BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 1st QUARTER OF THE FISCAL YEAR ENDING MARCH 2024
This is an English translation of summarized consolidated financial results prepared
for the convenience of non-resident shareholders. Should there be any inconsistency
between the translation and the official Japanese text, the latter shall prevail.

August 14, 2023
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Chikayo Suzuki, CFO/Executive Officer
Tel: +81-3-6855-7811
Date of Submission of Securities Report: August 14, 2023
Starting Date of the Dividend Payment: Preparation of Supplementary Materials for Quarterly Financial Results: None
Information Meeting for Quarterly Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the 1st Quarter of the Fiscal Year Ending March 2024
(From April 1, 2023 to June 30, 2023)(1) Consolidated Operating Results (cumulative totals)(Percentages indicate changes compared with the 1st quarter of the previous fiscal year.)

Net Sales
Millionsof yenYear ending March 2024 Q1
Year ending March 2023 Q1

Operating Income

%
△0.7
3.5

3,499
3,524

Millionsof yen△40△90

Ordinary Income
Millionsof yen%－－Net Income

%

△47
△46

－
－

Millionsof yen

%

△80
△87

－
－

(Note) Comprehensive income: 1st quarter of the fiscal year ending March 2024: △¥442 million (—%); 1st quarter of the fiscal year ending
March 2023: ¥78 million (△67.5%)

Net Income per Share

Diluted Net Income per Share

Yen
△7.40
△7.63

Year ending March 2024 Q1
Year ending March 2023 Q1

Yen
—
—

(2) Consolidated Financial Position
Total Assets
Year ending March 2024 Q1
Year ending March 2023

Net Assets

Ratio of Equity CapitalMillions of yen

Millions of yen%

23,137
24,226

14,895
15,38564.4
63.5(Reference) Equity capital: 1st quarter of fiscal year ending March 2024: ¥14,895 million; fiscal year ending March 2023: ¥15,385 million

2. Dividends
Dividends per Share
(Record dates)

Year ending March 2023
Year ending March 2024
Year ending March 2024
(Forecast)

1st Quarter

yen
—
—

Interim3rd Quarter

Year-end

Total

yen
5.00

yen
—

yen
5.00

yen
10.00

5.00

—

5.00

10.00

(Note) Revision of dividend forecast since the most recently announced dividend forecast: Not applicable3. Forecast for the Consolidated Results for the Year Ending March 2024
（from April 1，2023 to March 31，2024）(Percentages indicate changes compared with the previous fiscal year and the previous interim result.)

Net Sales
Millionsof yenFull year(Note)

16,100%
6.1

Operating Income

Ordinary Income

Net Income
Attributable to the
Shareholders of the
ParentMillionsof yenMillionsof yenMillions of
yen

%

305

－

%

300

－

100

Net Income
per Share

Yen

%
－

9.22

Revision of consolidated results forecast since the most recently announced forecast: Not applicable※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): Applicable
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 1 company (subsidiary’s name: Faith Wonderworks, Inc.)(2) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Not applicable(3) Changes in accounting policies, changes in accounting estimates, and restatements(i)
Changes accompanying revisions of accounting standards, etc.: Not applicable(ii) Changes other than the above: Not applicable(iii) Changes in accounting estimates: Not applicable(iv) Restatements: Not applicable(4) Outstanding shares (common shares)(i) Outstanding shares at the end of the period (including treasury shares):Year ending March 2024 Q1: 13,831,091 sharesYear ending March 2023: 13,831,091 shares(ii) Treasury shares at the end of the period:
Year ending March 2024 Q1: 2,988,635 sharesYear ending March 2023: 2,999,883 shares(iii) Average number of shares during the period (cumulative total for the quarter)Year ending March 2024 Q1: 10,836,066 sharesYear ending March 2023 Q1: 11,431,815 shares(Note) The number of shares of treasury stock at the end of the period includes those shares (245,900 shares in Q1 of the year ending
March 2024, 257,200 shares in the year ending March 2023) contributed as trust assets of the performance-linked stockcompensation plan. In addition, these shares are included in the shares of treasury stock deducted in calculating the average
number of shares during the accounting period (252,300 shares in the year ending March 2024, 257,200 shares in Q1 of theyear ending March 2023).

* This financial results report is exempt from quarterly review procedures.
* Statement regarding the proper use of performance forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to “1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter,(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.” on page 4 of theaccompanying material .

