Digital Garage, Inc.
1Q of FYE March 31, 2023 Financial Report＜2020-2025 Mid-term Plan＞

Designing our New Normal Context

2022.8.10

DG FinTech Shift

Copyright © 2022 Digital Garage, Inc. All Rights Reserved2Introduction/CEO message
We put together a “Strategy Overview” of ourstrategy we announced last year. It is anattempt to reflect a more strategic and cross-segmental perspectiveof the business from a medium-term view.

We continue to refine and execute this strategy and plan to announce
more details of our updates during this fiscal year. The content of
this quarter’s announcement is meant to be
the first phase of the Group's business transformation preceding
those updates.

“DG FinTech Shift” Strategy overview
Driving “DG FinTech Shift” Strategy by utilizing the payment platform as a solid foundation. Beyond
that, aiming to create new businesses in areas that will emerge non-linearly from technologies suchas blockchain.
web3/Crypto
relatedbusiness

New platform utilizing a blockchain

MarketingDX business

FinTechFinancialbusiness

Payment platform
Investment/Incubation

Payment platform

Expanding the portfolio of strategic businesses around the
FinTech area, which creates a competitive edge andcontributes to the growth of the payment business

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

4

Multi-layered revenue streams centered around payment
Aiming to become a platform that continuously generates stable revenue streams centered aroundthe payment business. In addition to primary and secondary revenue streams, aiming to create newrevenue opportunities, mainly utilizing data.
＜DG Revenue streams＞
Payment recurringbusiness

Primary revenue
streamPayment platform

Businessowners(Merchant)

DX businesses

Secondary revenue
streamCustomer behavior
data – from awarenessto transaction

Marketing/DX businessDX /Cashless

Attracting
customers• Marketing and DX (digitaltransformation) service revenues

Consumer• PSP (Payment Service Provider)service revenues

Payment• PSP service revenues

Data businessNew revenue stream

FinTech business• New financial services (planned)• Next generation marketing• PSP service revenues

Payment/
Purchase data
Copyright © 2022 Digital Garage, Inc. All Rights Reserved5First Strategic Business Initiative with Alliance partner Toshiba Tec.
In July 2022, Digital Garage, Kakaku.com, a DG group company, and alliance partner Toshiba Tecentered into an agreement to promote DX (digital transformation) in the food service and retail(Tabelog Order)industries, promoting the digital in-store mobile ordering service【DX promotion agreement and roles of the three companies for the food service industry】
Payment Service Provider
TSE Prime Market 4819

Payment transaction volume: 3.6 trillion yen
Number of Payment transactions: 720 million
Member stores: 700,000

Capital and Business Alliance
POS System

Tabelog
TSE Prime Market 6588

World‘s largest POS market share

Group Company

TSE Prime Market 2371

Restaurants listed on Tabelog: 830,000
Monthly users：93.23 million Monthly PV：2.056 billion

Strategic business for the 3 companies, each representing their own industries, which aims to invigorate the foodservice industry also utilizing IT introduction government subsidies.
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

6Overview of the Strategic Business among the 3 Companies
in the Food Service Industry(Tabelog Order) , generate further revenue streams
Starting fromby developing new businesses utilizing the customer base of alliance companies
SDK※

Revenue streams of DG①②③

Payment services
SaaS business offering an SDK※
to connect POS systems to otherservice applications
New financial services utilizing
data

Restaurants

Listed/contracted
restaurants

Attract
customers

Financialservices

Payment
service

Capital and businessalliance

Listed restaurants on Tabelog:
830,000
Monthly users：93.23million

World’s largest POS market
share

Systemdevelopment/operation

POS system

Visit

Payment/purchase data

※A collection of software development tools whichconnect POS systems to various applications easily
and at low cost for restaurants and retailers

Registered merchants: 70,000
Transaction volume: 3.6trn/year

Group company(Tabelog Order)

List menu

Marketing

Order

Payment

Sales Analysis

Customers
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

7Progress of “DG FinTech Shift”
Organization

Feb. 2021

Announced group strategy of “DG FinTech Shift”
Merged payment related subsidiaries

Newbusiness

Jun

Strategic subsidiary Crypto Garage registered as Japan’s first B2B-only
crypto asset exchange service provider

Organization

Sep

Acquired India’s financial system development company (DG FutureTech India) as a
new financial hub

Newbusiness

Sep

Started an electronic contract centralized management service
to support the real estate industry’s digital transformation

Alliance

Oct

At the same time as a capital and business alliance with Nomura Holdings, Inc., abusiness alliance with a group company in the custody business

Alliance

Dec

Capital and business alliance with Toshiba Tec Corporation, which had alreadycollaborated to establish JVAlliance

Feb. 2022

New
business

Mar

Started business of online ordering service
JCB Co., Ltd./Toshiba Tec CorporationNewbusinessJul

Started a collaboration throughToshiba Tec Corporation

Capital and business alliance with JCB Co., Ltd., a long-term leading partner in thepayment businessin collaboration with
with Kakaku.com, Inc. and

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

8Investment Highlights

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

9Overview of Business Segments
The Four Segments that make uplaunched last year

FINANCIAL TECHNOLOGY SEGMENT
Provides a diversity of comprehensive payment platforms as one of Japan’s largest
payment system providers supporting social infrastructure
MARKETING TECHNOLOGY SEGMENT
Develops comprehensive digital marketing solutions and data marketing businesses
utilizing various data
INCUBATION TECHNOLOGY SEGMENT
Invests in, incubates, and collaborates with entrepreneurs and startups mainly intechnology and Fintech sectors
LONG-TERM INCUBATION SEGMENT
Nurtures new businesses through long-term and continuous incubation

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

10Consolidated Financial Highlights
・Consolidated revenue and consolidated profit before tax hit a record high in 1Q.
・FT/IT/LTI business segments increased revenue and profit. Valuation gains on portfolio companies
remained strong.

