Financial Resultsfor Fiscal Year
Ended December 31, 2022

February 2,2023
SIOS ,Corp.
（Stock Code: 3744 on the Second Section of Tokyo Stock Exchange）© SIOS Corp. All rights Reserved.

Table of Contents
1. Highlights of Business Results for the Fiscal Year
Ended December 31, 2022 (FY 2022), and Key
Strategies for the Fiscal Year Ending December 31,
2023 (FY 2023)
2. Review of Business Results for FY 2022
3. Appendix© SIOS Corp. All rights Reserved.

1. Highlights of Business Results for the Fiscal
Year Ended December 31, 2022 (FY 2022),
and Key Strategies for the Fiscal YearEnding December 31, 2023 (FY 2023)© SIOS Corp. All rights Reserved.

Highlights of Consolidated Business Results
FY2021Results
Net Sales

15,725

Operating income

358

EBITDA

448

ROIC

10.0%

FY2022
Results

14,420△572△469△25.1%(In millions of yen)

Change%Change△1,305

△8.3%

△931

－

△918

－

－

－

Sales of our products and services for on-premise environments fell sharply amid
prolonged chip shortages.
Aggressive investments in our SaaS and other new businesses affected the bottom line.
EBITDA: The sum of operating profit, depreciation, and amortization of goodwill
ROIC: Ratio obtained by dividing operating profit after tax by the sum of shareholders’ equity and interest-bearing debts
On-premise environment: Requires a user enterprise to own and operate servers and software on its premises.
Note: The application of the Accounting Standard for Revenue Recognition resulted in a decrease of 489 million yen inconsolidated net sales, an increase of 22 million yen each in operating profit and ordinary profit, and an increase of 26
million yen in profit attributable to owners of parent for the fiscal year under review.
© SIOS Corp. All rights Reserved.

4

Key Strategies for FY 2023
Accelerate the growth of our cloud-based business to reduce ourdependence on sales of products and services for on-premiseenvironments

1. Continue to invest in our SaaS business
Expand the scope and scale of our SaaS business, which provides
subscription-based services, to make our business foundation more robust
to changes in external business environments

2. Bolster sales of the cloud- and subscription-based versionsof LifeKeeper*
3. Restructure our business operations to focus investments onwhat we can excel at
Note: See the Glossary on page 37 for descriptions of terms with an asterisk.
© SIOS Corp. All rights Reserved.

5

Continue to invest in our SaaS business© SIOS Corp. All rights Reserved.

SaaS Business 1: Gluegent Series
Both have achieved consistent growth in revenue,
driven by our stepped-up efforts for productdevelopment and marketing.

【ARR*of the Gluegent Series (In millions of yen) 】
650
542

577

436
313

2017.12359

2018.122019.122020.122021.122022.12

ARR: Annual Recurring Revenue, obtained by multiplying MRR (monthly recurring revenue, which is a predictable revenue that a business counts onreceiving every month from subscriptions) by 12© SIOS Corp. All rights Reserved.

7

SaaS Business 1: Gluegent Series
An ideal access-management system intended forzero-trust environments*
Gluegent Gate IDaaS* provides a high level of security and usability, which is essential
for zero-trust environments.
Zero-trust environment

External user

External user
Cloud

How Gluegent Gate works

Authentication andauthorization
management(Multi-factor
authentication)

Access control

Integrated accountmanagement
Cloud-based
services

Single sign-on (SSO)*

Grant authorized users access to internal and external
resources from anywhere

ID synchronization

Teleworking

ID
directory

OfficeUnauthorized
devices© SIOS Corp. All rights Reserved.

Authorizedusers anddevicesex. ActiveDirectory Internal user

Internal user

Head office

Remoteofficesand stores

8

SaaS Business 1: Gluegent Series
Case study in productdevelopment⚫

Upgraded to an end-to-end cloud-based workflow
system for contracts that covers the process fromdrafting to reviewing to signing

Works with third-party e-contract services to save users the time and risks associated with
contract preparation and signing.
Third-party e-contract services(1) Submit a
draft contract
for review andapproval⚫

(2) Managers to
consult andreview it(3) Decisionmaker toapprove andauthorize it

Once the contract
is approved, its
digital data is
uploaded to thecloud
automatically.

