Consolidated Financial Statements for the Three Months Ended March 31, 2024 (IFRS)
These financial statements have been prepared for reference only.
May 14, 2024
Link and Motivation Inc.

Stock exchange listing: Tokyo, Prime Market
Code number: 2170

http://www.lmi.ne.jp/english
Representative: Ozasa Yoshihisa, Chairman and Representative Director
Contact: Yokoyama Hiroaki, Corporate Officer andManager of Group Design Office
Phone: +81-3-6853-8111
Filing of Quarterly Report (Shihanki Hokokusho) (scheduled):
May 14, 2024
Start of distribution of dividends (scheduled):
June 25, 2024
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:No(Amounts are rounded down to the nearest million.)

1. Consolidated Results for the Three Months Ended March 31, 2024
(January 1, 2024 - March 31, 2024)(1) Revenues and Income
Revenues(¥ million)
Three months ended
March 31, 2024
Three months ended
March 31, 2023

Three months ended
March 31, 2024
Three months ended
March 31, 2023

(Percentages represent change compared with the same quarter of the previous year.)
IncomeOperatingNet
ChangeChangebeforeChangeChangeincomeincome(%)(%)
income taxes(%)(%)(¥ million)(¥ million)(¥ million)

8,307

3.7

800

(7.5)

784

(7.5)

547

7.8

8,008

0.8

865

8.1

848

17.4

507

(2.4)

Net income
attributable toowners of theparent(¥ million)

Change(%)

Comprehensive
income(¥ million)

Change(%)

Basic earnings
per share (¥)

Dilutedearnings per
share (¥)

525

24.3

896

37.9

4.84

4.84

422

(11.4)

650

36.6

3.79

3.77

(2) Financial Position

As of March 31, 2024
As of December 31, 2023

Total assets(¥ million)

Total equity(¥ million)

30,89730,84312,752
12,940Equity attributableto owners of theparent(¥ million)
9,948
10,165

Ratio of equity
attributable to ownersof the parent to total
assets (%)
32.2
33.0

2. Dividends
1st Qtr.
2.80
2.90

2nd Qtr.
2.80

Dividends per share
3rd Qtr.
Year-end
2.80
2.90

Total
11.30

3.00

11.90

2023
2024
2024 (est.)
3.00
3.00
Note: Revisions since the most recently announced dividend forecast: Yes

3. Forecast of Consolidated Results for 2024 (January 1, 2024 - December 31, 2024)(Percentages represent change compared with the previous fiscal year.)
Net income
Basic
Net
Revenues
attributable toearnings
incomeowners of the parent
per share(¥ million)(%) (¥ million) (%) (¥ million)(%)(¥ million)(%)(¥)
Full-year
36,900
8.6
5,330
15.3
3,600
14.7
3,248
14.3
32.31
Note: Revisions since the most recently announced forecast of results: No
OperatingincomeNotes(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Due to Change in Scopeof Consolidation): Yes
Added: – company (Name: –)Removed: 1 company (Name: Link Interac Inc.)
We conducted an absorption-type merge in which Link Japan Careers Inc. is the surviving company and Link
Interac Inc. is dissolved as the absorbed company. Following the merger, Link Japan Careers Inc. changed its
name to Link Interac Inc.
(2) Changes in Accounting Policies and Changes in Accounting Estimates(a) Changes in accounting policies required by IFRS: No(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: No(3) Number of Shares Issued and Outstanding (Common Stock)(a) Number of shares at the end of the period (including treasury stock)Three months ended March 31, 2024: 113,068,000; Year ended December 31, 2023: 113,068,000(b) Number of treasury shares at the end of the period:
Three months ended March 31, 2024: 4,911,968; Year ended December 31, 2023: 3,617,168(c) Average number of shares outstanding (cumulative with earlier quarters):
Three months ended March 31, 2024: 108,559,030; Three months ended March 31, 2023: 111,561,532* These Financial Statements Are Not Subject to Review by a Certified Public Accountant or Auditing Firm
* Explanation of the Proper Use of Performance Forecasts and Other Special Instructions
Note regarding forward-looking statements:
Consolidated forecasts and other statements regarding the future contained in this document are based on information
currently available to the Company and certain reasonable assumptions. Actual performance may differ substantially
due to numerous factors.
How to obtain supplementary quarterly financial information:
Supplementary quarterly financial information is disclosed on the same day on TDnet in Japanese. For information in
English, please see the Company website.

