UNOFFICIAL TRANSLATION
The formal official document is in Japanese

Summary of Consolidated Financial Results for the First Three Quarters of
Fiscal Year ending September 30, 2023 (Japanese Accounting Standards)
August 8, 2023
Tokyo Stock Exchange

Listed Company Name: MTI Ltd.
Listing Exchanges:
Securities Code9438
URL
https://ir.mti.co.jp/eng/
Representative:
Toshihiro Maeta, President and Chief Executive Officer
Contact:
Hiroshi Matsumoto, Senior Managing Director
Phone: +81-3-5333-6323
Scheduled date to submit the Quarterly Securities Report (Shihanki Houkokusho): August 14, 2023
Scheduled date of dividend payment: Supplementary documents for quarterly results: Yes
Quarterly results briefing: Yes (for securities analysts and institutional investors(On-demand))(Figures less than one millions of yen are omitted)

1. Consolidated business results for the nine months ended June 30, 2023
(October 1, 2022– June 30, 2023)(1) Consolidated operating results (cumulative total)
Net salesFirst three quarters of fiscal year
ending September 30, 2023
First three quarters of fiscal year
ended September 30, 2022
(Note) Comprehensive income(Percentages represent year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

20,138

4.1

(17)

－

151

72.4

495

－

19,354(0.8)

422 (76.5)

87 (93.1)(88)－

Nine months ended June 30, 2023: 469 millions of yen (－%)
Nine months ended June 30, 2022: (273) millions of yen (－%)
Net income
per shareFirst three quarters of fiscal year
ending September 30, 2023
First three quarters of fiscal year
ended September 30, 2022

Net income
per share/diluted
Yen

Yen

9.03

－

(1.62)－(2) Consolidated financial position
Total assets
As of June 30, 2023
As of September 30, 2022
(Reference) Shareholders’ equity:

Net assets

Equity ratio

Millions of yen

Millions of yen%

29,48029,265

17,515
17,877

46.9
48.1

As of June 30, 2023: 13,837 millions of yen
As of September 30, 2022: 14,065 millions of yen

2. Dividends
Dividend per share
End of firstquarter

End of second
quarter

Yen

Fiscal year ended September 30, 2022－
Fiscal year ending September 30, 2023－
Fiscal year ending
September 30, 2023(forecast)(Note) Revisions to dividend forecasts published most recently: No

End of third
quarterYear end

Annual

Yen

Yen

Yen

Yen

8.00
8.00

－
－

8.00

16.00

8.00

16.00

3. Forecast for consolidated business results for the fiscal year ending September 30, 2023
(October 1, 2022 – September 30, 2023)
Net sales
Full year(Percentages represent year-on-year changes.)
Profit attributable to
Net income
Ordinary income
owners of parent
per share

Operating income

Millions of yen%

26,800

1.2

Millions of yen%

Millions of yen%

Millions of yen%

Yen

200 (77.0)

400(17.7)

460

－

8.39

(Note) Revisions to forecasts for consolidated business results published most recently: No* Note:(1) Important changes of subsidiaries during the term(changes in specified subsidiaries resulting in change in scope of consolidation): Not applicable
New: –
Exception: –(2) Application of specific accounting treatment to the preparation of quarterly consolidated financial statements: Not

applicable(3) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies due to the modification in accounting methods:(ii) Changes in accounting policies other than (i):(iii) Changes in accounting estimates:(iv) Restatement:

Not applicableNot applicableNot applicableNot applicable(4) Number of outstanding shares (common shares)(i) Number of shares outstanding at the end of period (including treasury shares):6/23: 61,263,000 shares
9/22: 61,263,000 shares(ii) Number of treasury shares at the end of period
6/23: 6,405,973 shares
9/22: 6,450,273 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Nine months ended 6/23: 54,833,564 shares
Nine months ended 6/22 54,774,419 shares* Status of a quarterly review
This earnings release is not subject to an audit.

