Supplementary Materials for Financial
Results for the Third Quarter of the
Fiscal Year Ending June 30, 2023
System Support Inc. (Security Code: 4396)
May 10, 2023

Notice: This document is only for reference purposes. In the event of any discrepancy between this translated document andthe original Japanese document, the latter shall prevail.

Company Profile
Company name

System Support Inc. (STS)

Location

9F Rifare, 1-5-2 Honmachi, Kanazawa-shi, Ishikawa Prefecture

Founding

January 1980

Listed market

Tokyo Stock Exchange Prime Market (security code: 4396)

Capital

723 million yen

Net sales

16,198 million yen (FY2022/6, consolidated)

Representative

Ryoji Koshimizu, Representative Director

Number of
employees

1,233 (as of June 30, 2022, consolidated)

OfficesTokyo, Nagoya, Osaka, and Kanazawa (headquarters)

Business outline■Cloud Integration BusinessTechnical support for migration and use of cloud services (ServiceNow,
Microsoft Azure, AWS, Google Cloud, etc.) and resale of licenses, etc.

■System Integration Business

Overseas (U.S. & Canada):
10
Hokuriku area:
249
Tokyo metropolitan
area: 643
Tokai area: 154
Kansai area: 177

84% of employees
are engineers

Number of employees by region(as of June 30, 2022, consolidated)

Technical support for the introduction and use of ERP packages, constructionof infrastructure such as Oracle database, and IT system consulting, design, development, operation, and maintenance■Outsourcing Business

Our Group’s private cloud and other data center services, data analysis and input, and near-shore system operation andmaintenance■Product Business

Development and sale of products (software) by Our Group, and customization according to user companies’
applications■Overseas Business© 2023 System Support Inc.

Overseas system integration, outsourcing of payroll and accounting services, recruitment services, and media
management

2Company Profile – Net Sales Trends and History(1 million yen)Entered a Celonis Partner Program Agreement with CELONIS K.K.
Entered a Subcontractor Agreement with Automation Anywhere, Inc.
Entered a Google Cloud & Google for Education Commercial Partner Program Agreement with Google Cloud Japan G.K.

18,00016,00014,000Received Microsoft Cloud Platform Gold Competency certification

12,000Received Microsoft Cloud Platform Silver Competency certification
Entered a PartnerNow Master Terms with ServiceNow Nederland B.V.

10,000Entered an APN Consulting Partner contract with Amazon Japan K.K.

8,000Entered a SAP Service Partner contract with SAP Japan Co., Ltd.

6,000
4,000

Entered an Oracle EBS Technical Partner contract with Oracle
Corporation Japan

2,000

1980/121982/12'80/12 '82/12 1984/6'84/6 1986/6'86/6 1988/6'88/6 1990/6'90/6 1992/6'92/6 1994/6'94/6 1996/6'96/6 1998/6'98/6 2000/6'00/6 2002/6'02/6 2004/6'04/6 2006/6'06/6 2008/6'08/6 2010/6'10/6 2012/6'12/6 2014/6'14/6 2016/6'16/6 2018/6'18/6 2020/6'20/6 2022/6'22/6●Established System Support Inc. in Kanazawa City, Ishikawa Prefecture●Listed on the Tokyo Stock Exchange
Mothers Index●eNet Solutions Co., Ltd. financed and founded●Nagoya Office opened●Tokyo Office opened●Osaka Office opened0●Listed on the First Section of theTokyo Stock Exchange●Moved to TSE Prime●Acquired shares of T4C Co., Ltd., andmade it a subsidiary●STS Medic Inc. financed and founded●Acquired shares of Across Solutions, Inc. and made it a subsidiary●STS Innovation, Inc. financed and founded in California, USA●STS Innovation Canada, Inc. financed andfounded in Vancouver, Canada© 2023 System Support Inc.

* Net sales are consolidated from FY2016/6, and unconsolidated before that.

3

Summary of Financial Results for 3Q of FY2023/6 and Earning
Forecast of FY2023/6
Contents
1. Financial highlights
2. Net sales and income (consolidated)
3. Forecast for full year earning of FY2023/6 (consolidated)
4. Changes of reportable segments
5. Net sales and income by segment (consolidated)© 2023 System Support Inc.

4

Financial Highlights for 3Q of FY2023/6 (Cumulative)
Unit: 1 million yen

3Q of
FY2023/6(Cumulative)

Difference(YoY change)

Percentagechange(YoY change)

Progress rate
against full-year
forecast

Net sales

14,1922,256+18.9%

78.4％

Operatingprofit1,183

150+14.5%

81.2％

 Net sales were strong in all businesses, led by the cloud integration business.
 SG&A expenses increased mainly owing to the increase in the number of recruits,
reinforcement of the recruiting system and of the system to expand cooperation
with each cloud vendors.

© 2023 System Support Inc.