Contents of Attachments

1. Overview of Results of Operations and Other Information ............................................................................ 2(1) Overview of Results of Operations for the Three Months Ended March 31, 2024 ................................ 2(2) Overview of Financial Position for the Three Months Ended March 31, 2024....................................... 7(3) Overview of Cash Flow for the Three Months Ended March 31, 2024 ................................................... 7(4) Forecast ......................................................................................................................................................... 7

2. Condensed Consolidated Financial Statements and Main Notes ................................................................... 9(1) Condensed Consolidated Statements of Financial Position .................................................................... 9(2) Condensed Consolidated Statements of Operations and Comprehensive Income ............................... 11(3) Condensed Consolidated Statements of Changes in Equity ................................................................... 13(4) Condensed Consolidated Statements of Cash Flow................................................................................. 14(5) Notes to Condensed Consolidated Financial Statements ....................................................................... 15
Change in Accounting Policies ..............................................................................................................15
Significant Accounting Policies .............................................................................................................15
Notes Regarding Significant Accounting Estimates and Judgements ............................................ 15
Notes Regarding Assumption of Going Concern .............................................................................. 15
Significant Subsequent Events ............................................................................................................ 15--1--

1. Overview of Results of Operations and Other Information
Forward-looking statements in the following text are based on judgments as of March 31, 2024, the last day of theconsolidated accounting period under review.
(1) Overview of Results of Operations for the Three Months Ended March 31, 2024
The Group supports the transformation of numerous organizations and individuals using “Motivation Engineering”(the Group’s core technology), incorporating academic results in business administration, social systems theory,
behavioral economics, psychology and other disciplines, under its mission: “Through Motivation Engineering, we
provide opportunities to transform organizations and individuals and create a more meaningful society.” During the threemonths ended March 31, 2024, the Japanese economy recovered gradually with the improvement of the employment andincome environment. However, the economic outlook remains unclear because of the depreciation of the yen due tomonetary easing, and geopolitical risks due to the unstable international situation. Under these economic conditions, theGroup perceives a growing need for companies to promote human capital management in order to deal with change, andmore specifically, a need to improve employee engagement (the degree of mutual understanding and affinity between acompany and its employees), and to secure and develop human resources.
In this economic environment, the Group’s revenues for the first quarter of 2024 were ¥8,307 million (a 3.7%
increase compared with the same period of the previous year), gross profit was ¥4,456 million (a 7.3% increase),
operating income was ¥800 million (a 7.5% decrease) and net income attributable to owners of the parent was ¥525
million (a 24.3% increase).
In the first quarter, revenues increased year on year as a result of growth centered on the Consulting & Cloudbusiness, ALT Placement business and Personnel Placement business. Gross profit increased year on year due to thegrowth of the high-margin Consulting & Cloud business and the Personnel Placement business, which includes
OpenWork Inc. (“OpenWork”). Operating income decreased year on year as a result of an increase in advertising andpromotional expenses to expand recognition of OpenWork as planned at the beginning of the year, but overall progressed
as expected. Net income attributable to owners of the parent increased significantly due to factors including a decrease inincome taxes.
The segment and business classifications of the Group are as shown below, and an overview of the first quarter of2024 by segment and business follows.

--2--

Link and
Motivation Group

Organizational
Development Division

Individual
Development Division

Consulting &Cloud Business

Career School Business

Link and Motivation Inc.

Link Academy Inc.

Link Global Solution Inc.

Matching Division

ALT Placement Business

Link Interac Inc.

Link Japan Careers Inc.

Link Event Produce Inc.

IR Support Business

Cram School Business

Personnel Placement
Business

Link Corporate
Communications Inc.

Motivation Academia Inc.

Link Agent Inc.
Link-i Inc.
OpenWork Inc.

--3--

Organizational Development Division
The Organizational Development Division provides support for the creation of companies that are chosen byindividuals (“Motivation Companies”). In concrete terms, it offers services that provide support for increasing
engagement with a company’s stakeholders (employees, job applicants, customers, shareholders) by applying“Motivation Engineering,” which is the core technology of the Group.
In this segment, segment revenues for the first quarter of 2024 were ¥3,001 million (a 4.6% increase), and segment
income was ¥2,126 million (a 6.2% increase). An overview of operating results by business for the first quarter of 2024
is as follows.
Consulting & Cloud BusinessTo increase employee engagement, the Consulting & Cloud business diagnoses engagement based on its original
diagnostic framework and offers one-stop solutions for innovations in recruiting, training, systems and corporate culture
related to organizations and personnel. The business also provides the Motivation Cloud series of cloud-based services
that allow customer companies to manage employee engagement themselves.
In this business, revenues for the first quarter of 2024 were ¥2,664 million (a 4.2% increase) and gross profit was¥1,968 million (a 3.7% increase). Results by product in the Consulting & Cloud business were as follows.
Table 1. Revenues by ProductProduct (¥ million)(Figures in brackets are gross profit)

Three months ended
March 31, 2023

Three months ended
March 31, 2024

YoY change(%)