(4) Forward thecontract to theother party(5) Bothparties to signit

Gluegent Flow has been rated high in customer satisfaction and has won several trade awards
for its outstanding usability as described below:➢➢➢

Beginner-friendly simplified operation screen
Working well with Google Workspace and Microsoft 365
End-to-end support provided from implementation to operation© SIOS Corp. All rights Reserved.

9

SaaS Business 1: Gluegent Series
Step up product development and marketing
efforts
Key initiatives for FY 2023

Product
development⚫ Make it work better with thirdparty services and incorporate
updated features to help business
users resolve a wider range ofissues⚫ Make it work better with cloudbased network, threat-detection,and device-management
solutions in zero-trust
environments

Marketing⚫ Work more closely with partner
resellers⚫ Implement a more stringent
PDCA management cycle with
KPIs

⚫ Work more closely with zero-trust
solution vendors and partners tobolster sales to larger enterprises© SIOS Corp. All rights Reserved.

10

SaaS Business 2: Med Tech
An entirely cloud-based e-medical records service
that assists psychiatric hospitals in implementing
DX* solutions⚫ Compliant with the next-generation standards for exchanging healthcare
information between different systems➢ Responding to the government's and healthcare industry's efforts tostandardize healthcare data formats➢ Enabling hospitals to share healthcare data with each other➢ Can be applied to clinical research.

⚫ Entirely cloud-based subscription model➢ Significantly reduces initial cost.
➢ Makes it easy for hospitals to implement an e-medical records system at a➢lower cost.
Service can be available anytime, anywhere, and from any devices.
© SIOS Corp. All rights Reserved.

11

SaaS Business 2: Med Tech
Offers a wide range of features to meet every
operational need mental hospitals may have.
Category
Patient information
management

Feature menu of INDIGO NOTE
Patient directory (inpatients and outpatients), reception, reservation, consultation

Examination

SOAP notes entry, support for examination records entry, templates, patients' profiles

Ordering

Prescription, regular hospitalization, antibody tests, psychological tests, operations,injections, treatments, imaging tests, ECT, diet treatments, day care, work therapy,
group mental therapy, home-care service

Document management

Document creation, retention management

Hospitalization

Treatment of inpatients, physical isolation and restriction, movement restriction

Nursing care

Nursing planning, nursing record-keeping, bed management, examination planning for
inpatients, exit and sleepover passes

Communication

Reporting, sharing of patient information, bulletin boards posted for patients© SIOS Corp. All rights Reserved.

12

SaaS Business 2: Med Tech
Offers each function as a separate service tomake it easy to add or update features.
Its microservice architecture, under which to develop and operate services broken
into smaller modules with specialized functions, makes it easy to add or updatefeatures.
New features can be added on
without affecting existing ones.

Service

Service

Service

Service

Service

Outpatientcare

Nursing care

Day careNew feature 1

New feature 2

Data
accessData
accessData
accessData
accessData
accessDatabase
Database

Database

Database

Database

Database© SIOS Corp. All rights Reserved.

13

SaaS Business 2: Med TechContinue to develop and offer new and upgradedfeatures and services, and expand the customer base
Key initiatives for FY 2023

⚫ Product development➢ Continue to develop new and upgraded features➢ Make it work better with third-party systems via APIs
⚫ Marketing➢ Expand the customer base for the service among psychiatric hospitals in
Japan© SIOS Corp. All rights Reserved.

14

SaaS Business 3: HR Tech
Provide end-to-end solutions for analyzing andimproving employee engagement.*
Cycle of achieving greater employee engagement⚫
⚫

⚫

It is a service to analyze levels of
employee engagement.
Measures employee engagementlevels using ten key metrics toidentify issues.
Provides a short, easy-tocomplete questionnaire for
employees.

Analyze toidentify
issues⚫
⚫
⚫

Conduct
employeesurveysregularly

Solution forachieving greater
employeeengagement⚫

© SIOS Corp. All rights Reserved.

It is a free-address seating
management system.
Visualizes employees' attendanceand seating arrangements.
Randomly assigns seating
arrangements to employees tofoster greater communication
among them.

