BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 2nd QUARTER OF THE FISCAL YEAR ENDING MARCH 2024
This is an English translation of summarized consolidated financial results prepared
for the convenience of non-resident shareholders. Should there be any inconsistency
between the translation and the official Japanese text, the latter shall prevail.

November 14, 2023
Faith, Inc. (Stock code 4295, Listed on TSE Standard Market)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Chikayo Suzuki, CFO/Executive Officer
Tel: +81-3-6855-7811
Date of Submission of Securities Report: November 14, 2023
Starting Date of the Dividend Payment: December 8, 2023
Preparation of Supplementary Materials for Quarterly Financial Results: Applicable
Information Meeting for Quarterly Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the 2nd Quarter of the Fiscal Year Ending March 2024
(From April 1, 2023 to September 30, 2023)(1) Consolidated Operating Results (cumulative totals)(Percentages indicate changes compared with the same quarter of the previous fiscal year.)

Net Sales
Millionsof yenOperating Income
Millionsof yen%Ordinary Income
Millionsof yen%%Net Income
Millionsof yen%Year ending March 2024 Q2

6,773

△7.2

△329

－

△362

－

△363

－

Year ending March 2023 Q2

7,299

1.2

△240

－

△218

－

△263

－

(Note) Comprehensive income: 2nd quarter of the fiscal year ending March 2024: △¥1,068 million (—%); 2nd quarter of fiscal year ending
March 2023: ¥64 million (—%)

Net Income per ShareYear ending March 2024 Q2
Year ending March 2023 Q2

Diluted Net Income per Share
Yen

Yen

△33.55——△23.64(2) Consolidated Financial Position
Total Assets
Year ending March 2024 Q2
Year ending March 2023

Net Assets

Ratio of Equity CapitalMillions of yen

Millions of yen%

22,24424,226

14,26915,38564.1
63.5(Reference) Equity capital: 2nd quarter of fiscal year ending March 2024: ¥14,269 million; fiscal year ending March 2023: ¥15,385 million

2. Dividends
Dividends per Share
(Record dates)

Year ending March 2023
Year ending March 2024
Year ending March 2024 (forecast)

1st Quarter
Yen

—
—

Interim
Yen

5.00
5.00

3rd Quarter
Yen

Year-end
Yen

—

5.00

10.00

—

5.00

10.00

(Note) Revision of dividend forecast since the most recently announced dividend forecast: Not applicable

1

Total
Yen

3. Forecast for the Consolidated Results for the Year Ending March 2024
（from April 1，2023 to March 31，2024）(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Full year

Operating Income

Ordinary Income

Net Income
Attributable to the
Shareholders of the
ParentMillionsof yen%Millionsof yen%Millionsof yen%Millions ofyen%

16,100

6.1

305

－

300

－

100

－

Net Income
per Share
Yen

9.23

(Note) Revision of dividend forecast since the most recently announced dividend forecast: Not applicable* Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): Applicable
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 1 company (subsidiary’s name: Faith Wonderworks, Inc.)(2) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Not applicable(3) Changes in accounting policy, changes in accounting estimates, and restatements(i)
Changes accompanying revisions of accounting standards, etc.: Not applicable(ii) Changes other than the above: Not applicable(iii) Changes in accounting estimates: Not applicable(iv) Restatements: Not applicable(4) Outstanding shares (common shares)(i) Outstanding shares at the end of the term (including treasury shares):
The 2nd quarter of the fiscal year ending March 2024: 13,831,091 shares
The fiscal year ending March 2023: 13,831,091 shares(ii) Treasury shares at the end of the term:
The 2nd quarter of the fiscal year ending March 2024: 2,988,921shares
The fiscal year ending March 2023: 2,999,883 shares(iii) Average number of shares during the interim accounting period:
The 2nd quarter of the fiscal year ending March 2024: 10,839,127 shares
The 2nd quarter of the fiscal year ending March 2023: 11,131,726 shares(Note) The number of shares of treasury stock at the end of the period includes the Company's shares (245,900 shares in Q2 of the
fiscal year ending March 2024, 257,200 shares in the fiscal year ending March 2023) contributed as trust assets in theperformance-based stock compensation plan). In addition, such shares are also included in the treasury shares that are deductedin calculating the average number of shares during the accounting period (249,100 shares in Q2 of the fiscal year ending March
2024, 257,200 shares in Q2 of the fiscal year ending March 2023).

