DISCLAIMER: This document was prepared using our machine translation, and no manual modification has been made to thetranslated contents. This document is to be used solely as a reference and in cases where any differences occur between English
version and the original Japanese version, the Japanese version shall prevail. The consolidated financial statements in thisdocument are unaudited.

Consolidated Financial Results for the First Quarter of the Fiscal YearEnding February 29, 2024 (Japanese GAAP)
July 14, 2023
Company name

Listing Market TSE

MetaReal Corp.

Stock Code
Representative

6182(Title)Contact(Title)URL https://www.metareal.jp
Representative Director and CEO
Director, General Manager ofGroup Administration Division(Name) Junichi Goishi(Name) Taketo Arakawa

TEL 03-6685-9570

Scheduled date of filing ofJuly 14, 2023
Scheduled date of commencement of dividend payment quarterly report:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results briefings: Yes(Figures are rounded down to the nearest million yen)
1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending February 29, 2024 (March 1, 2023-May 31, 2023)(1) Consolidated Results of Operation (Cumulative)(Percentages indicate year-on-year changes.)
Net sales
%
△7.0
2.4

Millions of yen

Q1 FY2/24
Q1 FY2/23(Note) Comprehensive income

Operating income

983
1,058
Q1 FY2/24

Millions of yen

111
104

Ordinary income

%
6.4
169.3

124
116

59 Millions of yen (6.4%) Q1 FY2/23

Net income per share

Diluted net income per share

Yen
5.57
5.24

Yen
5.47
5.15

Q1 FY2/24
Q1 FY2/23

%
7.5
144.3

Millions of yen

Net income attributableto owners of parent
Millions of yen
%
59
6.4
55
75.8

55 Millions of yen (75.8%)(2) Consolidated Financial Position

Q1 FY2/24
FY2/23

Total assets
Millions of yen
4,329
4,220

(Reference) Shareholders' equity Q1 FY2/24

Net assets
Millions of yen
1,192
1,133

1,151 Millions of yen

FY2/23

Shareholders' equity ratio
%
26.6
25.9

1,092 Millions of yen

2. Dividend payment
Annual dividend per share
End of Q1

End of Q2
Yen
-

Yen
0.00

FY2/23
FY2/24
FY2/24 (Forecast)
0.00(Note) Revisions to the most recently announced dividend forecast: None

End of Q3

Year-end

Total

Yen
-

Yen
0.00

Yen
0.00

-

0.00

0.00

3. Consolidated Business Forecasts for the Fiscal Year Ending February 29, 2024 (March 1, 2023 to February 29, 2024)(Percentages indicate year-on-year changes.)
Net sales
Millions of yen

Full year

4,589

Operating income% Millions of yen
6.9

611

%

Net income attributable toowners of parent
Millions of yen%--

Ordinary income% Millions of yen
18.6-

Net income per
share
Yen

-

-

(Note) Revisions to the most recently announced business forecasts: None
◆Consolidated Business Forecasts by Segment(Percentages indicate year-on-year changes.)
Net sales
Full year

Operating income

Millions of yen%

Millions of yen%

MT business

3,152

8.3

599

△4.9

HT business

1,416

3.4

254

△4.6

Metaverse business

20

95.0

△280

-

Other corporate expenses

-

-

36

△15.2

(Note) 1.

Business results forecasts were made over a range in the fiscal year ended February 28, 2023. However, in light of factors
such as accumulation of information from release of speech AI translation services and designation of COVID-19 as aclass 5 infectious disease, we have decided to make spot business forecasts for the fiscal year ending February 29, 2024
instead.
Although the above forecasts reflect the impact of Metareal AI (see "Notice Regarding the Commencement of New
Businesses by Subsidiaries" released March 8, 2023), expenses in the MT business have been recorded in the sameamount as the increase in net sales (430 million yen), which corresponds to 10% of net sales in the previous fiscal year
(fiscal year ended February 28, 2023).
Although special expenses through May 31, the launch date for Metareal AI, were limited, forecasts of Metareal AI
expenses employ a conservative estimate equal to the increase in sales resulting from Metareal AI. This is because the2.

rapid changes in industry trends and growth curves make estimates difficult, and as a result expenses incurred are equal totheir impact on sales.
In addition, for now gains and losses on Metareal AI are recorded under the MT business. Plans call for changing thename of the MT business once actual figures for Metareal AI have increased in importance.
[Ordinary income], [Net income attributable to owners of the parent] and [Net income per share] in the consolidated
business forecasts for the fiscal year ending February 29, 2024 are not disclosed at this time because of uncertainties infinancial plans such as fund-raising in terms of both liabilities and equity associated with Metareal AI of new businesses.
We plan to disclose specific figures promptly once we are able to make more accurate projections.