* Cautionary statement with respect to forward-looking statements
The forward-looking statements included in this material are based on the Company’s judgments, assumptions, and convictions basedon information available to the Company at the time of publication of this document and may differ materially from actual results for arange of factors, including conditions of Japanese and overseas economies, changes in the situation of operations in Japan and overseas,
and uncertainties and potential risks inherent in forward-looking statements. The risks and uncertainties include unforeseeable effects offuture events. The information on consolidated earnings forecasts and other future forecasts on page 4 of the Accompanying Materials
describes notes on the assumptions of the earnings forecasts and the use of the earnings forecasts.
A video (Japanese) of the briefing on earnings for the first three quarters for securities analysts and institutional investors will be madeavailable on demand on the Company's website.

Accompanying materials – Contents
1. Qualitative information on financial results for the current quarterly settlement .................................................... 2(1) Explanation on operating results ..................................................................................................................... 2(2) Explanation on financial position .................................................................................................................... 3(3) Explanation of future forecast information including consolidated forecast .................................................. 4
2. Quarterly Consolidated financial statements and important notes ...................................................................... 5(1) Quarterly consolidated balance sheet ........................................................................................................... 5(2) Quarterly consolidated statement of income and quarterly consolidated statement ofcomprehensive income .................................................................................................................................. 7(3) Notes concerning quarterly consolidated financial statements ....................................................................... 9(Notes concerning going concern assumption) .............................................................................................. 9(Notes in the event of significant changes in shareholders’ equity) ............................................................... 9(Segment information, etc.) .......................................................................................................................................... 91

1.

Qualitative information on financial results for the current quarterly settlement(1) Explanation on operating results overview of the first three quarters of fiscal year ending September 30,
2023 (Period from October 1, 2022 to June 30, 2023)
The Group is actively engaged in the healthcare business and the school DX business, both of which are expected
to expand in the future, in order to enhance its corporate value over the medium to long term.
During the first three quarters under review, consolidated net sales stood at ¥20,138 million (up 4.1% year onyear) and gross profit at ¥13,643 million (up 0.3 % year on year), attributable to an increase in cost of sales.
The operating loss was ¥17 million (compared to operating income of ¥422 million in the same period of theprevious year) due to an increase in selling, general and administrative expenses due chiefly to a rise in advertisingexpenses.
Ordinary income stood at ¥151 million (up 72.4% year on year) chiefly due to non-operating income of ¥194
million, including a share of profit of entities accounted for using equity method of ¥78 million (compared to ashare of loss of entities accounted for using equity method of ¥406 million in the same period of the previous year).
Although there were impacts from the postponement of the recording of deferred tax assets and income taxesdeferred in the consolidated financial statements in accordance with the current accounting standards for the income
tax-related treatment of a gain on the transfer of shares, associated with the transfer of some of the shares in
Boshimo Ltd., a consolidated subsidiary, to MTI Healthcare Holdings Inc., a consolidated subsidiary, in October
2022, profit attributable to owners of parent came to ¥495 million (compared to a loss of ¥88 million in the same
period of the previous year), reflecting a consumption taxes refund of ¥873 million and a gain on change in equityof ¥237 million in extraordinary income.
Consolidated business results(Period from October 1, 2022 to June 30, 2023)
First three quarters

First three quartersof the fiscal year endingof the fiscal year ended

September 30, 2023

September 30, 2022

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen%

Net sales

20,13819,354+784+4.1

Cost of sales

6,495

5,756

+739

+12.8

Gross profit

13,643

13,597

+45

+0.3

SG&A

13,661

13,175+485+3.7

Operating income

(17)

422

(440)

－

Ordinary income

151

87

+63

+72.4

Loss attribute to ownersof parent

495

(88)

+583

－

Breakdown of SG&A
(Period from October 1, 2022 to June 30, 2023)
First three quartersof the fiscal year ending
September 30, 2023