5

Consolidated Net Sales and Income of 3Q of FY2023/6 (Cumulative)
3Q of
FY2021/6

3Q of
FY2022/6(Cumulative)

3Q of
FY2023/6(Cumulative)(Cumulative)

14,192

Unit: 1 million
yen
Difference(YoY change)

Percentagechange(YoY change)

2,256+18.9%(27.1%)

633+19.7%

1,183(8.3%)

150+14.5%(8.6%)

1,194(8. 4%)

168+16.4%(5.7%)

801(5.6%)

115+16.9%Net sales

10,603

11,936Gross profit

2,788(26.3%)

3,214(26.9%)

3,848

Operatingprofit776(7.3%)

1,033(8.7%)

Current profit

800(7.5%)

1,026

Current net
profit539(5.1%)

685*Profit ratio in (■Composition of net sales by segment*1
0.8%

9.1%

3.7%

26.8%

■Composition of segment profit*2
12.1%

3.3%

14.0%

59.6%

300
200

21.2%

50
System integration

Cloud integration

System integration

Outsourcing

Product

Outsourcing

Product

Overseas© 2023 System Support Inc.

Overseas

251
201

0

4.0%
Unit: 1 million yen
3.0%■ Research and development expenses
2.0%

150
100

Cloud integration)

5.0%expenses
350■Changes in investment-related
250

49.4%

Main factors of increase in SG&A
expenses
Personnel expenses: +290 million yen
Number of employees in sales,
administration, etc.: +34 YoY(as of the end of March 2023)
Hiring expenses: +47 million yen
Number of recruits: +21 YoY(Cumulative 3Q of FY2023/6)
Travel and transportation expenses:+34 million yen

1.7%
3Q of
FY2022/6（Cumulative）*1 Net sales by segment are sales to external customers.

1.8%
3Q of
FY2023/6（Cumulative）■ Training expenses
1.0%■ Recruitment-related expenses
0.0%― Percentage of net sales*2 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

6Forecast for Full Year Earning of FY2023/6 (Consolidated)
No change in the full-year consolidated earnings forecast announced at the beginningof the fiscal year
Unit: 1 million yen
FY2021/6

Net sales
Operatingprofit14,431931

FY2022/6

16,1981,196

FY2023/6(Forecast)

18,093
1,456

Percentagechange(Period overperiod)+11.7%+21.7%

1,190

1,452

+22.0%

Current net
profit

674

785

982

+25.1%

Interimdividends

0 yen

12 yen15 yen-Annual dividends

954

Total

© 2023 System Support Inc.

21 yen21 yen13 yen25 yen15 yen30 yenUnit: 1 million yen

20,00015,00010,0005,000
0Current
profitYear-end
dividends■Net sales/operating profit (consolidated)

11,762529

FY2019/6

13,376754

14,431931

1,196

FY2020/6

Net sales

FY2021/6

FY2022/6

Operating profit

1500

FY2023/6（Forecast）

0

Unit: Yen

25
13
1.5

1,456

2000
1000

■Dividends*

10

FY2019/6

18,093500-

16,198FY2020/6

Interim dividends

21
FY2021/6

30
15

12

15

FY2022/6

FY2023/6（Forecast）

Year-end dividends* Our Company conducted a 2-for-1 stock split of shares of common stock on April 1, 2019, and June 1, 2020, and the figures for FY2019/6 and earlier in this graph have been retroactively adjusted.

7

Changes of Reportable Segments
From FY2023/6, the reportable segments will be changed with the primary objectiveof more clearly showing progress in the cloud integration field that we are focusing
on in the medium term.
Old segments

New segments*
Cloud Integration Business

Solution Business[Cloud integration]

Support for the introduction and use of cloud services such as ServiceNow,
Microsoft Azure, and AWS[System integration]

Technical support for migration and use of cloud services (ServiceNow,
Microsoft Azure, AWS, Google Cloud, etc.) and resale of licenses, etc.

System Integration BusinessSupport for the introduction and use of ERP packages, construction of
infrastructure such as Oracle database, and development of IT systems

Technical support for the introduction and use of ERP packages, constructionof infrastructure such as Oracle database, and IT system consulting, design,development, operation, and maintenanceOutsourcing BusinessOutsourcing Business

Product Business

Product Business

OthersOverseas BusinessPrivate cloud services, data analysis and input, operations and maintenancein our Group’s data center
Development, sales, and customization of products (software)

Development and sale of products (software) by Our Group, andcustomization according to user companies’ applications

Overseas information provision services, overseas media business, etc.

Net sales composition (FY2022/6, consolidated)
84.0%
ソリューション
ソリューション
Solution© 2023 System Support Inc.