※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of
consolidation): None
(2) Adoption of special accounting methods for presenting quarterly consolidated financial statements: Yes(Note) For details, please refer to [2.Quarterly Consolidated Financial Statements, (3) Notes on Quarterly Consolidated Financial
Statements (Application of Accounting Procedures Specific to Preparation of Quarterly Consolidated Financial Statements)]
on page 6 of the Appendix.
(3) Changes in accounting policies, changes in accounting estimates and restatements① Changes in accounting policies due to revisions of accounting standards, etc.: None
② Changes in accounting policies other than ①: None
③ Changes in accounting estimates: None
④ Restatements: None
(4) Number of shares outstanding (common stock)① Number of shares outstanding at the end of
the period (including treasury stock)

Q1 FY2/24

10,688,460 shares

FY2/23

10,688,460 shares

Q1 FY2/24

468 shares

FY2/23468 shares③ Average number of shares outstanding during
Q1 FY2/24
the period (cumulative)

10,687,992 shares② Treasury shares at the end of the year

Q1 FY2/23

10,671,731 shares※ This quarterly financial report is not subject to the quarterly review by a certified public accountant or an auditing firm.
※ Explanations and other special notes concerning the appropriate use of business forecasts(Cautionary Statement with Respect to Forward-Looking Statements)
Forecasts of future performance and other forward-looking statements in this document are based on information currently available
to the Company and certain assumptions that the Company deems to be reasonable at the time this report was prepared. The Company
makes no promises concerning their achievement. Actual results may differ significantly from the forecasts due to various factors.
Please refer to [1. Qualitative Information on Consolidated Financial Results (3) Consolidated Business Forecasts] on page 3 of the
Appendix for the assumptions underlying the forecasts and cautions concerning the use thereof.
(Method of Obtaining Financial Results Briefing Materials)
Supplementary materials for financial results were disclosed on the TDnet on the same date.

○ Table of Contents of the Appendix
1. Qualitative Information on Quarterly Financial Results……………………………………………………………………

2(1) Results of Operations ……………………………………………………………………………………………………

2(2) Financial Position ………………………………………………………………………………………………………

2(3) Consolidated Business Forecasts …………………………………………………………………………………………

3

2. Quarterly Consolidated Financial Statements and Major Notes ……………………………………………………………

4(1) Quarterly Consolidated Balance Sheets …………………………………………………………………………………

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ……

5

Quarterly Consolidated Statements of Income
For the Three-month Period ………………………………………………………………………………………

5

Quarterly Consolidated Statements of Comprehensive Income
For the Three-month Period ………………………………………………………………………………………

5(3) Notes on Quarterly Consolidated Financial Statements …………………………………………………………………

6(Notes on Going Concern Assumptions) ………………………………………………………………………………

6(Notes on Significant Changes in Shareholders' Equity) ………………………………………………………………

6(Application of Accounting Procedures Specific to Preparation of the Quarterly Consolidated Financial Statements) .

6(Additional Information) ………………………………………………………………………………………………

6(Notes to the Quarterly Consolidated Statements of Income) …………………………………………………………

