Digital Garage, Inc.

3Q of FYE March 31, 2019 Financial Report2019.2.8

Financial Results Highlights



FY19.3 1-3Q results surpassed forecasts. No change in full-year forecast (IFRS) for profit before
income taxes of 9.0B JPY
Sales marked 50.8B JPY YoY grew by 16%, ordinary profit marked 4.8B JPY YoY grew by 16%, and profit before income taxes achieved 5.6B JPY
YoY decreased by 2%.

Ordinary profit reached a record high, and extraordinary loss of 1.4B JPY was recorded as loss on valuation of a listed equity etc., but profit before
tax remained almost unchanged in YoY.



FT: Profit before income taxes marked 2.2B JPY, up 23% YoY, continuing high growth. MT: Profit before income taxes decreased 43% YoY.
IT: Profit before income taxes marked 1.9B JPY, up 6% YoY.

KPI

Profit before income taxes by segments

FT
MT
IT
LTI

FY18.3 1-3Q

FY19.3 1-3Q

1.8

2.2

1.5
1.8
1.8

(B JPY)(B JPY)(B JPY)(B JPY)

0.8
1.9
2.1

(B JPY)(B JPY)(B JPY)(B JPY)

YoY

+23 %
-43 %
+6 %
+18 %

Profit before income taxes up 23% YoY, reached a record high. Both
EC/non-EC were strong.
Transaction volume

1.5T JPY (YoY up by 36%)

Number of transaction

290 million (YoY up by 33%)

Profit before income taxes decreased 43% YoY, due to a decrease inlarge-scale game projects last year and upfront investment.
Advertisement volume
24.2B JPY (YoY up by 18%)
By type of business

Financial: YoY up by 21%, Cosmetic/HR: YoY up by 1%
Game: YoY down by 31%, Real estate (NEW)Profit before income taxes up 6% YoY. Exit of both Japanese andoverseas investment progressed. Portfolio expanded.
Investment
4.6B JPY (Japan 34%, Asia 21%, US 43%, EUR 2%)
Book value

16.2B JPY

Profit before income taxes up 18% YoY. Investment profit on equity
method of Kakaku.com, Inc. trended steadily.
Investment profit on equity method of Kakaku.com
Monthly traffic for all sites of Kakaku.com

2B JPY (YoY up by 5%)

258 million (YoY up by 11%)

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

2

Business Highlights< Major highlights of 4 segments and strategic R&D >

FT
MT
IT



Non-EC /Alliances

Digitalmarketing

Reinforce real estate business area following finance, cosmetic/HR, smartphone/app. In the midst of aturning point in the Internet advertising industry, we began designing a cross-segment growth strategy,
including a solid FT segment.

Data scienceStrengthen the data science business using proprietary data across the DG Group. Collaborate withmedia consortium on demonstration tests in various forms, with BI. Garage, Inc. at the core.

Investment (DGI)

Promoting < Global Incubation Stream > linking the United States, Japan, Asia, and EuropeResi-Tech : Established a cross-industry accelerator originating in Japan that specializes in the housing and lifestylefields in collaboration with seven major real estate and construction companies in November. Started
the program in April 2019.
BioHealth : Formed a consortium with 22 companies, including major pharmaceutical and medical-relatedcompanies, and launched an accelerator specializing in the biohealth field. The first Demo Day was held.



Incubation (ONL)

LTIContinued high growth exceeding EC market. Substantial increase in profits. Transaction volume inpublic financing sector expanded.
Successful vertical start-up of post-settlement business by a JV with Nissen Co., Ltd., contributing
to profit growth.
Established a JV with TOSHIBA TEC CORPORATION, which has the largest share of the POS market
in Japan and overseas, to provide multi-payment services.

EC payment

Kakaku.com, Inc.

New businessCumulative net income for the 3Q increased 10% YoY to 12.0B JPY. Steady growth in “Tabelog” and“New Media”.
Crypto Garage, Inc. received official authorization to conduct the first finance project under the“Regulatory Sandbox”* by Cabinet Office in Japan. Launching test the issuance of JPY tokens and thedelivery versus payment settlement service between the token and crypto assets.

Promote research and development and demonstration tests focused on five priority areas. In the blockchain field, weestablished Crypto Garage Inc., a JV with Tokyo Tanshi Co., Ltd., and is working to generate medium-to long-term sustainablebusiness profits in the LTI segment.