Consolidated Revenue

Consolidated Profit before tax（Unit：M JPY）

Other

（Unit：M JPY）

17,734+63.6%

LTI
IT+129.9%
1,246

MT
FT

10,843
1,034

8,217
2,232

6,944

8,937

11,204

4,015

507

801
389

3,376

3,335

3,217

2,927

2,083

2,340

2,516

2,721

2,218

FY20.3 1Q

FY21.3 1Q

FY22.3 1Q

FY23.3 1Q

FY20.3 1Q

4,874
405

FY21.3 1Q

FY22.3 1Q

FY23.3 1Q

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

11Consolidated Financial Highlights
・IT increased profit with valuation gains. FT increased profit with transaction volume growth. LTI increased profit amid
recovery from Covid.
・FT increased profit by 13.4% in real terms after excluding the increase in system enhancement costs, etc., which began tobe recorded in FY22.3 2Q.
・MT decreased profit, affected by a reactionary decline from large projects in real estate advertising recorded in FY22.3.
(M JPY)FY 22.3
1Q

FY 23.3
1Q

Profit before
tax

4,874

11,204

YoY

Increase/Decrease

YoY

Remarks% Change+6,330 +129.9%

1Q Profit hit a record high.

FT

1,108

1,121

+13

+1.2%

Profit increased by 13.4% in real terms after excluding theincrease in system enhancement costs, etc., which began to berecorded in FY22.3 2Q. Expects double-digit profit growth from
FY23.3 2H as the impact of increased costs fades.

MT

248

101

-147

-59.4%

Profit decreased, affected by a reactionary decline from large-scale
projects in real estate advertising recorded in FY22.3.

IT

3,636

8,480

LTI

574

684

+110

+19.1%-692

818+1,510-

Others/Adjustme
nts and
Eliminations+4,844 +133.2%

Profit increased with the increase in fair value of investees,
including appreciation of the U.S. dollar.
Restaurant-related businesses, including Tabelog, are on arecovery trend with the lifting of priority preventive measures.

‐※ Musubell business was reclassified from MT to LTI Segment from FY23.3. Results for the same period of the previous fiscal year were retroactively revised to reflect the change.
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

12

KPI Highlights
・Strategic alliances with various companies in the area of a face-to-face settlement worked successfully,
resulting in settlement transaction volume growth.
・Investment profit on equity method from Kakaku.com, Inc. increased as the restaurant industry recovered.
Segment

FY 22.3
1Q

FY 23.3
1Q

Increase/Decrease% Change

100 M JPY

10,482

12,368+1,886+18.0%

Non-face-to-face

100 M JPY

8,522

9,466

+944

+11.1%

Face-to-face

100 M JPY

1,960

2,902

+942

+48.1%

M JPY

7,728

7,395

-333

-4.3%

Financial

M JPY

4,746

4,452

-294

-6.2%

Investment Value

M JPY

50,82086,565+35,746-

Amount Sold

M JPY

2,826

236

-2,590-

Amount Invested

M JPY

2,992

874

-2,118-Investment profit on equity method from
Kakaku.com

M JPY

563

863

+300

+53.4%KPI

Unit

Transaction Volume
FT

MT

IT

LTI

Digital Ads Volume

YoY

YoY

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

13Segment Performance Review

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14

Segment

Segment Overview

Performance

FY22.3 1Q

FY23.3 1Q

YoY Inc./Dec.

YoY % Chg

Segment Revenue

2,516 M JPY

2,721 M JPY+205 M JPY+8.1%

Segment Profit before tax

1,108 M JPY

1,121 M JPY+13 M JPY

+1.2%

Note) Revenue is external revenue. Profit before tax is before intersegment eliminations.

➤ DG Financial Technology, Inc.

Major Group Companies /Businesses

Japan's leading payment service provider➤ NaviPlus Co., Ltd.

Subsidiary of DG Financial Technology, Inc. Provides SaaS business for value- added
services for EC, such as recommendation and search engines➤ Scudetto Corporation

Provides fraud detection/prevention solutions, marketing solutions, etc.