2

Accompanying Material — Contents
1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter ····················(1) Explanation Concerning the Operating Results ··························································(2) Explanation Concerning the Financial Position ··························································(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.

2
2
4
4

2. Consolidated Financial Statements and Important Explanatory Notes ······································(1) Consolidated Balance Sheet ················································································(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ·······(Consolidated Statement of Income) ········································································(Consolidated Statement of Comprehensive Income) ·····················································(3) Notes Concerning the Consolidated Financial Statements ··············································(Note Concerning the Premise of a Going Concern) ····················································(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity) ··················(Segment Information) ······················································································

5
5
7
7
8
9
9
9
9

1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter(1) Explanation Concerning the Operating Results
In the Japanese information and communications field in 2022, the Internet penetration rate remained
high at 84.9%, while the percentage of households owning one or more smartphones increased to 90.1%,
greatly exceeding the 69.0% of households owning one or more personal computers (*1). In addition, while
the movement away from television has continued since the year 2000, mainly centered on the young,
advertising expenses for the Internet in Japan increased by 14.3% in 2022 from the previous year to¥3,091.2 billion, exceeding the combined advertising expenses for the four largest mass media sectors(newspapers, magazines, radio, and television) of ¥2,398.5 billion, and accounting for 43.5% of Japan’s
total advertising expenditures (*2). This trend is also evident worldwide, where in 2023 global spending
on digital advertising is expected to reach approximately ¥59 trillion (US$424.3 billion), an increase of
7.8% from the previous year, with spending on digital advertising exceeding 58.3% of total spending on
advertising (*3).
*1. Source: Ministry of Internal Affairs and Communications, 2022 Telecommunications Usage Trend Survey Results*2. Source: Dentsu Inc., 2022 Advertising Expenditures in Japan*3. Source: Dentsu Group Inc., Global Ad Spend Forecasts (2023-2025)

In the entertainment market in 2022, sales in the global music market centered on streaming services grewby 9.0% year over year to approximately ¥3,523.4 billion (US$26.2 billion), expanding for the eighthconsecutive year and reaching its highest sales total since the beginning of this century. In particular, paid
subscription streaming accounted for 67% of the total, increasing to ¥2,345 billion ($17.5 billion) (*4). In
Japan, the production value of music software including music videos increased by 4% year over year to¥202.3 billion, exceeding ¥200 billion for the first time since 2019, three years earlier. Moreover, paid
music distribution sales increased by 17% to ¥105.0 billion and audio streaming sales increased by 25%
year over year to ¥92.8 billion, accounting for almost 90% of total paid music distribution sales (*5).
In 2022, the size of the live entertainment market experienced a rapid recovery, reaching ¥565.2 billion,
which was 10.2% lower than the level in 2019, the year before the start of the novel coronavirus pandemic(the corresponding figure for 2021 was 51.2% lower than in 2019) (*6). Meanwhile, online live
performances have emerged as a new way to enjoy live entertainment, rather than as merely s substitutefor traditional physical live performances, and the size of the pay-per-view online live performance market
in 2022 is estimated at ¥46.6 billion (*7), with the combined size of the physical and online live
performance markets estimated to have reached ¥611.8 billion, approaching the size of record-setting¥629.5 billion scale the physical live performance market in 2019.
*4. Source: IFPI, Global Music Report 2023
*5. Source: Recording Industry Association of Japan (RIAJ), The Recording Industry in Japan 2023
*6. Source: PIA Research Institute, Japanese Live Entertainment Market Size 2022 Preliminary Report (published May 26, 2023)*7. Source: PIA Research Institute, Japanese Online Live Entertainment Market Survey (published May 26, 2023)

Founded in 1992, Faith was the first company in the world to commercialize ringtones, and has steadilygrown centered on the music distribution business and in step with the popularization of mobile phones.
In the current music market, along with the spread of smartphones and the diversification of media suchas streaming, user-generated content (UGC) (*8), which allows ordinary users to easily transmit
information to society, and social media, the music industry is facing a situation in which all its activities,
including content distribution methods, consumption styles, and content production methods, arechanging.
*8. User-generated content: images and videos generated and posted by users themselves on the Internet.

