3649

Supplementary Information on
Q3 FY2023 Financial Results Summary
FINDEX Inc.
13th November 2023

2023 FINDEX Inc.

Cautionary Statements

This material is provided for informational purposes only and does not constitute a solicitation of any action based on this material.
This document (including the business plan) has been prepared by the Company based on reliable information available at the time of
preparation, but it contains risks and uncertainties, and the Company assumes no responsibility for its accuracy or completeness. The
Company assumes no responsibility for the accuracy or completeness of the information contained in this material, even if it is desirable toupdate or revise forecasts or plans.
The Company assumes no responsibility whatsoever for any losses that may arise from investment decisions based on the forecasts and target
figures contained in this document.
The copyright of this material belongs to Findex Inc.
No part of this report may be reproduced or distributed in any form or by any means without the prior written permission of the Company.
In the graphs and tables of this document, some of the figures are rounded up or truncated for the purpose of adjusting fractional values.
This document has been translated from the Japanese original for reference purpose only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail.

2023 FINDEX Inc.

Q3 FY2023 KEY TAKEAWAYS•

Our Medical Business drove the financial performance. Large scale projects made progress and theconsulting unit performed well•

The achievement rate reached approx. 60% for operating profit

Cumulative net sales and operating profit for
9m turned positive
Net Sales YoY:

+15.8 %
+63.2%

Operating Profit YoY:

The achievement rate exceeded the same in
the previous year
9m Achievement Rate on Net Sales:

68.6

%

(9m FY2022 achievement rate: 66.1%)

9m Achievement Rate on Operating Profit:

Achieved one of the highest net sales and operating
profit levels in Q3 alone
Q3 Net Sales:JPY

Q3 Operating Profit: JPY

1,225
399

• The core Medical Business led sales growth2023 FINDEX Inc.

mn YoY +59.9 %mn YoY +12.3 times

60.7

%

(9m FY2022 achievement rate: 47.5%)• Backlog orders have reached their highest historical levels• If Q4 operating profit remains steady compared to the previous year, ourfinancial performance will be at a level where we can achieve our annualplan

3Q3 FY2023 Financial Performance Highlights•

Significant increase in net sales and operating profit, mainly due to strong demand in Medical Business•

Cumulative operating profit for 9m turned positive, achieving one of the highest net sales and operating profit
levels• Cumulative sales for 9m increased by 15.8% YoY• Operating profit decreased in H1 but turned positive with a 63.2% increase on a YoY basis（¥ Millions）

FY2021
Jan-Sep

FY2022
Jan-Sep

FY2023Jan-Sep

FY2022Q3

YoY

FY2023Q3

YoY

Net Sales

3,513

2,999

3,474

15.8%

766

1,225

59.9%

Gross Profit

1,920

1,751

2,132

21.8%

424

852

100.7%

54.7%

58.4%

61.4%

-

55.4%

69.5%

-

703

488

796

63.2%

32

399

1128.9%

20.0%

16.3%

22.9%

-

4.2%

32.6%

-

Recurring Profit

721

523

820

56.7%

42

405

862.4%

Profit Attributable to
Owners of the Parent

485

349

567

62.2%

29

283

852.2%

Gross Profit Margin
Operating Profit
Operating Profit Margin• In Q3 alone net sales increased by 59.9%, while operating profit increased 12.3 times compared to the previous year
• The gross profit margin remained high at 69.5% in Q3• Operating profit in Q3 is the second highest, following FY2019 when demand was exceptionally high due to the rise in Japanese consumption tax(Q3 FY2019 operating profit: JPY 569mn)• Q3FY2022 was still affected by the impact of COVID-19, resulting in YoY decreases of 30.9% in net sales and 84.9% in operating profit• On the other hand, Q3 FY2023 saw strong orders, which led to a significant number of billable projects for FY2024 and a high volume of revenue
recognition under the new accounting standards• Public Sector Business came back into the black at the operating level in Q3, and the loss has diminished in Health Tech Business2023 FINDEX Inc.

4

Balance Sheet•

No significant changes in the balance sheet•

Equity ratio remains at a high level of 86.0%
Q4 FY2022（¥ Millions）

Q3 FY2023

AmountAmountMainly caused by

Changes

B/S
Cash and deposits

2,414

2,703

289

Accumulation in profit

Notes, accounts receivable - trade and contract assets

1,361

1,102

-259

Decrease in accounts receivable andcontract assets

Merchandise and finished goods, work in progress

169

203

34

Raw materials and supplies

147

147

0

Other

37

49

12

4,128

4,205

77

Tangible assets

103

92

-11

Intangible assets

251

272

20

Software

251

271

20

498

506

9

4,981

5,075

94

TOTAL CURRENT LIABILITIES

654

439

-215

LONG-TERM LIABILITIES

284

278

-6

0

0

0

938

717

-221

4,043

4,359

316

4,039

4,352

314

4,981

5,075

94

TOTAL CURRENT ASSETS

Investments and other assets
TOTAL ASSETS(long-term and short-term interest-bearing liabilities)
TOTAL LIABILITIESNET ASSETS
Shareholders’ equity
TOTAL LIABILITIES and NET ASSETS

2023 FINDEX Inc.

• Deposits and cash
increased to JPY 2.7bn
with the cumulative profits
from the past
• Strategizing on effective
uses of capital including
M&A

Decrease in income taxes payable

Accumulation in profit

59m Factors Contributing to Changes in Operating Profit
・Significant increase in sales and profit were recorded in Q3, offsetting the decrease in Q1
・Above was led by an increased number of projects and partial revenue recognitions of Q4FY2023-Q1FY2024,
following the new accounting standards
Factors Contributing to Changes in Consolidated Operating Profit 9m FY2023(¥ Millions)

1,000
900

-6

800
-68

Q2 85

Q3 399

17

488
Q3 32

796

12

268

600

400

-61

160

700

500

-6

-8
Q2 109300

Q1 370Q1 288

200

Q1
9m

Q2
Net Sales Factors

Q3

Q1

Q2

Q3

Cross Profit Margin Factors

Q1

Q2
SG&A Factors• Both the increase in sales and theimprovement in profit margins madepositive contributions in Q3. The
favorable performance of theconsulting business was theunderlying factor• Gross profit margin decreased in Q1
as outsourcing costs increased, in
relation to data migration• SG&A expenses are under control

Q39m

FY2022

FY2023OperatingOperating

ProfitProfit2023 FINDEX Inc.