➤ TD Payment Corporation （49％ stake／equity method）

JV with Toshiba Tec Corporation. Deploys multi-payment solutions for POS systems➤ ANA Digital Gate, Inc.（49％ stake／equity method）

JV with All Nippon Airways Trading Co., Ltd. Develops and provides new payment
solutions using FinTech➤ SCORE Co., Ltd. （49％ stake／equity method）

JV with Nissen Co., Ltd. Develops post-payment settlement business and various financial
businesses utilizing settlement data
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

15

Segment
BackgroundMajorchanges・Unify management indicators following the business integration of two main settlement subsidiaries
・Disclose results of strategic alliances more quantitatively① Unify the definition of the number of transactions to “the number of purchases”② Change the classification of settlement transaction volume to non-face-to-face/face-to-face③ Disclose settlement transaction volume and the number of settlement transactions , including ones acquired
through alliances

CategoryNewclassification

Redefining Management Indicators as “DG FinTech Shift” accelerates

Revenue

Settlement
Transaction
VolumeClassification

Items includedPSPbusiness

Settlement fee／Basic monthly fee, Settlement fee revenue from OEM offerings, Fees foraccount transfer, post-settlement payment, fraud detection, remittance service, etc.,
Revenue from contracted development, Revenue from investments accounted for using
equity method

EC/DXbusiness

Revenue of NaviPlus

Non-faceto-faceE-commerce (non-face-to-face) settlements, including volume provided by OEMs

Face-toface

Settlements at real retail stores (face-to-face), including ones handled through OEM
offerings and joint ventures
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

16

Segment

Segment Performance

・Revenue continued to increase steadily with growth in transaction volume in both non-face-to-face and face-to-face areas.
・Profit increased by 13.4% in real terms after excluding the increase in system enhancement costs, etc., which began to be recorded
in FY22.3 2Q.

Segment Revenue（Unit：M JPY）
YonY

EC/DX business
PSP business

2,340
2,083
194

1,889

FY20.3 1Q

Segment Profit before tax

202

2,516
225

2,721
238

（Unit：M JPY）
YonY

+8.1%
+5.9%

Excludingcost factors+13.4%

2,138

FY21.3 1Q

2,291

FY22.3 1Q

2,483

FY23.3 1Q

+8.4%

1,061

1,018

FY20.3 1Q

FY21.3 1Q

1,108

1,121

FY22.3 1Q

FY23.3 1Q+1.2%

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

17Segment

Cost analysis and Forecast for the current fiscal year

Enhanced settlement systems that require high stability and security as social infrastructure. Began recording costs for the enhancement in FY22.3 2Q.
Settlement business was in a steady condition with a double-digit increase in profit after excluding the increase in these costs and other one-time
factors.

Forecasted expenses for system and operational
enhancements

Breakdown of change in profit before tax for 1Q（Unit：M JPY）
Increase in Increase in Operating
revenue
operating systemDep(excl. FX) expenses related reciation

229

81

78

One-time
factors(FX etc.)

16

41

The difference between increase and decrease due to an increase in fixed costs is
expected to fade in FY23.3 1H.

YonY+13.4%

FY22.3
FY23.3135

FY23.3 Forecast

94

System enhancement・
Operation expansion

1,108

86

80

1,121

42

0
FY22.3
1Q

FY23.3
1Q

1Q

2Q

3Q

4Q

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

18Segment

Trends in Settlement Transaction Volume

・Face-to-face settlement continues to grow at a high rate, and market penetration continues to expand steadily.
・Non-face-to-face settlement remains strong despite a rebound in Covid demand.
（Unit：100 M JPY）

YonY
12,133Face-to-face settlement

10,546

Non-face-to-face settlement

6,278
485

6,660

7,281

6,126

1Q

2Q

8,333

692

1,091

1,794

9,768
1,688

1,960

10,1482,746+18.0%

2,902+48.1%+11.1%

11,585
2,549

2,219

1,476

586

534

5,793

8,124

8,962

10,482

12,3686,695

3Q
FY20.3

7,432

7,242

7,486

4Q

1Q

2Q

8,752

3Q
FY21.3

8,080

8,522

4Q

1Q

9,387

9,036

9,466

3Q

4Q

1Q

7,929

2Q
FY22.3

FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

19Segment

Trends in Number of Settlement Transaction

・The number of settlement transactions continued to grow by 22.4% YoY
・Data volume of settlement purchase transactions handled by FT continued to grow.
（Unit：M Transactions）

213

211

3Q

4Q

197
170

167

3Q

4Q

222

YonY
+22.4%

181

148
130

78

1Q

96

90

2Q

3Q
FY20.3

108

4Q

1Q

2Q
FY21.3

1Q

2Q
FY22.3

1Q
FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

20Segment

Transaction Volume Analysis of Increase/Decrease by Sector

・Travel, amusement, and food service-related transactions increased as corona restrictions were relaxed.
・Equity/FX and Crypto asset related decreased due to the deteriorating investment environment.
（Unit：100 M JPY）※% compared to FY22.3 1Q

EatingAmusementout
Facility

General +71.8%
RetailTravel+50.8%+60.4%

C2C
PublicFund Market Place+11.3% -49.8% Equity/FX-24.3%

Crypto
Asset

Other

12,368-43.3%+170.9%10,482

FY22.3 1Q

FY23.3 1Q
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

21

Segment

Expansion through Alliance Strategy

Collaborate with the alliance companies to develop products to match needs of various types ofmerchants.
Face-to-face settlement market
Accelerate the provision of multi-payment solution/systems forlarge-scale stores with Toshiba Tec, the domestic top sharecompany providing POS systems and our capital alliance partner.
Established JV (TD Payment) to propel the business

Large

Merchant size

Provide multi-payment solutions/systems together through JV withANA Group. Mainly continue to capture consumption of shops andrestaurants in airports, travel industry and tourists to Japan

AirPAY

Recruit
Provide a QR code payment solution for AirPAY operated by
Recruit Co., Ltd.