In this environment, the Faith Group is continuing to forge ahead with its Multi-Content and Multi-Device
Strategy of creating environments in which people can enjoy a wide variety of content when and where
they want, by utilizing the efforts it has focused on digital content distribution ever since its establishment.
In addition, the Group is developing new services in response to the changing market environment,
including platforms that collect and organize the information flooding the Internet and providing it tousers after increasing its added value.
Through our new sprayer® crowdfunding platform, artists can register their own original music forworldwide distribution and monetization, and can also directly distribute music videos, live performances,and other activities using the unique spray LINK function. With spray LINK, artists can not only raise
funds to support their activities, but also share profits with their supporters so that their songs can reach2

as many listeners as possible. For the future, we will continue to provide a platform that allows artists
themselves to directly deliver information about their works to listeners and fans, thereby building deeper
engagement and monetization, and we will work to expand the artist economy at all levels and create asystem that “allows artists to grow together with their fans.”
The Faith Group has reorganized its Content Business with effect from April 1, 2023, with the goal ofestablishing an organization that is better adapted to the needs of the present era. By breaking down thefunctions that each group company has developed to date and clarifying their core competencies, we areaiming to create an organizational structure that facilitates business development, differentiates the profit
structure, and further improves efficiency. Moreover, by building a system capable of promptly
responding to the rapidly changing tastes and trends in the music market, we will enhance our ability tocreate appealing content and improve our competitiveness. We are aiming to further develop synergies
within the Group by consolidating the major labels, reinforcing and streamlining the administrative andsales functions, and integrating the assets belonging to each label using the Group’s own technology.
In addition, Faith, Inc. has consolidated its office functions into the Minami-Aoyama Office, and has
established a permanent telework work system in anticipation of changes in behavioral patterns and theestablishment of new values. We are actively engaged in a company-wide effort to reestablish and activatecross-sectional communication between departments, and we will continue to pursue more flexible
workstyles and realize diverse and efficient ways of working.
Regarding the Faith Group’s business performance for the first quarter of the current fiscal year ending
March 2024, net sales decreased by 0.7% from the same quarter of the previous fiscal year to ¥3,499
million. The Group reported an operating loss of ¥40 million (compared with an operating loss of ¥90
million for the same period of the previous fiscal year), an ordinary loss of ¥47 million (compared withan ordinary loss of ¥46 million for the same period of the previous fiscal year), and a net loss attributableto owners of the parent of ¥80 million (compared with a net loss attributable to owners of the parent of¥87 million for the same period of the previous fiscal year).

Information on each business segment is as follows.
Platform BusinessIn the Platform Business, as sales in existing distribution businesses continue to decline, we will continue
to invest in new growth areas by linking and platforming each of our services with the aim of developing
new and innovative products and grasping diversified profit opportunities.
Through FaRao PRO, we are focusing not only on providing BGM for commercial use, but also on
actively developing sales activities centered on the expansion of functions necessary for store operations,such as solutions that propose store branding, as well as announcement functions. In the future, we willcontinue to aim at the creation and activation of a new BGM market.
In Fans’, our platform of services for artists based on the D2C (*9) business model, which is expected to
expand further in future, we are enhancing the functions essential to artists’ musical activities such as
constructing official websites, distributing music and videos, selling artists’ goods, and operating fan clubs.
By strengthening links with SNS, we have introduced a system that allows fans to contribute to building
a community by sharing the information that creators send out. Moreover, as the provider of a service thatallows more artists to freely disseminate their work and information, we are attempting to acquire andexpand the number of users and improve the quality of the service by pursuing greater convenience.
*9. Abbreviation of “Direct to Consumer”—a business model for delivering services and products planned and manufactured by Faith directly to users

Our live-streaming platform Thumva includes features for group viewing, comment posting, and gifting,allowing users to share a sense of excitement and togetherness as if they were attending a live concert.
We have also launched Thumva BIZ as a new online store service utilizing Thumva’s resources thatallows customers who wish to make inquiries or consult online to initiate business discussions with asingle click.

3In addition, the Point Service provides a platform that allows retailers to operate point issuing systems
and other services, and also offers total support from planning to operation as a series of cycles of point
issuance data acquisition, analysis, and sales promotion utilization, as well as providing outsourcing
services to maximize the efficiency of sales promotion in the retail industry.