Consulting & Cloud Business

2,557[1,898]2,664[1,968]4.2%
3.7%

Consulting

1,518

1,326

-12.6%

Cloud

1,038

1,338

28.8%

In the first quarter, revenues and gross profit increased compared with the same period of the previous year, with thegrowth of the Motivation Cloud series contributing to results. Further growth is anticipated from the second quarter
onward, as the business focuses on sales to major companies to increase the number of new contracts.
In the Consulting category, the business is transitioning from consulting the cloud in order to increase profitability,
and is also revising its product portfolio by focusing on high-margin areas such as human capital consulting. Revenues in
the first quarter decreased mainly because of weakness in obtaining recruiting orders, but orders for core products havebeen steadily progressing in the second quarter.
The need to promote human capital management continued to grow, primarily at major companies. Currently, thisbusiness is supporting approximately 1,500 companies, but considering that there are roughly 100,000 companies with50 or more employees in Japan, the potential for future expansion is still significant. The Group will continue to expand
its support by leveraging its unique ability to comprehensively support the human capital management of companies
through the cycle of identification of problems through diagnosis, transformation of those problems, and disclosure of
the transformation initiatives and results.
Monthly fee revenue increased substantially compared with the previous year for the Motivation Cloud series of
products, which are part of the Cloud category and are priority services. The number of deliveries and monthly fee
revenue were as follows.
Table 2. Number of Deliveries and Monthly Fee Revenue for the Motivation Cloud Series at Quarter-End
2023
March

June

2024
September

December

March

Number of deliveries

846

851

883

915

883

Monthly fee revenue(¥ thousand)

339,179

358,792

395,398

427,345424,550

Since its founding in 2000, the Group has not only diagnosed the engagement status of companies and employees but
has also supported their transformation. The Motivation Cloud series is a group of cloud-based services in the field of
HR Tech (human resources combined with technology) for improving employee engagement. The Group migrated theorganization diagnosis service it has offered since its founding to the cloud and started providing the Motivation Cloud
service in July 2016. Motivation Cloud is currently ranked number one in share of sales by vendor in the employee
engagement market (the sixth consecutive year: fiscal 2017 to fiscal 2022 forecast) in ITR Market View: Human
Resources Management Market 2023, a market research report published by ITR Corporation.

--4--

Monthly fee revenue from the Motivation Cloud series at the end of March 2024 was ¥424,550 thousand (a 25.2%
increase). For the first quarter, new orders progressed as expected. Monthly fee revenue decreased compared with theend of December 2023 because there was one withdrawal of a large order for a company with many employees, and inanother, a contract divided by subsidiary was modified to a contract for the whole group. However, orders for the second
quarter, which is the beginning of the new fiscal year for companies with fiscal years ending March 31, have increased.
The business continues to focus on developing new contracts with major companies. Monthly fee revenue is projected tobe ¥450,000 thousand at the end of June 2024, and is progressing as expected toward the monthly fee revenue target of¥530,000 thousand at the end of December 2024.
In addition, for Stretch Cloud, a human resource development cloud service, business is expanding steadily in the humanresource development market, which exceeds ¥500 billion. The Group will continue to focus on introducing Stretch
Cloud at major companies, where there is substantial room for development, and will accelerate growth by improving
customer satisfaction, thereby further extending the length of contracts.
IR Support Business
The IR Support business provides one-stop support for corporate branding through various media and events centeredon the field of investor relations for the “creation of Motivation Companies” at corporations. In addition to printed media
such as integrated reports for shareholders and investors, web-based media such as investor relations (IR) sites, andvisual media such as videos that explain products and webcasts of shareholders’ meetings, the business creates physicaland virtual forums for shareholders’ meetings and other events.
In this business, revenues for the first quarter of 2024 were ¥404 million (a 7.7% increase) and gross profit was ¥206
million (a 48.4% increase).
In the first quarter, revenues increased compared with the previous year as production of integrated reports, the coreservice, expanded in line with expectations. Gross profit increased significantly compared with the previous year due toincreased productivity.
Needs for disclosure of non-financial capital, particularly human capital information, are continuing to increase withthe requirement to disclose human capital information in securities reports. The number of companies disclosing thediagnosis results of Motivation Cloud, which we provide, was 121 at the end of March 2024. Disclosure of employee
engagement is also steadily increasing. The business will generate synergies with the Consulting & Cloud business bycontinuing to enhance disclosure of human capital information based on diagnosis and transformation.
Individual Development Division
The Individual Development Division supports the creation of individuals who are chosen by organizations (“iCompanies”). Specifically, it applies “Motivation Engineering,” which is the core technology of the Group, to businesses
in areas including career schools and cram schools, to provide one-stop services to customers from elementary school
students to working adults. These services range from helping to set goals to understanding individual issues andformulating and implementing study plans.
In this segment, segment revenues for the first quarter of 2024 were ¥1,531 million (a 2.7% decrease) and segment
income was ¥682 million (a 1.8% increase). An overview of operating results by business for the first quarter of 2024 is
as follows.
Career School Business
The Career School business provides five services aimed at the career advancement of university students andworking adults: “Aviva” personal computer schools, “Daiei” qualification schools, “Rosetta Stone Learning Center,”“Rosetta Stone Premium Club” and “Hummingbird” foreign language schools.
In this business, revenues for the first quarter of 2024 were ¥1,342 million (a 4.2% decrease) and gross profit was¥606 million (a 0.9% increase).
In the first quarter of 2024, the business faced difficulty in attracting new enrollees, and a recovery in the second halfof the quarter was not enough to make up for the decrease. Consequently, revenue decreased compared with the same
period of the previous year. On the other hand, as a result of restructuring that has been taking place since October 2022,
the gross profit margin for the first quarter was 45.1%, an improvement compared with 42.9% in the first quarter of theprevious year. In 2024, we anticipate a recovery in the second quarter and later, when there are more new enrollees. In
addition, the business will improve efficiency and customer satisfaction by expanding online services.
Cram School Business
The Cram School business operates two cram schools in both in-person and online formats—“SS-1,” anindividualized instruction school for students preparing for junior high school entrance exams, and “Motivation
Academia” cram schools for junior high and high school students—to improve the academic ability of elementary, junior--5--