14 big players
of QR payments

Small

Operate DG product of Cloud Pay. Introducing to small-scale
stores as an MPM-type payment which is a consortium-type multiQR solutions that integrate various QR code payments into one QR
code※MPM (Merchant Presented Mode): Method in which consumers scan QR codes displayed at stores with their smartphones to make payments
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

22Segment

Increasing Share with Alliance Strategy

Alliance strategy in a face-to-face settlement worked successfully, continuing high growth insettlement transaction volume in each area.

Face-to-Face Settlement Transaction Volume（Unit：100 M JPY）
2,902

2,746
2,549

３ Year CAGR
81.5%
1,794

2,219

Size ofMerchants

YonY

Large

＋40.4%

Small to Mid＋72.5%

Small+43.1%

1,960

1,688

1,476
1,091

485

1Q

534

586

2Q

3Q
FY20.3

692

4Q

1Q

2Q

3Q
FY21.3

4Q

1Q

2Q

3Q
FY22.3

4Q

1Q
FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

23

Segment

Inbound-related Settlement

・Inbound-related settlements, which had highly contributed to business performance, remain less than 10% of the pre-Covid level.
・With the easing of entry restrictions, there is significant potential for recovery and expansion, in addition to high growth indomestic transactions.

Face-to-face Settlement Transaction Volume
FT’s inbound-related settlements are down 90%
from the pre-Covid level.
17

Inbound-related QR code settlement

159
287

292

179

247

294

1Q

2Q

3Q

306

FY20.3Government Goals

60 M visitors

23
24
2,729

13
1,459

Over 300 B JPY per year

15

17

（Unit：100 M JPY）

FT’s Potential Transaction Volume of Inboundrelated Settlement
31

22

Other face-to-face settlement

21

Number of Visitor Arrivals to Japan

1,773 1,664

1,937

2,204

2,871
2,527

2019
Visitor Arrivals
to Japan

31 M

1,078

533
4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q
FY23.32021

0.24 M visitors

Source) “Visitor Arrivals to Japan", Japan National Tourism Organization
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

24Segment

Multi-layered Strategic Sales Structure

・Not a single payment platform, but a package of various products demanded by the retail industry
・Profit structure produces double income in MT segment and LTI segment with payment business

Area

Payment
Face-to-face settlement area

Non-face-to-face settlement area

Strategy

Acquisition via partner sales
through the alliance

Acquisition via direct
marketing

Alliance strategy

Branding

Promote sales strategicallythrough collaborations withalliance partners

Strengthen brand throughintegration of major
payment subsidiaries

RecruitMarketing/DX
Various industry cut

Acquisition via in-house sales

Package sales of added value other thanpayment service•••

Product provision of marketing and DX that theretail industry demands
Upsell/package service for the customers
Build a sales structure for each business segment
within the group

Copyright © 2022 Digital Garage, Inc. All Rights Reserved25Collaboration with JCB: Started Providing Payment Service
to Shibuya City

Segment

Collaborate with JCB, a capital and business alliance partner, and utilize internal and external
resources to start providing a new payment service for Shibuya City ※※Shibuya city digital community currency business

New payment service using NFC tags.
Starting with Shibuya city, expanding to local
governments nationwide
Using NFC tags

Alliance partner

Capital and business alliance

Local payment

Local
currency

Cashlesspayment

Apple Pay
Google Pay

Web application for users
and merchants×# of merchantsworldwide
Approx.

Internal resource

Creditcard# of connected
merchants
Approx. 700,000

External
resource

Overview of Shibuya city
digital community currency business

Payment
MarketingIncubation
Technology

37 million

Customer base
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

26

Segment

New System Strategy Associated with Business Integration of Two
Major Payment Companies

・As a government-designated critical infrastructure operator, thoroughly investing in stable
operation and security 24 hours a day, 365 days a year.
・Strengthen system to minimize downtime risk due to unforeseen failures, etc.
Strengthen systems

Expanding operation center• Japan's first introduction of state-of-the-art technology
used in highly public areas such as finance andtransportation as a regular payment system• Expanding hubs to respond to the increase andcomplexity of operations in anticipation of future growth inpayment transaction volume• Non-disruptive system operation with two-way real-time
replication/redundant database in active configuration• Thoroughly improve the reliability of the disaster recovery
systemData center

・Real-time replication
・Active configuration• Minimize manned response 24 hours a day, 365 days ayear by introducing technologies such as RPA (Robotic
Process Automation)
Operation center2 hubs structure

