Financial Report
FYE March 2024

2024.5.9

Table of Contents

I.

Purpose / Business Model

P 03

II.

Consolidated Financial Results Highlights

P 06

III. Segment Performance Highlights

P 12

IV. Business Strategy for Fiscal Year Ending March 31, 2025

P 17

V.

P 26

Position and Overview of Each Segment in Fiscal Year Ending March 31, 2025

VI. Sustainability and DG’s History of Social Implementation

P 31

Copyright © 2024 Digital Garage, Inc. All Rights Reserved2

I. Purpose / Business Model

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3

Designing ‘New Context’ for a sustainable society
with technology

Three Core Technologies

Digital Garage has established a structure that links
the three different technologies of INFORMATIONTECHNOLOGY / MARKETING TECHNOLOGY /FINANCIAL TECHNOLOGY in a context thatenables continuous business growth

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

5II. Consolidated Financial Results Highlights

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6Group CEO Message

Significant increase in pre-tax profit to 6.3 B JPY (up 20.2 B JPY YoY), and steady progress inpayment and investment business〜Business alliance agreement with KDDI Group (au Financial Service) in payment field～

Below is the essence of the business strategy and highlights of DG group's businesses for FY24.3 and FY25.3.
[ PS Segment / FT×MTC ]In FY24.3, the first year of the medium-term plan, our core payment business achieved more than 15% profit growth due to the convergence of COVID-19 and successful
alliances with strategic partners. In terms of the "basic business P&L (excluding investment-related and one-time gains/losses)," the group's business base has been steadily
growing with stable profit growth.
In response to changes in the global business environment including the consumer economy, technological advances, and regulations, we have been promptly taking internaland external actions to "optimize the group's business structure.“ Following Toshiba Tec, which provides POS services, and JCB, which operates a credit card business, we have
expanded the capital and business alliance with a strategic partner, Resona Holdings, which has one of the largest client bases in Japan, mainly SMEs.
In FY25.3, DGFT is entering into a payment business alliance with au Financial Service of KDDI Group for the purpose of “collaboration for co-creation" to provide the nextgeneration, high-quality payment services for the au economic zone.
In FY24.3, we established an e-commerce company called “DG Commerce” with System Integrator Corp. to strengthen the enabling business group in the FT business and to
reinforce e-commerce/security/operation monitoring, etc. In FY25.3, we decided to acquire 100% ownership of Score. Co., Ltd., which provides BNPL services, and toincorporate FEELIST Inc, a leading system developer, into the group. In addition, MTC (Marketing business) aims to further evolve and optimize to become a "data-driven, highfunctioning marketing group" in line with the changing social environment of personal data.
[ LTI Segment ]While working with Kakaku.com's Tabelog, we have developed an incubation system to achieve continuous growth in FT and to create non-linear growing businesses driven bytechnology from three angles: "B2B payment/financial business," "industry-specific DX," and "next-generation technology.”[ GII Segment ]Through the global incubation stream developed over the years, we will invest in and nurture the startup communities related to next-generation technologies including Gen AI,
FT, and data. In the medium term, we will design and implement volatility conscious management with investment securities, with a focus on fund-based investments.
[ Dividends ]Basic policy is to pay progressive dividends with a payout ratio of 30% to the basic business CF, and we will commit to paying more than 10 billion yen in dividends over 5 years.
To conclude my message, as we face the current uncertain times caused by international conflicts and discontinuous technological progress, we will strive for further growth byenhancing the symphonic management of the group.

Kaoru Hayashi, Representative Director, President, Executive Officer and Group CEO
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7

Executive Summary for FYE 24.3
Financial Results

 Steady growth in mainstay payment business and successful investment exits driving significant
increase in consolidated profit before tax- Stable and continuous profit growth in the basic business P&L, which represents recurring business income and profit- Payment business: 15%+ growth in pre-tax profit, Marketing business: Marketing business: structural transformation on track- 5.6 billion of investment income in the first year of the mid-term plan; 1/4 transfer to the Resona joint fund completed

 Strengthened capital and business alliance with Resona Group

Business Topics- Advanced collaboration in payment/next generation Fintech (formation of strategic project team and personnel transfers)- Resona Kessai Services becomes an equity method subsidiary- Established a joint fund with Resona Group, and transferred part of DG group’s investment portfolio

 Expanded business domain into e-commerce, which is the gateway to payment business- Acquired the EC website construction division of System Integrator Corp. into DG group (DG Commerce Inc.)

 Made progress in structural transformation focusing on payment/Fintech- Enhanced collaboration between the payment and marketing business, strengthening cross-sectional synergies- On track to further optimize the marketing business in FY25.3 to support the sustained growth trajectoryof the payment business

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8Consolidated Financial Highlights - Segment Profit
FY23.3

M JPY

Consolidated
profit before tax

Payment-13,8814,897

FY24.3

YoY
(%)

6,298

+20,179

5,662

+765

(+15.6%)

1,137

-371
(-24.6%)(-%)

PS
Marketing

LTI

1,508
3,813

1,810

-2,003(-52.5%)

Summary• Significant increase in consolidated profit as a drop of fair value loss
on investments recorded in the previous year
• Each respective segment made progress in line with targets set forth in
the medium-term plan
• Continuous and stable 15%+ profit growth, mainly due to transaction
growth in travel and restaurant industry with the convergence of COVID19, and execution of alliance strategies in offline payments• Expenses on structural improvements for better integration with paymentbusiness, and one-time losses from equity method affiliates at yearend• Continued the early-stage investments in new businesses to generate
profit in the medium to long term
• Profit decrease driven by decrease in gains from securities sales, YoY,
but excluding one-time factors, segment profit grew 16%• Significant profit increase due to a drop of last year’s fair value losses

GII-11,833

1,372+13,205(-%)• Earned ¥5.6 billion from investment business, and started to transfer apart of portfolio to the joint fund with Resona Group.