high and high school students. For Motivation Academia in particular, unlike typical cram schools, students can not only
improve their academic ability but also acquire skills to play an active role in society.
In this business, revenues for the first quarter of 2024 were ¥188 million (a 10.3% increase) and gross profit was ¥75
million (a 9.4% increase).
In the first quarter, revenues increased substantially year on year and gross profit also increased, driven by
improvement of the continuation rate from SS-1 for elementary school students to Motivation Academia for junior highand high school students after they have completed junior high school entrance exams. This business will continue toincrease the number of new enrollees by providing learning opportunities through online courses to a wide range ofstudents, not just those in areas where they can attend physical schools.
Matching Division
The Matching Division operates the ALT (assistant language teacher) Placement business and the Personnel
Placement business in order to provide opportunities to connect organizations and individuals. It creates matches with ahigh retention rate by applying “Motivation Engineering,” the core technology of the Group, to go beyond the skill
requirements of companies and local governments and provide support for matching organizations and individuals basedon the characteristics of each individual and other relevant data.
In this segment, segment revenues for the first quarter of 2024 were ¥3,969 million (a 4.0% increase) and segment
income was ¥1,836 million (a 7.9% increase). An overview of operating results by business for the first quarter of 2024
is as follows.
ALT Placement Business
The ALT Placement business dispatches non-Japanese assistant language teachers (ALTs) to elementary, junior highand high schools throughout Japan and provides English-language instruction services on contract, in order to match
non-Japanese people who want to work in Japan with local governments. In this business, barriers to entry are extremely
high due to the importance placed on relationships of trust with customers and a company’s track record, and the Grouphas established the predominant number-one share among private companies.
In this business, revenues for the first quarter of 2024 were ¥3,010 million (a 2.0% increase) and gross profit was¥896 million (a 4.6% increase).
In the first quarter of 2024, the number of ALTs dispatched increased in line with expectations, resulting in a slightincrease in revenues and an increase in gross profit compared with the same period of the previous year. This businessfaced an intensely competitive environment until 2023 due to the impact of the requirement to enroll ALTs in social
insurance. In 2024, the competitive environment has flattened, and the business has strengthened communication
activities to target customers. As a result, contracts for the new fiscal year beginning in April are progressing steadily,
and the number of ALTs dispatched is expected to increase in line with expectations. The Group will continue to aim forrecovery of revenues and expansion of market share by shifting some services online and utilizing ICT, in addition todispatching high-quality ALTs, one of its strengths.
Personnel Placement Business
The Personnel Placement business operates a referral service for human resources that introduces the humanresources necessary for business growth in order to find the right fit between job applicants and companies. Mainly, it
provides mid-career referrals that match working adults looking to change jobs with companies, and conducts new
graduate recruiting and referrals that match university students looking for employment with companies.
In this business, revenues for the first quarter of 2024 were ¥965 million (a 10.7% increase) and gross profit was¥946 million (an 11.0 % increase).
In the first quarter, OpenWork, which has a particularly high growth rate, continued to steadily accumulate registeredusers as well as employee online reviews and evaluation scores. The direct recruiting service (OpenWork Recruiting)continued to make an active investment in marketing, which led to an increase in the number of online resume
registrations. The cumulative number of online resume registrations (working adults and students) has grown toapproximately 1,110,000. In addition, as a result of efforts to stimulate recruiting activity among existing customers andincrease employment opportunities, recruiting by employers and applications from job seekers expanded, and revenues
from this service were ¥511 million (a 29.2% increase).
This business will continue to expand synergy with the Organizational Development Division, and will ramp up its
matching services by considering not only the skills of individuals but also the type of job seekers.