6(Segment Information) …………………………………………………………………………………………………

7(Per share Information) …………………………………………………………………………………………………

9(Significant Subsequent Events) ………………………………………………………………………………………

9

- 1 -

1. Qualitative Information on Quarterly Financial Results(1) Results of Operations
During the first quarter of the current fiscal year (March 1 to May 31, 2023), while there was a decrease in income from theprevious year in the MT business and the HT business segments, there was a decrease in the amount of loss incurred in the
Metaverse business.
As a result, our group posted net sales of 983,792 thousand yen (down 7.0% year on year), operating income of 111,652
thousand yen (up 6.4% year on year), ordinary income of 124,863 thousand yen (up 7.5% year on year), and profit attributableto owners of parent of 59,480 thousand yen (up 6.4% year on year) for the cumulative first quarter of the current fiscal year.
Businesses other than the Metaverse business recorded total sales of 982,342 thousand yen (down 7.0% year on year) andoperating income of 167,894 thousand yen (down 22.0% year on year).
The performance of each business segment is as follows:① MT business
As for the MT business, the amount of orders received was 902,413 thousand yen (up 4.9% year on year) due to strong orders
received. Sales were 711,461 thousand yen (down 3.6% year on year) due to the impact of a decrease in orders received in theprevious fiscal year. Segment income was 134,042 thousand yen (down 12.8% year on year) due to the impact of upfront spendingon the new [Metareal AI] business. As for the [Metareal AI] project that was developed and provided from this fiscal year as a
growth measure in the short to medium term, we aim to contribute to business results at an early stage. During the first quarterof the fiscal year, we conducted six product launches, and commenced various proposals and business operations using generativeAI, mainly for large customers.
② HT business
As for the HT business, sales were 270,880 thousand yen (down 15.0% year on year), and segment income was 32,396
thousand yen (down 46.8% year on year).
③ Metaverse business
Mid-to-short term growth measures were shifted to the [Metareal AI] project. The Metaverse business reduced investment
from a long-term perspective by 10±5 years. As a result, sales were 1,449 thousand yen (down 2.9% year on year), and segment
loss was 56,241 thousand yen (segment loss of 110,442 thousand yen in the same period of the previous fiscal year).
(2) Financial Position(Assets)
Current assets increased by 200,644 thousand yen from the end of the previous fiscal year to 3,173,920 thousand yen at theend of the first quarter of the current fiscal year. This was due mainly to an increase of 155,054 thousand yen in income taxes
refund receivable included in other (mostly withholding taxes on intra-group dividends), a decrease of 46,496 thousand yen innotes and accounts receivable, and an increase of 31,282 thousand yen in cash and deposits. Non-current assets decreased by
91,650 thousand yen from the end of the previous fiscal year to 1,155,782 thousand yen. This was due mainly to a decrease of
16,729 thousand yen in property, plant, and equipment and a decrease of 63,979 thousand yen in intangible assets.
(Liabilities)
Current liabilities increased by 197,790 thousand yen from the end of the previous fiscal year to 2,187,282 thousand yen at
the end of the first quarter of the current fiscal year. This was due mainly to an increase of 215,815 thousand yen in advances
received. Non-current liabilities decreased by 148,277 thousand yen from the end of the previous fiscal year to 949,621 thousand
yen. This was due mainly to a decrease of 96,495 thousand yen in long-term debt and a decrease of 45,000 thousand yen inbonds.
(Net assets)
Net assets increased by 59,480 thousand yen from the end of the previous fiscal year to 1,192,798 thousand yen at the end of
the first quarter of the current fiscal year. This was mainly due to an increase of 59,480 thousand yen in retained earnings as aresult of recording profit attributable to owners of the parent.

- 2 -(3) Consolidated Business Forecasts
Our two management themes for the future are:
① [Metaverser] concept in the Metaverse business and its method [Metaverse×AI]
As a long-term growth strategy aiming to achieve results in five years or longer, the Metaverse business will focus on the
Metaverser initiative and [Metaverse×AI] as a means of implementing it.
② MT business and [Metareal AI] project
We will continue to aim for stable growth in the MT business, which provides services such as T-4OO and T-3MT for AI
document translation and Onyaku for speech AI translation. The AI-related service unified platform [Metareal AI] released on
the end of May integrates not only generative AI services such as ChatGPT but also numerous other AI service lines for corporate
use. We have begun development of this platform and providing it for use in order swiftly to provide not only proprietary
applications but also state-of-the-art AI services from around the world, while also serving as a bridge for connecting withJapanese companies. We aim to develop a comprehensive environment in which Japanese companies can adapt to the rapid
global trend toward AI. Through the MT business and the [Metareal AI] project, we aim to grow by 5% to 20%.