* This financial results report is exempt from quarterly review procedures.
* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to “1. Qualitative Information Concerning the Settlement of Accounts for the 2nd Quarter,(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.” on page 5 of theaccompanying material .
(To obtain supplemental documents relating to financial results)
Supplemental information on the Company’s quarterly financial results will be posted on the company website on November
30, 2023.

2

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

2
2
4
5

2. Consolidated Financial Statements and Important Explanatory Notes ···································· 6(1) Consolidated Balance Sheet ················································································· 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ······· 8(Consolidated Statement of Income) ········································································ 8(Consolidated Statement of Comprehensive Income) ····················································· 9(3) Consolidated Statement of Cash Flows ····································································· 10(4) Notes Concerning the Consolidated Financial Statements················································ 12(Note Concerning the Premise of a Going Concern) ······················································ 12(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity) ·················· 12(Segment Information) ······················································································ 12

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

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

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

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

as many listeners as possible. For the future, we will continue to provide a platform that allows artists
themselves to directly deliver information about their works to listeners and fans, thereby helping to build
deeper engagement and facilitating monetization, and we will work to expand the artist economy at alllevels and create a system that “allows artists to grow together with their fans.”
The Faith Group reorganized its Content Business with effect from April 1, 2023, with the goal ofestablishing an organization that is better adapted to the needs of the present era. By breaking down thefunctions that each group company has developed to date and clarifying their core competencies, we areaiming to create an organizational structure that facilitates business development, differentiates the profit
structure, and further improves efficiency. Moreover, by building a system capable of promptly
responding to the rapidly changing tastes and trends in the music market, we will enhance our ability tocreate appealing content and improve our competitiveness. We are aiming to further develop synergies
within the Group by consolidating the major labels, reinforcing and streamlining the administrative andsales functions, and integrating the assets belonging to each label using the Group’s own technology.
In addition, Faith, Inc. has consolidated its office functions into the Minami-Aoyama Office, and has
established a permanent telework work system in anticipation of changes in behavioral patterns and theestablishment of new values. We are actively engaged in a company-wide effort to reestablish and activatecross-sectional communication between departments, and we will continue to pursue more flexible
workstyles and realize diverse and efficient ways of working.
Furthermore, the Company, which had been listed on the Prime Market of the Tokyo Stock Exchange,
has transferred to the Standard Market of the Tokyo Stock Exchange as of October 20, 2023, following
its application for selection for listing on the Standard Market following the revision of the Tokyo Stock
Exchange rules, which came into effect on April 1, 2023. Looking ahead, we will continue to pursue
flexible organizational management, centralize our business strategies, speed up decision-making, andeffectively utilize resources such as knowhow and human resources to further strengthen the FaithGroup’s creative capabilities so that we can respond appropriately top the changes in the music industry
and enhance the corporate value of the entire group.
Regarding the Faith Group’s business performance for the second quarter of the current fiscal year ending
March 2024, net sales decreased by 7.2% from the same quarter of the previous fiscal year to ¥6,773
million. The Group reported an operating loss of ¥329 million (compared with an operating loss of ¥240
million for the same period of the previous fiscal year), an ordinary loss of ¥362 million (compared withan ordinary loss of ¥218 million for the same period of the previous fiscal year), and a net loss attributableto owners of the parent of ¥363 million (compared with a net loss attributable to owners of the parent of¥263 million for the same period of the previous fiscal year).
Information on each business segment is as follows.
Platform BusinessIn the Platform Business, as sales in existing distribution businesses continue to decline, we will continue
to invest in new growth areas by linking and platforming each of our services with the aim of developing
new and innovative products and grasping diversified profit opportunities.
Through FaRao PRO, we are focusing not only on providing BGM for commercial use, but also on
actively developing sales activities centered on the expansion of functions necessary for store operations,such as solutions that propose store branding, as well as announcement functions. In the future, we willcontinue to aim at the creation and activation of a new BGM market.
In Fans’, our platform of services for artists based on the D2C (*9) business model, which is expected to
expand further in future, we are enhancing the functions essential to artists’ musical activities such as
constructing official websites, distributing music and videos, selling artists’ goods, and operating fan clubs.
By strengthening links with SNS, we have introduced a system that allows fans to contribute to building
a community by sharing the information that creators send out. Moreover, as the provider of a service thatallows more artists to freely disseminate their work and information, we are attempting to acquire andexpand the number of users and improve the quality of the service by pursuing greater convenience.
*9. Abbreviation of “Direct to Consumer”—a business model for delivering
services and products planned and manufactured by Faith directly to users