• An increase in profit registered in Q3,
offsetting the decrease in Q1

6

9m FY2023 Trends in Each Business Segment•

Sales in Medical Business remained strong•

Public Sector Business turned profitable with a steady growth andreduced Health Tech Business losses contributed to improved financial
performance(¥ Millions)

FY2022
Jan-Sep

FY2023Jan-Sep

Medical Business

FY2022Q3

YoY

FY2023Q3

YoY

Net Sales

2,999

3,474

15.8%

766

1,225

59.9%

Medical Business

2,874

3,321

15.5%

754

1,168

54.9%

Public Sector Business

62

112

79.5%

10

55

407.4%

Health Tech Business

6440-36.3%

1

1

43.8%

Operating Profit

488

796

63.2%

32

399

1128.9%

Medical Business

704

892

26.7%

107

423

294.1%

Public Sector Business

-53

9

-

-29

20

-

Health Tech Business

-162

-105

-

-45

-45

-

* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited• Sales expanded steadily in Q3, leading
to a 15.5% YoY increase in net sales
for 9m• Profit was boosted by maintenancerevenue from new customers, revenue
from consulting, and the progression oflarge-scale projects• Profit growth offset the increase of
personnel costs, resulting in a highlevel of operating profit margin in Q3• Number of installations and add-ons
during 9m : 34 for hospitals and 83 forclinics

Public Sector Business• Q2 saw decline in revenue but returned
to a positive in Q3. Operating profit isalso in the black for 9m• Bidding for local governments and otherpublic entities performed well
• The cumulative numbers of installations
since the service launch: 26 for public
sector organizations and 6 for hospitals

Health Tech Business• Continued investing in R&D, resulting
in ongoing deficits
9m
2023 FINDEX Inc.

9m

• Domestic sales of GAP/GAP-screener
during 9m : 13 units

7

Medical Business 1/2•

Demand is strong, driven by momentum of work-style reforms inhealthcare institutions•

Providing cloud-based solutions to large hospitals
Net Sales andOperating Profit（¥ Million)••

Average Numbers of Soluions Installed per
Medical Facility
6.00

1,600
1,478

5.50

1,400
1,196

1,179

1,200

•

5.00
1,168

4.60
4.33

4.50
1,000

4.16

973

925

4.04

•

4.00
754

800

4.30

4.39

3.50
3.00

600

2.76

2.96

3.06

3.10

2.49

2.53

2.64

2.41
2.19

2.22

2.86

2.54
2.50
400

2.29

2.00
1.96

200

2.33
2.04

2.34

2.37

1.50
0
Q1

Q2

Q3

22/12FY
Net sales

Q4

Q1

Q2

Q3

23/12FY
Operating profit

•
•

1.00
2019

Large hospitals
Small hospitals

2020

2021

2022

2023.Q3

Medium sized hospitals
Clinics*Definitions are unified due to the presence of mixed definitions insome of the previously disclosed data
2023 FINDEX Inc.

Key Initiatives•
2018

Software was selling well and newly
established consulting department
received continuous orders. Large scale
projects proceeded smoothly (resulting in
an increase of revenue recognitions
under the new accounting standards)
Launched our in-house brand PiCls,
offering various cloud services like
Medical Avenue, and developed several
products to support collaborations of
medical facilities
Cross selling for the existing customers,
mainly the large hospitals was strong.
Delivery of comprehensive services
including maintenance also increased
Profit margin increased as packaged
solutions with low implementation costs
were preferentially sold•

Expanding cloud-based services
Utilization of generative AI and preparation
for data businessSubsidiary Fitting Cloud inc. has initiatedR&D in collaboration with Kyoto University
Hospital on medical documentation creation
support using generative AI.
Regarding the sales of medical software in
India, ongoing discussions with Toyota
Tsusho Corporation are focused on the
product’s sales timing and pricing
8Medical Business 2/2•

Number of medical solutions users steadily growing, reaching 2,000 soon•

Customer Retention Rate is 99%
9m Medical Business - Composition of Sales by Products
Changes in the Number of Medical Solutions Users(# of Facilities)

2,500

100.0%

98.7%

99.3%

97.8%

99.4%
98.8%
1,911

2,000
1,757

Claio and related products

98.9%
98.0%

MapleNote
DocuMaker
MoveBY

1,973
96.0%

Claio andrelated products
33%

1,823

1,675

94.0%

1,558
1,500

REMORA
Radiology
Consulting

Maintenance
31%

92.0%

MaintenanceHardwareLicense

90.0%

Other
Fitting Cloud

88.0%

1,000

Consulting
4%

86.0%
84.0%

500

Trends in Distributor Sales(¥ Millions)

82.0%

1,200
1,000

80.0%

0
2018

2019

2020

2021

2022

2023 Q3

Large hospitals

Medium sized hospitals

Small hospitals

Clinics

OthersCustomer retention rate
継続率

*Calculation changed as categorization of large hospitals revised from 500 or more
beds to 400 or more beds following the revision of medical service fees in 2018.
*Consumers of one-time products are excluded. Definitions are unified due to thepresence of mixed definitions in some of the previously disclosed data
2023 FINDEX Inc.