--6--

Venture Incubation
In addition to its divisions, the Group conducts venture incubation. In venture incubation, the Group provides its
know-how in organizational and personnel consulting in addition to funding, as well as support on an organizational
level for growing venture companies that aim to list their stock. The two main criteria for selection of investees are
sympathy with the idea of “creation of Motivation Companies” and aim to list stock. Gains on sales and other results
generated from venture incubation are recorded in retained earnings on the condensed consolidated statements offinancial position, or under other income or other expenses on the consolidated statements of operations.
(2) Overview of Financial Position for the Three Months Ended March 31, 2024
Total assets as of March 31, 2024 were ¥30,897 million, an increase of ¥54 million from the end of the previous year.
This was mainly due to a ¥224 million decrease in other current assets, offset by a ¥132 million increase in property,
plant and equipment and a ¥145 million increase in other non-current financial assets.
Total liabilities as of March 31, 2024 were ¥18,144 million, an increase of ¥242 million from the end of the previous
year. This was mainly due to factors including a ¥145 million decrease in lease liabilities, a ¥604 million decrease inincome tax payable, a ¥124 million decrease in deferred tax liabilities, and a ¥1,167 million increase in interest-bearing
and other financial liabilities.
Total equity as of March 31, 2024 was ¥12,752 million, a decrease of ¥188 million from the end of the previous year.
This was mainly because the Group posted net income attributable to owners of the parent and other comprehensive
income. However, total equity decreased due to share buybacks and payment of cash dividends.
(3) Overview of Cash Flow for the Three Months Ended March 31, 2024
Cash and cash equivalents (“cash”) as of March 31, 2024 were ¥7,354 million, a decrease of ¥35 million during theperiod.
Cash flow during the three months ended March 31, 2024 was as follows.
Cash Flow from Operating Activities
Net cash used in operating activities was ¥131 million (compared with net cash provided of ¥70 million in the same
period of the previous year). The principal factor increasing cash was a ¥395 million increase in trade and other payables
compared with the same period of the previous year, while the principal factors decreasing cash included a ¥63 million
decrease in income before income taxes compared with the same period of the previous year, a decrease in loss on
impairment of ¥105 million compared with the same period of the previous year, an increase in trade and otherreceivables of ¥67 million compared with the same period of the previous year, and a ¥357 million increase in income
taxes paid compared with the same period of the previous year.
Cash Flow from Investing Activities
Net cash used in investing activities was ¥85 million, an increase of ¥39 million compared with the same period of
the previous year. Principal factors increasing cash included a ¥353 million increase in proceeds from sale of investment
securities, while the principal factors decreasing cash included a ¥220 million increase in payments for acquisition of
investment securities compared with the same period of the previous year, a ¥56 million decrease in proceeds fromrecovery of security deposits and guarantees compared with the same period of the previous year, and ¥75 million in
payments for fulfillment of asset retirement obligations.
Cash Flow from Financing Activities
Net cash provided by financing activities was ¥179 million, a decrease of ¥744 million compared with the same
period of the previous year. The principal factor increasing cash was ¥4,200 million in proceeds from long-term financial
liabilities, while the principal factors decreasing cash included a decrease of ¥4,000 million in short-term financial
liabilities compared with the same period of the previous year, the non-recurrence of proceeds from payments from noncontrolling interests that occurred in the same period of the previous year, and an increase of ¥413 million in payments
for acquisition of treasury shares.
(4) Forecast
In the first quarter ended March 31, 2024, revenues increased compared with the same period of the previous year asa result of growth mainly in the Consulting & Cloud business, ALT Placement business and Personnel Placementbusiness. Operating income decreased compared with the same period of the previous year due to an increase inadvertising and promotional expenses at OpenWork. Nevertheless, progress toward the performance forecasts for the--7--year ending December 31, 2024 of revenues of ¥36,900 million (an 8.6% increase) and operating income of ¥5,330
million (a 15.3% increase) is proceeding as expected.
The Group views changes in the labor market as a crucial opportunity, and will focus in the near term on theConsulting & Cloud business of the Organizational Development Division, which has high growth potential. The Group
believes that there is still ample room for growth in providing support to domestic companies, and plans to leverage its
ability to comprehensively support human capital management through the cycle of identification of organizational
problems through diagnosis, transformation of those problems, and disclosure of the transformation results.
Specifically, the Group will focus on expanding the Motivation Cloud series, primarily at major companies in Japan.
Since the sales target of this series has shifted to major companies, contracts that begin in the second quarter or later, the
new fiscal year of those companies, are increasing, and monthly fee revenue is on pace toward the monthly fee revenue
forecast of ¥530,000 thousand at the end of 2024. In addition, the Group is eyeing future global expansion of the series,
and will introduce it at overseas subsidiaries of Japanese companies. As of March 31, 2024, the number of under contract
was approximately 30, monthly fee revenues were up more than 160% from the same period a year earlier, and averagemonthly fee revenue per customer was up more than 60% from the same period a year earlier, with large orders also
showing steady progress. As a result of efforts to expand sales of this series, the backlog of orders (total orders for future
projects obtained at a given point in time) has increased significantly. As of March 31, 2024, the backlog of orders was¥13.2 billion, up 16.1% from a year earlier, indicating steady progress toward establishment of a recurring revenue
business model.
The Group also plans to actively make business investments in M&As and business alliances to accelerate the growthof the Consulting & Cloud business. Recently, the Group entered into a basic agreement on a capital and businessalliance with FCE Inc. (FCE), which has strengths in enhancing human resource capabilities, including in areas such as
education and training. Smart Boarding, FCE’s platform for creating employee education systems, has been introduced atmore than 700 small and medium-sized companies in Japan. By providing the Motivation Cloud series, the Group’s
employee engagement improvement service, and expanding sales of transformation services centered on human resource
development to the users of Smart Boarding, as well as leveraging FCE’s sales capabilities to accelerate expansion of the
Motivation Cloud series to small and medium-sized enterprises, the Group aims to further expand the Consulting &Cloud business, its strategic focus. In addition, the Group will create synergy between the Individual Development
Division and the Matching Division.
The Group will also achieve substantial growth through recovery of revenues through flattening of the competitiveenvironment in the ALT Placement business, in addition to substantial growth of revenues in the Personnel Placementbusiness, including OpenWork.