- 3 -

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheets(Thousands of yen)Previous fiscal year
(February 28, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term loans payable
Current portion of corporate bonds
Income taxes payable
Provision for bonuses
Advances received
Other
Total current liabilities
Non-current liabilities
Corporate bonds
Long-term debt
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Share subscription rights
Total net assets
Total liabilities and net assets- 4 -Current first quarter(May 31, 2023)

2,523,695
278,738
16,075
196,817△42,051
2,973,276

2,554,978232,241
18,720398,805△30,825
3,173,920

117,936

101,207

6,709
647,051572
16,752
671,086

5,032
574,837
12,172
15,064607,106

86,071
372,338
458,4091,247,433
4,220,709

86,071
361,396
447,467
1,155,782
4,329,702

74,270100,000
385,980
134,000
28,91344,860859,439
362,028
1,989,491

57,541
385,980
134,000
74,77386,289
1,075,254
373,442
2,187,282

388,000
669,550
40,349
1,097,899
3,087,391

343,000
573,055
33,566
949,621
3,136,903

786,021
1,759,968△1,452,866△951
1,092,171
41,146
1,133,318
4,220,709

786,021
1,759,968△1,393,386△951
1,151,652
41,146
1,192,798
4,329,702

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(For the Three-month Period)(Thousands of yen)Previous first quarter(From March 1, 2022
to May 31, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries, allowances and bonuses
Research and development expenses
Provision for bonuses
Retirement benefit expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gain
Subsidy income
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of investments accounted for using equity
methodBond issuance expenses
Other
Total non-operating expenses
Ordinary income
Special income
Income on sales of non-current assets
Total special income
Special loss
Loss on sales and retirement of noncurrent assets
Impairment loss
Total special loss
Income before income taxes
Income taxes
Net income
Net income attributable to owners of parent

Current first quarter(From March 1, 2023
to May 31, 2023)

1,058,240
396,877
661,363983,792
332,537
651,254

163,789
53,21933,075
1,737
304,608
556,430
104,933

159,087
51,99931,312
1,935
295,267
539,601
111,652

11
46
8,969
16,067694
25,79011650
1620,875
1,270
22,824

3,526

2,669

3,005

6,246

6,624
1,412
14,568116,154

697
9,613
124,863

-

831
831

2,260
2,260
113,894
58,01555,87955,8792,826
2,826
122,868
63,38859,48059,480(Quarterly Consolidated Statement of Comprehensive Income)(For the Three-month Period)(Thousands of yen)Previous first quarter(From March 1, 2022
to May 31, 2022)
Net income
Comprehensive income
Comprehensive income (loss) attributable to:
Owners of parent
Non-controlling interests- 5 -Current first quarter(From March 1, 2023
to May 31, 2023)

55,87955,87959,48059,48055,879-59,480-(3) Notes on Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
Not applicable.
(Application of Accounting Procedures Specific to Preparation of the Quarterly Consolidated Financial Statements)
Income taxes are calculated by multiplying the income before income taxes by the forecasted effective tax rate, which iscomputed by matching the forecasted yearly income taxes with the forecasted yearly income before taxes.
However, if the calculation of tax expenses using the estimated effective tax rate yields a highly unreasonable result, thenthe statutory tax rate is used.
(Additional Information)(Handling of Accounting and Disclosure for Application of the Group Comprehensive Accounting System)
We, as well as some of our domestic consolidated subsidiaries, have shifted from the consolidated tax payment system to thegroup-wide tax system since the first quarter of the current fiscal year. Accordingly, accounting and disclosure of income taxes,
local income taxes, and tax-effect accounting are conducted in accordance with [Treatment of Accounting and Disclosure forApplication of the Group Comprehensive Accounting System] (Practical Issues Task Force No. 42, August 12, 2021.
Hereinafter referred to as [Practical Solution Report No. 42].). In addition, in accordance with Paragraph 32(1) of Practical
Issues Task Force No. 42, we do not deem the impact of changes in accounting policies due to the application of Practical
Issues Task Force No. 42.
(Notes to the Quarterly Consolidated Statements of Income)(Impairment loss)
Previous first quarter (From March 1, 2022 to May 31, 2022)
Not applicable.
Current first quarter (From March 1, 2023 to May 31, 2023)
This information is omitted because it is not material.