800

1,085
956
866

853

198

260

668

593

2019

2020

251

237

600
400

719

834

810

200
0
9m

Q4

2021
2022
2023
*Figures for the now-removed Public Sector
Business is included up to FY2022

9

Public Sector Business 1/2•

Revenue significantly increased in Q3 as ongoing projects are progressing well and the number of new
projects consistently grew, operating profit returned to a positive•

Monthly usage revenue steadily growing•

Net Sales andOperating Profit(¥ Millions)

Breakdown of Net Sales

projects on municipalities and publicorganizations

70(¥ Million)

Proactively participating in bidding for

70
59

60

55

•

60

government and national universities in Q3,
summing up to a total of 7 ongoing projects.

50
50
40
30

Received 4 orders from a prefectural

These revenue will be recognized in

36
26

FY2024

25

40

21

•

20

Mid to small sized projects are handled by
the distributors, large projects by FINDEX

11
30

10

•

0

in hospitals, leveraging our existing sales

20

(10)

Accelerate sales for administration offices
channel in medical industry

(20)
10

Key Initiatives

(30)
(40)

•

0
Q1

Q2

Q3

22/12FY
Net sales

2023 FINDEX Inc.

Q4

Q1

Q2

Q3

23/12FY
Operating profit

Q1

Q2

Q3

Q4

22/12FY
Monthly usage revenue

Q1

Q2

Q3

23/12FY
OthersFurther expand the organization andinternal resources for anticipated large
scale projects. Properly prepare forupcoming large projects
10Public Sector Business 2/2 - Orders and Backlog for DocuMaker Office (DMO)•

Stronger than expected demand has led to multiple orders for 2024 and 2025•

High-confidence projects are in place and workforce reinforcement is being carried out for securing them
Public Sector Business Sales Forecast(¥ Millions)

400*Actuals and Forecasts are adjusted for the new revenue recognition standards

350

350
300

Mid-Term Successful
Bid Accumulation

250
207

200
150
100
50
0

160
DMO Implementation Forecast

Other

Other
DMO Implementation Forecast

DMO Usage Fee Forecast
DMO Implementation Q3 ActualDMO Usage Fee Forecast

DMO Usage Fee Q3 Actual

Q3 Actuals + Forecast

Medium-Term Plan

Current Orders +Forecast

FY2023Medium-Term Plan

FY2024

Medium-Term Plan
FY2025

List of Confirmed Orders and Backlog
Implementation scheduled in

Winning bid in

Customers

Solutions# of expected users

MAR2023

City A

Public document management & e-Approval

OCT2023900

MAY2023

Prefecture B

Public document management & e-Approval

MAR2024

5,000

JUN2023

National University C

Public document management & e-Approvale-Application (public document excluded)

APR2024

1,000

AUG2023

Organization D

Public document management & e-Approval

DEC202330

SEP2023

National University E

Public document management & e-Approval

APR2024

450

SEP2023

Foundation F

Public document management & e-Approval

APR2024

150

SEP2023

Organization G

Public document management & e-Approval

APR2024

500*Public Document Management & e-Approval: Document management and electronic approval in accordance with the Public Document Management Act

2023 FINDEX Inc.

*e-Application (public document excluded): Application of documents other than public documents (e.g. Notification of commuting)11

Health Tech Business••

Struggled for domestic sales of GAP. Continuing to strengthen thesales structure while conducting product marketing, prioritizing theimprovement of product recognition
Mass-Manufacturing process of GAP being carried out for sales in
EuropeNet Sales andOperating Profit(Units)(¥ Million)

60

GAP/GAP-screener
Cumulative Numbers of Sales andDomestic Demonstrations

160
43
37

40
20

International Sales

120
5

3

2

• Making final adjustments with Rexxam to startsales in the EU within FY2023. Massmanufacturing process started

100

0

80

• Continuing the preparations for medical
approvals in India and ASEAN countries to start
sales

(20)

60
(40)

Key Initiatives

40
(60)

• Conduct further R&D to target additions ofdifferent eye test functions to the device

20

(80)

0
Q1

Q2

Q3

22/12FY
Net sales

Q4

Q1

Q2

Q3

23/12FY
Operating profit

Q1

Q2

Q3

Q4

Q1

Q2

Q3

2022

2023

# of demonstrations# of units sold

*Only the numbers of demonstrations by Findex are aggregated2023 FINDEX Inc.

• Continuing to expand sales to hospitals, eyeclinics and checkup facilities• Undergoing organizational development toachieve the sales targets of 20 units to hospitals
and 40 units to checkup facilities in FY2023• Creating a new market among checkup facilities
together with Toyota Tsusho Corporation,
focusing on the early detections of eye diseases• Well-received at the 77th Annual Congress ofJapan Clinical Ophthalmology• Conducting additional studies with Kyoto
University. Posted an academic paper to a journal(currently in review)

140

20
1

Domestic Sales• GAP has been selected for a project by AMED
(Japan Agency for Medical Research andDevelopment), as it can be used to detect not
only visual field abnormality, but also MCI.
Possibility of applying it to tests for other mental
disorders and brain diseases

129m FY2023 Progress Report•

Achievement rate for operating profit against the guidance: 60.7％, exceeding the same of the previous year•

Flat Q4 sales and profit results YoY would still meet the annual guidance

FY2023Jan-Sep Actual

FY (Plan)Achievement rate（¥ Millions）
6,000

Trends in Quarterly Sales

5,000

Net sales

3,474

5,065

68.6%
4,000

Operating profit

796

1,313

60.7%

Recurring profit

820

1,330

61.7%

Profit attributable toowners of the parent

3,000
2,000
1,000

567

923

61.5%

0
FY19/12

FY20/12Q1

FY2022

Jan-Sep Actual

FY (Plan)Achievement rate（¥ Millions）
1,400

FY21/12Q2Q3

FY22/12

FY23/12

Q4

Trends in Quarterly Operating Profit

1,200

Net sales

2,999

4,541

66.1%

1,000
800

Operating profit

488

1,028

47.5%

600
400

Recurring profit

523

1,055

49.6%

200
0

Profit attributable toowners of the parent

(200)

349

722

48.4%

(400)
FY19/12

FY20/12Q12023 FINDEX Inc.