It is a service to visualize how
employees feel about themselves at
work.

15

SaaS Business 3: HR Tech
Increase awareness of the services among business
users by improving usability and stepping up
marketing efforts

Key initiatives for FY 2023

Product
development

Marketing⚫ Incorporate customer feedback to
improve its usability⚫ Make it work better with thirdparty employee-attendancemanagement systems⚫ Improve its usability⚫ Increase awareness of the
product through expanded
marketing programs⚫ Make greater use of reseller
channels, in addition to direct
sales channels⚫ Step up digital marketing efforts,
with a focus on online advertising⚫ Continue to update its dedicatedwebsite© SIOS Corp. All rights Reserved.

16

Bolster sales of the cloud- andsubscription-based versions of LifeKeeper© SIOS Corp. All rights Reserved.

LifeKeeper Assists Enterprises in Making Greater Use of
Cloud Environments
Sales of the cloud-based version of LifeKeeper
have been growing in Japan.
Sales of the cloud-based version of LifeKeeper in Japan

Up
19.8%
YoY

⚫ Sales of LifeKeeper for cloud environments have continued to rise, while thosefor on-premise environments have been declining.
⚫ LifeKeeper, with its system redundancy, provides greater availability when
corporate customers switch their enterprise systems from on-premiseenvironments to cloud environments.
© SIOS Corp. All rights Reserved.

18

LifeKeeper Assists Enterprises in Making Greater Use of
Cloud Environments
The percentage of sales of the subscription-based
version of LifeKeeper has been rising sharply outside
Japan.
Percentage of sales of the subscription-based version of LifeKeeper outside Japan⚫ The subscription-based version of LifeKeeper has been gaining popularity
among corporate users as it provides quick and hassle-free implementation.
© SIOS Corp. All rights Reserved.

19LifeKeeper Assists Enterprises in Making Greater Use of
Cloud Environments
Bolster sales of the cloud-based version of LifeKeeper
both in Japan and overseas
Key initiatives for FY 2023

⚫ Product development➢ Develop features deemed useful in cloud environments in order to provide
the same level of operational availability in cloud environments as in onpremise environments⚫ Marketing➢ Work more closely with partner resellers➢ Bolster sales of the subscription-based version outside Japan© SIOS Corp. All rights Reserved.

20

Restructuring of Business Operations/Business
Forecasts for FY 2023 andMedium-Term Business Plan

© SIOS Corp. All rights Reserved.

Business Forecasts for FY 2023 and Medium-TermBusiness PlanAs the Group's revenue comes largely from the sales of products and services
intended for on-premise environments, its business performance tends to besignificantly affected by external factors beyond its control, such as corporate
customers' capital expenditure projects and the supply-demand balance ofelectronic components.
To make the Group's revenue base more robust against changes in external
environments, we intend to restructure our business operations and bolster ourcloud-based business, including the SaaS business and the subscription-based
version of LifeKeeper.
We are not disclosing at this time the Group's consolidated business forecasts
for the fiscal year ending December 31, 2023, or its medium-term businessplan, as we are unable to make reasonable assumptions or estimates.
As soon as we can make reasonable assumptions and estimates, we will disclose
the above-mentioned information.
© SIOS Corp. All rights Reserved.

22

Cash Dividends for FY2022
24th term

25th term

Fiscal Year Ended
Fiscal Year Ended
December 31,2021 December 31,2022
Annual dividend rateYear-end Cash
Dividend(for fiscal year ended
December 31,2022)¥15(Ordinary dividend: ¥10)
(Commemorative dividend: ¥5)¥10

Pay an ordinary dividend of ¥10 per share

We have not determined yet the dividend rate for the fiscal year ending December 31,
2023. We will announce it as soon as we finalize it.
© SIOS Corp. All rights Reserved.

23

2. Review of Business Results for FY 2022

© SIOS Corp. All rights Reserved.