--8--2. Condensed Consolidated Financial Statements and Main Notes(1) Condensed Consolidated Statements of Financial Position(Millions of yen, rounded down to the nearest million)

As ofDecember 31, 2023
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Other non-current financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

--9--

As of
March 31, 2024

7,389
3,627
225
12
1,446
12,701

7,354
3,666
294
0
1,221
12,538

604
3,586
9,347
2,194
1,753
584
70
18,14130,843

737
3,510
9,347
2,188
1,898
608
67
18,35830,897

(Millions of yen, rounded down to the nearest million)

As ofDecember 31, 2023

As ofMarch 31, 2024

1,821
1,244
6,158
1,005
1,036
43
1,816
13,127

1,780
1,267
4,217
975
431
5
1,783
10,462

1,264
2,669
335
386
119
4,774
17,902

4,372
2,553
374
262
119
7,682
18,1441,380
4,619(1,539)7,396(1,690)10,165
2,774
12,94030,843

1,380
4,615(2,304)
7,172
(916)
9,948
2,804
12,75230,897

LIABILITIES AND EQUITY
LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Interest-bearing and other financial liabilities
Lease liabilities
Income tax payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Interest-bearing and other financial liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EQUITY
Equity attributable to owners of the parent
Share capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity- - 10 - -(2) Condensed Consolidated Statements of Operations and Comprehensive Income
Condensed Consolidated Statements of Operations(Millions of yen, rounded down to the nearest million)

Three months ended
March 31, 2023

Three months ended
March 31, 2024

8,008
3,854
4,153
3,237
89
140
865
1
17
848
341
507

8,307
3,850
4,456
3,563
12
104
800
5
21
784
237
547

422
85
507

525
22
547

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Income before income taxes
Income taxes
Net income(Attributable to)
Owners of the parent
Non-controlling interests
Total

(Yen)

Earnings per share attributable to owners of the parent
Basic earnings per share
Diluted earnings per share

3.79
3.77

- - 11 - -

4.84
4.84

Condensed Consolidated Statements of Comprehensive Income(Millions of yen, rounded down to the nearest million)

Three months ended
March 31, 2023
Net income
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets
measured at fair value through other comprehensive income
Total of items that will not be reclassified to profit or loss

Three months ended
March 31, 2024

507

547

142
142

350
350

Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total of items that may be reclassified to profit or loss
Total other comprehensive income
Total comprehensive income

(0)
(0)
142
650

(1)
(1)
349
896

(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income

564
85
650

874
22
896

- - 12 - -(3) Condensed Consolidated Statements of Changes in Equity
Three months ended March 31, 2023
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent

January 1, 2023
Net income
Other comprehensive
incomeTotal comprehensive
incomeChange in ownershipinterest in subsidiaries
Dividends fromsurplus
Exercise of stock options
Share-based paymenttransactions
Transfer from othercomponents of equity
to retained earnings
Total transactions with theownersMarch 31, 2023

SharecapitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

1,380
—

4,464
—

(320)
—

5,385
422

(1,851)
—

9,057
422

2,185
85

11,243
507

—

—

—

—

142

142

—

142

—

—

—

422

142

564

85

650

—

161

—

—

—

161

305

467

—
—

—
8

—
—

(223)
—

—
(8)

(223)
—

—
—

(223)
—

—

—

—

—

2

2

—

2

—

—

—

(205)

205

—

—

—

—
1,380

169
4,633

—
(320)

(428)
5,378

200
(1,508)

(58)
9,563

305
2,577

247
12,140Three months ended March 31, 2024
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent

January 1, 2024
Net income
Other comprehensive
incomeTotal comprehensive
incomeAcquisition of treasury
sharesChange in ownershipinterest in subsidiaries
Dividends fromsurplus
Exercise of stock options
Share-based paymenttransactions
Transfer from othercomponents of equity
to retained earnings
Total transactions with theownersMarch 31, 2024

SharecapitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

1,380
—

4,619
—

(1,539)
—

7,396
525

(1,690)—10,165
525

2,774
22

12,940
547

—

—

—

—

349

349

—

349

—
—

—
—

—
(765)

525
—

349
—

874
(765)

22
—

896
(765)

—

(9)

—

—

—

(9)

7

(2)

—
—

—
5

—
—

(317)
—

—
(5)

(317)
—

—
—

(317)
—

—

1

—

—

(1)

0

—

0

—

—

—

(431)

431

—

—

—

—
1,380

(3)
4,615

(765)
(2,304)

(749)
7,172

425
(916)

(1,092)
9,948

7
2,804

(1,084)
12,752- - 13 - -(4) Condensed Consolidated Statements of Cash Flow
(Millions of yen, rounded down to the nearest million)

Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Loss on impairment
Loss (gain) on sales of fixed assets
Financial revenues and financial expenses
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Other
SubtotalInterest and dividends received
Interest paid
Income tax refund
Income taxes paid
Net cash provided by (used in) operating activities
Cash flow from investing activities
Payments for acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for acquisition of intangible assets
Payments for acquisition of investment securities
Proceeds from sale of investment securities
Payments for security deposits and guarantees
Proceeds from recovery of security deposits and guarantees
Payments for fulfillment of asset retirement obligations
Other
Net cash provided by (used in) investing activities
Cash flow from financing activities
Net increase (decrease) in short-term financial liabilities
Proceeds from long-term financial liabilities
Repayment of long-term financial liabilities
Proceeds from exercise of stock options
Payments of cash dividends
Repayment of lease liabilities
Proceeds from payments from non-controlling interests
Payments for acquisition of treasury shares
Net cash provided by (used in) financing activities
Cash and cash equivalents translation adjustment
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of quarter
Cash and cash equivalents at end of quarter- - 14 - -Three months ended
March 31, 2023

Three months ended
March 31, 2024

848
403
136
—
16
27
(21)
(545)
(89)
776
0
(18)
0
(687)
70

784
404
30
(0)
15
(39)
(69)
(150)
(45)
929
3
(19)
0
(1,044)
(131)

(21)
—
(112)
(79)
112
(15)
59
—
10
(46)

(42)
0
(128)
(300)
465
(18)
3
(75)
11
(85)

1,300
—
(354)
16
(223)
(266)
452
(0)
924
0
949
6,112
7,061

(2,700)
4,200
(332)
10
(317)
(266)
—
(413)
179
1
(35)
7,389
7,354

(5) Notes to Condensed Consolidated Financial Statements(Change in Accounting Policies)
None applicable(Significant Accounting Policies)
The significant accounting policies applied in these condensed consolidated financial statements are the same as
those applied in the consolidated financial statements for the previous fiscal year.
Income taxes expense for the three months ended March 31, 2024 was calculated using the estimated average annual
effective tax rate.
(Notes Regarding Significant Accounting Estimates and Judgements)
In preparing the consolidated financial statements, management makes judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The
results of accounting estimates may differ from actual results.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effects of a review ofaccounting estimates are recognized in the accounting period in which the estimates are reviewed as well as in future
periods.
Estimates and estimate-related judgments that have a significant impact on these condensed consolidated financial
statements are the same as those in the condensed consolidated financial statements for the same period of the previous
fiscal year.
(Notes Regarding Assumption of Going Concern)
None applicable(Significant Subsequent Events)(Authorization of Share Buyback)At a Board of Directors meeting held on May 14, 2024, the Group authorized the repurchase of shares of its common
stock pursuant to the provisions of Article 459, paragraph 1 of the Companies Act of Japan, and Article 43 of the Articles
of Incorporation, as outlined below.
(1) Reason for the Share Buyback
The Group is implementing a flexible capital policy to enhance capital efficiency and shareholder returns, after
comprehensively considering its financial condition and stock price. Having sufficiently secured the cash necessary for
growth investments, and the Group believes that although the stock price is determined by the market, its future
profitability is not fully reflected in the current stock price level, and therefore made the decision to buy back its own
shares.
(2) Details of the Share Buyback
1) Type of shares to be bought back2) Total number of shares to be bought back3) Total amount of buyback4) Buyback period