FY21/12Q2Q3

FY22/12

FY23/12Q4

13

FY2023 Financial Guidance•

There is no change to the financial guidance announced at the beginning of the current fiscal year•

Continue to develop profitable business and further increase profit margins

FY2022 Actual(¥ Millions)

AmountFY2023 Guidance
AmountYoY(%)Net sales

4,541

5,065

+11.5%

Operating profit

1,028

1,313

+27.7%

Recurring profit

1,055

1,330

+26.1%

722

923+27.8%

28.21

36.03

－

Interim dividend (Yen)

3.00

4.00

－

Year-end Dividend (Yen)

6.50

7.00

－

Full-year dividend (Yen)

9.50

11.00

－

Profit attributable to owners of theparentEarning per share (Yen)Dividend per share2023 FINDEX Inc.

14

Backlog and Orders (Excluding Maintenance)•

Amount of backlog is at one of the highest levels•

Besides the strong order demand, the expedited timing of orders is a significant factor(¥ Millions)

Maintenance
30%

2,000

1,800

1,894

Composition
ratio of sales

1,600
1,429
1,346

1,400
1,263
1,197
1,200

1,122
1,059

1,000

1,159

1,114

1,071

1,041
979

962
909

846
834

829

799

800
690

688
617

600

352

400

200

0
Q1

Q2

Q3

Q4

Q1

Q2

21/12FY

22/12FY

Backlog
2023 FINDEX Inc.

Q3

Q4

Q1

Q2

Q3

23/12FY

Orders15

Order-to-Acceptance Timeline•

The adoption of new revenue recognition standards has led to longer order-to-acceptance periods•

The increase in orders and the second-half emphasis in the initial guidance are partially due to this change
in practice•

From the outset, FY2023 was projected to have higher earnings in the second half of the year•

Order placement timings have shifted to be earlier due to changes in commercial practices•

Some of the sales from large-scale projects in Q1FY2024 will be recognized in Q4FY2023 due to the adoption of the new accounting standard

Revenue composition ratio changes by order placement period
More than
12 months ago

More than
12 month ago

More than
12 months ago

9-12 months ago

9-12 months ago
3 months ago

3 months ago

3 months ago
6-9 months ago

9-12 months ago

FY2021

FY2022

3-6 months ago

FY2023

6-9 months ago
3-6 months ago
3-6 months ago
6-9 months ago*Sales by distributors, small orders, support and maintenance are excluded*Net sales are not adjusted to the "Accounting Standard for Revenue Recognition“. Ratios above are calculated based on the total amount of acceptance

2023 FINDEX Inc.

16

FY2023 Steps to Achieve Our Goals – Status and Strategies
FY2023
Objectives

MedicalBusiness

PublicSectorBusiness

HealthTechBusiness2023 FINDEX Inc.

Establish a Consulting
Department to launch a
new business model,
providing consulting
services for medical
facilities

Roll out a new businessfrom the project toaccelerate sales of
DocuMaker Office,targeting municipalities
and public organizations

Continue to cooperatewith sales partners tocatch up domestic/overseas sales of GAP,
aiming to install 260
units in and outside
Japan

9m
Evaluation

Details on Evaluation

Market Environments and
Our Perceptions

Our Strategies for Q4 and Beyond◎• The newly established consulting
department largely contributed tothe profit• Cross-selling progressing
favorably primarily to large
hospitals• Delivery of comprehensive
services including maintenanceincreasing• Improved profit margin byprioritizing sales of existing
packaged solutions with low
implementation costs• Investment in improvement ofworkstyle for medical
professionals continues• Discussions for digitalization
in medical industry seem to
be gaining momentum• Collaboration needs are risingamong hospitals andneighboring areas• Time required until medical
treatment data can be utilized
outside of medical facilities• Continue to deliver consulting services,
proposing effective problem-solving• Explore business in real medical data,
leveraging the advantage of having many
acute care hospitals as our customers• Aim to expand cloud-based solutions tostimulate collaborations• Secure and train software developers• Branding of cloud-based solutions• Work towards the utilization of generative
AI together with our subsidiary Fitting
Cloud Inc.

◎

• Bidding for municipality projects
progressing as participating
actively• Revenue from the monthly usage
increasing• Product recognition improving as
number of implementations
increasing• Secured human resources tosupport business expansion• Ministry of Internal Affairs andCommunications promoting
digitalization• Demand for official
documents management
software remains strong• Digitalization of back-office islagging behind• Focus on large projects• Product improvement with new functions• Strengthen marketing, leveraging brandrecognition• Secure necessary personnel toaccommodate business growth△• GAP project behind the plannedschedule• Started mass-manufacture
process for sales in the EU.
Currently finalizing export
process with the distributor• Continuing R&D to maximize
utilization of GAP• Exhibitions anddemonstrations well received,
confirming market needs• No change in aging trends
and recognition for eye
diseases rising• Product launch in the EU• Preparations for the medical approval in
India• Promotion activities to raise awarenessand strengthen distributor sales• Create a market focusing on the early
detections of eye diseases• Advance research with domestic andinternational research institutions andpublish academic papers

17Medium-Term Business Plan “Vision for 2025”“Enriching Society with Technologies and Creation”
FY2022（￥Millions）

Net salesCAGR
FY2025/FY2022

Medium-Term Business Plan

Actual

6,330

11.7%

Medical Business

4,352

4,705

5,066

5,320

6.9%

Public Business

121

160

207

330

39.7%

Health Tech Business

69

200

480

680

114.4%

1,055

1,330

1,710

2,100

25.8%

23.2%

26.3%

29.7%

33.2%

9.50

11.00

15.00

18.00

Payout ratio

Concentration ofManagement
Resources

Acceleration ofAdvanced R&D

Addressing Key
Sustainability
Challenges

2023 FINDEX Inc.

33.7%

23.7%

31.2%

• Restructure medical solutions business to sustain growth• Prioritize M&A as a key growth strategy• Strengthen partner sales• Reconceptualize our presence as a R&D-oriented company• Improve internal training system and enable dynamic staffing including
management levels• Acquire and retain the right talent• Support and engage in international initiatives for climate change (E)• Contribute to reducing disparities in health care and improving wellbeing ofpeople (S)• Ensure good corporate governance and foster a diverse and inclusive
workplace culture (G)Business Strategy 2023-2025
Medical Business