Headquarters/
adjustments-12,266-3,672+8,594• Fair value losses on securities held at headquarters were recognized in
the previous year
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9Key Indicator Highlights
・15% stable growth in the basic business profit excluding investment and one-time gains/losses
・Alliance strategy execution drove strong growth in offline payments, while online payments also grew double-digits
・Generated 5.6 billion JPY of cash from investing activities, while new investments were carefully selected to be lessthan 25% of the investment business income

Unit

FY23.3

FY24.3

YoY% Change

Basic Business Profit

M JPY

4,203

4,847

+644

+15.3%

Transaction Volume

100M
JPY

52,77462,295+9,521+18.0%

Online Payment

100M
JPY

39,707

44,135+4,428+11.2%

Offline Payment

100M
JPY

13,067

18,159+5,093+39.0%

Investment Business
Income *1

M JPY

5,051

5,626

+575

-

New Investment *2

M JPY

2,817

1,311

-1,505-Investment-related KPIs

*1 Investment Business Income: Total of profit from the sales of holding shares and profit distribution from funds*2 New Investment: New investments in operational investment securities, excluding business related expenditures
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10Basic Business Revenue and Profit**Recurring business revenue and profit excluding*investment-related and one-time gains/losses

・Basic business revenue and profit showed consistent and stable growth, especially the profit increased by 15% YoY
・Aiming to accelerate mid-term growth by focusing on consistent growth in PS and creating new businesses in LTI

Basic Business Revenue
Others/adjustments and eliminations
LTI
PS

28,62829,136

4,555

4,802

Basic Business Profit(M JPY)(M JPY)

YoY

YoY

31,331

+7.5%

5,853

+21.9%

23,51023,742

24,456

FY22.3

FY23.3

FY24.3

+3.0%

3,833

FY22.34,203

FY23.3

4,847+15.3%

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

11III. Segment Performance Highlights

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12Segment Results - PS Segment: Overview of Payment Business
Payment transaction volume, a key indicator, was up 18% YoY to ¥6.2 trillion, and is expected to show sustainablegrowth both online and offline.

Annual Payment Transaction(100M JPY)

62,29552,77444,34837,60828,342

YoY

18,159+18.0%+39.0%

13,067

9,474

Offline 2,296

Online 26,046

34,874• Continued strong growth in QR and credit card
payments, especially at large retailers• Accelerating further merchant acquisition in FY25.3

Online Domain

6,048

31,560

Offline Domain

39,707

44,135+11.2%• Back on track for growth with increased transactions
mainly in non-merchandising and DX fields; a reboundin the travel industry following the convergence of
COVID-19, an increase in mobile ordering at
restaurants, and growth in online supermarkets• With the launch of DG Commerce, enhanced capability
to respond to increased demand

FY20.3

FY21.3

FY22.3

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

13Segment Results - PS Segment
For further growth in payment business, marketing business optimization #2 will be implemented in FY25.3
・Payment business delivered 15%+ profit growth despite one-time factors including the loss of a transaction.
・Marketing business recorded lower profit due to the loss of an equity-method affiliate, while making structuralchanges for stronger integration with payment business.

Segment Revenue(M JPY)

Marketing

YoY

Payment

23,510

Segment Profit

23,742

24,472+3.1%

13,658

9,852

10,818

FY22.3

FY23.3

12,211

12,245

FY24.3-5.5%+13.2%

YoY

Payment

6,405
5,473

12,924(M JPY)

Marketing

1,508

6,787

+6.0%

1,137

-24.6%

5,662+15.6%

1,090

4,383

FY22.34,897

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

14

Segment Results - LTI Segment
Established collaboration project task force and identified focus areas with DG x Kakaku.com
・Continued upfront investments in several new payment-related businesses, with a view to the DG group’s medium
to long-term growth・Kakaku.com posted a record profit in the Tabelog business and steady growth in the Kyujin Box business

Segment Revenue
One-off revenue
Profit from equity method(M JPY)7,687

Business revenue

Segment Profit
YoY

5,898

-23.3%

3,685+10.8%(M JPY)

One-off gains/losses

YoY

Profit from equity method
Business gains/losses
Segment profit

3,813

4,853

2,946

1,477

FY22.3

FY23.3-52.5%

1,055

3,325

1,609

1,810

2,168

+46.7%

FY22.3

FY23.3

FY24.3-1,799-1,914

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

15

Segment Results - GII Segment
Invest in and incubate startups related to payment business from a global perspective, in addition to investment returns

・Generated ¥5.6 billion in cash throughout the year from the sale of securities and fund distribution income
・The balance of operating investment securities excluding currency fluctuations was ¥62.9 billion, a decrease of¥4.8 billion from the previous fiscal year due to steady progress in sales

Operating Investment Securities Increase/Decrease(M JPY)New
investment*+1,311

Fair value

Decrease inbook value
due to sales

67,676(impact of foreignexchange)+6,648-4,368_69,569Fair Value(excluding foreignexchange)-2,061_-4,756

Others+362
Balance

Proceeds from sales

4,538 M JPY

excludingforeign exchange

Cash distribution
from funds

1,098 M JPY

62,921

Investment
Business income

Balanceat year-end

5,626 M JPY* New investments in operational investment securities, excluding business related expenditures
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16IV. Business Strategy for Fiscal Year Ending March 31, 2025
(2nd Year of the Medium-Term Plan)

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17

Business Plan and Dividend Forecast for FYE 25.3

FYE 25.3
GrowthTargetShareholder
Returns

GrowthTargetProfitbefore tax

Dividend
per share

Payment Business
PS segment

YoY
YoY

+20 %

+20～25 %Ordinary Dividend

43 JPYSpecial/Commemorative
Dividend

10 JPY

Total

53 JPY•

Payment business: 20% profit growth expected, driven by its stable business expansion, revenue contribution from business alliances with partners, and thestatus of ongoing projects•

Platform Solution segment: target growth rate of 20-25%, reflecting the reclassification of the marketing business for structural reform and the absence of a
one-time loss from equity method affiliates in the previous fiscal year.

•

DG's basic policy is to distribute a progressive dividend that continuously increases in line with stable profit growth, and the ordinary dividend forecast at the
beginning of the fiscal year is determined considering its capital needs for growth and its financial condition.

Shareholder•
Returns

In addition, a special/commemorative dividend of 10 yen per share is planned for this year in celebration of DG's 30th anniversary, following the completion ofa partial transfer of the investment portfolio to a joint fund with Resona Group
Copyright © 2024 Digital Garage, Inc. All Rights Reserved18Track Record of Shareholder Returns
Dividend Policy

Progressive dividends for ordinary dividends

5-year total dividends
FY24.3-FY28.3

10 B+ JPY

New

Initial forecast

30% as a guide

Dividend payout ratio tobase business CF

10

Dividends per share (Unit: JPY)
Special/Commemorative dividends

10

Ordinary dividends

15
20
20

15

28

24

28

37

35

32

40

43

Mid-term plan

55FY14.6

FY15.6

FY16.6

FY17.3

FY18.3

FY.19.3

FY20.3

FY21.3

FY22.3

FY.23.3

FY24.3

FY25.3

Total dividends

100M
JPY

11.7

14.1

9.4

11.3

12.9

17.5

14.7

16.5

17.0

19.0

-

Share buyback

100M
JPY

-

-

-

-

50.0

-

-

-

50.0

50.0

-

Total shareholder
return

100M
JPY

11.7

14.1

9.4

11.3

62.9

17.5

14.7

16.5

67.0

69.0

-

Dividend payout
ratio to basebusiness CF

%

-

-

-

-

29.1%

41.1%

32.8%

32.6%

28.7%

29.8%

-

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19Growth Strategy for Fiscal Year Ending March 2025