アウトソーシング
アウトソーシング
Outsourcing

4.1%
11.7%

プロダクト
プロダクト
Product

その他
その他
OthersOur Group’s private cloud and other data center services, data analysis andinput, and near-shore system operation and maintenanceOverseas system integration, outsourcing of payroll and accounting services,
recruitment services, and media management

0.2%

4.1%
20.9%
Cloud
integration
クラウドインテグレーション

プロダクト
プロダクト
Product

64.8%
Systemintegration
システムインテグレーション
システムインテグレーション
海外
海外
Overseas*The arrows from the old segments to the new segments indicate the main ones. Net sales are sales to external customers.
The net sales composition in the new segment category is based on reclassified financial results for FY2022/6, and has not been reviewed by an auditing firm.

0.4%

9.7%
Outsourcing
アウトソーシング
アウトソーシング

8

Consolidated Net Sales and Income by Segment for 3Q of FY2023/6 (Cumulative)Cloud Integration Business
•
•
•

4,000
3,500

57.4% increase

3,000
2,500

33

2,414

2,000

161
302

1,500

775

3,800

0

■Gross profit/profit ratio*2

Unit: 1 million yen

50.8% increase
1,000

382

800

3Q of FY2022/6(cumulative)© 2023 System Support Inc.

706

50.0%

600

46.8% increase

500

30.0%

300

20.0%

200

10.0%

100

0.0%

0

28.0%

200
0

3Q of FY2022/6 3Q of FY2023/6(cumulative)(cumulative)

Gross profit

Gross profit ratio

Unit: 1 million yen

700

Google Cloud400
Microsoft Azure

29.3%

Technical support for migration
and use of cloud services(ServiceNow, Microsoft Azure,
AWS, Google Cloud, etc.) andresale of licenses, etc.

■Operating profit/profit ratio(Segment profit/profit ratio*3) 50.0%

40.0%

AWS

3Q of FY2023/6(cumulative)

70.0%

26.8%

Cloud Integration
Business

59.6%

600

Others

1,383

80.0%

0.8%

Composition of net sales bysegment(3Q of FY2023/6 cumulative)

400

ServiceNow
1,140

1,065

60.0%

518

1,235

Unit: 1 million yen

1,200

279

1,000
500

9.1%

Driven by DX, cloud-related services performed well, with particularly strong growth in AWS
and Google Cloud.
Resale of AWS and Microsoft Azure widen owing to higher per-customer usage fees andweaker yen
Expansion of cloud infrastructure migration and use support, including resale, affected grossprofit margin■Net sales*1

3.7%

598

45.0%
40.0%
35.0%
30.0%

407

25.0%
20.0%
16.9%

15.7%

15.0%
10.0%
5.0%

3Q of FY2022/6 3Q of FY2023/6(cumulative)(cumulative)

Segment profit*1 Net sales are sales to external customers.

*2 Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.
*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

0.0%

Segment profit ratio

9Cloud Integration Business Details (1) Cloud Platform Migration and Usage Support
Cloud platform migration (Microsoft Azure, AWS, Google Cloud) and usage support
Our strength is in the area of using databases and data analysis platforms in the cloud, thanks to ourtechnological expertise in the database field, which we have cultivated over many years.
Net sales for cloud platform
migration, usage support, etc.
Unit: 1 million yen

1Q
3000

3Q

4Q

Our main services

Up 89.6% YoY

Beforecloud
migration(3Q(Cumulative))

2500
2000

1,857

1500

583

944

424

1000

850

Proposal and design▼
Migration and usage support

FY2022/6 *© 2023 System Support Inc.

■Resale sales trends
1Q

2Q

After
cloud
migration

FY2023/6*There have been minor revisions to the sales figures for each quarter of the
fiscal year ended June 30, 2022, as compared to the figures shown in the
supplementary materials for the 1Q of the fiscal year ending June 30, 2023.

3Q

4Q Unit: 1 million yen

Up 71.1% YoY(3Q(Cumulative))▼(Delivery)
Operation and monitoring
Resale621

359

Reselling cloud accounts (pay-as-you-go or bulk
purchases based on data usage) from Our
Company to customers to ensure stock revenue(creation of cloud environment)

490

500
0

2Q

Flow of cloud platform
migration and usage support

991
759

773

153
141

273

216

216

273

212

191

181
163

FY2020/6

FY2021/6

424
470

287
214
FY2022/6 *333
FY2023/6

10

Cloud Integration Business Details (2) Support for the Introduction and Use of ServiceNow
Support for the introduction and use of ServiceNow*, a cloud service for businesses from the U.S.
*ServiceNow is a cloud service provided by ServiceNow, Inc. to standardize IT service management and other operations.
ServiceNow, Inc. is ranked No. 1 in FORTUNE Future 50 (2020), with a market capitalization of approximately US$90 billion in April 2023.