KDDIʼs participation as a DG Labʼs core partner. Aiming to create business in the 5G era.
＊The Act is to develop an environment in which businesses are able to conduct demonstration tests and pilot projects for new technologies and business models thatare not envisaged under existing regulations with a limited number of participants and within the predetermined implementation periods. (ref. METI)
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

3

Financial Results by Quarters: Consolidated Sales
Consolidated sales
FY17.3

FY18.3

FY19.3(+15%)
156

115 122126152

162 153180

174

 3Q sales marked 17.4 B JPY, up
15% compared to 3Q FY18.3

131

 All segments increased in sales,
especially MT and FT drove theconsolidated sales(JPY in 100
Million)

1Q

2Q

3Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

(7-9) (10-12) (1-3) (4-6) (7-9)(10-12)(1-3) (4-6) (7-9)(10-12)(FY17.3 was nine-month period due to change in fiscal year-end)

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

4

Financial Results by Quarters: Consolidated Profit before Income Taxes
Consolidated Profit before Income Taxes
FY17.331

FY18.3

FY19.330

Kakaku.com,Inc.
Investment profit onequity method

6 (7-9) by fiscal termchange

18

15

23
18

18

16

21

 3Q profit before income taxes
marked 0.7 B JPY, decreased
67% compared to 3Q FY18.3

Extraordinary
losses13

11(-67%)

 Special factors for 3Q 1.3 B JPY
 Loss on valuation of investment
securities
0.7 B JPY
 Impairment of goodwill 0.6 B JPY

7(JPY in 100
Million)

1Q

2Q

3Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

(7-9) (10-12) (1-3) (4-6) (7-9)(10-12)(1-3) (4-6) (7-9)(10-12)(FY17.3 was nine-month period due to change in fiscal year-end)
Copyright © 2019 Digital Garage, Inc. All Rights Reserved5Group Financial Performance Review

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

6

FY19.3 3Q (Cumulative) Consolidated P/L Summary
Sales grew by 16% YoY, ordinary profit grew by 16% YoY, profit before income taxes marked 5.6B JPY YoY decreased by 2%〜 Extraordinary loss of 1.4B JPY was recorded due to valuation loss on a listed equity etc, but profit before tax
remained almost unchanged 〜
FY18.3

FY19.3

1Q-3Q

1Q-3Q

J-GAAPJ-GAAP

Net sales

43,92150,805+15.7+6,883Operating profit

2,192

2,403

+9.6

+210

Non-operating income

2,318

2,785

+20.2

+467

1,914

2,191

+14.5

+277

323

343

+6.3

+20

Ordinary profit

4,187

4,845

+15.7

+657

Extraordinary income

1,675

2,256

+34.7

+580

798

2,061

2.6 x

+1,263Extraordinary losses

44

1,401

-

+1,357

Impairment loss

-

665

-

+665

10

697

-

+687

Profit before income taxes

5,818

5,699

-2.1

-119

Income taxes

1,740

2,123

+22.0

+382

Profit attributable to owners of parent

4,052

3,605

-11.1

-447

JPY in Millions

Share of profit of entities accounted for using
equity method

Non-operating expenses

Gain on sales of shares of subsidiaries andassociates

Loss on valuation of investment securities

YoY%

FY19.3Full Year

AmountForecast

IFRS

Revenue

33,500

Profit before tax

9,000

Profit attributable to

6,200

owners of parent

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

7

FY19.3 3Q (Cumulative) Consolidated Segment P/L Summary
All segments increased in sales. Profit before income taxes remained strong in FT, up 23% YoY〜 MT increased in sales, however profit dropped due to decrease of large game deal in FY18.3, strategic personnel
reinforcement, and development investment etc 〜FY18.3

FY19.3

1Q-3Q

1Q-3Q

J-GAAPJ-GAAP

43,92150,805+15.7+6,883

FT Financial Technology

15,61917,300+10.8+1,6806,500

MT Marketing Technology

25,37928,226+11.2+2,847

14,500

Incubation Technology

2,355

3,545

+50.5

+1,1893,100

LTI Long Term Incubation

567

1,733

3.1 x

+1,166

6,500

Profit before income taxes

5,818

5,699

-2.1

-119

FT Financial Technology

1,857

2,292

+23.4

+435

3,200

MT Marketing Technology

1,501

853

-43.1

-647

2,250

IT

Incubation Technology

1,821

1,930

+6.0

+109

1,350

LTI Long Term Incubation

1,835

2,172

+18.4

+336

3,450

JPY in Millions

Net sales

IT

YoY
%

FY19.3Full Year

AmountForecast

IFRS

Revenue

Profit before tax

33,5009,000

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

8

FY19.3 3Q Consolidated B/S Summary
FY19.3 3Q

Difference

75,176

92,210+17,034

Cash and deposits

32,922

41,926+9,004

Money held in trust

5,307

4,329

-978

Raising funds by issuing CB, Share buy-back, Loan repayments etc
Relating to FT business
Consolidation of DG Communications, Co., Ltd.