Consolidated Financial Results for FY 2022
(In millions of yen)

FY2021Results

FY2022
Results

Change%Change

Gross profit

15,725
4,884

Operatingincome358

Ordinary income

400

14,420
4,666
△572
△499

Profit (loss)
attributable toowners of parent

367

△639

△1,007

－

448
10.0%

△469
△25.1%

△918
－

－
－

Net Sales

EBITDA
ROIC△1,305
△217

△8.3%
△4.5％

△931

－

△899

－

*EBITDA: Operating profit + Depreciation + Amortization of goodwill*ROIC: Operating profit after tax / (Shareholders’ equity + Interest-bearing debts)© SIOS Corp. All rights Reserved.

25

Consolidated Net Sales（In millions of yen）

15,725

FY2021

14,420Down
8.3% YoY

FY2022© SIOS Corp. All rights Reserved.

26

Consolidated Operating Profit, EBITDA, and R&D Spending（In millions of yen）

838

638
358

448

⚫ R&D expenses increased by¥199M YoY.
⚫ EBITDA decreased by¥918M YoY.

△572
FY2021
Operating Profit△469

FY2022
EBITDAR&D Spending© SIOS Corp. All rights Reserved.

27

Consolidated Balance Sheets（In millions of yen）

As of December 31, 2021

Current
assets 5,774(including
cash anddeposits of
3,148)

Investment and otherassets 653

Total
liabilities
4,752(includinginterestbearing
debts of314)

Total net
assets1,897

As of December 31, 2022

Current
assets 5,195(including
cash anddeposits of
2,505)

Investment and otherassets 634

Total liabilities

Total
liabilities
4,778(includinginterestbearing
debts of
222)
Total net
assets 1,243

Total liabilities

Total assets
and net assets
6,649
6,649

Total assets
and net assets
6,022438
投資その他
6,022

◼ Property, plant and equipment 121◼ Intangible assets 100◼ Property, plant and equipment 112◼ Intangible assets 79© SIOS Corp. All rights Reserved.

28

Analysis of Consolidated Cash Flows（単位：百万円）

3,148
△370

80

△107
△245

Cash and cash
equivalents as ofDecember 31,2021

Cash flows fromoperatingactivities

Cash flows frominvesting activities

2,505

Effect of exchange
Cash and cash
Cash flows fromrate change on cash
equivalents as offinancing activities
and cash equivalents December 31, 2022

© SIOS Corp. All rights Reserved.

29

Year-on-Year Changes in Cash Flows（In millions of yen）
Cash flows from operating
activities

Cash flows from investing
activities

Cash flows from financing
activities¥58M net cash generated ¥267M net cash used
Net amount of cash generated or ¥587M net cash generated
used
Amount of cash
Proceeds from withdrawal
Breakdown
Profit before income taxes:
generatedof time deposits:
¥396M
¥130M
Cash generated as a result of adecrease in trade receivables:¥222M
Cash generated as a result of adecrease in inventories:¥429M
Cash generated as a result of
an increase in advances
received:¥271M
Cash used to reduce trade
Cash used to pay dividends:
Amount of cash usedpayables:¥87M
Cash used to repay long¥628M
term borrowings:¥123M© SIOS Corp. All rights Reserved.

30

Open System Infrastructure BusinessNet sales

8,716 million yen, Down 9.1％ YoY）

（In millions of yen）

⚫ While perpetual license sales of

LifeKeeper declined in Japan, sales werestrong in the Americas, Asia, and9,588

Oceania.

8,716⚫ Sales of software products sourced fromRed Hat, Inc.* declined, as high-volume
sales to corporate clients were sluggish,
due to delays and reassessments of theircapital expenditure projects at the heightFY2021

FY2022of chip shortages.

© SIOS Corp. All rights Reserved.

31

Open System Infrastructure Business
Segment income-13 million yen, compared with a profitof 352 million yen the year before（In millions of yen）

352

Segment profit was down YoY,

due to decreased sales andincreased personnel expenses.

△ 13
FY2021

FY2022© SIOS Corp. All rights Reserved.

32

Application BusinessNet sales

5,691 million yen, Down 7.2％ YoY）

（In millions of yen）

⚫ Revenue from the sales of the Gluegent
series and software applications for MFPs*

6,136

5,691

was up YoY.
⚫ Sales of the management support systemwere slow to financial institutions because ofdelays and reassessments of their capital
expenditure projects at the height of chipshortages.
⚫ The application of the Accounting Standard

FY2021

FY2022for Revenue Recognition resulted in adecrease in net sales in this segment.