5,754

Annual cash dividends per share

3

FY2025

5,065

Ordinary profit margin2

FY2024

4,541

Ordinary profit

1

FY2023• Proactively cross-sell software solutions, tomore than 1,900 existing customers (as ofDecember 2022) mainly the large hospitals• Extensively install packaged solutions via
distributors to achieve higher profit margin• Promptly penetrate the market with selfdeveloped data infrastructure which support
medical digitalization

Public Sector Business• Set our legally compliant DocuMaker Office
the public records management solution as
the core product, focusing the target on
municipalities, public companies, andexternal organizations of ministries andagencies

Health Tech Business• Overseas: Establish sales structures not
only in the EU countries but also in India,
ASEAN countries, and the U.S. to boost
sales of GAP, a perimeter equipped witheye tracking technologies• Domestic: Establish a consulting sales
system at medical equipment dealers bytraining and assigning sales professionals
capable of explaining the technical aspectsof GAP
18

Trends and Topics in the Medical Software Industry 2023-2024「 Medical DX Reiwa Vision 2030 」
Establishment of a National Medical
Information Platform

Standardization of EMR Information(Promotion across all medical institutions)

Digitalization of Medical Treatment Fee
Amendment

Medical AI / Big Data

Cloud-Based Services

Telemedicine•

Generally, all medical institutions and pharmacies areconnected to the Online Certification System for
Healthcare→Laying the Groundwork for Data Utilization• The implementation of the Next Generation Medical
Infrastructure Act will expand the collection andutilization of diverse real-world data
• In addition to the Health Insurance Claims Data currently
being traded in the market, it will be possible to handle
more accurate medical data such as medical records inthe future
Advantages for hospitals and healthcare industry:• Support for diagnosis, treatment, and surgery• Applications for disease and nursing care prevention andreduction of medical costs• Development of new markets via data accumulation•

Cloud-based operations with high security levels are
now possible without compromising the "three principles
of electronic storage“• In small and medium-sized hospitals and clinics, the useof cloud-based products is expanding, while in large
hospitals, on-premises system operation is still common→The widespread adoption of cloud storage will likely
accelerate as its market prices decrease• Utilizing the cloud for the Construction of a Regional
Collaboration Network
Advantages for hospitals and healthcare industry:• Efficient information sharing enables smart coordination
with other facilities• No need for extensive capital investment, server room
allocation, or regular system updates•

The 2022 revision of medical fees has led to an increasein the insurance points for initial consultation fees to 87%
of in-person medical care, resulting in a rapid increase infacilities that have introduced telemedicine• Meanwhile, there is a limited number of medical facilities
that offer telemedicine services, and large hospitals arehesitant to fully implement them
→The applications are limited, primarily in second opinion
outpatient settings• Emergence of teleoperated surgical robots
Advantages for hospitals and healthcare industry:• Expanding the choice of medical facilities, improving
healthcare systems in remote areas and to address
medical service disparities• The reduction of congestion and infection risk due to adrop in patient visits

Electronic Prescriptions

Myna Insurance Card

Better Working Environments•

The Japanese gov’t targets all hospitals and pharmacies
to implement e-Prescriptions by the end of 2024 (Current
implementation rate is 1%)•

Medical facilities need to install Online Certification
System for Healthcare and issue HPKI cards prior to theutilization of e-Prescriptions• The Japanese gov’t plans to phase out healthinsurance cards in fall 2024 and integrate them into
the national My Number identification system• 80% of the hospitals and pharmacies in Japan had
already started the new operation utilizing Online
Certification System for Healthcare
Advantages for hospitals and healthcare industry:• Enhanced healthcare through centralized medical
history management• Reduction of administrative costs• Starting next April, overtime work for employedphysicians will be limited to no more than 960 hours
per year→Proper management of working hours is necessary• Digitalization has also been accelerated for
improvement of efficiency in medical practices
Advantages for hospitals and healthcare industry:• Improvement in long working hours of physicians• Sales opportunities for attendance management
solutions

Advantages for hospitals and healthcare industry:•

Optimization of dispensing and counseling tasks•

Prevention of duplicated prescriptions by centralizing
management of prescribing information•

Contribution to telemedicine and home care services

Domestic Market Size of Medical Software : approx. 500 billion yen*2023 FINDEX Inc.

* excerpted from NIKKEI COMPASS October 3, 2023

19

How We See Our Future
Enriching Society with Technologies and Creation
Equal Access to Medical Services

Developing New Technologies
for Healthy Livings

Digitally Connecting Medical Communities

Electronic operations
Cloud-based services

Paper-based operations
On-premises Solutions

Encourage digital transformation(DX) in local governments and publicorganizations through the expansionof our public document
management system

Our Strengths:• Having variety of products that drive digital transformation(DX) within and outside medical institutions• Specialized in the processing of diverse patient data owned
by large hospitals• Being an expert in hospital software, we extract valuable
information from a vast amount of medical data andproviding consulting services to medical institutions
Connect medical facilities andpatients with cloud services tobuild a safe and secure platform

Promote regional medical
collaboration with solutions thatallow sharing of patient information
among related facilities

Support the collection, processing,and utilization of medical data tocontribute to the exploration of new
knowledge

GAP

DocuMaker
OfficeSupport for new initiatives suchas electronic prescriptions

Medicalexamination
facilities

Local government

Claio

Enlighten the necessity of visual
field tests in medical examination
facilities through the provision of
perimeters

Nursing home

Hospital DocuMaker
Medical Industry
Pharmacy
C-NoteREMORA

Hospital-Integrated Medical Care
2023 FINDEX Inc.