■ Net sales of ServiceNow
Unit: 1 million yen

1Q
2,000

2Q

3Q

4Q

Up 21.4%
YoY

1,527

1,500

(3Q(Cumulative))• Our Company actively invests in the development of engineers to create a systemcapable of providing stable service, and captures demand as the number of companies
that have adopted ServiceNow in Japan increases.
• Our Company ranked second in terms of ServiceNow certified build certifications as ofthe end of September 2022*1.
• First domestic company certified as a Bronze Services Partner in 2017*2; currently thehighest ranking Elite Partner.

■ Number of our ServiceNow
certified build certifications

8

461

6

416
488

4

410

500

144

312
0

FY2022/6 *© 2023 System Support Inc.

Net sales of ServiceNow, Inc.*3

Unit: Case

387
1,000

(1 billion USD)

434
31

FY2023/6

37

69

176

187

84

'19年
'20年
'20年
'21年
'22年
'22年30, '22年
Dec.
31, Jun.
30, Dec.
31, Jun.
30, Jan.
15, Jun.
Sep. 30,201920202021 1月15日
2022
2022 9月末
2022
12月末 2020
6月末 12月末
6月末
6月末*There have been minor revisions to the sales figures for each quarter of the
fiscal year ended June 30, 2022, as compared to the figures shown in the
supplementary materials for the 1Q of the fiscal year ending June 30, 2023,
but the full-year total figures remain unchanged.

202014/12 2015/12 2016/12 2017/12 2018/12 2019/12 2020/12 2021/12 2022/12*1 From the ServiceNow Japan website (target: Certified Implementation Specialist/Certified Application Developer/Certified
Application Specialist)*2 From the ServiceNow partner program of ServiceNow, Inc. in the U.S.
11
*3 Prepared by Our Company from ServiceNow, Inc. financial results

Consolidated Net Sales and Income by Segment for 3Q of FY2023/6 (Cumulative)
System Integration BusinessTechnical support for the introduction
and use of ERP packages, constructionof infrastructure such as Oracle
database, and IT system consulting,design, development, operation, andmaintenanceSystem Integration Business••

SAP ERP faring well.
Increase in large-scale projects with end users contributed to theincrease in sales of IT system development■Net sales*1
9,000
8,000

8.2% increase
7,817

7,000
6,000

4,204

4,629

5,000
4,000
3,000

1,459

1,454

2,000
1,000
0

2,153

2,377

Unit: 1 million yen

2,200 9.0% increase
2,100
2,000
1,854
1,900
1,800
1,700
1,600
1,500
1,400
IT system development
1,300
1,200
Database
1,100
1,000
ERP
900
23.7%
800
700
600
500
400
300
200
100
0
3Q of FY2022/6(cumulative)

3Q of FY2022/6(cumulative)© 2023 System Support Inc.

3Q of FY2023/6(cumulative)*1Net sales are sales to external customers.

Gross profit

50.0%
45.0%
40.0%
35.0%
30.0%
25.0%

23.9%

400
350

100

0.0%

Gross profit ratio

18.0%

25.4% decrease
256

200

15.0%

50
0

4.4%

3Q of FY2022/6(cumulative)

Segment profit

Segment
14.0% profit(operating profit)
12.0%
decreased
due to anincrease in common
10.0%
SG&A expenses suchashead office
8.0%
expenses.
6.0%
4.0%

3.0%
3Q of FY2023/6(cumulative)

2.0%
0.0%

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

20.0%

Unit: 1 million yen

16.0%

250

150

5.0%

344

300

20.0%
10.0%

3Q of FY2023/6(cumulative)

26.8%

Composition of net sales
by segment(3Q of FY2023/6
cumulative)■Operating profit/profit ratio(Segment profit/profit ratio*3)

Unit: 1 million yen

2,020

9.1%

0.8%

59.6%

■Gross profit/profit ratio*2
8,460

3.7%

12

Consolidated Net Sales and Income by Segment for 3Q of FY2023/6 (Cumulative)Outsourcing Business•

Increase in monthly subscription fees and other stock sales andincrease in subscription fees per company due to expansion ofcustomer use business contributed to increase in data center related
sales.
■Net sales*1

1,400
1,200
1,000

13.8% increase
1,139

Unit: 1 million yen

1,296

450 16.3% increase

231

400
350

250

942

1,064

■Data center

3Q of FY2022/6(cumulative)© 2023 System Support Inc.

3Q of FY2023/6(cumulative)*1Net sales are sales to external customers.

45.0%
35.0%

31.2%

31.9%

30.0%
25.0%
20.0%

150

9.1%

26.8%

Composition of net sales
by segment(3Q of FY2023/6
cumulative)■Operating profit/profit ratio(Segment profit/profit ratio*3)

50.0%
40.0%

analysis, input,
200
■Data
near-shore, etc.