First three quartersof the fiscal year ended
September 30, 2022

Millions of yen

Millions of yen

Millions of yen

%

Total

13,661

13,175+485+3.7

Advertising expense

1,569

1,137

+432

+38.0

Personnel expenses

5,904

5,786

+117

+2.0

Commission fee

2,223

2,315

(92)

(4.0)

Subcontract expenses

1,513

1,542

(29)

(1.9)

924

991

(67)

(6.8)

1,526

1,400

+125

+9.0

Depreciation
Other

2

ChangeAmountPercentage

Operating results by segment are as follows.
Effective from the first quarter of the consolidated fiscal year under review, the classification of reportable segments
has been revised. Comparison and analysis for the first three quarters under review are based on the new segments.
① Content business
The content business includes B2C monthly billing services (excluding the “Luna-Luna” healthcare service forwomen and the “CARADA medica” health Q&A service in cooperation with healthcare professionals) and theB2B original comic distribution business that offers original comic content to comic distributors.
This segment served 3.14 million of paying subscribers. The figure was 60 thousand smaller than at the endof September 2022. The number of paying subscribers was nearly level, reflecting an increase in the number ofpaying subscribers to the “AdGuard” security-related app.
Net sales came to ¥13,819 million (up 3.0% year on year) mainly due to video sales at the consolidated
subsidiary Video Market Corporation, despite a decrease in the number of paying subscribers compared to thesame period last year.
Operating income was ¥4,005 million (down 4.3% year-on-year) due to an increase in SG&A expenses
resulting from a rise in advertising expenses to promote “AdGuard” membership.
② Healthcare business
The healthcare business includes B2C monthly billing services under the “Luna-Luna” and “CARADA medica”
brands and B2B and B2B2C healthcare services for medical institutions and local governments, such as thecloud drug record service and the maternal health record book app.
This segment served 550 thousand of paying subscribers. The figure was 40 thousand smaller than at the endof September 2022. On the other hand, the number of pharmacies that offer the cloud drug record service came
to 1,639 at the end of June 2023 (up 375 from the end of September 2022), as the result of great efforts focusedon increasing the number of pharmacies whose motivation to introduce such service is growing.
Net sales came to ¥3,351 million (up 14.9% year on year), given expanded sales of Cloud drug record service
and Childcare DX service, etc. Operating loss stood at ¥233 million (compared to a loss of ¥899 million in thesame period of the previous year), attributable to the effect of increased sales and cost containment measures.
③ School DX business
The school DX business includes school DX business developed for educational institutions by the consolidated
subsidiary Motivation Works Inc.
Net sales amounted to ¥581 million (up 114.4% year on year) due to an increase in monthly usage fees fromeducational institutions that have introduced the “BLEND” cloud-based school business support system.
“BLEND” has been used by 566 educational institutions since April 2023 (226 institutions more than a yearago). Despite the significant increase in net sales, the operating loss amounted to ¥569 million (compared to aloss of ¥535 million in the same period of the previous year) due to an increase in subcontracting expenses
resulting from stricter recording of software assets from the second half of the previous fiscal year.
④ Other business
Other business includes the B2B AI business operated by Automagi Inc., a consolidated subsidiary, and theCompany’s DX support business for large companies and solution business.
Net sales amounted to ¥3,600 million (down 3.8% year on year) due to a decrease in orders for the AI business.
Operating loss was ¥1,220 million (compared to an operating loss of 428 million yen in the same period of theprevious year), primarily reflecting an increase in the cost of sales as a result of the ongoing response to lowmargin projects in the DX support business for major corporate customers in addition to decreased sales in the
AI business.