Home medical care

Hospital

Patient

Community-BasedComprehensive Medical Care20

Sustainable Management Policy / ESG Initiatives〈Topics on Sustainability for Q3 FY2023〉
 CDP questionnaire submitted
 TCFD initiatives: Identifying key risks and opportunities; assessing business impacts
 Engaged in preparing responses for Corporate Sustainability Assessment (CSA) conducted by S&P Global
Environment（E）
Support and engage in international initiatives for climate change〈Emission Calculations for FY 2022 and Future Reduction Goals〉
Scope1,2

Scope3

In accordance with the SBT 1.5℃ target, we will annually reduce GHG emissions by 4.2% comparedto the previous years.

The aim is to achieve a 50% reduction in emissions by 2030, using
a sales-based unit target (Emissions/Sales).

FY2022（Actual）

GHG Emissions

GHG Emissions

FY2022（Actual）

Scope1

13 t-CO2

10 t-CO2

Category 1

2447 t-CO2

Scope2209 t-CO2

148 t-CO2

Category 2

164 t-CO2

Category 3

36 t-CO2

Category 4

4 t-CO2

Category 5

10 t-CO2

Category 6

289 t-CO2

Category 7

148 t-CO2

Category 9

5 t-CO2

Category 11

965 t-CO2

Category 12

27 t-CO2

Emission reduction targets for Scope1 and 2 ~2030（Unit︓t-CO2)

250

FY2030（Target）

222

213

204

200

196

187

179

172

165

158

150

Scope3

100
50
0
2022

2023

2024

2025

Scope12023 FINDEX Inc.

2026

2027

Scope2

2028

2029

2030

*There are no emission sources for Scope 3, Categories 8/10/13/14/15.

21

Sustainable Management Policy / ESG Initiatives
Social（S）

Governance（G）

Contribute to reducing disparities in health care and improving
well-being of people

Ensure good corporate governance and foster a diverse and inclusive
workplace culture• Strengthen information security• Increase access to early detection of glaucoma and other eye
diseases by promoting the use of GAP, an in-house developed
perimeter

External▶ All employees are required to participate in an annual information security seminarand to respond to a security checklist on a monthly basis▶ Visual field tests using the GAP/GAP-screener gaze analysis
type of perimeter are being performed at health screening sites
sponsored by the city of Iyo in Ehime Prefecture, as well asother local governments• Realize a framework that allows any person to receive smoothand efficient medical care at large hospitals, introducing
telemedicine and utilizing location information• Foster an organizational culture that can withstand changes in the external
environment by facilitating diversity in hiring and promotion• Supporting employees in developing their talents in line with their career goals
through internal programs, making necessary adjustments for promotions▶ Annual stress checks are conducted for all employees▶ Increase the proportion of women in managerial positions to 9% by 2026 and raise
it to 18% by 2030

▶ Introduced a fully remote work option for employees based in
distant areas and overseas
Our benchmark initiatives

FY2022（Actual）

Total number of visual field tests
performed with GAP at checkups
organized by local governments

7,070

8,676

10,000Total number of GAP units sold

35

48

1,550

Total number of facilities implemented
Medical Avenue

As of Sep
30, 2023▶ Commitment is made to eradicate harassment, strengthen the protection of
personal information, promote work styles that are in compliance with the Labor
Standards Act, and enhance mental health support for full-time employees,
contract workers, and part-time staff▶ Annual participation in compliance-related e-learning is mandatory for all
employees• Create and maintain a healthy work environment with high levelsof employee engagement

Internal• Ensure compliance

FY2025（Target）

FY2022（Actual）

As of Sep
30, 2023

FY2025（Target）1０0Security Checklist Response Rate

100％

100％

100％

e-learning participation rate

100％

ー

100％

% of employees with disabilities

1.0%

0.7％

2.0%

% of foreign employees

0.3％

1.0％

1.5％

Our benchmark initiatives# of incidents related to information security

1

1

5

Employee Survey Response Rate

96%

ー

96%

% of female managers

3.8%

3.8%

8.0%

Stress Check Survey Response Rate

88%

ー

100%

% of independent outside Directors

33.3%

33.3%

44.4%

2023 FINDEX Inc.

22

Appendix

2023 FINDEX Inc.

Appendix

Net Sales•

Medical Business flourishes, Q3 net sales hits second highest on record•

Significant net sales increase within initial H2-focused plan range
Revenue by Quarterly（¥ Millions）+59.9％

1,800• Net sales increased by 59.9% YoY

1,631

1,629

1,542

1,600
1,463

• Medical Business led this financial
performance

1,455

1,400
1,265
1,200

1,252

1,225

1,170
1,108
1,038

751

800

997

969

943

1,000

• Investment interest in solutions to
support medical practices for improving
working environment and hospital
operational efficiency shows continued
recovery766

730• Continued recovery trend from the
COVID-19 restriction period

707
629

600

• Record high sales achieved in Q3
FY2019 . A surge in demand occurred
before the consumption tax hike in
October 2019

400

200

0
Q1

Q2

Q3

19/12FY

Q4

Q1

Q2

Q3

20/12FY

Medical Business

Q4

Q1

Q2

Q3

Q4

Q1

21/12FY

Public Sector Business

Q2

Q3

Q4

Q1

22/12FYQ2

Q3

23/12FY

Health Tech Business* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited

2023 FINDEX Inc.

24

Appendix

Gross Profit Margin and CoGS•

Significant revenue growth and high gross profit margin•

Sales of packaged solutions by distributors and cross selling contributed（¥ Millions）

Gross Profit Margin and CoGS（Fixed/Variable）

2,000

80%
69.5%

1,800

70%
64.5%

1,600

63.0%

62.6%

60.2%

58.2%

55.5%

56.7%

55.3%

55.1%

60%

1,400
48.8%

48.5%

53.6%
1,200

57.1%

55.4%

43.7%
40.7%

+100.7％40.1%• No major changes in fixed costs.
Variable costs such as outsourcing fees
remained marginally increased