3In line with the recovery of the real-live market, our live-streaming platform Thumva will cease providing
services at the end of November 2023, after fulfilling its original purpose of “delivering exciting live
experiences online” under the restrictions on activity imposed due to the spread of infectious disease.
With respect to Thumva BIZ, our new online service for stores that utilizes Thumva’s resources, theCompany entered into an agreement to transfer this business as of October 31, 2023.
Regarding the performance of this segment for the second quarter of the current consolidated fiscal year,
net sales decreased by 1.7% year over year to ¥1,051 million due mainly to a decline in sales of official
carrier website services distributing content for cell phones and a decrease in the issuance of points toexisting member stores in the retail point system operation platform,, and the segment recorded a loss of¥108 million (compared with a segment loss of ¥168 million for the same period of the previous fiscal
year).
Content BusinessIn the Content Business, we are strengthening new businesses with an eye to the future in order toovercome our dependence on sales of packaged products in the severe environment faced by the music
and video-related industries due to the changing music market. In an effort to create new hits, the threelabel companies, Nippon Columbia, DREAMUSIC, and KSR, are developing and nurturing content
suitable for the next-generation music business. In addition, they are actively utilizing their extensive
catalog assets in new projects, with the goal of expanding their IP domains both domestically and globally.
NHK's TV drama serial Boogie Woogie being broadcast in the second half of 2023 is based on the life ofjazz singer and actress Shizuko Kasagi, who recorded a slew of hits for Nippon Columbia. In addition to
the new drama theme song, “Happy Boogie,” we are developing a multifaceted new IP featuring
Shizuko’s past works and the Faith Group’s sound sources including songs by composer Ryoichi Hattori
and singer Noriko Awatani, both of whom were active during the period in which the drama is set.
We also accept commissions to manage various facilities and events utilizing the Faith Group’s
accumulated location business management knowhow. We have been entrusted with the operation of
ZEROTOKYO (a new facility that utilizes the nighttime hours of Zepp Shinjuku (TOKYO), one of thelargest live halls in the area), which opened inside the Tokyu Kabukicho Tower in April 2023. Events arebeing held at ZEROTOKYO in a variety of genres, and many people from both Japan and abroad areusing the facility now that the inbound market is recovering in response to the increase in the number offoreign visitors to Japan. We expect this business to generate stable revenue due to its asset-light businessstructure, and we are working to further expanding it by harnessing synergies with our existing businesses.
Regarding the performance of this segment for the second quarter, due to delays in the launch of major
titles and a decline in sales of major package products, net sales decreased by 8.2% year over year to¥5,722 million, while segment income decreased by 99.0% year over year to ¥1 million.
*Product and service names appearing in this document are trademarks or registered trademarks of Faith, Inc. either in Japan or in othercountries.

(2) Explanation Concerning the Financial Position(Analysis of the Financial Position)
As of the end of the second quarter of the current consolidated fiscal year ending March 2024 (September
30, 2023), total assets decreased by ¥1,982 million compared to the end of the previous consolidated fiscal
year to ¥22,244 million. This was mainly due to a decrease in investments and other assets.
Total liabilities decreased by ¥865 million compared to the end of the previous consolidated fiscal yearto ¥7,975 million. This was mainly due to repayment of long-term debt and a decrease in deferred tax
liabilities.
Net assets decreased by ¥1,116 million compared to the end of the previous consolidated fiscal year to¥14,269 million. This was mainly due to a decrease in unrealized gains on available-for-sale securities.
As a result of the above, the equity ratio increased by 0.6 percentage points to 64.1%.