- 6 -(Segment Information)[Segment Information]
Ⅰ Previous first quarter (From March 1, 2022 to May 31, 2022)
Information on net sales and income or loss by reportable segment and breakdown of income(Thousands of yen)
Reportable Segments
Metaverse
business

Adjustment(Note 1)

Amounts on the
consolidated
financialstatements(Note 2)MT businessHT businessTotal

729,008
9,105

7,833
310,799-

736,842
319,905-

736,842
319,905

-

-

1,493

1,493

-

1,493

738,114318,633

1,493

1,058,240-

1,058,240

86,490283,646

1,493

371,630-

371,630

651,623

34,986-686,610-686,610738,114318,633

1,493

1,058,240-

1,058,240

Net sales to unaffiliatedcustomers

738,114318,633

1,493

1,058,240-

1,058,240

Intersegment sales ortransfer

1,134

10,348-

11,483△11,483-

Total

739,249

328,981

1,493

1,069,723△11,483

1,058,240

Segment income or loss (△)

153,631

60,846△110,442

104,036897

104,933

By type of goods or services
Machine translation
Human translation
Metaverse
Revenue from contracts
with customers
Revenue recognition by
periodGoods or services that aretransferred at one time
Goods or services that aretransferred over a period oftime
Revenue from contracts
with customers(Note) 1. Adjustments to segment income or loss (△) of 897 thousand yen include elimination of intersegment transactions andcorporate expenses. Corporate expenses mainly consist of expenses related to the administrative departments of the parent
company that are not attributable to reportable segments.
2. Segment income or loss (△) is adjusted with operating income in the quarterly consolidated statements of income.

- 7 -Ⅱ Current first quarter (From March 1, 2023 to May 31, 2023)
1. Information on net sales and income or loss by reportable segment and breakdown of income(Thousands of yen)
Reportable Segments
Metaverse
business

Total

Amounts on the
consolidated
Adjustment
financial(Note 1)statements(Note 2)MT businessHT business

687,478
17,624

8,149
262,731-695,627
280,355-

695,627
280,355

Metaverse
Consigned development

6,359

-

1,449
-

1,449
6,359

-

1,449
6,359

Revenue from contracts
with customers

711,461

270,880

1,449

983,792-

983,792

63,766

235,123943

299,832-

299,832

647,695

35,757506

683,959-

683,959

711,461

270,880

1,449

983,792-

983,792

711,461

270,880

1,449

983,792-

983,792

1,535

12,457-

13,993△13,993-

Total

712,997

283,337

1,449

997,785△13,993983,792

Segment income or loss (△)

134,042

32,396△56,241

110,197

1,455

111,652

By type of goods or services
Machine translation
Human translation

Revenue recognition by
periodGoods or services that aretransferred at one time
Goods or services that aretransferred over a period oftime
Revenue from contracts
with customers
Net sales to unaffiliatedcustomers
Intersegment sales ortransfer(Note) 1. Adjustments to segment income or loss (△) of 1,455 thousand yen include elimination of intersegment transactions andcorporate expenses. Corporate expenses mainly consist of expenses related to the administrative departments of the parent
company that are not attributable to reportable segments.
2. Segment income or loss (△) is adjusted with operating income in the quarterly consolidated statements of income.
2. Information on impairment loss on noncurrent assets or goodwill by reportable segment(Significant impairment loss on noncurrent assets)
This information is omitted because it is not material.

- 8 -(Per share Information)
Net income per share and the basis for calculating it, and diluted net income per share and the basis for calculating it are as
follows.
Previous first quarter(From March 1, 2022 to May 31,2022)(1) Net income per share

Current first quarter(From March 1, 2023 to May 31,
2023)

5.24 yen

5.57 yen

55,87959,480--55,87959,48010,671,731

10,687,992

5.15 yen

5.47 yen--

182,055

178,445(Basis of calculation)
Net income attributable to owners of parent (thousandsof yen)Amount not attributable to common shareholders(thousands of yen)
Net income attributable to owners of parent related tocommon stock (thousands of yen)
Average number of shares of common stock
outstanding during the period (shares)(2) Diluted net income per share(Basis of calculation)
Adjustment to net income attributable to owners ofparent(thousands of yen)
Increase in number of common shares (shares)
Outline of potential shares that had not been included in
the calculation of diluted net income per share because
they had no dilutive effect, and that had changed-

significantly since the end of the previous fiscal year
(Significant Subsequent Events)
Not applicable.

- 9 --