200
0

355

300

800

400

413

3.7%

Unit: 1 million yen

200

150

100

10.0%

50

5.0%

0

0.0%

Gross profit

3Q of FY2023/6(cumulative)
Gross profit ratio

170

151

40.0%
35.0%
30.0%
25.0%

100

20.0%
15.0%

50

13.3%

13.1%

10.0%
5.0%

0

3Q of FY2022/6(cumulative)
Segment profit

3Q of FY2023/6(cumulative)

0.0%

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

50.0%
45.0%

12.5% increase

15.0%

3Q of FY2022/6(cumulative)

0.8%

59.6%

■Gross profit/profit ratio*2

Unit: 1 million yen

196

600

Outsourcing Business
Our Group’s private cloud andother data center services,
data analysis and input, andnear-shore system operationand maintenance13

Consolidated Net Sales and Income by Segment for 3Q of FY2023/6 (Cumulative)

Product Business••

Strong sales performance of Tateyakusha and SHIFTEE.
Sales decreased owing to a decrease in equipment sales associated with theintroduction of Shugyoyakusha.
Improved profit margin on stock sales such as monthly subscription fees and no
significant increase in selling, general and administrative expenses contributed tohigher segment profit ratio.

•

600

500

■Net sales*1
5.3% increase
493
79

400

300

200

100

0

57
50

Unit: 1 million yen

519

300

53
59

169

136
3Q of FY2022/6(cumulative)© 2023 System Support Inc.

3Q of FY2023/6(cumulative)

318

130.0%

180

288

110.0%

Others90.0%

Shugyoyakusha

200

MOS
Tateyakusha

164

200

250

SHIFTEE

168

150.0%

Unit: 1 million yen

350 10.7% increase

74

150

61.3%

58.3%

*1Net sales are sales to external customers.

100.0%

160 12.2% increase

Unit: 1 million
yen
90.0%

146

130

140

80.0%
70.0%

100

50.0%

50.0%

80

40.0%

60

30.0%

10.0%

Gross profit■Operating profit/profit ratio(Segment profit/profit ratio*3)

70.0%

50
3Q of FY2023/6(cumulative)

Composition of net sales
by segment(3Q of FY2023/6
cumulative)

60.0%

30.0%

3Q of FY2022/6(cumulative)

26.8%

120

100

0

9.1%

59.6%

■Gross profit/profit ratio*2
400

3.7%

Product Business
Development and sale ofproducts (software) by Our
Group, and customizationaccording to user companies’
applications

0.8%-10.0%

Gross profit ratio

40

26.4%

28.2%

10.0%

20
0

20.0%

3Q of FY2022/6(cumulative)
Segment profit

3Q of FY2023/6(cumulative)

0.0%

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

14

Consolidated Net Sales and Income by Segment for 3Q of FY2023/6 (Cumulative)

Overseas Business•

0.8%

Overseas Business
Overseas system integration,
outsourcing of payroll andaccounting services, recruitment
services, and media management

Strong performance in outsourcing operations in North America.

3.7%
9.1%

26.8%

Composition of net sales
by segment(3Q of FY2023/6
cumulative)

59.6%

140
120

■Net sales*1

61.4% increase

1.2
Unit: 1 million yen

114

1

Unit: 1 million yen

70
59

60

54.2% increase

100
80■Gross profit/profit ratio*2

100.0%

0.8
50

80.0%

38

40
0.6

71

60.0%

30

60

53.8%

0.4
20

51.4%

40

0

0
3Q of FY2022/6 (cumulative) 3Q of FY2023/6 (cumulative)© 2023 System Support Inc.

0

40.0%
20.0%

10
0.2

20

120.0%

3Q of FY2022/6(cumulative)*1Net sales are sales to external customers.

Gross profit

3Q of FY2023/6(cumulative)

0.0%■Operating profit/profit ratio(Segment profit/profit ratio*3)
45

40

40

Unit:100.0%
1 million yen

48.4% increase

80.0%

35
30

70.0%

27

60.0%

25

50.0%

20
15

40.0%
38.5%

10

35.4%

Gross profit ratio

10.0%
3Q of FY2022/6(cumulative)
Segment profit

3Q of FY2023/6(cumulative)

0.0%

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

30.0%
20.0%

5
0

90.0%

15

Reference Materials
Contents
1. Human resources strategy
2. Financial condition (consolidated)
3. Growth strategy by segment
4. Our Company topics© 2023 System Support Inc.

16

Human Resources Strategy
Our Group regards human resources as a source of business growth, and is actively
engaged in the expansion of its education system and recruitment activities.

Number of employees (consolidated)
Unit: People

30.0%

1,400
1,233
1,200
1,000
800
600
400

956
157

1,039
163

25.0%

194

177

FY2020/6

FY2021/6

FY2022/6

New graduate
recruitment

58

60

70

10.0%

Mid-career
recruitment

97

89

83

5.0%

Retirement
rate

7.7%

5.9%

4.9%

20.0%
15.0%

799

876

8.1%

7.7%

200
0

1,126

949

5.9%

FY2019/6

FY2020/6

Engineers

Sales, management, etc.