50%

44.2%

1,000

• Significant improvement in gross profit
margin to 69.5% in Q3

40%

800

• Expanding high profit cross selling andconsulting services contributed to
Medical Business

30%

600
20%
400
10%

200
0

0%
Q1

Q2

Q3

Q4

Q1

19/12FY

Q2

Q3

Q4

Q1

20/12FY
CoGS(fixed)

Q2

Q3

Q4

Q1

21/12FY
CoGS(Variable)

Gross Profit

Q2

Q3

Q4

Q1

22/12FYQ2

Q3

23/12FY

Gross Profit Margin* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited

2023 FINDEX Inc.

25

Appendix

SG&A•

Increased in SG&A expenses driven by rising personnel costs, yet within control•

Increased personnel and advertising expenses by normalized sales operations•

Q3 net sales growth leads to a significant YoY reduction in the SG&A expense ratio

Quarterly Results on SG&A expenses（￥ Millions）

500
450
400

457

451
422

400

399
351

350

357

419

396

376

431

421

453

426

• Personnel costs increased due tothe strengthening of hiring• The number of employees at the endof Q3 is 306, an increase of 10
employees YoY

392• Advertising costs increased asacademic congresses andexhibitions have returned to theconditions before the COVID-19
pandemic period

300
250
200

• Q3 net sales growth led to a
reduction in the SG&A expense ratio,
bringing it down to 37.0%

150
100
50
0
Q1

Q2

Q3

Q4

Q1

Q2

20/12FY

Q4

Q1

21/12FY
Personnel

2023 FINDEX Inc.

Q3

R&D

Advertising

Q2

Q3

22/12FY
Travel

Rent

Q4

Q1

Q2

Q3

23/12FY

Others26

Appendix

Operating Profit•

Q3 operating profit landed at the highest level following Q3FY2019•

Medical Business drove earnings. Public Sector Business came back into the black, and the loss has been
diminished in Health Tech Business
Quarterly Performance on Operating Profit（¥ Millions）
800
700• Significant increase in Q3 operating
profit achieved by increased revenues
and improved gross profit margin

651
596

600

540
500
451
400

399

370

300

288

284
214

200

(10)

109

85
38

0

• Public Sector Business rebounds from
Q2 operating loss to profit in Q3

217

128

100

32

(44)

(100)

(98)

(127)

(200)
Q1

Q2

Q3

Q4

19/12FY

Medical Business

Q1

Q2

Q3

Q4

Q1

20/12FY

Public Sector Business

Q2

Q3

Q4

Q1

21/12FY

Q2

Q3

Q4

Q1

22/12FY

Health Tech Business• Medical Business, which accounts forthe majority of profit, saw a significant
increase in profit in Q3

Q2• Investing in R&D continues in Health
Tech Business, widening the deficit
amount QoQ. But the same has been
narrowing YoY as EMC Healthcare Co.,
Ltd. became an equity method affiliate
in July 2022Q3

23/12FY

Operating Profit* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited
2023 FINDEX Inc.

27

Appendix

Changes in the Number of Customers - Medical solutions（ # of Facilities ）Categories

Q3 FY2022

Q2 FY2023

Q3 FY2023

QoQ

Large hospitals (>400 beds)

286

289

290

+1

Medium sized hospitals (100 to 399 beds)

302

319

317

-2

Small hospitals (20 to 99 beds)

83

82

82

0

1,166

1,212

1,227

+15

54

56

57

+1

1,891

1,958

1,973

＋15

Clinics (<19 beds)
Other medial-related facilities

Total（ As of September 30, 2023 ）2023 FINDEX Inc.

28

Appendix

Changes in Numbers of Employees

Changes in Numbers of Employees

Employees composition ratio(# of Employees)

350

300

286

289

293

301

293

295

296

301

300

309

306

Exectives 2%

263
250

Exectives

Programmers

240

232

Administration
17%

Sales・Software

200

Programmers
28%
Customer
Service13%150

Developers
Customer Service

Administration
100

Sales・Software Developers
40%

Internal Audit

50

Note: This includes 15 part-time/temporary staff

0
2016

2017

2018

2019

2020

2021

2022

Q1

Q2

Q3

2022

Employees2023 FINDEX Inc.

Part-time & Temporary

Q4

Q1

Q2

Q3

2023

（ As of September 30, 2023 ）29

Appendix

Updates and Highlights 9m FY2023
Changes made in reporting business segments

Jan

A subsidiary Fitting Cloud Inc. released three
new solutions
Changes made in organizational structure

Feb Revision of Medium-Term Business Plan

Jun

•
•
•
•

Weberi: Internet Browsing Virtualization Service
Bricks: Cloud-based general-purpose EDC/Questionnaire system
Valloon: Closed-cloud data storage
System Development Department divided into “Software Package Development” and “Product
Planning & Development”• Established “Consulting Department” “Public Solution Department” ”Customer Support”
The targets were revised due to changes in the business environment and delays in the schedule
for obtaining European Medical Device Regulation

Introduced a Restricted Stock Compensation Plan

Strengthen the link between board of directors' compensation and stock value to further promotevalue sharing with shareholders

Released a new product “AAdE-Report”

An electronic tracing report service to digitally connect hospitals and pharmacies with patient
information

HR regulations partially revised• Working hours reduced from 8 hrs to 7.5 hrs per day• Introduced a fully remote work option for employees based in distant areas and overseas

Released a new product “Remotalk-Cloud”

Application for Sharing Medical Examination Information Remotely

Perimeter “GAP” presented at 10th World
Glaucoma Congress®

Perimeter "GAP” presented as "FIELDNavigator" under Rexxam's OEM brand in a congress held
in Italy

Established the M&A section

Founded with the objective of enhancing business capacity through the efficient utilization ofcapitalMar

Apr

Changed to three segments: “Medical Business,” “Public Business” and “Health Tech Business”

Jul Revamped “Sustainability” webpage
Introduced the First Step Reward System andEnhancement of disclosure content in accordance with various guidelines

Aug Referral Reward Program

Introduced Financial Incentives for Applicants and Referrers

Sep Launched a new brand 'PiCls'

A brand specializing in cloud-based services
Our product lineup includes:
・ AAdE-Report
An Electronic Tracing Report Service
・ On-Shin
Online Medical Consultation Support System
・ Medical Avenue
Next Generation Patient Guidance Application
・ Booking AssistantOnline Appointment Reservation Service
・ Referral
Medical Information Transfer System

Co-hosted a Luncheon Seminar on 6th OctoberOct 2023 at the 77th Annual Congress of Japan
Clinical Ophthalmology
2023 FINDEX Inc.