4

(Cash Flow Situation)
The balance of cash and cash equivalents at the end of the second quarter of the current consolidated fiscal
year stood at ¥10,696 million, a decrease of ¥277 million from the end of the previous consolidated fiscal
year. Details of cash flow for the consolidated cumulative second quarter and its contributory factors are
as follows:(Cash Flows from Operating Activities)
Cash flows from operating activities amounted to an inflow of ¥54 million (compared with an outflow of¥539 million for the same period of the previous fiscal year), due mainly to the recording of ¥364 million
in respect of a loss before income taxes, ¥153 million in respect of a decrease in trade receivables, and¥135 million in respect of income taxes refunded, etc.
(Cash Flows from Investing Activities)
Cash flows from investing activities amounted to an outflow of ¥6 million (compared with an outflow of¥231 million for the same period of the previous fiscal year).
(Cash Flows from Financing Activities)
Cash flows from financing activities amounted to an outflow of ¥325 million (compared with an inflowof ¥15 million for the same period of the previous fiscal year), mainly due to the repayment of long-termloans payable.

(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
Performance forecasts are made based on information currently available to the Company, but there is apossibility that the actual performance figures will differ significantly from the forecast figures due to avariety of factors. Regarding the current full-year performance forecast, we are planning to release several
packaged products in the second half of the year, which had originally been scheduled for release in thefirst half of the year, and in addition, we are anticipating an increase in earnings in the second half of theyear due to the holding of major events by our artists, etc. Accordingly, the current performance forecast
for the full financial year remains unchanged from the forecast issued on May 12, 2023.

5

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

6

As of September 30, 2023

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

10,746,607
9,632
1,832,337
140
213,187
265,802396,136
53,13454,539652,621△22,163
14,201,977

3,581,540

3,546,262

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

1,088,802
373,160
1,461,962

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

2,577,130
139,909426,434△109,238
3,034,235
8,042,460
22,244,437

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

776,361
390,000
433,200
828,085
3,086,972
62,235
237,610
24,093764,848
6,603,407

924,800
504,822708,200
489,780

47,15834,81339,333
482,410
29,3352,027,860
8,840,561

39,33382,62016,851
1,371,599
7,975,006

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

7

As of September 30, 2023

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

3,218,000
2,840,438
9,432,564△2,414,501
13,076,502

1,848,510△8,87958,547
1,898,179－
15,385,889
24,226,451

1,163,544△8,871
38,255
1,192,928－
14,269,431
22,244,437

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Thousands of yen)Six months ended
September 30, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Interest on marketable securities
Gain on investments in investment partnerships
Foreign exchange gains
Subsidy income
Gain on reversal of provision for directors’ stock
benefits
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Loss on investments in investment partnerships
Loss on valuation on securities
Settlement money
Miscellaneous expenses
Total non-operating expenses
Ordinary income (loss)
Extraordinary Income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Net income (loss) before income taxes
Income taxes - current
Income taxes - deferred
Net income (loss)
Net income (loss) attributable to owners of parent

8

Six months ended
September 30, 2023

7,299,265
4,534,194
2,765,071
3,006,033△240,961

6,773,515
4,223,301
2,550,213
2,879,608△329,394

52
3,203
52
569
275
42,286

57
4,716
252
5,067
1,122
414

－

6,853

4,430
50,86920,95839,442

3,133
8,480
9,916
6,135
－
421
28,086△218,178

4,536
37,572
6,003
6,738
11,155
6,534
72,540△362,492

2,019
2,019

－
－

541
－
541
△216,700
37,2109,295△263,206△263,206

－
1,784
1,784
△364,277
36,797△37,356△363,717△363,717

(Consolidated Statement of Comprehensive Income)(Thousands of yen)Six months ended
September 30, 2022
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Retirement benefit adjustment (before any applicabletax effect)
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