© 2023 System Support Inc.

FY2021/62

1,039

4.9%
FY2022/6

FY2023/6

85（Actual）

93（Planned)–

0.0%

Retirement rate

17

Financial Condition for the 3Q of FY2023/6 (Consolidated)
Unit: 1 million yen
End of
FY2022/6

Difference

End of 3Q of
FY2023/6(From the end of
previous fiscal year)

Current assets

6,303

6,852

549

Non-current assets

1,511

1,641

130

Total assets

7,815

8,494

679

Current liabilities

3,686

3,727

40

707

831

124

Total liabilities

4,393

4,558

165

Total net assets

3,421

3,935

514

Total liabilities andnet assets

7,815

8,494

679

Capital-to-asset ratio

43.8%

46.3%

-

Non-current liabilities© 2023 System Support Inc.

Main factors of change
Increase: Notes and accounts receivable - trade, andcontract assets+736

Increase: Provision for bonuses
Accounts payable – trade
Short-term borrowings
Decrease: Other of current liabilities

+350
+263
+237
-689

Increase: Retained earnings

+511

18

Growth Strategy by Segment (Cloud Integration Business)
Business outline: Technical support for migration and use of cloud services (ServiceNow, Microsoft Azure,
AWS, Google Cloud, etc.) and resale of licenses, etc.
1

Expansion of the corresponding area
Expanding investment to quickly develop new overseas cloud services in theJapanese market and expanding the range of supported services

2

Expansion of existing businesses
Focusing on AWS, Microsoft Azure, Google Cloud, and ServiceNow, which
are the mainstays of this business, Our Company will strengthen thedevelopment of proprietary services to further enhance customer
convenience and improve the productivity of Our Group, differentiating
itself from other cloud integrators. We are also considering value-added
features that will differentiate the resale of cloud accounts from othercompanies.

(100 million yen)

20,000Receives customer referrals
from global IT vendors andincreases orders

Expansionof orders

Cloud platform services (IaaS/PaaS) market
trends and forecasts*
CAGR of 23.1% for 2018–2024 (forecast)

15,00010,000
5,000

5,000
0

Developing cloud-related engineers expand orders andmaintain and improve a virtuous cycle of further growth of
Our Company business through market growth

6,900

8,500

10,50015,10017,40012,600Engineertraining andknow-how
accumulation

2018
2019
2020
2021
2022
2023
2024
2018年 2019年 2020年
2021年
2022年 (Forecast)
2023年 (Forecast)
2024年
2020年(Forecast)
2021年 (Forecast)
2022年
2023年

予測
予測

予測
予測

Strengthening
relationships
with global IT
vendors

予測
予測

Strengthens relationships with global IT
vendors by gaining technicalcertifications and recognition
Actively invests in training cloud-related engineers

予測

Note 1: Business operator's net sales base Note 2: Forecasts for 2021 and subsequent years
Note 3: Market size does not include Software as a Service (SaaS)© 2023 System Support Inc.

* Source: “Survey on the Cloud Platform (IaaS/PaaS) Services Market (2021),” by Yano Research Institute, Inc.,

announced on September 7, 2021

19

Supplement for Cloud Integration Business■Changes in the number of customers in thecloud integration business
207

204

189

146

150

158

172

■History of major certification and awards in Cloud
Integration Business
Microsoft Azure• Obtained Gold Cloud Platform competency certification
Recognized as a partner with an outstanding track record in Microsoft Azure
deployments
・Obtained Advanced Specialization*1
Obtained highly specialized partner certifications in specific solution areas
・Won the MVP Award five times in a row
Received consecutive awards in the field of data platforms since 2017*2
AWS
・Obtained Oracle competency in the AWS competency program*3
・Received APN partner award “Rising Star of the Year 2014”
Google Cloud・Obtained data analysis specialization with Partner Advantage program
Oracle・Received 14 consecutive awards for Oracle Database*4
Received awards including Oracle Certification Award 2020 from Oracle Japan

1Q of
2Q of
3Q of
4Q of
1Q of
2Q of
3Q of
FY2022/6 FY2022/6 FY2022/6 FY2022/6 FY2023/6 FY2023/6 FY2023/6© 2023 System Support Inc.

*1

Acquired in the “Migrating Windows Server and SQL Server to Microsoft Azure” field*2
Awarded by Our Company employees*3

Program to identify, validate, and recommend AWS Partner Network (APN) advanced and premium tier partners
that have demonstrated technical expertise and customer success for AWS*4
Awards from 2007 to 202020

Growth Strategy by Segment (System Integration Business)
Business outline: Technical support for the introduction and use of ERP packages, construction of
infrastructure such as Oracle database, and IT system consulting, design, development,
operation, and maintenance

Growthstrategy
Expansion of existing
businesses

Strengthening project
management

Steadily recruit and train engineers
and secure orders for ERP-related,database-related, RPA-related, andother IT system development, which
are the mainstay of this business.