Business Strategy to Underpin Stable
Stable 20% Growth*
Growth in Payment Business5 Actions & Further Optimization of PS segment (Structural Transformation of Marketing Business)
Financial

1. Strengthening the Capital and Business Alliance with Resona Group

Telecom

2. Business Alliance with au Financial Service of KDDI Group(Provision of high-quality payment services for the au economic zone)

Group Media

3. Promotion of Group Business in Strategic Sectors with Kakaku.com(EC/Restaurant/Travel/Real Estate/HR)

Value-chain
Enhancement

4. Acquiring 100% share of SCORE. Co., Ltd. that provides BNPL services

Development
Enhancement

5. Expanding development resources through M&A of competent systemdevelopment company*Pre-tax profit growth / Overall PS segment growth rate target is 20-25%
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1. Strengthen the Capital and Business Alliance with Resona Group
Full Scale Initiatives to Strengthen the Capital and Business Alliance with Resona Group
Completed the share acquisition of Resona Kessai Service Co., Ltd. (RKS) to make it an equity method affiliate
and the joint establishment of DG Resona Ventures

Overview of the Capital and Business Alliance with Resona Group

Progress
1 Share acquisition of Resona Kessai Service• Acquired 20% of RKS shares on April 1, 2024, to
make it an equity-method affiliate, effective from
FY25.3

Share acquisition

20%
1Partial transfer
of investment
portfolio

2

Jointestablishment

50%

50%

DG Resona Ventures Fund I Investment Limited Partnership

Corporate clientsBusiness assets

500K corporations

Corporate businessprofessionals

3,000

Enhance sales of payment
product by developing joint
sales scheme

Number of BranchesOver

800 locations• Developed joint sales scheme including
accepting and dispatching professionals between
DG Group and Resona Group

2 Joint fund establishment• Established joint venture fund “DG Resona
Ventures Fund I Investment Limited Partnership”• Completed the partial transfer of the DG Ventures
investment portfolio• Expecting an additional transfer of investment
portfolio in FY25.3

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2. Payment Business Alliance with au Financial Service
DGFT* and KDDI Group's au Financial Service Formed a Business Alliance to Collaborate in the Payment Business
Aim to expand market share and improve positioning in the growing cashless market by developing a one-stop
payment service through co-creative collaboration

Overview of the Business Alliance

Company Profile of au Financial Service
Name

au Financial Service Corporation

Location

2-3-1 Nishi-Shinbashi, Minato-ku, Tokyo

EstablishedFebruary, 2014

Shareholder

au Financial Holdings Corporation(Wholly-owned subsidiary of KDDI
Corporation)

Representative Atsushi Nagano

Business

Provide high-quality payment services in the au economic zone

Credit card, settlement agency, loan,acquiring, bank agency, and non-life
insurance businesses*DGFT stands for DG Financial Technology, Inc.
A wholly owned subsidiary that serves as the core of DG Group's payment business

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3. Promotion of Group Business in Strategic Sectors with Kakaku.com
Collaboration between Group Businessand Strategic Partners

1Finance/Payment

Group Business Collaboration
Realizing group collaboration between DG
and Kakaku.com in the identified strategic
sectors (EC, Restaurants, Travel, Real Estate,and HR)

2

Strengthening Group Data Infrastructures

EC

Restaurant

1

2

Progressing development of group data
infrastructure based on the strategic sectors
aboveGroup-wide
data analysis
platform

Travel23

Data Partnering with Strategic Partners
Developing new services for strategic sectors
jointly with capital/business alliance partners,
and promoting R&D activities based on nextgeneration AI researched and developed in
our Lab.

3

Telecom

Real Estate

HR

Logistics

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4. Payment Business Expansion by Strengthening the BNPL Services
Agreed to Acquire 100% Share of SCORE. Co., Ltd. that Provides BNPL Services
Additional share acquisition to provide group-wide pay later solutions for B2B in addition to B2CSCORE Revenue Trend

Business Plan

Continuous revenue growth with increasing needfor pay later services

DG Financial Technology, a wholly owned subsidiaryof DG, is planning to acquire the shares of Score
from Nissen Co., Ltd. on July 1

CAGR +11.4%

DG Group synergiesc realize the followingc

1. Development of comprehensive services (offline
domain) in combination with DG's various solutions- BNPL services via CloudPay Neo, device-free payment
service, etc.

FY2020

FY2021

FY2022

FY2023

2. Product enhancement aimed at entering the B2B
financial market in addition to the current B2C
services

Established in 2018 as a joint venture with DG Group and Nissen Co., Ltd., a general mail-order operator, by spinning off its pay
later business Shareholder as of March 31, 2024: Nissen Co. 51% / DG Financial Technology 49%
Copyright © 2024 Digital Garage, Inc. All Rights Reserved245. Expansion of the Digital Garage Group’s Development Resources
FEELIST Inc., a Sapporo-based Company with Excellent
Engineers, is Scheduled to Join DG Group on July 1st
暗号資産
Strengthening product development capabilities within DG Group for greater competitive advantage

DG Group’s Technology Infrastructure
Technology personnel
in DG group

Approx.

Payment System
Social infrastructure system that is required to bestable 24/7 operation and solid security

180 people

New Products

Affiliated engineers

Approx.

Next generation products that drive DG group’s growth
via promotion of DX/Fintech in various industries

200 people

Advanced Technology
New technology development in GenAI & crypto assets,
and collaboration with the Digital Architecture Lab*Research lab that designs next-generation social structures driven by advancing technology andpromotes implementation

New group-in

Approx.