(2) Explanation on financial position
At the end of the first three quarters under review, total assets increased ¥214 million from the end of September
2022, to ¥29,480 million.
Current assets increased ¥298 million mainly due to an increase in cash and deposits despite a decrease in
consumption taxes refund receivable. Non-current assets declined ¥83 million chiefly due to a decrease ingoodwill and customer-related assets, which more than offset an increase in investment securities.
Current liabilities increased ¥1,039 million, mainly reflecting rises in income taxes payable and contract
liabilities. Non-current liabilities fell ¥462 million chiefly due to a decline in long-term borrowings.
Net assets decreased ¥362 million chiefly due dividend payments, despite a profit attributable to owners ofparent of ¥495 million.
3(3) Explanation of future forecast information including consolidated forecast
The Company will work hard to expand sales and cut losses of its healthcare business, which is expected to play a
key role in increasing revenue and earnings in the future. In the content business, it will make every effort toincrease the number of paying subscribers by expanding sales of the “AdGuard” security-related app and striving
to bolster the original comic distribution business.
Also, the Group will focus on expanding the school DX business that Motivation Works Inc., a subsidiary of theCompany, is actively working to develop. Given the large number of business inquiries related to “BLEND”, thecloud-based school affairs support system provided by Motivation Works, the Group is earnestly working toincrease the number of schools that will introduce this system beginning in April 2024.
The Company takes medium- and long-term perspectives in its engagement in the healthcare business, which hasstrong potential for future growth and compared with B2C transactions, may move toward a more stable stock-typebusiness through the establishment of long-term business relationships with customers. Therefore, the Company iscommitted to implementing a variety of measures to achieve sales growth.
The cloud drug record service is particularly in high demand in dispensing pharmacies and we will increase thenumber of introducing stores through enhancing cooperation with Medipal Holdings, our business partner. This isbecause it can contribute to the sustained growth of sales in the healthcare business.
It will also enhance childcare-related services with a focus on local governments that have introduced the“Boshimo”, a maternal health record book app, and will advance digital cooperation among local governments,
hospitals, and residents, thereby advancing its “Boshimo” childcare DX platform strategy to enable the healthcare
business to make a contribution to profit in the medium term.
The Company continues to hold its consolidated earnings forecasts for the fiscal year ending September 30, 2023
as announced on May 24, 2023.
Earnings forecast for the fiscal year ending September 30, 2023
(Period from October 1, 2022 to September 30, 2023)(Millions of yen)

YoY(%)Net sales

26,800+1.2

Operating income

200(77.0)

Ordinary income

400(17.7)

Profit attributable toowners of parent

460

－

4

2.

Quarterly consolidated financial statements and important notes(1) Quarterly consolidated balance sheet（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2022)

The current first halfof the fiscal year
(As of June 30, 2023)

AssetsCurrent assets
Cash and deposits

12,097,658

13,800,949

Notes and accounts receivable-trade, and contract assets

4,294,825

4,138,890

Other2,420,195

1,170,592

Allowance for doubtful accounts(34,097)(33,655)

18,778,582

19,076,776

193,060

215,296

Software2,058,982

2,145,251

Goodwill

655,709442,348

Customer-related assets

912,600

596,700

Other

163,473

211,762

3,790,765

3,396,062

3,675,499

4,071,724

337,475

305,7452,394,793

2,310,901

Other106,411

114,980

Allowance for doubtful accounts(10,904)(10,904)

Total investment and other assets

6,503,275

6,792,446

10,487,102

10,403,805

29,265,684

29,480,581

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets
Investment securities
Leasehold and guarantee deposits
Deferred tax assets

Total non-current assets
Total assets

5

(Unit: thousands of yen)Previous fiscal year
(As of September 30, 2022)

Liabilities
Current liabilities
Account payable-trade
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - other,
Income taxes payable
Contract liabilities
Provision for bonuses
Other1,068,638

The current first halfof the fiscal year
(As of June 30, 2023)－
751,780
1,221,218
19,2362,356,643－
968,835

1,079,547
37,737750,330
1,213,152
415,555
2,731,391
207,362
990,878

Total current liabilities

6,386,353

7,425,955

Non-current liabilities
Long-term borrowings
Retirement benefit liability
Other

3,178,010
1,816,159
7,432

2,615,625
1,914,814
8,877

Total non-current liabilities

5,001,601

4,539,316

11,387,955

11,826,949

Shareholders' equity
Share capital
Capital surplus
Retained earnings

5,218,512
6,768,841
5,224,287

5,232,078
6,769,335
4,458,031

Treasury shares(3,257,237)(3,230,813)