Common stock
1,700,000 shares (upper limit)(1.57% of total shares issued, excluding treasury stock)¥1,000 million (upper limit)
May 15, 2024 – December 27, 2024

(Basic Agreement on a Capital and Business Alliance)
At a Board of Directors meeting held on May 14, 2024, the Group approved the decision to conclude and sign a basic
agreement on a capital and business alliance (“the Alliance”) with FCE Inc. The basic agreement for the Alliance isbased on the assumption of formally concluding a capital and business alliance between the Group and FCE. The specificdetails of that capital alliance will be negotiated at a later date.
Going forward, the terms of the Alliance will be based on negotiations with FCE. Upon signing of the Alliance, it isexpected that FCE will become an equity method affiliate.

- - 15 - -(1) Reason for the Alliance
The Group provides support for creating companies that are chosen by individuals (“Motivation Companies”),
individuals who are chosen by organizations (“i-Companies”) and matching that connects organizations and individuals
based on its mission: “Through Motivation Engineering, we provide opportunities to transform organizations andindividuals and create a more meaningful society.” FCE’s purpose is to “create a world in which everyone can approachand solve challenges with all their might” and its mission is to “contribute to maximizing human capital through“People” x “Tech.” It has strengths in enhancing human resource capabilities through education and training, including
programs based on Seven Habits of Highly Effective People J®. The reason for entering into the Alliance is to combine
the strengths of the Group and FCE, and to enable both organizations to offer unique value in realizing their respective
visions.
The synergies the Group expects in each of its business areas through the Alliance are as follows.
Organizational Development Division
Smart Boarding, FCE’s platform for creating employee education systems, has been introduced at more than 700 small
and medium-sized companies in Japan. By providing the Motivation Cloud series, the Group’s employee engagement
improvement service, and expanding sales of transformation services centered on human resource development to theusers of Smart Boarding, as well as leveraging FCE’s sales capabilities to accelerate expansion of the Motivation Cloud
series to small and medium-sized enterprises, the Group aims to further expand the Consulting & Cloud business, its
strategic focus.
Individual Development Division
FCE owns extensive education and training content (over 450 types), including a program based on Seven Habits ofHighly Effective People J®. The Group has a broad customer base of approximately 14,000 enrollees (on average) in its
Career School business and Cram School business. In these businesses, the Group expect to create synergy by offering
comprehensive learning opportunities for elementary, junior high and high school students, university students, andworking adults.
Matching Division
FCE’s “Foresight Handbook,” which helps children to cultivate independence, has been used by approximately
340,000 people and in 1,100 schools. In its ALT Placement business, the Group has transactions with approximately 440
local governments and 6,440 schools, and has the number-one private-sector share in the number of ALTs dispatched toschools. The Group anticipates that synergy between FCE and the ALT Placement business will enable the Group toprovide even greater value to public education.
(2) Details of the Alliance
We aim to sign the capital and business alliance in August 2024. Under the Alliance, the Company will acquire 20%of the stock of FCE, which will become an equity method affiliate. The two companies will have discussions todetermine details such as the specific content of the Alliance and the method of forming the Alliance, and will sign
contracts accordingly.

(3) Summary of the Other Party in the Alliance1) NameFCE Inc.
2) Location
Shinjuku NS Building, 10F, 2-4-1 NishiShinjuku, Tokyo
3) Name and Title of
Ishikawa Junetsu, President andRepresentative
Representative Director
4) Business
Provision of information on corporate
management, business, products,
technologies and real estate, and consulting
business.
5) Capital¥181 million (As of December 31, 2023)
6) Date of Establishment
April 21, 2017(4) Schedule
1) Date of Board of Directors Resolution
2) Date of Signing of Basic Agreement on Capitaland Business Alliance3) Date of Signing of Capital and Business AllianceAgreement

May 14, 2024
May 14, 2024
August 9, 2024 (scheduled)- - 16 - -