ORACLEEXADATA

Monitoring center
Copyright © 2022 Digital Garage, Inc. All Rights Reserved27

Segment

Capital Expenditures and Depreciation

・Continues to invest in systems to ensure stable 24/365 operation and improve robustness of security.
・Depreciation is expected to normalize around year 2025 with efficiency gains from system integration.
（Unit：M JPY）

746

Capital Expenditures
Depreciation

605

416

410
348

354

328

277

348

258

187

191

195

204

1Q

2Q

3Q

4Q

FY20.3

232

1Q

253

260

273

280

292

2Q

3Q

4Q

1Q

2Q

FY21.3

358

337

299

FY22.3

310

314

318

3Q

4Q

1Q
FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

28

Segment

Costs・Marginal Profit Ratio

・Fixed costs are on an increase trend due to system-related depreciation and operational redundancy.
・Marginal profit is expected to remain at a current level.
Marginal Profit Ratio
91.2%
88.6%
88.1%
81.1%

85.2%

87.2%

86.5%

84.4%

87.5%

84.6%

87.6%

83.3%

83.4%

（Unit：M JPY）
Variable costs
Fixed costs
404
238

263

346

342

308

374

316

412

349

460

452

193

783

829

862

1Q

2Q

3Q
FY20.3

988

976

1,018

4Q

1Q

2Q

1,042

3Q
FY21.3

1,143

1,093

1,142

1,201

1,241

4Q

1Q

2Q

3Q

4Q

FY22.31,148

1Q
FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

29

Segment

Market size and its growth outlook for Settlement business for consumers (toC)

Cashless settlement market is expected to continue to grow at a high rate for both non-face-to-faceand face-to-face settlements.
Continue to promote cashless in this market, expand merchant network assets, and drive Fintech businessPrivate final
consumption
expenditure

305（Unit：T JPY）

289

Government Goals
Ratio of Cashless
Settlements
Up to 80％

Room forCashless(Cash payment,
etc.)

33

38

43

21

25

29

Face-to-face Cashless
Settlement Market

65

66

72

79

84

91

'18

'20

'21 (Est.)'22 (Fcst.)'23 (Fcst.)'24 (Fcst.)'25 (Fcst.)

EC Settlement Market

'19

'26 -

Estimated by the Company based on the following data
“System of National Accounts for 2020”, Cabinet Office / “Domestic Cashless Settlement Market 2022”, Yano Research Institute / “Cashless Roadmap 2021”, Ministry of Economy, Trade and Industry/ “Results of FY2020 E-Commerce Market Survey Compiled”, Ministry of Economy, Trade and Industry / “Current Status and Outlook of the Internet Settlement Services Market in EC, FY2021
Edition”, Deloitte Tohmatsu MIC Research InstituteCopyright © 2022 Digital Garage, Inc. All Rights Reserved30Segment

Segment Overview

Performa
nce

Segment Revenue
Segment Profit before tax

FY22.3 1Q

FY23.3 1Q

YoY Inc./Dec.

YoY % Chg

3,217 M JPY

2,927 M JPY-289 M JPY-9.0%

248 M JPY

101 M JPY

-147 M JPY-59.4%Note) Revenue is external revenue. Profit before tax is before intersegment eliminations.

Major Group Companies /Businesses➤ Marketing Technology Company

Supports client’s business through performance-based ads,
web marketing, CRM marketing, and DX businesses➤ DG Communications Co., Ltd.
Develops real estate advertising business➤ BI.Garage, Inc.

Contextual ads business and media consortium business➤ CyberBuzz, Inc.（20％ stake／equity method）Ticker : 7069

Provides the social media marketing platform structured with influencers
as its center part

Copyright © 2022 Digital Garage, Inc. All Rights Reserved31Segment

Segment Performance

・Volume of the financial sector remains stable in addition to an increase in the volume of D2C projects.
・Both revenue and profit decreased in 1Q due to a reactionary drop from large-scale projects in the real estate
advertising recorded in FY22.3.

Segment Revenue

Segment Profit before tax（Unit：M JPY）

CRM, etc.

（Unit：M JPY）

Real Estate
Digital Ads

3,376

3,335

640
1,445
1,773

3,217
769

1,306
968

YonY

2,927

-9.0%

678

-11.8%

1,163 -10.9%

327

YonY

248

-59.4%

178
962

922

FY20.3 1Q

FY21.3 1Q

1,143

1,087

FY22.3 1Q

FY23.3 1Q

-4.9%

101
FY20.3 1Q

FY21.3 1Q

FY22.3 1Q

FY23.3 1Q

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

32Segment

Advertising Volume

・Digital ads are recovering from the budgetary austerity of companies placing ads in the Corona disaster.
・Steady growth mainly in the financial sector, where MT has a high market share.
Real Estate
Smartphone/App
Cosmetics/HR

