeMTA, EdgeMTA, FinalCode, i-フィルター, DigitalArts@Cloud, Desk, Desk Event, StartIn, f-FILTER, Dアラート, Dコンテンツ,f-FILTER and other logos and icons related to Digital Arts Inc. and its products are trademarks or registered trademarks of Digital Arts Inc.

19Copyright © Digital Arts Inc.

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