JPY in Million

Current assets

FY18.3

Notes and accounts receivable-trad

7,741

8,234

+493

Operational investment securities

12,364

15,192+2,828

Accounts receivable-other

16,88922,616+5,727

Fixed assets

Reason for change / Remarks

New investment, Mark-to-market, etc
Relating to FT business

33,41939,156+5,736

Investment securities

16,552

21,400+4,848New investment, Increased investment profit on equity method

Goodwill

7,822

6,667

-1,154

Impairment and amortization

Total assets

108,596

131,423+22,827

Current liabilities

49,29455,313+6,019

5,018

6,567

+1,549Consolidation of DG Communications, Co., Ltd.
Demand for operating capital (FT)

Notes and accounts payable-trade

Short-term loans payable

4,137

6,222

+2,085

Deposits received

36,49938,387+1,88820,28438,890+18,606-

25,233+25,233

18,89011,773-7,116

601

515

-85

Total liabilities

69,57894,204+24,625

Net assets

39,017

37,218-1,798

Shareholders' equity

36,36333,887-2,476

Capital stock

7,464

7,494

+29

Fixed liabilities
Convertible bond-type bonds withshare acquisition rights

Long-term loans payable

Deferred tax liabilities

Capital surplus

3,104

3,127

+22

Retained earnings

25,81928,291+2,472

Treasury shares
Accumulated other comprehensive income

Valuation difference on available-forsale securities

Total liabilities and net assets-26-5,026-4,999

1,440

1,519

+78

339

286

-53

108,596

131,423+22,827

Relating to FT business
CB issuance
Proceeds from issuance of convertible bonds
were partially used for debt repayment

Increased net profit
Share buy-backCopyright © 2019 Digital Garage, Inc. All Rights Reserved

9Segment Performance Review

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

10

FT Segment
Ⅰ

Financial Technology Segment
Net Sales

Income Before
Income Taxes

FY18.3

1Q-3Q

15,619 M JPY

1,857 M JPY

FY19.3

1Q-3Q

17,300 M JPY

2,292 M JPY

FY19.3

Plan (IFRS)

6,500 M JPY

3,200 M JPY➤ econtext ASIA Ltd.
Payment corporation to expand e-commerce platforms globally➤ econtext, Inc.
Integrates online and offline business as the convenience store payment pioneer➤ VeriTrans Inc.
Provides leading e-commerce payment solutions➤ ANA Digital Gate, Inc.（49％ stake／equity method）
Develops and offers the new payment solution by FinTech➤ SCORE Co., Ltd（49％ stake／equity method）

Development of post-settlement payment business and various financial businesses
utilizing settlement data

➤ TD Payment Corporation（49％ stake／equity method）
Offers multiple payment solutions for POS systems

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

11

FT Segment Highlights
Net sales in 1-3Q rose 11% YoY, operating profit marked 2.2B JPY, +19% YoY〜 Operating margin which shows profitability increased to 44.7％, improved by 1.5 points YoY 〜
Net Sales
FY18.3(JPY in
100 Million)

Operating Profit
FY19.3(+11%)

49

54

53

53

56

FY19.3

18.5

62

22.0

(+19%)(JPY in
100 Million)

173

156
52

FY18.3

5.8 5.9

Operating Margin

6.7 6.6

7.0 7.1(JPY in
100 Million)

FY18.3
1-3Q

FY19.3
1-3Q

YoY

Net sales

156.1

173.0

+ 11%

Gross profit (A)

42.8

49.2

+ 15%

(B)

18.5

22.0

+ 19%

44.7%

+1.5
points7.9

Op. profit

Operating margin 43.2%
(B)



1Q

2Q

3Q

4Q

1Q

2Q

3Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

(4-6)

(7-9)

(10-12)

(1-3)

(4-6)

(7-9)

(10-12)

(4-6)

(7-9)