Digital Ads

Financial

8,230
2,250

1,701

1,723

1,728

9,727
8,519
2,091

2,072

1,810

2,556

2,547

1Q

2Q

8,397
1,918

1,592

2,069

8,259
7,305

1,321

2,324

1,765

1,275
1,119
1,743

1,768

1,377
1,631

8,440

1,460

3Q
FY20.3

4,013

4Q

9,737
2,009

1,401
1,476

2,106

1,220
1,762

1,622
1,288

3,167

3,487

3,534

1Q

2Q

3Q
FY21.3

YonY

9,838

9,637

9,003

-7.5%

1,608

-20.0%

904-25.9%

2,039+15.7%

4,612

4,452

-6.2%

4Q

1Q

8,296

1,960

1,767

855

812

2,344

2,411

1,791

2,029

5,731
3,117

（Unit：M JPY）

11,024

4Q

4,746

4,384

1Q

2Q

3,926

3Q
FY22.3

FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

33

Segment

BI.GARAGE: Japan’s Largest “Whitelist Consortium"・In June 2022, BI.GARAGE signed a capital and business alliance agreement with
two Hakuhodo DY Group companies.
・Accelerate the contextual targeting advertising business in the post-cookie era
5 major advertising agencies

28 major domestic media companies
62%※owned subsidiary※After this capital and business alliance

Capitalalliance

Capitalalliance

Cookieless contextual targeting ads for each article
150 premium media of 28 leading domestic media
companies.
Analyzing data from 100 million profiles

Contextual targeting ads example

Use the analysis results to extract pages
that match related keywords

Related keywords

Example of ESG: Environmental issues,
decarbonization, renewable energy, diversity andLGBT, etc.

Future Plan: Application to EC/Fintech Shift deployment
Use the extracted results to match
advertisements with placements that meet thetarget of the advertisement

Reaching Specific Context Interest
GroupsClients: Otsuka Pharmaceutical, Shiseido, Takara Leben,
Coca-Cola Japan, Nintendo, Panasonic, Rinnai, etc.

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

34

Segment

Segment Overview

Performance

FY22.3 1Q

FY23.3 1Q

YoY Inc./Dec.

YoY % Chg

50,819 M JPY

86,565 M JPY+35,746 M JPY+70.3%

Amount Sold

2,826 M JPY

236 M JPY--

Amount Invested

2,992 M JPY

864 M JPY--

Operational Investment Securities➤ DG Ventures Inc.

Major Group Companies /Businesses

Invests in and incubates cutting-edge internet startups➤ Open Network Lab（Program）
Seed Accelerator Program➤ DG Incubation, Inc.

Supports startups that challenge the world
through incubation and fund management➤ DG Daiwa Ventures, Inc.（50％ stake／equity method）
Manages DG Lab Fund to invest in startups
with next-generation technologies➤ Digital Garage US, Inc.
The US-based global strategy headquarters
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

35

Segment

Segment Performance

・The fair value of portfolio companies excluding the impact of foreign exchange grew steadily, while equity markets in Japanand the U.S. continued to be weak.
・The fair value at the end of June was 86.6 B JPY (+11.1% vs. the end of FY22.3), primarily driven by the strong U.S. dollar.
Balance of Operational investment securities（Breakdown by Currency）（Unit：M JPY）

86,565
6,114

OthersPortfolio by Region
Europe0.2%

Others12,724

INR

12.5%

JPY
USD

36,303
1,491
9,626

Japan

50,8192,112
10,006

14.8%

66,843

North America

53.0%

Asia

19.5%

38,09924,460FY21.3 1Q

FY22.3 1Q

FY23.3 1Q
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

36Segment

Trends in Fair Value of Investees

Built a global portfolio focusing on the U.S., Asia, and Japan. Achieved sustainable growth in fairvalue through diversification of investments in each growth stage.

（Unit：100 M JPY）

IRR 31.5%

190

219

242

267

278

1Q

2Q

3Q

4Q

1Q

FY19.3

331

351

365

363

2Q

3Q

4Q

1Q

FY20.3

406

2Q

438

3Q

FY21.3

472

4Q

508

1Q

615

2Q

667

3Q

FY22.3

780

4Q

866

1Q
FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved37

Segment

Examples of Investments

Fintech/DX promising portfolio companies in the With Corona era grew in Asia, Japan, North America, and otherareas. Steady progress was made in fundraising, listing, and exit of investees.
DG Group's Fintech business collaboration projects

Asia
Droom
[India] 2.0% stake
Operates Droom, India's largest automotive buying and selling
online marketplace

NoBroker Technologies
Solutions[India] 1.4% stake

Operates India’s peer-to-peer property marketplace. Users canrent/buy houses online without brokers

Expedient Healthcare
Marketing[India] 8.4% stake

Operates medical web service “Healthians.com,” which offers
online booking for health checkups at clinics, related informationfrom doctors/experts, etc.

Ralali[Indonesia] 4.0％ stake

Operates BtoB marketplace for office appliances, etc.

ListedGoTo Group[Indonesia] 0.1% stakeIndonesian technology company formed in a merger between ridehailing giant Gojek and e-commerce platform TokopediaJapan
AGE technologies[Japan] 12.4% stake
A member of the 18th Open Network Lab Seed Accelerator
Program. Provides "Souzoku.com," a service that completes
various procedures occurring at the time of inheritance on theInternet.