120 people

FEELIST Inc.
Sapporo-based near-shore engineering company with good track record in SES and contracted development projects,
including web system and application development projects for major companies
Representative: Toshifumi Kino / Head office: Sapporo, Hokkaido, Japan / Offices: Sendai, Niigata, Tokyo, Kyoto, Fukuoka

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25

V. Position and Overview of Each Segment
in Fiscal Year Ending March 31, 2025

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26

New DG Group Formation Grand Design

Grand Design for New Group Formations
PS segment

ⅠⅡ

LTI segment

Enabling business group / Strategic Partners

Ⅲ

GII segment

Media (Kakaku.com)/ID
Retail Tech
B2B

Resona Group

Financial Service

Real Estate
web3

Mobile & Next Tech

Money Flow

・Data management
・PP project

DATA FLOWMedia & Mobile & Next Tech

Gravity

Information FlowBusiness Flow

Startup

Global Incubation Stream

Global TECH & Startup Community
Logistics＜Tokyo／San Francisco／London＞

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I PS segment

Overview of the PS Segment and Enabling Businesses

Strategic Enhancements to Functionality in Four Areas Surrounding Payment and Data
Optimization of data integration following the enabling business group to achieve the virtuous cycleⅣ- 1
Kakaku.com user *1

40.29 million

Gravity

Tabelog user

Ⅰ

Optimization ofMarketing

Enabling business group
centered on DG Commerce

95.00 million
auPAY user

Ⅳ- 2

34.38 million

Providing high quality payment
services for the au economic zone

GlobalGen AI
Start-up

Technology

GravityMedia
Customerbase

Commerce
Enabling

Utilization of Next
Generation Technology

5th Generation
Payment Gateway

Technology

DGFT
HybridCloud

Unifiedcommerce
OMO

Next focus area
Ⅲ
Accelerate data collaboration
with strategic partners

Link toshop operation
Link tologistics

Data
enabling

Payment

Optimization of
Data Integration

Resona GroupⅡ
Expanding DGFT's
payment methods andpayment locations further*1 Monthly users as of December 2023. *2 Actual results for FY24.3
Copyright © 2024 Digital Garage, Inc. All Rights Reserved28

Ⅱ LTI segment

Overview of the LTI Segment (Fintech Shift / Gravity Wing)

Developing an incubation system that also works with the Kakaku.com Group's Traffic (Gravity)
・ Accelerating business development in the “EC,” “Restaurants,” “Travel,” “Real Estate,” and “HR” fields throughenhanced collaboration with Kakaku.com
・ In DG alone, strategic business planning and development will be promoted with a focus on three fields highly
linked to payment business: B2B payment/finance, industry-specific DX, and next-generation technologies/services

Strengthen Strategic Business Planning and Development■Strategic Businesses
B2B Payment/FinanceIndustry-specific DX

Next-gen. Technologies/Services

B2B Payment

Real Estate

Crypto Assets

DX services for Real estate industry
Corporate payment service thatenables card payment on any invoice

Financial Services

Restaurants / Retail
DX service that combinesmanagement and operation of avariety of online orders.

Payment and Custody solutions for B2B
crypto asset transactions, and consulting
and support for web3/NFT businesses

Next-generation Marketing

Healthcare
Factoring Service

BNPL service for medical institutions

Data science business, anddevelopment of cutting-edge web
advertising technology

Copyright © 2024 Digital Garage, Inc. All Rights Reserved29

Ⅲ GII segment

Overview of the GII Segment (Startup Wing)

Investing in and nurturing startup communities in next-generation technologies including Gen AI, Blockchain, as wellas financial technology and data on a global scale through "global incubation streams" developed over the years

Investment Portfolio by Area
Europe0.1%

Others
13.9%

Japan

14.4%
Asia

21.3%

North America

50.3%• Leveraging San Francisco-based DG717 with 10 years of experience (Japan ⇆ Silicon Valley)→ Becoming a start-up mecca for GenLab (AI Studio) and web3
• New London office to enter the European start-up ecosystem,→ Joined by a prominent venture capitalist, Hiro Tamura (Alti-Yuma)

Copyright © 2024 Digital Garage, Inc. All Rights Reserved30VI. Sustainability and DG’s Historyof Social Implementation

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31Sustainability Initiatives: Materiality Identification
DG Purpose (Sustainability Policy)
Designing “New Context” for a sustainable society with technology

3 Material Issues (Areas) and 8 Materiality to achieve the purpose
Materiality
Identification
process(1) Recognize and(0) identify social issues(2) Evaluate the importance(0) to DG group(3) Evaluate the importance(0) to stakeholders(4) Sort the priorities(5) Evaluate relevance and(0) identify materiality

Business

Human Resources

Business Foundation

Creating a sustainable ecosystem through technology
and innovation

Creating an environment in which all
employees can thrive and play anactive role

Cultivating trust in order to move forward hand-in-handwith society

Exploring, pursuing andinnovating newtechnologies for a better
futureCreating a more
prosperous society throughthe utilization andapplication of Fintech

Contributing towards amore sustainable society
through co-creation efforts
with a variety of business
partners and alliances

Creating and organizing asystem in which an
inclusive and diverse
workforce can grow andthrive together

The implementation of
Human CapitalManagement initiatives
that help to unlock abrighter future through theeducation and support for
talent growth

Promoting responsible,
transparent and compliant
corporate activities

Co-existing in harmony
with society while
respecting all human rights

Supporting individuals andsociety through theoperation of highly secure,private, trustworthy andstable systems

Integration with business / Setting of key performance indicators (KPI) / Formulation of action plans
Contribute to a sustainable society through business operations considering the purpose and the materiality
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32

History of DG Group's Contextual Design and Social Implementation
Since its establishment in 1995, DG has been developing the latest internet business deploying cutting-edge
technologies based on marketing and payment. Our next generation focus will be on Gen AI / web3, etc.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved33

Reference materials

Reference Materials(1):Next Generation Strategic Business Topics

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

35

Next Generation Strategic Business Topics (1) Musubell, the Real Estate DX Solution
Musubell, One of the Largest DX Platforms for Real Estate Transactions in Japan.
Entered the condominium management business to promote DX in the whole industry
Cooperation partners will be expanded in the coming years

Real Estate Transactions DX BusinessCondominium Management DX

280% increase in the number of installed locations ofreal estate operators compared to August 2023

New service launched in March 2024
Promoting DX of the entire condominium management operations

Services

Real estate service expansion

for the New Condominiums

 Promoting the use of IT in business processes with stakeholders
including brokers and outsourcing companies

for Real Estate Agent Aiming to solve social issues such as the shortage of management staff

for Property Survey

Musubell Partner Program

Track Record
Installed locations

420

Electronic contracts

8,665 (total for FY24.3)

Real estate agency users

1,700

DX Engagement Platform providing
services to streamline overall sales andmanagement operations with electronic
real estate contracts.