Dr. Masahiro Miyake from the Department of Ophthalmology at Kyoto University Graduate Schoolof Medicine, Kyoto University Hospital, chaired our seminar titled “Cutting-edge Practice andInsights: Eye-tracking Perimeter and Data Preservation of Electronic Medical Records (EMR).”30

Appendix

Transition of the Medical Information Industry and Trends of Our Sales（¥ Millions）

6,000

2022：Medical DX Reiwa Vision 2030
Electronic Medical Record (EMR) Adoption Rate @over 400 beds：91.2%

5,000

Forcast

5,015

4,968

4,541

2018：The Next Generation Medical Infrastructure Act
Institutionalization of Telemedicine

4,281
4,004

4,000
3,603

April 2014： Consumption Tax Hike

3,311

3,288
3,000

2,863

2,951

Oct 2019： Consumption Tax Hike

2,382
1,987
2,000
1,543

1,000

2021：Establishment of the Digital Agency
Online Credential Verification Initiated

0
2011

2012

2013

2014

2015

2016
Q1

2017
Q2

Digitalization of Medical Claims
Adoption of Electronic Medical Record Systems
2023 FINDEX Inc.

Q3

2018
Q4

2019

2020

2021

2022

2023

The pandemic of COVID-19

Initiatives to Standardize
Medical Information31

Appendix

Net Sales FY2011-2022（¥ Millions）
6,000

4,969

5,000

4,541
4,282

4,005

4,000
3,603

3,000

2,864

3,288

3,312

2016

2017

2,952

2,383
1,988

2,000
1,543

1,000

0

2011

2012

2013

2014

2015

2018

2019

2020

2021

2022

-1,000Support2023 FINDEX Inc.

Outsourced R&D and Others

EMC Healthcare

Fitting Cloud

SoftwareHardware

Health Tech

Adjustment

32

Appendix

Our Market ShareAn Overwhelming Market Share of

approx.

75%

in National University Hospitals
Market share in large hospitals with more than 400 beds ＝ approx. 40％
Other hospitals and clinics ▶ Over 1,500 facilities*Calculation changed as categorization of large hospitals revised from 500 or more beds to 400 or more beds following the revision of medical service fees in 2018
*Consumers of one-time products are excluded from 2021
*Reference: Ministry of Health, Labor and Welfare 2021 Survey of Medical Facilities (static and dynamic) and Summary of Hospital Reports（ As of September 30, 2023 ）2023 FINDEX Inc.

33

Medical Business - Our Flagship Solutions

Appendix

Cloud Solution

On-Premise Solution

Hospitals

Clinics
Medical Big Data Search System

Integrated Browsing System

UniversalSearcher

ClaioDashboard

PDI Import / Export
Solution

PDI+MoveBy

Network Imaging System

Claio

Progress Note System

C-NoteHIS
Progress Note System(Hospital Information System)

Document Integrated
Archiving System

FAX ReferenceManagement Solution

C-ScanConnectFAX

C-NoteMedical Document
Management System

Medical Information
Remote Sharing Application

Electronic
Medical Record

Perinatal Information System

DocuMaker

Remotalk-Cloud

Electronic Medical
RecordREMORA

MapleNote

Radiological Information
System

ProRad RIS

Patients

Network Imaging System

Claio
Radiological Reporting
SystemNext Generation Patient
Information Application

ProRad RS

Medical Avenue
Care
Facilities

Tests & Examinations
Telemedicine System

On-shinAccounting and Administration
Medical Document
Management System

Document Management
System

RPA Tool for
Medical Facilities

Electric Tracing
Report Service

DocuMaker

DocuMaker Office

DigiWorker

AAdE-Report

Pharmacies

Local
Governments

Medical Community
2023 FINDEX Inc.

34

Appendix

Financial Indicators

ROIC and Equity Ratio

ROE & DuPont Analysis

35%

140%
35%

95%

30%

90%

25%

85%

20%

80%

15%

75%

130%

30%

120%
25%

110%

20%

100%
90%

15%

80%

10%

70%
FY14

FY15

FY16

FY17

FY18

FY19

ROE
Total asset turnove(RHS)

FY20

FY21

FY22
10%

Net profit margin
Financial leverage(RHS)

70%
FY14

FY15

FY16

FY17
ROIC

Cash Flow（¥ Millions）

FY18

FY19

FY20

FY21

Equity ratio (RHS)（¥ Millions）

Marginal profit Ratio

3,500

FY22

100%

1,400

3,000

90%

2,500

80%

2,000

70%

1,000

60%

800

1,500

1,200

50%

1,000

40%

600

500

30%

400

0

20%
200

10%

(500)

0

0%

(1,000)Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

FY14

FY15

Operating C/F

2023 FINDEX Inc.

FY16

FY17

FY18

Investment C/F

FY19

FY20

Free C/F

FY21

FY22

Cash

19/12FY

20/12FY

Marginal profit ratio

21/12FY
Variable cost ratio

22/12FY

23/12FY
Break-even sales

35Progressive Software Creators
Always have, Always will.

2023 FINDEX Inc.