North America・Europe
MX Technologies[US] 3.2% stake
Offers a PFM (personal financial management) tool for financial
institutions in the US

THIRD[Japan] 13.3%
stakeHelium Systems[US] 1.3% stake

Provides cost reduction consulting services for construction,
machinery, and electrical work, and AI-based real estate
management platform “Kanri Roid”

Operates IoT business through smart sensor devices that can beprovided at low cost

Pocket Change[Japan] 10.4% stake

Blockstream[US] 7.2 % stake

Provides "pocket change" service for collection, redemption, andexchange of foreign coins, linked to electronic money and point services

Develops Sidechain, a technology for using Blockchain, Bitcoin's
core technology, in various applications* % stake includes investment securities held by Digital Garage, Inc.

GOYOH
[Japan] 5.0% stake

Pie Systems[Denmark] 11.6% stake

Develops and operates IT services for real estate, commercial andresidential properties in Japan and abroad. Develops EaSyGo, a realestate tech service that increases real estate value through stakeholder
ESG behavior change

Develops mobile app that automatizes refund workflow forinternational VAT (Value-Added Tax) and bypasses airport kiosk

Copyright © 2022 Digital Garage, Inc. All Rights Reserved38

Segment

Segment Overview

Performa
nce

Segment Revenue
Segment Profit before tax

FY22.3 1Q

FY23.3 1Q

YoY Inc./Dec.

YoY % Chg

1,034 M JPY

1,246 M JPY+212 M JPY+20.5%

574 M JPY

684 M JPY

+110 M JPY+19.1%Note) Revenue is external revenue. Profit before tax is before intersegment eliminations.

➤ Kakaku.com, Inc. （20％ stake／equity method） Ticker : 2371

Major Group Companies /Businesses

Operates purchase support service Kakaku.com, restaurant review andrestaurant service Tabelog, and New Media and Solutions➤ Crypto Garage, Inc.

Promotes development of advanced financial services utilizing blockchain
technology and cryptography technology with Tokyo Tanshi Co., Ltd., and Nomura Holdings, Inc.

➤ Brainscan Technologies, Inc.
MRI business for drivers➤ Musubell business

Develops and provides "Musubell," a system to promote DX of contracting andoperations in the real estate industry

other➤ Academie Du Vin Co., Ltd.

Runs wine school and wine sales business and develops EC business➤ Welby Inc. （19％ stake／equity method ） Ticker : 4438

Develops medical record business, disease solution business, and medical data researchbusiness
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

39

Segment

Segment Performance・Restaurant-related businesses, including Tabelog, are on a recovery trend as the priority preventive
measures, etc., were lifted.
・Core revenue, excluding one-time factors and discontinued operations, has recovered to the pre-Covid level.

Segment Revenue
2,232

Segment Profit before tax（Unit：M JPY）

（Unit：M JPY）

One-time revenue
Discontinued operation (NCS※)

642

Other
Investment profit on equity method

YonY

346
381

801
341

863

176
284

FY20.3 1Q

FY21.3 1Q

1,034
127

1,246

+20.5%

405+16.0%

841+50.6%

YonY

1,493

+19.1%

349
558
FY22.3 1Q

574

684

120
FY23.3 1Q

FY20.3 1Q

FY21.3 1Q

FY22.3 1Q

FY23.3 1Q※ Transferred all operations of New Context Services, Inc. in FY21.3.
Copyright © 2022 Digital Garage, Inc. All Rights Reserved40Segment

Segment Revenue

Although the activity restrictions of the Corona disaster mainly affected investment profit on equity method from
Kakaku.com, core revenue, excluding one-time factors and discontinued operations, has stabilized under thecurrent circumstances.
One-time revenue
NCS
Other

642

642

Investment profit on equity method

346

381

345

355

404

403

289

359
312

350

341
986

947

906

176

（Unit：M JPY）

422

444

370

863

1,103

170

127

316

349

345
391
984

914
623

405

589

558

603

4Q

1Q

2Q

801

841

4Q

1Q

284
1Q

2Q

3Q
FY20.3

4Q

1Q

2Q

3Q
FY21.33Q
FY22.3

FY23.3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

41

Segment

Kakaku.com, Inc. Performance

Source) "Results Briefing for the First Quarter of the Fiscal Year ending March 31, 2023", Kakaku.com, Inc.

Kakaku.com, Inc. Quarterly Revenue by Business（Unit：M JPY）

Kakaku.com
Tabelog
New Media and Solutions/Finance

16,023

12,243
9,502

5,933

13,309

6,130

5,474

5,958

7,371
4,493

1,735
1,809

2,277

2,718

Q1

Q2

Q3
FY21/3

12,021
5,417

14,015YonY+21.7%

4,957

-8.5%

4,253

5,373

+43.1%+29.3%

14,053

13,787

5,320

5,566

5,308

11,861
5,114

4,187

3,754

3,565

2,991

2,850

3,182

3,426

3,968

3,685

Q4

Q1

Q2

Q3

Q4

Q1

FY22/3

FY23/3Copyright © 2022 Digital Garage, Inc. All Rights Reserved

42

Financial Information

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

43Consolidated P/L（IFRS）
FY21.3

FY22.3

FY23.3

YonY (1Q)