Continue project management fromthe perspective of quality, duration,
cost, and risk control to curb theoccurrence of unprofitable projects
and improve service quality© 2023 System Support Inc.

Strengthening relationshipwith customers

Our Company engineers work closely withcustomers such as user companies toexpand projects and continue receiving
orders from existing customers■Efforts to secure stable orders

User
company

SIer

Our Group

Percentage of directtransactions: 67.4%*1
Customer repeat rate: 74.4%*2

Build close relationships with user
companies to expand projects andcontinue receiving orders*1 Percentage of our net sales for FY2021/6. *2 Percentage of customers with sales recorded by Our Company in FY2020/6 who continued to record sales in FY2021/6

21

Growth Strategy by Segment (Outsourcing Business)
Business outline: Our Group’s private cloud and other data center services, data analysis and input, and nearshore system operation and maintenance■Features of Our Group’s data center•

Growthstrategy••

Our Group’s data centers are located in Kanazawa and Tokyo, andcustomer companies use servers at the data centers.
The revenue structure, based on long-term continuous use, nottemporary use, builds up stock-type sales as the number ofcustomers increases and their business expands.
It can also be used as a BCP measure by setting up a data centerin Kanazawa City, where earthquakes rarely occur*.

Data center expansion

Target customers different from major
cloud users, and use AI-related and otherunique services as a hook tool to build up
the numbers of customers and subscription
fees per customer.

Expansion of ERP nearshore

With the need for maintenance of ERP
products, centered on SAP ERP,
expected to increase toward 2027, Our
Company is strengthening its system
by training near-shore personnel in the
Kanazawa area.

■Stock sales trends of our Group’s data center
1Q
1,061

Continuous data center
facility expansion

Gradually expand facilities according tooperating conditions to both improve quality
and ensure profitability.

274

2Q

3Q

(1 million yen)

4Q

1,157
302
326

267

293

261

283

319

258

278

309

FY2021/6

FY2022/6

FY2023/6* Sources: Japan Meteorological Agency seismic intensity database Number of earthquakes of intensity 1 or greater observed in 2021: 3 (maximum intensity 2)© 2023 System Support Inc.

22

Growth Strategy by Segment (Product Business)
Business outline: Development, sales, and customization of products (software) by Our Group
Mainly cloud-based products (monthly billing system); sales expansion throughdistributors in addition to direct sales■Our Group’s main products

Growthstrategy
Customer expansion

Maintaining andimproving highprofitability

Existing main products are almost
profitable, with cumulative segment
profit ratio of 28.2% in 3Q of
FY2023/6. Maintain a structure inwhich sales growth leads to higher
profits and secure high profits.
* As of December 31, 2022 (cumulative)© 2023 System Support Inc.

In order to increase new customers, Our
Company will expand sales channels foragents and strengthen advertising andpublicity. In addition, Our Company will aim toincrease the number of users by expanding thenumber of divisions within existing customers.

Construction information management
system for the building industry
Tateyakusha

702 companies (including OEMs)*

714 companies*

Cloud-based shift management
systemAttendance and work management
system
Shugyoyakusha

113 companies*

171 companies*■Changes in stock sales in the Product Business
1Q

Functional
enhancement

Continue to enhance existingproducts to reduce lead time until
introduction and improve
competitiveness against othercompanies’ products.

Mobile order and supply system

301
77
76

2Q

3Q

4Q

(1 million yen)

350
89
89

98

73

89

100

74

82

95

FY2021/6

FY2022/6

FY2023/6

23

Growth Strategy by Segment (Overseas Business)
Business overview: System integration overseas (in the U.S. and Canada), outsourcing of payroll andaccounting services, recruitment services, and media management

Growthstrategy

Our subsidiary
STS Innovation Canada(Vancouver, Canada)

Support forcompanies entering
North America
Expansion of
cutting-edge
services in Japan

Collecting cutting-edge IT
information to develop
promising businesses inJapan© 2023 System Support Inc.

Support for IT infrastructure,
recruitment, and marketing ofJapanese companies entering
North America

Strengthening
outsourcing services

Strengthen remote monitoring
services for Japanese companies
using the time difference between
Japan and North America andoutsourcing services for Japanesecompanies in the U.S.

Support for companies entering
North America and remotemonitoring service using timedifference★
★

Outsourcing
services forJapanesecompanies in
the U.S.
Our subsidiary
STS Innovation(Silicon Valley,
U.S.A.)