Service expansion throughOpen Innovation

Started showing tentative mortgage loan approval results

 Connected to Toppan Edge's Mortgage Provisional Loan Screening
Service Results of provisional screening by financial institutions can be
confirmed within Musubell

Copyright © 2024 Digital Garage, Inc. All Rights Reserved36

Next Generation Strategic Business Topics (2) DGFT Invoice Card Payment, B2B Payment
Promoting Payment Business for B2B Payment Market, which is Larger than the B2C Market
Aiming to build a B2B Fintech Gateway to provide financial and data services for businesses

Business Overview

Customer
Value

Service
ChannelA service that allows corporations to pay their bills
for purchases, etc. by credit card

(1) Improved cash flow
(payment due extended for up to 60 days)(2) Simpler billing/payment processes with DX

Partnerships with corporate card issuers and B2B
SaaS providers in addition to our own channel(1) Own channel(2) Partnership channel through our system OEMs, etc.

Partner Channels (Example)
Corporate Card Issuers

Market Size*
B2C Payment

B2B Payment
Approx.

Approx.

300

trillion yen

Approx.

1,500

5x

trillion yen* Estimated based on corporate statistics, etc.

Traction
Payment transaction volume has increased
for 16 consecutive months since the launchof the service in November 2022

SaaS Providers

Copyright © 2024 Digital Garage, Inc. All Rights Reserved37

Ecosystem from the “Fintech Shift” Perspective
Synergy with

Payment service
provider（PSP）

OfflineGravity wing

and GII segment

Startup wing

Wholly-owned
subsidiary

Joint Ventures/Affiliates/Equity
Companies

Capital alliance/joint
venture partners

Business partners

EC tool development
NEW

EC platform
development
Offshoredevelopment
EC media

B2B

Fraud detection

Crypto assets/web3

FintechStart-up investment

DG Resona Ventures

BNPL

Copyright © 2024 Digital Garage, Inc. All Rights Reserved38

Grand Design of Payment Platform and Next-Generation Businesses
Linear Development of Payment Platform

I

Continue “DG FinTech Shift” strategy centered on payment platform and strengthen recurring revenue stream

Development of Non-linear Businesses

II

Social implementation of next-generation technologies / Development of non-linear businesses through Blockchain, Gen AI, etc
NEW

II

Development of
Non-linear Businesses

Blockchain / Gen AI

Creation of non-linear global
businesses integrated with payment
with cutting-edge technologies

March 2024: Launch ofcustody staking service
NEW

EC site development

Marketing /DX Business

Payment Platform
Investment Incubation
Payment Platform

March 2024: Launch of
Gen Lab, a start-up studiofor generative AI in the U.S.

Fintech / Financial
Business

I

Linear Development ofPayment Platform

Expanding strategic businesses withsynergy effect, centered in the
Fintech area, bringing competitiveedge and the growth to thepayments business
Copyright © 2024 Digital Garage, Inc. All Rights Reserved39

Reference Materials(2):Supplementary Data

Copyright © 2024 Digital Garage, Inc. All Rights Reserved40Segment Classification after FYE March 2024
• Consolidated business segments to accelerate the business strategy, integrating payments and data/marketing.
• Consolidated new businesses and next-generation media business, aiming for vertical launch by leveraging DGGroup’s business assets as strategic businesses to increase its corporate value in five years.

New Segments

Until Last Fiscal Year

Financial Technology

Platform Solution(PS)• Integration of payment and marketing businesses• Thoroughly strengthening cross-selling and establishing a recurring
revenue model

Marketing Technology

Long-term Incubation

Headquarters Costs
New Business

Incubation Technology

Long-term
Incubation(LTI)• Incubation and new strategic businesses leveraging the Group synergy
with Kakaku.com• Developing commerce and Fintech product services that contribute tomulti-layering and recurring revenues, mainly in Japan

Global Investment
Incubation(GII)• Global startup investments• Have a reach to the technology and services by the alliance with startups
having an overwhelming speed

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

41Basic Business Revenue and Profit (Quarterly)• Consistent and stable growth in basic business revenue and profit• Accelerating mid-term growth focusing on developing new businesses in LTI, with stable growth in PS

Revenue (excluding investment and one-time gains/losses)
HQ/Adjustment
LTI
PS
7,449
6,696
941

7,615

6,868
1,035

1,412

7,446
7,319 7,201
7,170
1,341 1,054

1,166
1,264 1,143

7,651 7,668

1,204

Profit before tax (excluding investment and one-time gains/losses)(M JPY)(M JPY)

YoY

YoY

8,645

+16.1%

1,748+65.8%

7,368

1,974

1,377 1,524
1,300
1,199

6,197

5,595 5,763

6,463
6,092 6,292 5,947 6,020 6,027

1,155

1,055

1,039

5,695 5,733 5,885+95.9%

1,049
947

1,008

1,084

＋2.7%

634
439

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q

2Q

3Q

FY24.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q

2Q

3Q

4Q

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

42Platform
Solution

Performance by Segment (Quarterly) - Platform Solution• Payment business: 15%+ profit growth despite one-time factors such as churn of project• Marketing business: Recorded lower profit YoY due to losses in equity-method affiliates, and made structural change
Marketing business: for better integration with payment business

Segment Revenue

Segment Profit(M JPY)

Marketing

YoY

Payment

5,695 5,733

5,885

6,197

6,092
5,595

6,292

5,763

6,479

3,298

3,673
3,113

YoY

1,949

Payment

1,796

+3.0%

5,947 6,020 6,027

1,597

509

1,502

3,103

3,186 3,522 2,977 3,041 2,917

3,275

-7.0%
292

1,361
219

249

341

512

2,587 2,524 2,483 2,660
2,292 2,450

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3,188
2,906 2,769 2,969 2,979 3,109

3Q

FY23.3

4Q

1Q

2Q

3Q

FY24.3

4Q+15.1%

1Q

2Q

3Q

FY22.3

339

238

469

-8.5%

1,322

+16.8%

91

146

1,472
1,411 1,456

1,440
1,042 1,079

+9.2%

1,214
330

1,231

1,795
1,695

1,644

1,450
1,334 1,328

3,403 3,283(M JPY)

Marketing

1,257

1,132

1,031 1,068

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q

2Q

3Q

4Q

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

43Platform
Solution

Payment Transaction Volume - Online and Offline Payment Trends• Online: Steady growth during COVID-19. Focusing on e-commerce domain with the launch of DG Commerce• Offline: Significant growth due to increased number of merchants driven by successful alliance strategy(100M JPY)