Regarding the performance of this segment for the first quarter of the current consolidated fiscal year ,net sales increased by 2.1% year over year to ¥529 million, and the segment recorded a loss of ¥49 million(compared with a segment loss of ¥96 million for the same period of the previous fiscal year).
Content BusinessIn the Content Business, we are strengthening new businesses with an eye to the future in order toovercome our dependence on sales of packaged products in the severe environment faced by the music
and video-related industries due to the changing music market. In an effort to create new hits, the threelabel companies, Nippon Columbia, DREAMUSIC, and KSR, are developing and nurturing content
suitable for the next-generation music business. In addition, they are actively utilizing their extensive
catalog assets in new projects, with the goal of expanding their IP domains both domestically and globally.
We also accept commissions to manage various facilities and events utilizing the Faith Group’s
accumulated location business management knowhow. We have been entrusted with the operation of
ZEROTOKYO (a new facility that utilizes the nighttime hours of Zepp Shinjuku (TOKYO), one of thelargest live halls in the area), which opened inside the TOKYU KABUKICHO TOWER in April 2023.
Events are being held at ZEROTOKYO in a variety of genres, and many people from both Japan andabroad are using the facility now that the inbound market is recovering in response to the increase in thenumber of foreign visitors to Japan. This business is expected to generate stable revenue due to its assetlight business structure, and we will work toward further expanding it by harnessing synergies with ourexisting businesses.
Regarding the performance of this segment for the first quarter, despite an increase in the number of titles
sold and the steady growth in income related to the use of sound sources and other items, net sales
decreased by 1.2% year over year to ¥2,969 million, while segment income increased by 29.8% year overyear to ¥122 million.
*Product and service names appearing in this document are trademarks or registered trademarks of Faith, Inc. either in Japan or in othercountries.

(2) Explanation Concerning the Financial Position
Total assets as of the end of the first quarter of the current consolidated fiscal year ending March 2024
(June 30, 2023) decreased by ¥1,088 million compared to the end of the previous consolidated fiscal
year to ¥23,137 million. This result was mainly attributable to a decrease of ¥444 million in accounts
receivable , and a decrease of ¥514 million in investment securities.
Total liabilities decreased by ¥598 million compared to the end of the previous consolidated fiscal
year to ¥8,242 million. This result was mainly due to a decrease of ¥168 million in accounts payableother, a decrease of ¥168 million in the provision for bonuses, a decrease of ¥108 million in long-termloans payable, and a decrease of ¥221 million in deferred tax liabilities..
Net assets decreased by ¥489 million compared to the end of the previous consolidated fiscal year to¥14,895 million. This was mainly due to the recording of a net loss and to dividend payments.
As a result of the above, the equity ratio increased by 0.9 percentage points to 64.4%.

(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
There is no change in the forecast of consolidated financial results for the current fiscal year from theforecast announced on May 12, 2023. Although performance forecasts are based on information
available to the Company at the time of preparation, there is a possibility that the actual performance
figures will differ significantly from the forecast figures due to a variety of factors.

4

2. Consolidated Financial Statements and Important Explanatory Notes(1) Consolidated Balance Sheet(Thousands of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes receivable
Accounts receivable
Contract assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Income taxes refundable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term debt
Accounts payable - otherAccrued expenses payable
Income taxes payable
Provision for bonuses
Contract liabilities
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Retirement benefit liabilities
Provision for share awards for directors (and otherofficers)
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities

5

As of June 30, 2023

11,024,018
6,873
1,992,323
920
218,509290,769
373,434
62,796
175,393
796,954△23,801
14,918,191

11,074,97810,626
1,547,837
440
218,981
316,127
345,124
43,486
178,084
915,043△22,060
14,628,669

3,581,540

3,557,362

1,149,180
359,067
1,508,248

1,118,991
361,9211,480,913

3,621,214
210,402
1,064,557△677,703
4,218,470
9,308,259
24,226,451

3,107,032
118,758
353,974△108,716
3,471,049
8,509,324
23,137,994

765,755
390,000
495,350
906,621
3,141,533
27,201
295,468
48,216
742,554
6,812,700

674,216
390,000
464,075
737,799
3,119,760
46,526
126,687
32,560987,961
6,579,587

924,800
504,822

816,500
489,246

47,15833,47939,333
482,410
29,3352,027,860
8,840,561

39,333
260,662
23,191
1,662,413
8,242,001

(Thousands of yen)
As of March 31, 2023
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Accumulated retirement benefit adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