© SIOS Corp. All rights Reserved.

33

Application Business
Segment income-570 million yen, compared with a profitof 4 million yen the year before（In millions of yen）

4

Posted a segment loss, due
to decreased sales, increased
personnel expenses, andincreased investments in△ 570

FY2021new products and services.

FY2022© SIOS Corp. All rights Reserved.

34

3. Appendix© SIOS Corp. All rights Reserved.

About SIOS Corporation
SIOS is Innovative Open Solutions
SIOS Corporation started as a system integrator that provided solutions based on Linux and other varieties of open

source software. Today, the company is listed in the Standard Market of the Tokyo Stock Exchange, and serves as aholding company of the SIOS Group, which includes technology firms specializing in software products and SaaS
solutions.
Under the mission of making the impossible possible for the people of the world, the SIOS Group is committed topursuing innovative solutions that resolve issues affecting people and contributing to a better society.
Visit https://www.sios.com/en to learn more about us.

Headquarters
CapitalEstablished

SIOS Building, 2-12-3 Minami Azabu Minato-ku, Tokyo,
Japan

1,481 million yen

May 23, 1997

No. of employees

525on a consolidated basis (as of December 31, 2022)

Main consolidated
subsidiaries

Japan:
SIOS Technology, Inc.

U.S.A.:
SIOS Technology Corp.

© SIOS Corp. All rights Reserved.

36

Glossary
Page

Term

5

Subscription business model

5

LifeKeeper

7

Gluegent series

8

Zero-trust environment

8

IDaaS

8

Single sign-on (SSO)

11

DX(Digital transformation)

13

API

15

Employee engagement

Description
A business model that charges customers a recurring monthly or annual fee to access asoftware product or service.
A failover software product that automatically switches a failed primary server to a backup
server.
Service products designed to assist corporate clients in achieving greater operational
efficiency using cloud solutions. The series includes the Gluegent Gate cloud-based
management of user IDs, the Gluegent Flow cloud-based workflow system, and the Gluegent
Apps Group Scheduler, which incorporated a function to manage schedules of team members
into Google Calendar.
A security framework that assumes there is no traditional network edge and requires allusers, whether inside or outside the organization’s network, to be authenticated, authorized,
and continuously validated for security before being granted access to information assets.
Acronym of Identity as a Service, which is a cloud-based solution for unified identity andaccess management of users of multiple services.
An authentication method that enables a user to authenticate with multiple web and cloudservices by using just one set of user IDs and passwords.
A process in which a company uses data and digital technology to transform its products,
services, and business models to more effectively respond to constantly changing businessenvironments and deliver greater value to customers and society as well as to transform its
business processes and organizational structure and culture to gain greater competitive
advantage.
Stands for application programming interface, which is a set of protocols that enables
different software programs and applications to communicate with each other.
A workplace approach based on two-way commitment between a company and employeesthat contributes to achieving greater organizational and individual performance.
© SIOS Corp. All rights Reserved.

37

Glossary
Page
31
33

Term

Description

Software products sourced from Open-source software products developed by Red Hat, Inc., a provider of open-source
solutions.
Red Hat, Inc.
Software applications for
multifunction printers (MFPs)

A multifunction printer (MFP) is a piece of office equipment that incorporates print, scan,copy, and fax capabilities into one unit. The Group develops, markets, and updates document
management software applications, such as Quick Scan and Speedoc, that run on an MFP.

© SIOS Corp. All rights Reserved.

38

Cautionary Statement
Forward-looking statements about the Company’s business outlook contained in this document reflect
management’s assumptions and judgments made on the basis of available information, and may include
risks and uncertainties. We caution that significant risks and uncertainties could cause actual performance
to differ materially from what is discussed in the forward-looking statements. Significant risks anduncertainties that might affect our performance include, but are not limited to, the economic environment
and market conditions in which we operate.

For inquiries about this document
Call the IR Section of SIOS Corporation on 03-6401-5111(+81-3-6401-5111 from outside Japan)
or fill in and send an online inquiry form available at:https://mk.sios.com/SIOS_Inquiry_english.html© SIOS Corp. All rights Reserved.

39