Total shareholders' equity

13,954,404

13,228,632

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

75,55489,490(53,931)

131,599
101,312(51,907)

Total accumulated other comprehensive income

111,114

181,004

Subscription rights to shares
Non-controlling interests

110,774
3,701,436

101,747
3,576,426

Total net assets

17,877,729

17,515,309

29,265,684

29,480,581

Total liabilities
Net assets

Total liabilities and net assets

6

(2) Quarterly consolidated statements of income and quarterly consolidated statement of comprehensive
incomeQuarterly consolidated statement of income
For the first three quarters(Unit: thousands of yen)
For the first three quarters
For the first three quartersof the previous fiscal yearof the current fiscal year
(from Oct 1, 2021 to Jun 30, 2022) (from Oct 1, 2022 to Jun 30, 2023)

Net sales
Cost of sales

19,354,186
5,756,213

20,138,623
6,495,291

Gross profit

13,597,973

13,643,332

Selling, general and administrative expenses

13,175,305

13,661,078

422,668(17,746)

89
7,012
71,96672
3,961
43,826－78,045

Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Share of profit of entities accounted for using equity
methodOther

37,95968,519117,027

194,426

4,239

8,945

406,668－

9,231
31,595

7,903
8,154

451,735

25,003

Ordinary income

87,960151,676

Extraordinary income
Gain on sale of non-current assets
Gain on sale of shares of subsidiaries and associates
Gain on change in equity
Consumption taxes refund－
12,41776,481

Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodCommission expenses
Other
Total non-operating expenses

－

454
－
237,588873,339

88,8981,111,382

14,926
909
3,240
－
4,700

11,695
10,546
13,4507,148

Total extraordinary losses

23,77642,841

Income before income taxes

153,082

1,220,217

Income taxes-current
Income taxes-deferred
Total income taxes

26,437394,349
420,786

740,064
80,969821,033

Profit (loss)(267,704)

399,184

Loss attributable to non-controlling interests(179,095)(96,108)

Profit (loss) attributable to owners of parent(88,609)495,293

Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on sale of investment securities
Loss on valuation of investment securities
Loss on step acquisitions

7－

Quarterly consolidated statement of comprehensive income
For the first three quarters(Unit: thousands of yen)
For the first three quarters
For the first three quartersof the previous fiscal yearof the current fiscal year
(from Oct 1, 2021 to Jun 30, 2022) (from Oct 1, 2022 to Jun 30, 2023)

Loss
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment, before tax
Remeasurements of defined benefit plans, before tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income(267,704)

399,184(68,238)
69,856(2,152)

4,222
11,0252,023(5,114)

52,619(5,649)69,890Comprehensive income(273,353)

469,074

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests(94,867)

565,183(178,485)(96,108)83) Notes concerning quarterly consolidated financial statements(Notes concerning going concern assumption)
Not applicable.
(Notes in the event of significant changes in shareholders’ equity)
Not applicable.
(Segment information, etc.)【Segment information】
Ⅰ First half of previous fiscal year (period from October 1, 2021 to June 30, 2022)
1. Information on net sales, profit or loss for each reporting segment and revenue breakdown information
Reporting segment
Content
business

Healthcare
business

School DX
business

13,238,085

2,856,635

11,039

Revenue from contracts
with customers(Unit: thousands of yen)Amountreported on the
Adjustment
quarterly
amountconsolidated(Note)1
statement ofincome(Note)2

Otherbusiness

Total

271,426

2,300,358

18,666,506－

18,666,506

46,374－630,266

687,680－

687,680

13,249,124

2,903,009

271,426

2,930,625

19,354,186－

19,354,186

Sales to outside customers

13,249,124

2,903,009

271,426

2,930,625

19,354,186－

19,354,186

Internal sales between
segments or transfers

169,344

13,602－

813,943996,890(996,890)