YoY
16,134
14,135
12,133

GRP
0.30%

0.30%

10,545
9,768

0.27%

6,278

OfflineOnline

485

6,660
534

5,793

6,126

1Q

2Q

7,281

8,124

8,333

692

1,091

8,962

1,794

1,476

0.22%

1,688
0.22%

10,482
1,960

10,1482,746

12,368 12,424
11,585
2,549

0.22%

6,695

3Q

FY20.3

7,432

7,242

7,486

4Q

1Q

2Q

3Q

FY21.3

8,080

8,522

4Q

1Q

4,929
3,972

4,399

0.20%

0.20%

0.20%

10,550

10,39010,677

10,624

3Q

4Q

1Q

2Q

3,457

0.21%

4,859

+40.5%

15,023

13,8483,584+19.1%

3,123

2,219
0.24%
0.21%

0.22%

586

8,752

2,902

14,64816,489

0.21%

9,387

9,036

9,466

9,301

3Q

4Q

1Q

2Q

7,929

2Q

0.20%

FY22.3

FY23.3

0.19%

0.19%

11,205

11,631

3Q

4Q+11.9%

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

44Platform
Solution

Payment Transaction Volume – Trends by Merchandize and Service• Service: Temporary stagnation in the travel industry due to COVID-19, but currently back on a growth track• Merchandize: Winning new merchants, mainly general retailers (supermarkets, department stores, etc.), throughMerchandize: alliance strategy
YoY(100M JPY)
16,134
14,135
12,133
10,545
9,768
8,124
6,278

6,660

8,333

10,482

14,64816,48915,023+19.1%+16.8%

13,84812,368 12,424
11,585+18.7%

10,148

8,962

7,281

OthersMerchandise+20.1%

Services
1Q

2Q

3Q

FY20.3

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q

2Q

3Q

4Q

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

45Platform
Solution

Payment Transaction Volume – Increase / Decrease by Sector• Transactions in Travel and restaurant industries recovered due to the convergence of COVID-19• The number of new merchants increased due to successful alliance strategy, including with Toshiba Tec

Payment Transaction Volume: Increase/Decrease by Sector(100M JPY)
* % compared to FY23.3

Restaurant
Travel+44.4%+45.1%

Telecom+17.0%

Public Fund+18.7%

Food+30.5%

Others62,295General Retail+33.6%

52,774

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

46

Payment Transaction Volume – Online and Offline Payment by Industry

Platform
Solution• Online: Transaction volume increased across industries, driven by travel industry where DG has strength• Offline: General retail remains strong, as well as restaurants and facility-related due to COVID-19 convergence

Online Payment

Offline Payment(100M JPY)

OthersYoYEntertainment, Hobby
Facilities, Ticket booking
Home appliances, Furniture,
Interior

44,135+11.2%(100M JPY)

OthersYoY

Facilities, Ticket booking

18,159

Restaurants

39,707+39.0%

Automobile-related
Travel-related

Public Fund

General retail

Telecommunications, ASP

13,067+91.4%+0.2%

Travel-related+59.3%-7.0%+18.6%+35.2%+17.0%+41.0%
FY23.3

FY24.3

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

47

Platform
Solution

Payments Related to Inbound Tourism• Foreign visitors are recovering, but Chinese visitors with high consumption remain at 50% of pre-COVID-19 levels• High potenrial for expansion in Alipay/WeChat Pay services that DG can offer

The Number of Foreign Visitors to Japan (by area)
Source: JNTO

Offline Transaction Volume(100M JPY)

Other countries
EuropeQR code payment by foreign visitors

North America

Other offline payments

253 340

Other Asian countries

246

China, Hong Kong

126
43

48

35
17

31
22

15
21

23
24

17
13
292
306 287
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3
2017

2018

2019

2020

2021

2022

2023

2024

159

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY20.3

FY21.3

FY22.3

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

48Platform
Solution

Capital Expenditures and Depreciation Related to Payment Business• Continue to invest in payment systems to ensure stable 24/7 operations and enhance robustness of security• It is expected that fixed costs may show gradual increase due to redundancy of system operations and marginal
profit ratio remains at a current level

Payment-related Expenditures・Depreciation(M JPY)

Capital expenditures
Depreciation

Payment-related Costs・Marginal Profit Ratio(M JPY)

Marginal profit ratio

One-off cost
Valuable cost
Fixed cost
88.0%

264

275

293

297

302

293

302

302

288

288

1Q

2Q

282

3Q

FY22.3

297

294

4Q

1Q

2Q

275

FY23.3

4Q

85.9% 87.3% 85.9%

80.9%

355

281

378

297

301

344

356

608
419

377

439

336
254

3Q

88.1% 88.7% 88.2% 87.2%

142

386

349

344

85.0%

294

398
321

89.1%

318

451

331

85.5%

1Q

2Q

3Q

FY24.3

4Q

974

1,199 1,258
1,115 1,118 1,103 1,122 1,139 1,139 1,145
1,075
1,017

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q

2Q

3Q

4Q

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

49Platform
Solution

Profit in Marketing Business/Transaction Volume in Digital Advertising• DG’s core digital ads business is stable in the long run, despite quarterly fluctuations in both revenue and ad volume• Digital ad volume in the financial domain declined YoY due to clients' shrinking budgets

Profit in Marketing BusinessTransaction Volume in Digital Advertising(M JPY)

Real EstateNon-financial area
Financial area

EC support/CRM
Digital advertising
3,673
3,403

993

1,105 1,101

1Q

3,275

-7.0%

881

-23.6%

962

1,304
1,124 1,034 1,088 1,064 1,200 1,063 1,120 1,096

+8.6%

3Q

4Q

3,283 3,298

1,025

2Q

YoY

3,522
3,113 3,103

1,326
1,154

FY22.3

916

1Q

966

2Q

3,186

1,202

3Q

FY23.3

2,977 3,041 2,917

1,153
921

4Q

1Q

1,009

2Q

999

3Q

FY24.34Q

1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY16.6

FY17.3

FY18.3

FY20.3

FY20.3

FY21.3

FY22.3

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved50Long-term
Incubation

Performance by Segment (Quarterly) – Long-term Incubation• Continuing early-stage investment in new businesses linked to payment business, aiming for mid to long-term growth• Kakaku.com achieved record profit in the Tabelog business, as well as steady growth in the Kyujin box business

Segment Revenue

Segment Profit(M JPY)

4,168

One-off revenue

YoY

Profit from equity method
1,771

Business revenue
1,505

1,422

1,132

1,056

1,035

+71.4%

570

553
434

423

380

449

412

951
868

984

558

499

1,233

1,163

(M JPY)

3,263

717

1,389

1,324 1,299
1,072+67.7%

One-off gains/losses
Profit from equity method
Business gains/losses
Segment profit