(10-12)

(1-3)

(4-6)

(7-9)

(10-12)

In addition to the payment collection
service, data processing payment with highprofitability has increasedHigher gross profit due to improved
profitability contributed to record-highprofits(A)

Operating margin improved as increased
marginal profit
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

12

FT Segment Highlights
Transaction volume in 1-3Q marked 1.5T JPY, +36% YoY, number of transaction increased to 290 million,+33% YoY〜 Gross profit increased 15% YoY to 4.92B JPY due to the contribution of high-margin data processing payment
contributed gross profit 〜Transaction Volume
FY18.3
1-3Q(JPY in
100 Million)(+36%)

11,242

FY19.3
1-3Q

15,265

FY18.3
1-3Q(in million)(+33%)

216.91OthersOthersDataprocessing
payment

Data
processing
payment

289.19FY18.3
1-3Q(JPY in
100 Million)

Card
payment(+11%)

156.1

Monthly basic fee/Initial

OthersData processing
payment

Convenience
store
payment

Convenience
store
payment

Convenience
store
payment

Card
payment

FY19.3
1-3Q

Gross Profit

Net Sales

Number of Transaction

FY19.3
1-3Q

173.0

FY18.3
1-3Q(JPY in
100 Million)(+15%)

FY19.3
1-3Q

49.2

42.8
OthersMonthly basic fee/Initial

Data
processing
payment
Convenience
store
payment

Card
payment

Card
payment

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

13

MT Segment
Ⅱ

Marketing Technology Segment
Net Sales

Income Before
Income Taxes

FY18.3

1Q-3Q

25,379 M JPY

1,501 M JPY

FY19.3

1Q-3Q

28,226 M JPY

853 M JPY

FY19.3

Plan (IFRS)

14,500 M JPY

2,250 M JPY➤ Marketing Technology Company

Supports clientʼs business through performance-based ads, Online to
Offline strategy and web marketing➤ DG Communications Co., Ltd.
Providing solutions that make people's lives more comfortable, mainly throughthe real estate advertising business➤ BI.Garage, Inc.

Develops and provides ad products incorporating data science, social marketing,and cutting edge ad technology➤ NaviPlus Co., Ltd.

Offers website support tools including personalized recommendation engines➤ DG MARKETING DESIGN, Inc. （20％ stake／equity method）
Established on June 25th, 2018 and its predecessor is Business Design Company

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

14

MT Segment Highlights
Net sales in 1-3Q increased 11% YoY, operating profit in 1-3Q decreased -48% YoY〜 Sales to the financial sector remained solid 〜
Net Sales(JPY in
100 Million)

FY18.3

FY19.3(+11%)

253

105

95

(JPY in
100 Million)

FY18.39382
72(-48%)

4.2

63

7.5

4.6

35

2.3

1Q

2Q

3Q

4Q

1Q

2Q

3Q

(7-9)

(4-6)

(7-9)

1Q

2Q

3Q

4Q

(10-12)

(1-3)

1Q

(4-6)

(10-12)

(4-6)

(7-9)

(10-12)

(1-3)

(4-6)

63

22
22

20

19

21

23

24

25

19

66

19

19

19

3.2

 Net sales increased 11% YoY due to theconsolidation of DG Communications Co., Ltd.

FY19.3

79

6.1
4.2

Advertising Sales
FY19.3

14.7

82

80

FY18.3(JPY in
100 Million)

282

95

94
78

Operating Profit

16

19

16

22

20

19

27

28

27

1.9
30

2Q

3Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

(7-9)

(10-12)

(4-6)

(7-9)

(10-12)

(1-3)

(4-6)

(7-9)

(10-12)

 Profit decreased 48% YoY mainly due todecrease of large deal of games in FY18.3 andupfront investment in personnel expansion, floor
space expansion, and new projects.