－

Total

13,418,469

2,916,612

271,426

3,744,569

20,351,077(996,890)

19,354,186

4,186,165(899,663)(535,652)(428,311)

2,322,537(1,899,869)

422,668

Net salesGoodsorservicestransferred at a point in
time
Goods
or
servicestransferred over time

Segment income (loss)(Note) 1. The segment income (loss) adjustment of ¥(1,899,869) thousand includes the elimination of inter-segment transactions of¥(57,411) thousand and corporate expenses not allocated to each reporting segment of ¥(1,842,457) thousand.
Corporate expenses are composed largely of general and administrative expenses not attributed to any reporting segment.
2. The segment income (loss) represents the result of adjustment to operating income reported on the quarterly consolidated
statement of income.

2. Information on impairment loss on non-current assets or goodwill and others for each reporting segment(Important impairment losses related to fixed assets)
Reporting segment
Content
business
Impairment loss－

Healthcare
business

School DX
business

－

－

Other
business
909

Total

909

(Unit: thousands of yen)Amountreported on the
Adjustment
quarterly
amountconsolidated(Note)1
statement ofincome(Note)2－

909(Material change in goodwill)
In addition, in other business, goodwill of ¥149,142 thousand was recorded for the first nine months of the
fiscal year under review as a result of the acquisition of additional shares of AI Infinity Co., Ltd., which madethe company a consolidated subsidiary.
9Ⅱ First half of previous fiscal year (period from October 1, 2022 to June 30, 2022)
1. Information on net sales, profit or loss for each reporting segment and revenue breakdown information
Reporting segment
Content
business

Healthcare
business

School DX
business

13,650,932

3,340,826

42,424

Revenue from contracts
with customers(Unit: thousands of yen)Amountreported on the
Adjustment
quarterly
amountconsolidated(Note)1
statement ofincome(Note)2

Otherbusiness

Total

549,583

2,075,311

19,616,654－

19,616,654

28,712

32,239418,593521,969－

521,969

13,693,356

3,369,539

581,8222,493,904

20,138,623－

20,138,623

Sales to outside customers

13,693,356

3,369,539

581,8222,493,904

20,138,623－

20,138,623

Internal sales between
segments or transfers

126,522

7,692－

1,106,850

1,241,066(1,241,066)

－

Total

13,819,879

3,377,232

581,8223,600,755

21,379,690(1,241,066)

20,138,623

4,005,241(233,708)(569,022)(1,220,395)

1,982,114(1,999,861)(17,746)

Net salesGoodsorservicestransferred at a point in
time
Goods
or
servicestransferred over time

Segment income (loss)(Note) 1. The segment income (loss) adjustment of ¥(1,999,861) thousand includes the elimination of inter-segment transactions of¥(33,234) thousand and corporate expenses not allocated to each reporting segment of ¥(1,966,627) thousand.
Corporate expenses are composed largely of general and administrative expenses not attributed to any reporting segment.
2. The segment income (loss) represents the result of adjustment to operating income reported on the quarterly consolidated
statement of income.

2. Information on impairment loss on non-current assets or goodwill and others for each reporting segment(Important impairment losses related to fixed assets)
Reporting segment
Content
business
Impairment loss－

Healthcare
business

School DX
business

1,992

－

Other
business
8,554

Total

10,546(Unit: thousands of yen)Amountreported on the
Adjustment
quarterly
amountconsolidated(Note)1
statement ofincome(Note)2－

10,546

3. Matters regarding change in reporting segments and others
Due to the increased importance of the school DX business operated by its consolidated subsidiary, Motivation
Works Inc., the internal management classification was reviewed, and as a result, the reporting segments werechanged from the previous three segments of "Content business," "Healthcare business," and "Other business"
to four segments of "Content business," "Healthcare business," "School DX business," and "Other business" fromthe first quarter of the current fiscal year.
The segment information for the first three quarters of the previous fiscal year is based on the new segments
after the change.

10