801

603

841
783

733

1,040
661

1Q

2Q

3Q

FY22.3

383

433

429

1Q

2Q

3Q

FY22.3

365

423

4Q

1Q

360

301

2Q

3Q

FY23.3

394

4Q

471

509

1Q

2Q

573

3Q

615

4Q

1Q

-301

-323

2Q

3Q

1Q

FY23.3
-369

2Q

3Q

4Q

FY24.3-438-503+56.3%
-584

4Q

-447

-431
-520

-515

-604

4Q

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved51

Global Investment
Incubation

Trends in Operational Investment Securities / by Currency and Area
• JPY depreciation trend led to an increase in the fair value of operational investment securities• Fair value of operational investment securities was ¥69.6B at year-end (up ¥1.9 billion from the previous year-end)

Balance of Operational Investment Securities(100 M JPY)

866

Others
INR

780

JPY

Europe

798
722

USD

Investees by Area

677

667

726 739 712

696

0.1%

Others

13.9%

615

363

406

438

472

508

Japan

14.4%

North America

50.3%

Asia

21.3%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY21.3

FY22.3

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

52

Global Investment
Incubation

Breakdown of Operational Investment Securities• Unrealized gains account for more than 1/2 of the fair value of operational investment securities at end-March 2024
• Diversified portfolio with more than 200 start-ups and LP investments, mainly seed and early-stage companies

Breakdown

Balances of the Top 5 Companies in the Portfolio

Whole Fair Value

69.6 billion

Unrealized gains(M JPY)86,56579,76977,95072,19367,676

72,59473,924

71,151

69,569Top 5

37.3 billion

Book value

Others

56.0 %

56.0 %

65.1 %

65.1 %

63.9 %

63.5 %

63.1 %

63.6 %

58.8 %

22.3

22.6

22.9

22.12

23.3

23.6

23.9

23.12

24.3

32.3 billion
FY22.3

FY23.3

FY24.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved53

Reference Materials(3):Business Model

Copyright © 2024 Digital Garage, Inc. All Rights Reserved54Size of B2C Payment Market• Both of online and offline payment markets are expected to remain high growth rates.

Private final consumption
expenditure
304

291

294

(Unit: T JPY)

309

Target by Japanese
Government
Cashless rate
～80％

Room for cashless payment(Cash payment, etc.)

86

96

106

116

Offline cashless payment
market65

73

EC payment market

21

23

25

27

29

30

’18
18年

’20
20年

’21
21年

’22
22年

’23 (Forecast)
23年(予想)’24 (Forecast)
24年(予想)’25 (Forecast)
25年(予想)

’19
19年

after
’26
26年以降

Calculated by the Company with referent to the following materials as source of data.
“National Accounts 2022” by Cabinet Office/ “Status of Domestic Cashless Payment Markets and Forecast” by Yano Research Institute Ltd./ “Cashless Roadmap 2023” by METI
“e-commerce Market Survey 2022” by METI / Deloitte Tohmatsu Consulting LLC / MIC Research Instituite “Current Status and Future Prospect for Internet Payment Service Providers in EC”
Copyright © 2024 Digital Garage, Inc. All Rights Reserved

55

The Structure of Transactions by Credit Card
Contract
Brand membership contract

International brands

Money
お金

Brand membership contract

VISA/MASTER/AMEX/DINERS/JCB
Pay feePay fee
Payment

IssuerIssue credit cards

Representative
contract

Payment Service
ProviderPay on behalf（fee deducted）
Purchase goods & services

Payment
agencycontract

Merchant contract（ Direct contract）

Pay on behalf（fee cost deducted））
fee deducted

ConsumerAcquire and manage merchants（
Payment

Credit card payment

Credit card contract

Credit card member

Acquirer

Pay feeMerchant
E-commerce & In-store businesses

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

56

Commercial Distribution of Payment Service Provider
An intermediary service between merchants (EC & physical stores) and payment providers (credit card companies,
convenience store, etc.), that enables the merchants to install a number of payment methods with a single contract

ConsumerElectronic message
Money

Payment service
providerMerchant

Payment networks
Credit Card Companies① Order

EC website② Payment
information③ Payment
information

Bank Payment
Convenience Stores Payment
E-money Payment⑦ Offer goods⑤ Notify result④ Notify result

Real storesTelecom Carriers Payment
ID Payment
International Payment⑨ Pay theamount less thesettlement
agent's fees

⑧ Pay sales
proceeds lessfees

QR Code Payment
BNPL (Buy Now Pay Later)⑥ Payment

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

57

Payment Methods and Major Payment Products• Offering solutions for 40+ major payment methods, including credit card and convenience store payments• Address the needs of clients with payment products designed for different industries and use cases
Payment Methods
Credit Cards

JCB, VISA, Mastercard, American Express,
Diners Club

ConvenientStoresSEVEN-ELEVEN, Lawson, FamilyMart,
Seicomart, MINISTOP, Daily YAMAZAKI

ID/QR

au PAY, Amazon Pay, Bank Pay, J-Coin Pay, Rakuten
Pay, d payment, LINE Pay, PayPay,
Smart Code, merpay, FamiPay, Apple Pay,
Google Pay, EPOS payment, COIN+

Carrier
Payments

au Easy Payment, d payment, Softbank Payment

Banks

Pay-easy, Rakuten Bank, SBI Sumishin Net Bank,
PayPay Bank

Electric Money

Rakuten Edy, Suica, nanaco, WAON

Overseas

Alipay, Alipay＋, WeChat Pay, PayPal, Union Pay

Web AccountTransfers

About 290 Financial institutions in Japan（Major banks, Internet banks, Local banks, andShinkin banks）

OthersVeriTrans BNLP, Credit cards for multi-currency,
Eikyufumetsu Point System

Major Payment Products

Patent-pending

Multi-payment service foronline merchants

Multi-QR Code payment
service for offline merchants

QR Code multi-payment
service for offline merchants

HotelPay
Account transfers overemails and cash receipt at
Lawson stores

セレモニーPAY(Ceremony Pay)
Payment and financial
solutions specificallydesigned for funerals

Barcode payments for
PoS
One-stop installation of
ID Payment to PoS terminals

Payment services for hotels &hospitality industry, integrated
reservation systems

IVR Payment
Patented

Credit card payment solution
for real estate industry(rents and initial fees)

e-mail link payment

Credit card payment solution
for telephone ordering

Payment solution to provide
payment URLs by emails.