As of June 30, 2023

3,218,000
2,840,496
9,851,724△2,422,510
13,487,710

3,218,000
2,840,451
9,716,046△2,414,368
13,360,129

1,848,510

1,506,481△8,87958,547
1,898,179－
15,385,889
24,226,451△8,874
38,255
1,535,863－
14,895,992
23,137,994

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Thousands of yen)Three months ended
June 30, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Interest on marketable securities
Gain on investments in investment partnerships
Foreign exchange gains
Subsidy income
Gain on recovery of written-off claims
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Los on valuation on securities
Loss on investments in investment partnerships
Equity in losses of affiliates
Foreign exchange losses
Miscellaneous expenses
Total non-operating expenses
Ordinary income (loss)
Extraordinary losses
Loss on disposal of non-current assets
Total extraordinary losses
Net income (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income (loss)
Net income (loss) attributable to owners of parent

7

Three months ended
June 30, 2023

3,524,919
2,126,659
1,398,259
1,488,860△90,600

3,499,101
2,068,491
1,430,609
1,470,964△40,354

0
3,121
12
569
－
49,460－592
53,756

1
4,606
118
－
840
－
6,853
8,805
21,224

888
3,724
－
4,536
276
14
9,440
△46,285

2,402
495
4,198
16,716－
4,387
28,199△47,329541
541△46,826
13,37527,02840,404△87,231△87,231－－△47,329
22,103
10,80332,906△80,236△80,236(Consolidated Statement of Comprehensive Income)(Thousands of yen)Three months ended
June 30, 2022
Loss
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Retirement benefit adjustment (before any applicabletax effect)
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

8

Three months ended
June 30, 2023

△87,231△80,236

164,205
4△342,029
5

1,216△20,292

165,425
78,193△362,315△442,552

78,193△442,552－－

(3) Notes Concerning the Consolidated Financial Statements(Note Concerning the Premise of a Going Concern)
Not applicable(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Not applicable(Segment Information)
Ⅰ 1st quarter of the previous consolidated fiscal year/FY 2022 (April 1, 2022 through June 30, 2022)
1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)

Adjustment
amount(Note 1)

Amount recorded in
Consolidated Financial
Statements (Note 2)－

3,516,813

8,105

－

8,105

518,670 3,006,249 3,524,919－

3,524,919

518,670 3,006,249 3,524,919－

3,524,919

PlatformContent

Total

Net sales
Goods transferred at a single point
in timeGoods transferred over a period oftime
Revenue from contracts withcustomers
Sales to external customers

518,670 2,998,143 3,516,813
－

8,105

Intersegment sales or transfer
amount87,07094,801△94,801－

Total

605,740 3,013,981 3,619,721△94,801

3,524,919

Segment income or segment loss (△)△96,311△88,822△90,600

7,731

94,532△1,778Notes: 1. The segment income or loss adjustment amount of △ ¥88,822 thousand consists of ¥4,211 thousand in eliminatedintersegment transactions and △¥93,033 thousand in companywide expenses that are not allocated to the reportablesegments.
2. Segment income amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on current assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on current assets or significant
change in amount of goodwill.

9Ⅱ 1st quarter of the current consolidated fiscal year/FY 2023 (April 1, 2023 through June 30, 2023)
1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)

Adjustment
amount(Note 1)

Amount recorded in
Consolidated Financial
Statements (Note 2)－

3,491,433

7,667

－

7,667

529,393 2,969,707 3,499,101－

3,499,101

529,393 2,969,707 3,499,101－

3,499,101

PlatformContent

Total

Net sales
Goods transferred at a single point
in timeGoods transferred over a period oftime
Revenue from contracts withcustomers
Sales to external customers

529,393 2,962,040 3,491,433
－

7,667

Intersegment sales or transfer
amount108,970

137,359△137,359－

Total

638,364 2,998,096 3,636,460△137,359

3,499,101

Segment income or segment loss(△)

△49,418△113,643△40,354

28,388

122,70773,288Notes: 1. The segment income or loss adjustment amount of △¥113,643 thousand consists of ¥3,095 thousand in eliminatedintersegment transactions and △¥110,548 thousand in companywide expenses that are not allocated to the reportablesegments.
2. Segment income amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on current assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on current assets or significant
change in amount of goodwill.

10