Financial

Cosmetics/HR

Smartphone/App

Real estate Sales to the financial sector increased 21% YoY
 Sales to the real estate sector have contributed
since 2Q.
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

15

MT Segment – Analysis of Profit before Income Taxes Decrease Profit before income taxes
FY18.3

FY19.3

1-3Q

1-3Q

1,501

853

(JPY in
1 Million)

YoY%

Amount

-43.1

-647

 Decrease in gross profit in
the game application field-350 M JPY➡ Impact of the decrease of large
deal for games in FY18.3

 Personnel expenses increase/ -350 M JPY
Floor space expansion➡ 1. Expansion of the Tokyo
office floor space to optimize
operations
2. Establishment of a Sapporo
Nearshoring Base
3. Personnel reinforcement
related to the above-mentioned
matters Upfront investment for
new project-200 M JPY

 Gross profit increase due tosales increase etc+250 M JPY➡ 1. Operation of Japan Premium Media
Consortium
2. Development of next-generation
payment application linked to FT

Total of decrease in
MT segment income-650 M JPY

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

16

MT Segment Highlights
Sales in the data science business increased 80% YoY as a strategic business, and strengthened
cooperation with Kakaku.com, Inc.
〜 Collaboration with Media Consortium on various demonstration experiments 〜

Data Science Business Expansion

Japan Premium Media Consortium Initiatives< Sales of BI. Garage, Inc. >FY18.3

FY19.3(+80％)

32 major media companies participate
Admin Office : Digital Garage, Inc.
Newspapercompany

Sales up 80% YoYConsistently received orders, mainly fromconsumer electronics and automobile
manufacturers.
Provide DMP, which stores the unique data of the
DG Group, and strengthen cooperation with
Kakaku.com, Inc.

Radio
station

Providing optimal advertisingindicators and advertising value
for both brand advertisers andinfluential premium media

 Viewability Brand safety Elimination of ad fraud
 Ensuring reliability inadvertising etc

Internet
Media

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

Consumer(4-12)

TV station

Premium media(4-12)（National Clients)



1-3Q

Advertisers




1-3Q

Magazinepublisher17

IT Segment
Ⅲ

Incubation Technology Segment
Net Sales

Income Before
Income Taxes

FY18.3

1Q-3Q

2,355 M JPY

1,821 M JPY

FY19.3

1Q-3Q

3,545 M JPY

1,930 M JPY

FY19.3

Plan (IFRS)

3,100 M JPY

1,350 M JPY➤ DG Incubation, Inc.

Invests in and incubates cutting-edge internet startups➤ Open Network Lab, Inc.

Provides support to internet-business entrepreneurs with global visions➤ 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➤ DG Technologies, Inc.
Drives strategic technology development with DG Lab

Some businesses in DGHQ segment have transferred to IT segment, therefore figures on FY18.3 updated with the current category.
Copyright © 2019 Digital Garage, Inc. All Rights Reserved18

IT Segment Highlights
Steady progress in sales of securities holdings, profit before income taxes in 1-3Q up 6% in YoY〜 Expand investment in leading start-ups in Japan and overseas 〜Profit Before Income Taxes(JPY in
100 Million)

FY18.318.2

FY19.3

(+6%)

-1.0
1Q

Blockstream [U.S. /Canada]

19.3

16.8
6.5

2.4

Major Portfolio

8.2

4.4

Droom [India]
-4.1

2Q

3Q

4Q

1Q

2Q

3Q

Book Value# ofcompanies

Book Value

171

14.3 B JPY

Domestic

61

2.8 B JPY

Overseas11011.5 B JPY

Fund

15

1.9 B JPY

Total

186

16.2 B JPY

EquityDevelops sidechain technologies,
parallel blockchains that areinteroperable.

Note)DG Incubationʼs investment balanceMark-to-market as of quarter end for listed
stocks. Equity includes convertible note.
Book value totals may not match details
because of rounding down fractions

WHILL [Japan]
Transform antiquated power wheelchair
into an intelligent personal electric vehicle,
focusing on an approachable andaesthetically pleasing powered vehicle.

Repro [Japan]
Operates mobile app analytics andmarketing SDK “Repro.”

A leading online marketplace for new andsecond-hand automobiles in India.

MX Technologies [U.S.]

Monstar Lab [Japan]

Offers a PFM (personal financial management)
tool for financial institutions in the US.

Operates Sekai Lab, a global outsourcing
platform that allows engineers from aroundthe world to request development.

Cloudian [U.S.]

Panair [Japan]

Build and operate a cloud storage
system that stores large volumes of data
used in IoT, AI, big data analysis, etc.
economically and safely.

Provides “Panair Cloud”, an automatedelectricity retail platform that uses cloudcomputing and artificial intelligence.

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

19

LTI Segment
Ⅳ

Long-term Incubation Segment
Net Sales

Income Before
Income Taxes

FY18.3

1Q-3Q

567 M JPY

1,835 M JPY

FY19.3

1Q-3Q

1,733 M JPY

2,172 M JPY

FY19.3

Plan (IFRS)

6,500 M JPY

3,450 M JPY➤ Kakaku.com, Inc.（20％ stake／equity method）
Operates purchase support service, Kakaku.com and restaurant review andrestaurant service, tabelog, etc.