9

Six months ended
September 30, 2023

△263,206△363,717

324,9189△684,966
8

2,433△20,292

327,360
64,153△705,250△1,068,968

64,153△1,068,968－－

(3) Consolidated Statement of Cash Flows(Thousands of yen)Six months ended
September 30, 2022
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for share awards for
directors (and other officers)
Interest and dividend income
Loss (gain) on valuation of securities
Interest income on securities
Interest expenses
Subsidy income
Equity in losses (profit) of affiliates
Loss (gain) on investments in investment partnerships
Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
Subtotal
Subsidies received
Interest and dividends received
Interest paid
Income taxes refunded
Income taxes paid
Net cash flows from operating activities

10

Six months ended
September 30, 2023

△216,700
91,177
61,37819,711
2,198
2,788△364,277
88,84660,37814,483△57,858△15,041

3,583△12,345△3,255
6,135
△52
3,133
△42,286
8,480
9,346
－
541
436,927△99,703△643,591△247,727△607,913
42,286
3,263△1,913141,976△117,114△539,415△4,773
6,738
△252
4,536
△414
37,572935
1,784－
153,015
12,707
10,606
6,437△56,921414
5,026△4,686
135,743△24,995
54,579(Thousands of yen)Six months ended
September 30, 2022
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of software
Proceeds from sale of investment securities
Proceeds from distributions from investment
partnerships
Proceeds from collection of loans receivable
Payments for leasehold deposits
Proceeds from refund of leasehold deposits
Other, net
Net cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Proceeds from disposal of treasury shares
Dividends paid
Net cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11

Six months ended
September 30, 2023

△267,663
2,019△49,344
1,218△25,579－△36,990
－

－

902

－
△102
126,854△44,732△231,752

347－－
55,255△6,06550,0001,450,000△120,150△1,300,016
6△64,128
15,711－△755,456
11,484,630
10,729,174－－△278,750△244
8,196△55,134△325,932
8△277,410
10,973,997
10,696,586

(4) Notes Concerning the Consolidated Financial Statements(Note Concerning the Premise of a Going Concern)
Not applicable(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Not applicable(Segment Information)
Ⅰ 2nd quarter of the previous consolidated fiscal year/FY 2022 (April 1, 2022 through Sept. 30, 2022)
1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)

Adjustment
amount(Note 1)

Amount recorded in
Consolidated Financial
Statements (Note 2)

PlatformContent

Total

1,068,700

6,205,762

7,274,463－

7,274,463－

24,80224,802－24,802

1,068,700

6,230,564

7,299,265－

7,299,265

1,068,700

6,230,564

7,299,265－

7,299,265

185,476

16,854

202,331△202,331－

Total

1,254,177

6,247,419

7,501,596△202,331

7,299,265

Segment income or segment loss (△)△168,792

112,934△55,858△185,103△240,961

Net sales
Goods transferred at a single point in
time
Goods transferred over a period oftime
Revenue from contracts withcustomers
Sales to external customers
Intersegment sales or transfer amountNotes: 1. The segment income or loss adjustment amount of △ ¥185,103 thousand consists of ¥5,754 thousand in eliminatedintersegment transactions and △¥190,857 thousand in companywide expenses not allocated to reportable segments.
2. Segment income amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on non-current assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on non-current assets orsignificant change in amount of goodwill.
Ⅱ 2nd quarter of the current consolidated fiscal year/FY 2023 (April 1, 2023 through Sept. 30, 2023)
1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)

Adjustment
amount(Note 1)

Amount recorded in
Consolidated Financial
Statements (Note 2)

PlatformContent

Total

1,051,006

5,665,523

6,716,530－

6,716,530－

56,98556,985－56,985

1,051,006

5,722,508

6,773,515－

6,773,515

1,051,006

5,722,508

6,773,515－

6,773,515

222,751

25,610248,362△248,362－

Total

1,273,758

5,748,119

7,021,877△248,362

6,773,515

Segment income or segment loss (△)△108,582

1,120△107,462△221,932△329,394

Net sales
Goods transferred at a single point in
time
Goods transferred over a period oftime
Revenue from contracts withcustomers
Sales to external customers
Intersegment sales or transfer amountNotes: 1. The segment income or loss adjustment amount of △ ¥221,932 thousand consists of ¥1,522 thousand in eliminatedintersegment transactions and △¥223,454 thousand in companywide expenses not allocated to reportable segments.
2. Segment income amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

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

12