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

Increas/Decrease％ Change

6,944

12,3209,447

11,767

10,84329,266

12,77920,067

17,734+6,891+63.6%

6,148

6,301

6,138

6,357

6,004

6,068

6,226

6,532

6,002

-3

-0.0%

Revenue in operational investment
securities

302

4,968

2,226

3,535

3,893

9,834

4,378

10,1637,534+3,641+93.5%

Other income

193

207

214

1,335

326

223

202

202

159

-167

-51.2%

Finance income

1

0

17

40

18

11,382

513

1,247

2,131

+2,113 +11502.9%

300

843

853

499

600

1,758

1,461

1,923

1,907

+1,307 +217.8%

6,539

6,689

6,123

6,811

5,969

6,715

6,526

8,352

6,530

+561

+9.4%

Cost of sales

2,764

2,829

2,459

2,645

2,531

2,617

2,662

2,703

2,622

+91

+3.6%

Selling, general and administrative
expenses

3,453

3,588

3,400

4,095

3,304

3,831

3,696

3,988

3,758

+454

+13.7%

Other expenses

69

109

69

370

72

117

99

1,594

80

+8

+11.1%

Finance costs

252

163

195

-299

62

151

69

68

70

+8

+13.6%

Profit before tax

405

5,632

3,324

4,956

4,874

22,551

6,253

11,715

11,204+6,330 +129.9%

Profit attributable to owners of parent

224

3,779

2,290

3,493

3,343

15,152

4,305

7,529

7,467

+4,124 +123.4%

JPY in Millions

Revenue
Revenue in recurring business

Share of profit of investments accounted
for using equity method

Expenses

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

44

Segment P/L（IFRS）
FY21.3

FY22.3

FY23.3

YonY (1Q)

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

Increas/Decrease％ Change

6,944

12,3209,447

11,767

10,84329,266

12,77920,067

17,734+6,891+63.6%

Financial Technology

2,340

2,409

2,525

2,392

2,516

2,675

2,814

2,757

2,721

+205

+8.1%

Marketing Technology

3,335

3,257

2,958

3,499

3,217

3,098

3,087

3,618

2,927

-289

-9.0%

Incubation Technology

389

5,269

2,225

3,599

4,015

12,214

5,008

11,5498,937

Long-term Incubation

801

1,305

1,646

2,179

1,034

994

1,406

1,146

1,246

Others/Adjustments and Eliminations

79

81

94

97

61

10,286

465

996

1,903

+1,842 +3041.6%

405

5,632

3,324

4,956

4,874

22,551

6,253

11,715

11,204+6,330 +129.9%

Financial Technology

1,018

1,083

1,141

875

1,108

1,120

1,264

1,057

1,121

+13

+1.2%

Marketing Technology

178

78

202

276

248

183

150

442

101

-147

-59.4%

Incubation Technology

72

4,916

1,861

3,415

3,636

11,886

4,593

11,1008,480Long-term Incubation

120

485

843

1,205

574

504

813

-639

684

+110

+19.1%

Others/Adjustments and Eliminations

-983

-931

-724

-815

-692

8,858

-567

-244

818

+1,510-JPY in Millions

Revenue

Profit before tax+4,922 +122.6%+212+20.5%+4,844 +133.2%

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

45Consolidated BS（IFRS）
JPY in Millions

End of
FY22.3End of
FY22.6

Increas/Decrease

Current assets

147,642

155,828+8,186

Cash and cash equivalents

43,41546,748+3,333

Trade and other receivables

24,462

19,926-4,536

FT business-related items

Operational investment securities

77,95086,565+8,616

Increase in fair value of investee companies

83,96586,433+2,468Property, plant and equipment

18,423

18,224-199

Intangible assets

4,194

4,260

+66

Investments accounted for using equity method

Non-current assets

Reason for change / Remarks

27,80828,880+1,072Equity in earnings of affiliates

Other financial assets
Total assets

23,317
231,60724,485242,261+1,167+10,653

Increase in fair value of investee companies

Current liabilities

59,24260,525+1,284

Borrowings

9,223

11,333+2,111

Trade and other payables

43,90043,908+875,14978,301+3,153

Bonds and borrowings

40,71040,999+289

Other financial liabilities

10,683

10,304-379

Deferred tax liabilities

22,001

25,203+3,202

Total liabilities

134,390

138,827+4,436

Total equity attributable to owners of parent

95,738

101,766+6,028

Share capital

7,692

7,810

+117

Capital surplus

6,147

6,077

-70

Treasury shares-1,409-1,409+0

Non-current liabilities

Other components of equity

2,273

2,435

+162

Retained earnings
Non-controlling interests

81,035
1,479

86,854
1,668+5,819+189

Total equity

97,217

103,434+6,217

Borrowing for working capital

Increase in estimated tax expense on unrealized gains on securities

Increased profit

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

46

Datasheet

Starting this fiscal year, the information previously disclosed in the“Supplementary Explanatory Material" section will be posted as adatasheet at the Company's website.
URL: https://www.garage.co.jp/en/ir/library/
We continue to enhance information disclosure to provide
information that contributes to investment decisions by ourshareholders and investors.

Copyright © 2022 Digital Garage, Inc. All Rights Reserved

47

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 sold 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.