➤ Crypto Garage, Inc.
Promoting development of advanced financial services utilizing blockchain technology
and cryptography technology with Tokyo Tanshi Co., Ltd.

➤ ACADEMIE DU VIN

Operates wine schools and wholesaling wine.

➤ DK Media, Inc.（50% stake／equity method）
Internet media business utilizing fashion magazines by Kodansha
MI segment has been changed to LTI segment from FY18.3, by aiming to generate sustainable business profit in mid-long term.

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

20

LTI Segment Highlights
Profit before income taxes in 1-3Q marked 2.1B JPY, +18% YoY. Investment profit on equity
method of Kakaku remains robust〜 “Tabelog” and “New Media” performed well 〜(JPY in
100 Million)

Profit Before Income Taxes

Business Progress of Kakaku.com, Inc.

(+18%)【Total Accumulated Traffic for Kakaku.com Group】

18.3

21.7

Monthly traffic for all sites of Kakaku.com has increased to258.00 million, up 11.3% yoy (December 2018)

13.4

YoY
+11.3%(in million people)

9.1
5.5

6.9

5.8

6.0

6.5

2Q

3Q

6.6

1Q

2Q

3Q

FY18.3

4Q

1Q

FY19.3

Changed measurement method
Regarding changes in traffic measurement method
Due to the mobile webpage speed, Kakaku.com, Inc. has been experiencing some overlap when measuring monthly user numbers but as of September 2018
Kakaku.com, Inc. has switched to a method which allows them to exclude overlapping users. The graph from September 2016 to September 2018 was recreatedusing the new method.

Ref. Kakaku.com, Inc. Results Briefing for 3Q FY2019/3
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

21

LTI Segment - The first finance project authorized by Cabinet Office Regulatory Sandbox in Japan

Crypto Garage, Inc., a JV with DG, Tokyo Tanshi Co., Ltd. and Blockstream,

Testing the issuance of JPY tokens and the delivery versus payment settlement service between thetoken and crypto assets
Challenges in crypto exchanges market

Launched a proof-of-concept project toovercome the challenges

Takes at least 10 minutes to fix theremittanceSidechain enables speedy remittancesHigh counterparty risk

Support the delivery versus payment settlement of
JPY Token and crypto assets (Bitcoin)

Low confidentiality of trade between the
trading parties

Can conceal a counterparty because of noneed to recognize a payer

Low visibility of trading for the regulatory
authorities

Transaction content can be verified asnecessary【Reference】■Tech Crunch/ Digital Garage teams up with Blockstream to develop blockchain financial services in Japan
https://techcrunch.com/2019/01/21/digital-garage-teams-up-with-blockstream-to-develop-blockchain-financial-services-in-japan/■Impress Corporation (written in Japanese)
https://crypto.watch.impress.co.jp/docs/news/1165850.html?fbclid=IwAR3eEYsJba5zAt4KYq1hoiyZmyc92YVvxLm59lDLjiqYUjKN3OblyH2TctM
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

22Appendix

Copyright © 2019 Digital Garage, Inc. All Rights Reserved

23

Financial Results: Consolidated profit and loss

Note: Kakaku.com, Inc. is affiliated company for using the equity method, and started to apply IFRS from FY18.3. The figures on FY17.3 has been applied retrospectively.
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

24

Financial Results: Consolidated profit and loss by segments

JPY in Millions

FY14.6

FY15.6

FY16.6

FY17.3

FY18.3(Full Year Act)

(Full Year Act)

(Full Year Act)

(Full Year Act)

(Full Year Act)

9 monthNet sales

33,751

38,08743,76336,45160,168FT

Financial Technology

13,454

14,56816,392

14,14020,956

MT

Marketing Technology

14,822

16,06421,02820,49434,938IT

Incubation Technology

5,475

7,454

6,343

1,775

3,123

LTI*

Long Term Incubation

-

-

-

41

1,150

Profit before income taxes

5,035

9,248

7,574

5,819

7,619

FT

Financial Technology

1,496

1,335

1,758

1,478

2,539

MT

Marketing Technology

874

1,061

1,396

1,074

1,959

IT

Incubation Technology

1,595

2,804

3,105

766

1,405

LTI*

Long Term Incubation

1,776

4,477

3,052

2,899

3,176

Note: Income before income taxes per segment is based on figures prior to elimination or group deduction, etc*MI segment has been changed to LTI segment from FY18.3, by aiming to generate sustainable business profit in mid-long term.
Some businesses in IT segment have transferred to LTI, therefore figures on FY17.3 updated with the current category.
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