OmniPAY

Fraud-detection Service

One-stop payment solution
to manage both online andoffline payments

Security solutions forfraud prevention and detection（ACI, ReD Shield, Sift, etc.）

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

58

Contract Type of Payment Service Provider
Storage agency type （Representative
contract）(Representative contract)
Acting as an all-in-one agent for contracting procedureswith various payment settlement institutions and payment ofsales amounts• Single point of contact for payment

Payment dataprocessing

Payment
service provider

Payment dataprocessing

Monthly fee
Pay sales
proceeds lessfees

Pay the amountless thesettlement agent's
fees• Streamline operations such as payment management andconfirmation

Payment
institutions• Monthly sales proceeds are deposited to the merchant in a lump-sum
payment from our company

Merchant• We handle all contracting procedures with payment providers such as
credit card companies and financial institutions

Merchant contract

type (Direct contract)
Payment data processing type（Directcontract）• Merchants sign contracts directly with credit card companies• Provide the necessary software and transaction management tools• Also provide support for software installation
Electronic
message
Money

Merchant• Provide payment systems and automate card payment processing

Data processing
contract
Payment dataprocessing

Payment
service provider

Payment dataprocessing

Monthly fee,
Processing fee
Merchant contract
Pay sales proceeds less fees

Payment institutions

Based on the merchant agreements with credit cardcompanies signed by the merchants, credit card payment
processing is automated through the introduction of apayment system provided by PSP

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

59

Business Model: Marketing Business• Supporting clients’ business growth through comprehensive digital marketing services• Providing solutions utilizing CRM and data, and Fintech solutions linked to payment business
Promoting interest and purchaseintent in all touchpoints with consumers

Clients

Marketing business

Bank/Card
Securities/Payment/
Other financial services

Outsource

RetailOthers (HR/Public
transportation/Hotels/Travel, etc.)

Customer databasedevelopment and analysis
Application
development

App/Game/E-book/Contents services
Real estate developer

Consumer

Overall internet advertising(Purchase promotion/customer
attraction/brand recognition)

Cosmetic/Consumer goods
manufacturer
e-commerce

Contact points

Work
togetherin DX area

Web media

SNS

Search engine

App

Mass media

Store

Media
development

AI solutions

Competing platforms for GAFA

Joint projects in DX and IT

Copyright © 2024 Digital Garage, Inc. All Rights Reserved

60

Multi-layered Businesses and Profit Opportunities with Payment• Platforms that continuously generate stable revenues, mainly from payments• Aim to generate multi-layered profit with DX/ Financial FinTech/next generation media in addition to existing business

AcquiringMembers
Opening
Accounts
・Credit Cards
・e-Money・Bank・QR payment
etc.

Payment Partners

Platform
Solution
Marketing Services

Marketing Service

Products for DX/ Cashless

Co-development of
New services

Payment

Payment Platform

Long-term
Incubation

B2B Payment
Improvement of cash flow
Next-generation media

Business
Operators(Merchants)

DX
Cashless

Attracting
customers

Consumers

Payment
Companies
Financial
Institutions

Consumer Behavior Data
from awareness to purchase

B2B transactions

Wholesalers
MakersData for Payment
and Purchase
Copyright © 2024 Digital Garage, Inc. All Rights Reserved61

Reference Materials(4):Cash Flow Allocation / Shareholder Returns

Copyright © 2024 Digital Garage, Inc. All Rights Reserved62

Overview of Cashflow Allocation
PL

Profit before tax
in PS

RevenueCashflow
before tax

Expenses

Distributable cash

Use of cash

Corporate tax

Headquarter
costs

Capex in PS
Repayments of debt

+Depreciation+ Impairment/valuation
gains/losses

Base businesscash flow

Dividends fromsubsidiary and affiliates

Investment
Business CF
・ Distribution income
・ from funds
・ Dividends Income¥30B+ in 5 years¥10B+ in five years

New businessdevelopment

Positive cash flow from new
Business will be added to theDistributable cash

Corporate tax etc.
in investment business

Costs for investment
business

・Proceeds from the sales
・ of securities

Shareholder returns(progressive dividend)

Investment
business
cash flow

Additional
Shareholder returns
Start-up investment
Strategic investment
M&A

Up to 30% of investment
business income

FinanceDebt, equity, asset sales, etc.

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63

Financial Strategy for Investment Business• Promote the sales of shares directly held by DG to generate investment EXIT income (proceeds from sales, etc.)• Carefully select new investments, and plan for investing through funds for income purposes to diminish the balance• Clarify the use of investment EXIT income and make strategic decisions on growth investment and additional returns,
including new business development
Usage of Investment EXIT Cash Flow

5Y Picture of Direct Investment and Income from Sales

70 B JPY
Investment in Growth✓ (NewBusiness Development)
Make strategic decisions based on businessenvironment and opportunities

Operational
Investment
on
Balance
Sheet

Unrealized
ProfitInvestment
Business CF(Operating costs,
after tax)

Book value

Investment
Business Income
More than 30 B Yen（5Y Total）

End of FY23.3✓

Consider Additional
Shareholder Return✓

Reinvestment in Startups
and Managed Fund
Up to 30% of Investment Business
Income✓Strategic Investments（M&A・Capital alliance）

End of FY28.3
Copyright © 2024 Digital Garage, Inc. All Rights Reserved64Shareholder Return Policy• Dividends Policy: Progressive dividend based on PS cash flow & additional dividends by cashflow from new business• Additional returns (special dividends, share buy-back) through CF from the investment business are active options

Shareholder Return Policy

Shareholder Return based on Base Business CF
Additional Returnfrom Investment
Business

2nd Layer

Additional dividend
from new businesses(LTI)

businesses)

Base Business CF

Stable divided from CF from PS Segment, etc.

(New

Investment for growth or additional shareholder returns will be
determined, considering business environment andinvestment opportunities

Aim to increase dividends bygenerating cash flow throughlaunch of strategic businesses
Annualsingle-year Policy

1st layer(PS)

Plan to pay progressive dividends
from cash flow of PS Segment,
which is expected as continuous
profit growth

Dividend payout
ratio

30% or more

10B JPY or more
FY24.3Medium-term Plan

FY28.3Copyright © 2024 Digital Garage, Inc. All Rights Reserved

65

Please note that the business forecasts and strategies covered in today’s presentation are based on our current evaluation and future results may vary significantly depending on unforeseeable
events or circumstances. This announcement is solely for the purpose of the investors relationship and is not for making any solicitation for investment in any securities. This announcement does
not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of any such jurisdiction. Any securities of our consolidated subsidiaries have not been registered under the U.S. Securities Act of 1933, as
amended (the “U.S. Securities Act”) and may not be offered or solid in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.
Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer andits management and financial statements.