24

Our Company Topics for FY2023/6 (July 2022 to April 2023)
Date

Subject

July 8, 2022

Number of Google Cloud certifications held by our employees exceeds 120.
Focusing on training engineers in data analysis, a field in which Google Cloud excels.

July 8, 2022

Our employees have won the Microsoft MVP award (Data Platform) five times in a row.

July 12, 2022

System Support moved Microsoft Base Kanazawa in front of Kanazawa Station.
Started offering free DX education for the public, and set up co-working space with private booths.

July 25, 2022

Conducted an online seminar (Microsoft Base Kanazawa New Facility Opening Ceremony and Opening Memorial Webinar).

August 1, 2022

System Support assisted in the migration of the Nikkei ID platform from on-premise to AWS.
Succeeded in a secure migration of the Nikkei ID, which is used by 10 million members for web service logins, with short downtime andno complete shutdown.

August 30, 2022

Microsoft Base Kanazawa is certified as a subsidized facility for the “Project to Expand the Use of Private Facilities Utilizing Trees in
Ishikawa.”

September 20, 2022

Received Oracle Certification Award 2022.

October 3, 2022

System Support provides DX training at Microsoft Base Kanazawa for young employees of Ishikawa Prefectural Police.
They learned basic knowledge of DX and simple web application development.

October 4, 2022

System Support obtained data analysis specialization with Google Cloud Partner Advantage program.
Proved our proficiency and successful track record in data analysis.

October 6, 2022

System Support developed three solution packages that leverage Google Cloud services and launched them on October 6.
Google Cloud services are packaged and can be started in a short period of time.

October 21, 2022

System Support held “HoloWeen,” a Halloween event where visitors can experience cutting-edge MR (Mixed Reality) technology.
Microsoft HoloLens 2 utilized at Microsoft Base Kanazawa.

© 2023 System Support Inc.

25

Our Company Topics for FY2023/6 (July 2022 to April 2023)
Date

Subject

November 24, 2022

Eight-Japan Engineering Consultants Inc., an integrated construction consultant, adopts Celonis as its DX platform to evolve its entire
value chain.

December 13, 2022

System Support held "Ho-Ho-HoloLens," a Christmas event where visitors can experience cutting-edge MR (Mixed Reality) technology.
Microsoft HoloLens 2 utilized at Microsoft Base Kanazawa.

December 22, 2022

System Support selected by Google Cloud as AlloyDB launch partner.

January 10, 2023

System Support starts to provide “Introduction Support Service for Azure+OCI.”
We help customers who wish to use Oracle Database on Microsoft Azure to build a high-performance, cost-effective multi-cloudenvironment.

January 12, 2023

System Support introduces a “remote work system outside commuting area” with the aim of securing human resources by improving
employees’ work environment.

April 12, 2023

System Support was recognized as Silver Partner by Celonis Japan, one of world’s largest providers and a pioneer in system support andprocess mining.

April 20, 2023

System Support won the Dbvisit Partner of the Year Award 2022.

April 24, 2023

Our employees were selected as 2023 Japan AWS All Certifications Engineers.

© 2023 System Support Inc.

26

Microsoft Base Kanazawa Initiatives
 Microsoft Base Kanazawa, a facility in Kanazawa City, Ishikawa Prefecture, is operated under

the concept of “Kanazawa-based IT urbanization in the Hokuriku area.” It provides a place forcloud-centered communication, where people can receive DX education and experience thelatest technologies to promote DX by industry, academia, public and private sectors.
Universities
andstudents

Enterprises
Community

Stakeholders••

Support for the promotion of DX by industry, academia, and the publicthrough the provision of free DX education, etc.
Expanding local businesses, revitalizing the economy, and creating new
business opportunities by providing co-working spaces and other businessspaces.

Implementation offree DX education© ©20232023 System
SupportInc. Inc.
System
Support

Provision of business space(co-working space)Interaction with IT
engineers and holding
events

Latest VR and
MR experiences
27
27

Disclaimer and Forward Looking Statements
This document has been prepared by System Support Inc. (hereinafter referred to as “Our

Company”) for the purpose of providing investors with an understanding of the current
status of Our Company.
The contents of this document are prepared based on economic, social, and otherconditions generally recognized as prevailing at the time this report was prepared, as wellas certain assumptions that we have judged to be reasonable, but may be subject to change
without notice due to changes in the business environment or other reasons.
The materials and information provided in this presentation include so-called “forward
looking statements.” These statements are based on current expectations, projections, andassumptions with risks and involve uncertainties that could cause results to differ materiallyfrom those in the statements.
Such risks and uncertainties include general industry and market conditions, and generaldomestic and international economic conditions such as interest rate and currency
exchange rate fluctuations.
For further information, please contact:
Investor Relations, Administrative Planning Department, System Support Inc.
TEL: 076-265-5151 E-mail: ir@sts-inc.co.jp© 2023 System Support Inc.

28

Thank you