25

Press Releases
Date

Title

2019.1.29

Digital Garage Group's Face-to-face Payment Business Exceeds Annual Transaction Amount of 100
Billion Yen

2019.1.28

DG Lab Provides AR Technology for a SOUND RPG Event Collaborated with an Eminent Musician inJapan2019.1.21

Crypto Garage, The First Blockchain and Finance Project Authorized by Regulatory Sandbox in Japan

2019.1.21

Crypto Garage Launches SETTLENET Product to Boost Application Development for Blockchain Based
Financial Institutions

2018.12.19

ECONTEXT Launches the QR Code-Based National Tax Collection Service at Convenience Stores to the
National Tax Agency

2018.11.16

VeriTrans and Toshiba Tec Establish TD Payment, A JV Offering Multiple Payment Solutions for POS
Systems

2018.11.8

Digital Garage Launches "Open Network Lab Resi-Tech," a Global Accelerator Program Targeting Real
Estate-Related Startups

2018.11.6

ECONTEXT Registered as Electronic Payment Service Provider

2018.11.1

econtext Provides a Comprehensive Service for New Online Application System of Hiroshima Prefectural
Board of Education

2018.10.10

DG Lab to Host THE NEW CONTEXT CONFERENCE 2018 SAN FRANCISCO

2018.10.5

Digital Garage Exhibits at Japan Healthcare Venture Summit 2018 Hosted by the Ministry of Health,Labour and Welfare

2018.10.2

econtext Launches Convenience Store Payment Services for Civil Fee Payments in Osaka Prefecture

2018.9.13

VeriTrans Collaborates on a PCI P2PE Solution that lets Phone and Mail-order Businesses Retain no
Credit Card Information

2018.9.4

VeriTrans Provides Credit Card Payments for a PoC of Ringo Pass, JR-East's New Public Transportation
Smartphone App

2018.8.30

Announcement Regarding Result and Completion of Repurchase of Shares through Off-Auction Own
Share Repurchase Transaction (ToSTNeT-3)

2018.8.29

Announcement Regarding Determination of Terms of Issue of Zero Coupon Convertible Bonds due
2023

2018.8.29

Announcement Regarding the Issuance of Zero Coupon Convertible Bonds due 2023

2018.8.29

Announcement Regarding Repurchase of Shares
Copyright © 2019 Digital Garage, Inc. All Rights Reserved

26

Press Releases
Date

Title

2018.8.29

Announcement Regarding Repurchase of Sharesthrough Off-Auction Own Share RepurchaseTransaction (ToSTNeT-3)

2018.8.27

VeriTrans and Nissen to Establish a JV in the Postpaid Shopping Business2018.8.2

Digital Garage & KDDI Entered into a Basic Agreement on Strategic Alliance2018.8.1

Digital Garage and Welby Form a Capital and Business Alliance to Build a Person-Centered Health andMedical Data Platform2018.7.20

Digital Garage and Tokyo Tanshi to Establish a JV for Blockchain Financial Service R&D and Business in
the Fintech Field

2018.6.15

Digital Garage and iRidge's Fintech Subsidiary Collaborate in the Regional Digital Currency Field

2018.5.23

Digital Garage Launches "Open Network Lab BioHealth", an Accelerator Program Specialized in
Biotechnology and Healthcare

2018.5.17

Digital Garage Launches One-Stop Marketing and Fulfillment Solution for Online Shopping Suppliers
Aiming to Expand Overseas in Thailand and Taiwan

2018.4.27

DG Lab to Host THE NEW CONTEXT CONFERENCE 2018 TOKYO on the Theme of "Governance ofRegulations and Innovations"2018.4.20

Digital Garage and The Hokkaido Shimbun Press Launch "Open Network Lab HOKKAIDO", an
Accelerator Program

Copyright © 2019 Digital Garage, Inc. All Rights Reserved27

Please note that the business forecasts and strategies covered in todayʼs 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 inany 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 whichsuch offer, solicitation or sale would be unlawful prior to registration 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 bemade by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements.