Consolidated Financial Results
for the First Half of the Fiscal YearEnding March 31, 2021
(From April 1, 2020 to September 30, 2020)
Supplementary Material
October 30, 2020

Digital Arts Inc.
(Securities Code: 2326)
Copyright © 2015 Digital Arts Inc.

Contents
Item Key Points・・・ ３
 Consolidated Results Highlights・・・ ９ By Market・・・21
 Introduction to Digital Arts Consulting (DAC)・・・25

 Initiatives for the Second Half・・・29
 Full-Year Financial Forecast for the Fiscal YearEnding March 31, 2021

・・・35

2

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the First Half of the Fiscal Year Ending March 31, 2021

Key Points

Copyright © Digital Arts Inc.

Key Points(1) Contracts and net sales for the first half hit record highContracts leaped considerably, specifically 43.7% year on year, to 3,748 million
yen. Consolidated net sales rose by 12.2% year on year to 3,101 million yen.
* Reasons for the disparity in the increase between contracts and net sales are explained in the Supplement.
 In the enterprise sector market, teleworking rapidly increased as a means of addressing COVID-19.
Sales of the i-FILTER series, which provides secure access to websites irrespective of location orsituation, grew.
 In the public sector market, sales of the i-FILTER series surged because of the GIGA School
Concept.
 Digital Arts Consulting (DAC), a subsidiary offering security consulting services, achieved steady
growth.

(2) Operating profit for the first half also achieved a record highOperating profit was up 19.5% to 213 million yen after cost of sales rose 245
million yen (up 38.9%) and SG&A expenses dropped 121 million yen (down 11.7%)
year on year.
The rise in the cost of sales resulted from a hike in labor expenses following the increase in
consultants at DAC.
SG&A expenses contracted after the cancellation of events and the shift to working from home.

4

Copyright © Digital Arts Inc.

Supplement: Trends in Contracts and Net Sales(Million yen)
FY March
2020 1HFY March 2021
1H

ChangeContracts

2,609

3,748

1,139

+43.7%Net sales

2,764

3,101

337

+12.2%

License sales products andothersCloud service products

2,609
13.9%

362

86.1%

2,247

% ChangeContracts obtained in the first half raised 1,139
million yen or 43.7% year on year.

Net sales for the first half rose 337 million yen
or 12.2% year on year.

The disparity in the increase between contracts
and net sales is explained by a massive rise in
the percentage of total contracts that contracts forcloud service products accounted for, from
13.9% for the first half of previous fiscal year
to 33.3% for the same period of the fiscal year
under review.



The method for posting sales differs between thetwo categories of products. For license sales
products, a large part of the contract amount isrecorded as sales in a lump at the time ofcontract. For cloud service products, recorded
sales are apportioned on a monthly basis
throughout the contract period.

Recorded sales within a short period aresmaller for cloud service products than forlicense sales products, and the amount of thecontract that is deferred is larger.

Contracts
3,748(+43.7%)

1,247

33.３%

(+244.3%)

2,500

66.7%

(+11.3%)FY March 2020 1H

FY March 2021 1H

5

Copyright © Digital Arts Inc.

Supplement: Recording of Sales
Recording of sales of license sales products

License fees make up a large proportion of the contract amount. This portion is recorded in a lump sum as sales in themonth when the contract is obtained.



The maintenance fees portion is apportioned on a monthly basis throughout the contract period.

Net sales

Contracts

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Recording of sales of cloud service products
Sales of cloud service products are apportioned on a monthly basis throughout the contract period, recording the resulting
monthly portions as sales.

As the contract amount of cloud service products rises, the contract amount that is deferred increases.

Net sales

Contracts

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

6

Nov.

Dec.

Jan.

Feb.

Mar.

Copyright © Digital Arts Inc.

Supplement: Contract Renewal PriceContracts for license sales products
 For license sales products with a contract period of one year, the contract is renewed every year.
 The renewal price is half the contract price for the first year.

The renewal price is half the contract
price for the first year.
・・・

Contracts

Contract
契約月
conclusion
month

Jan.
+1月

Feb.
+2月

Mar.
+3月

・・・

Recorded
sales

・・・

Contract

更新月
+10月
+11月
+12月
Oct.
Dec.
Nov.
renewal

+1月
Jan.

+2月
Feb.

+3月
Mar.

・・・

Contracts

+10月
+11月
+12月
Nov.
Dec.
Oct.

month

Contracts for cloud service products
 For cloud service products with a contract period of one year, the contract is also renewed every year.
 The renewal price is the same as in the first year of contract. That means that cloud service
products are more profitable than license sales ones.
Recorded
sales

・・・

Contracts

Contract
契約月
conclusion
month

+1月
Jan.

+2月
Feb.

+3月
Mar.

・・・

・・・

+10月
Oct.

+11月
Nov.

Contract

renewal
更新月
month

7

Jan.
+1月

Feb.
+2月

Mar.
+3月

・・・

Contracts

Oct.
+10月

Nov.
+11月
Copyright © Digital Arts Inc.

Supplement:Trends in Contracts and Net Sales(consolidated)

The share of cloud service products is growing. For this type of product, the contract amount is apportioned ona monthly basis for recording purposes. The contract amount deferred to the second half or later, or theorder backlog, rose 48.8% to 2,437 million yen.

The portion to be recorded as sales for the second half increases 23.3% to 804 million yen.

The portion to be recorded as sales for the next fiscal year or later grows 65.3% to 1,632 million yen.



According to the increase in contracts of cloud service products, the deferred contract amount increases. Since
the contract price is constant for future renewals, a stable revenue base according to the stock-typebusiness model is established.

Comparison of order backlog(Million yen)

2,437

Sales recorded for the second half
Sales recorded for the following fiscal year and later

1,638(+48.8%)1,632(+65.3%)

987

804

651

(+23.3%)As of the end of September in FY March 20208

As of the end of September in FY March 2021
8
Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the First Half of the Fiscal Year Ending March 31, 2021

Consolidated Results
Highlights

Copyright © Digital Arts Inc.

Consolidated Financial Highlights for the First Half of the
Fiscal Year Ending March 31, 2021
Contracts:

Contracts

3,748 million yen (+1,139 million yen / +43.7% YoY)

Sales of the i-FILTER series increased in the public sector market, due to the
influence of the GIGA School Concept.
Projects increased as DAC gained new customers.

Net Sales:

Net sales

OperatingprofitOrdinary profit

Profit attributable toowners of parent

3,101 million yen (+337 million yen / +12.2% YoY)

The spread of teleworking in the enterprise sector market helped boost sales.
Sales grew after DAC gained new customers.

Operating profit:

1,310 million yen (+213 million yen / +19.5% YoY)

In cost of sales, labor expenses soared after DAC increased staff.
Among SG&A expenses, advertising expenses contracted after the cancellation of
events and expenses declined due to the shift to working from home.

Ordinary profit:

Profit:1,316 million yen

908 million yen(+224 million yen / +20.5% YoY)(+163 million yen / +22.0% YoY)

10

Copyright © Digital Arts Inc.

Summary of Consolidated Financial Results for the First
Half of the Fiscal Year Ending March 31, 2021
Consolidated Results(Million yen)
Change YoY

Financial forecast for
FY March 2021 1H

FY March 2020 1H

FY March 2021 1H

Contracts

2,609

3,748

+43.7%Net sales

2,764

3,101

+12.2%

3,300

Cost of sales

630

875

+38.9%

770

Gross profit

2,133

2,225

+4.3%

2,530

Selling, generalandadministrative
expenses

1,036

915

-11.7%

1,040

Operating profit

1,096

1,310

+19.5%

1,490

Operating margin

39.7%

42.3%

ー

45.2％

Ordinary profit

1,092

1,316

+20.5%

1,490

Profit attributable toowners of parent

745

908

+22.0%

1,030

EBITDA

1,508

1,770

+17.4%

ー―* Financial Forecast is the consolidated financial forecast announced on May 8, 2020.
* EBITDA = Operating profit + Depreciation + Tax expenses included in operating expenses
11

Copyright © Digital Arts Inc.

Summary of Consolidated Financial Results for the First
Half of the Fiscal Year Ending March 31, 2021
Consolidated quarterly results(Million yen)
FY March 2020
2Q

FY March 2021
2Q

FY March 2020
1H

FY March 2021
1H

Contracts

1,461

2,286

+56.5%

2,609

3,748

+43.7%Net sales

1,514

1,687

+11.4%

2,764

3,101

+12.2%

Cost of sales

343

447

+30.3%

630

875+38.9%

Gross profit

1,171

1,239

+5.9%

2,133

2,225

+4.3%

Selling,
general andadministrative
expenses487

414-15.1%

1,036

915-11.7%

Operatingprofit683

825+20.8%

1,096

1,310

+19.5%

Operatingmargin

45.1%

48.9%

ー

39.7%

42.3%

ー

Ordinary
profit680

827+21.6%

1,092

1,316

+20.5%

Profitattributable toowners ofparent464

574+23.7%

745

908+22.0%

Change YoY

12Change YoY

Copyright © Digital Arts Inc.

Summary of Non-Consolidated Financial Results for theFirst Half of the Fiscal Year Ending March 31, 2021
Non-Consolidated Results for the First Half
(Million yen)
FY March 2021 1H

Contracts

2,482

3,405

+37.2%Net sales

2,677

2,797

+4.5%

3,100

Cost of sales

569

605

+2.0%

600

Gross profit

2,107

2,191

+4.0%

2,500

Selling, generalandadministrative
expenses

986

866-12.2%

1,020

Operating profit

1,120

1,324

+18.2%

1,480

Operatingmargin

41.9%

47.4%

ー

47.7%

Ordinary profit

1,117

1,332

+19.2%

1,480

Profit770

924+20.1%

1,020

13

Change YoY

Plan for FY March
2021 1HFY March 2020 1HーCopyright © Digital Arts Inc.

Summary of Non-Consolidated Financial Results for theFirst Half of the Fiscal Year Ending March 31, 2021
Non-Consolidated Quarterly Results(Million yen)

FY March
2020 2QFY March 2021
2Q

Change YoY

FY March
2020 1HFY March 2021
1H

Change YoY

Contracts

1,383

2,108

+52.5%

2,482

3,405

+37.2%Net sales

1,465

1,509

+3.0%

2,677

2,797

+4.5%

Cost of sales

308

294

-4.4%

569

605

+2.0%

Gross profit

1,157

1,214

+4.9%

2,107

2,191

+4.0%

Selling,
general andadministrative
expenses469

411-12.4%

986

866-12.2%

Operatingprofit687

802+16.7%

1,120

1,324

+18.2%

Operatingmargin

46.9%

53.2%

ー

41.9％

47.4％

Ordinary profit

685

806

+17.6%

1,117

1,332

+19.2%

Profit472

555+17.6%

770

924+20.1%

14ー

Copyright © Digital Arts Inc.

Trend in Consolidated Net Sales for the First Half
Sales for the first half hit a record high, following the briskness of theenterprise sector and public sector markets.

(Million yen)

3,101

2,420
（125%）（112%）

2,764

2,764

（112%）（100%）

2,468（102%）

1,935（120%）

1,610
1,481
1,328
1,103

（120%）

1,351（109%）（110%）（102%）（109%）FY March 2011 FY March 2012 FY March 2013 FY March 2014 FY March 2015 FY March 2016 FY March 2017 FY March 2018 FY March 2019 FY March 2020 FY March 2021
1H
1H
1H
1H
1H
1H
1H
1H
1H
1H
1H

* Percentage figures represent comparisons with the preceding 1H.

15

Copyright © Digital Arts Inc.

Quarterly Trend in Consolidated Net Sales
Record quarterly sales were achieved with strong performance in theenterprise sector and public sector markets.
(Million yen)

1,687

1,674
1,565

1,546

（102%）（118%）

（87%）

1,158

1Q

（98%）

1,402

1,217

1,376

1,413

（90%）
（113%）

（98%）

1,249
（103%）（105%）

1,083（126%）

1,500

1,514
（130%）

1,309（111%）（107%）

（99%）

2Q

3Q

FY March 2018

4Q

1Q

2Q

3Q

4Q

FY March 2019

1Q

2Q

3Q

FY March 2020

4Q

1Q

2Q

FY March 2021

* Percentage figures represent comparisons with the same period a year earlier.

16

Copyright © Digital Arts Inc.

Consolidated Cost of Sales and Selling, General and
Administrative Expenses

Labor expenses constituting part of the cost of sales rose after DAC increased consultants.



Depreciation as part of the cost of sales increased after the start of the depreciation of cloud products and other software in the second
quarter of the previous fiscal year.

Advertising expenses as part of SG&A expenses decreased due to the cancellation of the Partner Conference and other outside events.

Transportation expenses as part of SG&A expenses declined because of working from home and online sales activities introduced as ameasure against COVID-19.
(Million yen)

FY March 2020 1H

Cost of sales
Labor

FY March 2021 1H

Change YoY

630

875

+245

253

362

+108

Main Factors for Change

DAC increased consultants.

Depreciation

221

283

+62

Depreciation of cloud products andother software has been rising since
the second quarter of the previous
fiscal year.

Transfer to other accounts
Other manufacturing costs

155

229

+73

Outsourcing expenses soared after
DAC obtained more orders.

Selling, general andadministrative expenses

1,036

915

-121

Personnel expenses

529

490

-39

Advertising expenses

116

67

-49

Decrease due to the voluntary decision
to refrain from holding the Partner
Conference and other events

Other

389

356

-33

Transportation expenses fell forreason of working from home andonline sales activities.

17

Copyright © Digital Arts Inc.

Quarterly Trend in Consolidated Cost of Sales■ Labor expenses swelled after DAC increased consultants.
■ Increase after start of depreciation of cloud products and other software in the second quarter of theprevious fiscal year
(Million yen)

Labor

Depreciation

Transfer to other accounts and others

427
377
343

232

235

（97%）

（92%）

66

62

306

301

（125%）（114%）

79289（125%）

75

1Q

2Q（101%）

（83%）

76

90

93

3Q

FY March 2018

121

4Q

120

1Q

2Q

105

124

102
82

87

73
123

126

140

143

181

180

1Q

2Q

129

97

95

92

（99%）

74

77

77

131
102

250

236
90

69

98

（92%）

（149%）（151%）（124%）

286

282

66
94

68

（145%）

352

447（130%）

110

98

3Q

4Q

FY March 2019

116

1Q

137

136

145

2Q

3Q

4Q

FY March 2020

FY March 2021

* Percentage figures represent comparisons with the same period a year earlier.

18

Copyright © Digital Arts Inc.

Quarterly Trend in Consolidated Selling, General and
Administrative Expenses■Advertising expenses contracted due to voluntary restraint of the Partner Conference and other outside events.
■ Decrease in transportation expenses due to shift to working from home and online sales activities to work to control
COVID-19

Personnel expenses

Advertising expenses

Other

Overseas expenses

632（111%）

569
（99%）

53

509
（92%）

533

526

（107%）

（88%）

67
69

94

568

69

（87%）
13

482

469

（90%）

60

163

12

46

40

40

243

229

224

230

237

1Q

2Q

3Q

4Q

1Q

FY March 2018

167
156

164
109

473
（98%）

443

501

（91%）

414

（94%）

（85%）

211

194

89

487

25

200
201

(Million yen)

（85%）

（89%）

42

190

182

548

（112%）

59

195

179
190

70

46

46

57

240

228

230

253

262

2Q

3Q

4Q

1Q

2Q

161
32

47

34

43

FY March 2019

246

3Q

FY March 2020

272
218

210

4Q

1Q

2Q

FY March 2021

* Percentage figures represent comparisons with the same period a year earlier.

19

Copyright © Digital Arts Inc.

Summary of the Consolidated Balance Sheet for FY2021
March 2Q
Consolidated balance sheetThe equity ratio stood at 80.6% to show that strong financial health was maintained.
Capital efficiency was good with higher ROE and ROA than in the preceding year.
(Million yen)

As of end of 2Q FYMarch 2020

As of end of 2Q FYMarch 2021

% Change

As of end of FY
March 2020

Current assets

8,408

9,380

+11.6%

8,733(Cash and deposits)

7,363

8,257

+12.1%

7,651

Non-current assets

2,126

2,056

-3.3%

2,118

Total assets

10,534

11,437+8.6%

10,852Current liabilities

2,023

2,149

+6.2%

2,125

Non-current
liabilities

46

49

+6.4%

46

Equity capital

8,428

9,220

+9.4%

8,652

Net assets

8,464

9,238

+9.1%

8,680

Equity ratio

80.0%

80.6%

―

79.7%

ROE

9.2%

10.2%

―

19.4%

ROA

7.3%

8.2%

―

15.4%

20

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the First Half of the Fiscal Year Ending March 31, 2021

By Market

Copyright © Digital Arts Inc.

Summary of Consolidated Net Sales by MarketIn the enterprise sector market, net sales were up 293 million yen or 19.1% after acquisition of i-FILTER projects andthe growth of DAC.
In the public sector market, net sales were up 79 million yen or 8.1% after acquisition of i-FILTER projects as thegovernment furthered the GIGA School Concept.
In the consumer sector market, net sales were down 35 million yen or 13.8% due to reduction in prices for carriers inthe second quarter of the previous fiscal year despite a rise in the introduction of filtering among young people.

Consolidated
net sales

Net Sales: 3,101 million yen

Enterprise
SectorNet Sales: 1,832 million yen

Public Sector

Net Sales: 1,049 million yen

Contracts: 3,748 million yen

Contracts: 1,774 million yen

Contracts: 1,755 million yen

Consumer
SectorNet Sales:

219 million yen

Contracts: 219 million yen(+337 million yen / +12.2% YoY)(+1,139 million yen / +43.7% YoY)(+293 million yen / +19.1% YoY)(+363 million yen / +25.8% YoY)(+79 million yen / +8.1% YoY)(+797 million yen / +83.2% YoY)(-35 million yen / -13.8% YoY)(-21 million yen / -8.8% YoY)

22

Copyright © Digital Arts Inc.

Trend in Consolidated Net Sales for the First Half by Market(Million yen)

Record-setting net sales were attained for the first half with bullish performance inthe enterprise sector and public sector markets, favored by the increase in
teleworking and advances in ICT education in schools.

Enterprise Sector

Public Sector

Consumer Sector

2,420

2,468

2,764

2,764

（112%）（100%）

235

1,935
1,610
1,481
1,328
1,103
（109%）

1,351（110%）（120%）

130（102%）（125%）

174

1,049

179

1,108

970

922
1,096

（109%）

175

186

754

140

609

132
585

527

536
1,832

415

555

（112%）
219

254（102%）（120%）

170

3,101

1,366

612

684

758

824

1,010

1,419

1,538

1,149

FY March 2011 FY March 2012 FY March 2013 FY March 2014 FY March 2015 FY March 2016 FY March 2017 FY March 2018 FY March 2019 FY March 2020 FY March 2021
1H
1H
1H
1H
1H
1H
1H
1H
1H
1H
1H

* Percentage figures represent comparisons with the preceding 1H.

23

Copyright © Digital Arts Inc.

Quarterly Trend in Consolidated Net Sales by Market
Highest-ever quarterly net sales were marked with strong sales of the i-FILTER series following theincrease in teleworking and advances in ICT education in schools.
(Million yen)Enterprise Sector

Public Sector

Consumer Sector

1,687

1,674
1,565
（102%）

103

1,309
1,158
（126%）

（87%）

1,217

86

（105%）

1,083

484

（99%）

92

（107%）

1,546（118%）

1,402

115（130%）

139

1,249

141
536

（90%）

114

（98%）

100

1,413

104

（113%）

115

90

597
426
451

515

546
383

408
324

998

977

1Q

1,376

587

699

497

640

（98%）

（103%）（119%）

1,500

140

120

92
424

1,514

726

665

2Q

3Q

FY March 2018

4Q

688

731

715

1Q

2Q

3Q

725

4Q

FY March 2019

985

975

1Q

813

770

2Q

3Q

FY March 2020

847

4Q

1Q

2Q

FY March 2021

* Percentage figures represent comparisons with the same period a year earlier.

24

Copyright © Digital Arts Inc.

Introduction to Digital Arts Consulting (DAC)

Copyright © Digital Arts Inc.

About Digital Arts Consulting Inc. (1/3)
Digital Arts Consulting was established in 2016 as a subsidiary of Digital Arts for the
purpose of offering security consulting services.
As it steadily won new projects, it made an upfront investment to hire additional
consultants.

Company Profile
Company

Digital Arts Consulting Inc.

Address

14F Otemachi First Square West Tower, 1-5-1 Otemachi, Chiyoda-ku, Tokyo 100-0004
Japan

Date ofestablishment

April 1, 2016

Share capital

73 million yen

Parent company(primaryshareholder)

Digital Arts Inc.

Business

IT strategy consulting
Business consulting
Information security consulting

Staff

Four officers
24 employees(as of the end of March 2020)

26

Four officers
54 employees(as of the end of September 2020)

Copyright © Digital Arts Inc.

About Digital Arts Consulting Inc. (2/3)
In security consulting, it introduces i-FILTER, m-FILTER, FinalCode and other solutions to produce
synergy.

IT Strategy Consulting(CIO Service)

Security Consulting(CISO Service)

Digital Solutions
Business

Overview

Providing a one-stop, all-inclusive
consulting service covering thedevelopment of IT strategies for
optimal use of different IT solutions
and the construction of systems
and operations for helping clientswith digital transformation (DX)

Offering comprehensive services
including security checkups andanalysis, proposals of measuresand solutions for raising thesecurity level and support for
implementation

Offering solutions that help
clients achieve digitalization andsecurity enhancement in a
broad range of areas

Service
Details- Development of IT (DX) businessstrategies and plans- Business process reengineering(BPR)- Optimization of SoR/SoE- DAC Robotics Service- FIDO authentication solutions- Governance consulting- Cyber security consulting andsolutions- Support service for toughening
security measures- FIDO authentication solutions- Robotic process automation(RPA)

Business

27

Copyright © Digital Arts Inc.

About Digital Arts Consulting Inc. (3/3)
To large companies, it advertises Digital Arts products after taking comprehensive security measures based on its
understanding of customers' businesses, system configuration and status of operations to ensure that customers
accurately understand the product value.

Digital Arts products

Extra value throughconsulting

Corporate customers

Security checkup
IT governancedevelopment

Large

Architectural design

MediumSecurity productintroduction
Security operation

Small
DAC offering value to customers
Advertise the value of Digital Arts products on the basisof comprehensive security measures

Provide operation services using specialists familiar
with Digital Arts and other products (realization ofwhitelist operations)Introduce Digital Arts products optimally configured
from the perspective of customers

Offer the Group's one-stop security services to maximize
cost effectiveness for customers

28

Copyright © Digital Arts Inc.

Material on Consolidated Financial Results for the First Halfof the Fiscal Year Ending March 31, 2021

Initiatives for the Second Half

Copyright © Digital Arts Inc.

Actions in the Second Half of FY2021 MarchEnterprise Sector

Copyright © Digital Arts Inc.

Actions in the Second Half of FY2021 MarchEnterprise Sector
 Advertise whitelist operation as the last resort of a multi-layered defense in a Zero Trustenvironment (end point security)
 Expand sales of DigitalArts@Cloud in line with the accelerated use of cloud services based on theincrease of teleworking
 Carry out sales promotional activities centering around online seminars. Sales activities to target
large companies.

External
environment

Zero Trust
A security model according to which security
measures are implemented on the assumption that
nothing can be trusted
Ubiquity of employees and information assets amid
the trends toward work style reforms and cloudtechnologies

Accelerate the shift to cloud technologies
Due to the COVID-19 coronavirus pandemic,
teleworking rapidly became widespread and the shift ofsecurity products to the cloud speed up.

Stress whitelist operations

Actions

Explain that it has at least 5 million users and thatthe solutions are so useful that no incident resulting
in damage from malware has been reported toemphatically stress their whitelist operations as thelast resort of a multi-layered defense (end point
security)

Expand sales of DigitalArts@Cloud
Provide a secure experience in a cloud environment
using the whitelist operations of i-FILTER and mFILTER

Carry out sales promotional activities centering around online seminars
Organize these events for partners and end users
Conduct sales activities to target large companies
Collaborate with partners and carry out direct sales activities targeting large companies with1,000 or more employees
31

Copyright © Digital Arts Inc.

Example of Whitelist Operations at Japan's Largest
Securities Firm

32

Source: Nomura Securities Co., Ltd.'s materials on introduction examples

32

Copyright © Digital Arts Inc.

Actions in the Second Half of FY2021 March

Public Sector

Copyright © Digital Arts Inc.

Actions in the Second Half of FY2021 March
Public Sector
 Massively higher sales than the average year are expected from the actions surrounding the GIGA
School Concept.
 Advertise the importance of advanced filtering Engage in sales promotional activities through online seminars and internal and external media
outlets
 Focus sales approaches on customers that have not yet introduced solutions

External
environment

Acceleration of the GIGA School Concept
The GIGA School Concept has unveiled a policy to supply approximately 7.5
million tablets to school-aged children to realize an environment in which every
child has a terminal. New demand for web filtering software is foreseeable.

Actions

Engage in sales promotional
activities through online seminars
and internal and external media
outlets
Advertise the importance of advanced
filtering and facilitate the introduction ofcloud services by supporting kitting andother measures

34

Stress the necessity of Digital Arts
products to customers that have yet
to introduce them
Intensively approach boards of educationthat have yet to introduce filtering because
advanced filtering is essential to secure
online learning for school-aged children

Copyright © Digital Arts Inc.

Supplementary Material on Consolidated Financial Results
for the First Half of the Fiscal Year Ending March 31, 2021

Full-year Financial Forecast
for the Fiscal Year Ending
March 2021

Copyright © Digital Arts Inc.

Full-Year Financial Forecast for the Fiscal Year Ending
March 2021
Consolidated Financial Forecast for the
Fiscal Year Ending March 31, 2021
Achieve the growth of cloud services in the enterprise sector market and boost sales under the
GIGA School Concept in the public sector market with the goal of achieving a high rate of growth(Million yen)

FY March
2020 FullYear Results

FY March 2021
Full-Year Plan

Net sales

5,641

7,500

Cost of sales

1,361

Gross profit

FY March 2021
1H Results

Achievement
rate+32.9 %

3,101

41.4%

1,850

+35.9 %

875

47.3%

4,280

5,650

+32.0 %

2,225

39.4%

Selling,
general andadministrative
expenses

1,952

2,100

+7.6 %

915

43.6%

Operatingprofit

2,328

3,550

+52.5 %

1,310

36.9%

Ordinary profit

2,326

3,550

+52.6 %

1,316

37.1%

Profit attributableto owners ofparent

1,590

2,450

+54.0 %

908

37.1%

% Change36

Copyright © Digital Arts Inc.

Full-Year Financial Forecast for the Fiscal Year Ending
March 2021
Non-Consolidated Financial
Forecast for the Fiscal Year Ending
March 31, 2021

(Million yen)

FY March 2020
Full-Year
Results

FY March 2021
Full-Year Plan

Net sales

5,336

7,000

Cost of sales

1,098

Gross profit

FY March 2021
1H Results

Achievementrate+31.2 %

2,797

40.0%

1,450

+32.0 %

605

41.8%

4,238

5,550

+30.9 %

2,191

39.5%

Selling,
general andadministrative
expenses

1,881

2,050

+9.0 %

866

42.3%

Operatingprofit

2,357

3,500

+48.5 %

1,324

37.9%

Ordinary
profit

2,359

3,500

+48.4 %

1,332

38.1%

Profit

1,613

2,420

+50.0 %

924

38.2%

% Change37

Copyright © Digital Arts Inc.

Return to Shareholders for Fiscal Year Ending March 31,
2021
Dividends
We are planning to pay dividends as follows to return a portion of our earnings to ourshareholders.
Target payout ratio for fiscal year ending March 31, 2021: 31.5% (of consolidated net profit)
Annual dividends of surplus forecasted for fiscal year ending March 31, 2021: 55.00 yen per
share
Dividend (in yen) per share
Interim

FY March 2020

25.00

FY March 2021

25.00

Year-end

FY March 2021 (forecast)

38

Total

Consolidated
payout ratio

25.00

50.00

44.0%

30.00

55.00

31.5%

Copyright © Digital Arts Inc.

Notes on Descriptions

Among the descriptions of plans, strategies and financial forecasts in this presentationmaterial, those that are not historical facts are forward-looking statements. They reflect
judgments made by the management of Digital Arts Inc. on the basis of information
currently available to it. They may be subject to considerable change depending onchanges in the environment and other factors, and the Company does not in any way
guarantee the achievement of the projections.
Digital Arts Inc. will disclose any significant changes that occur in the future as
appropriate.
With some exceptions, the basic figures in this presentation are rounded down to thenearest million yen.

•

デジタルアーツ, DIGITAL ARTS, i-FILTER, info board, ARS, Active Rating System, ACTIVE RATING, ZBRAIN, D-SPA, SP-Cache, NET
FILTER, White Web, m-FILTER, m-FILTER MailFilter, m-FILTER Archive, m-FILTER Anti-Spam, m-FILTER File Scan, Mail Detox, FinalCode, iFILTER, DigitalArts@Cloud, Desk@Cloud, D-Alert, D-Content, and logos and icons related to Digital Arts Inc. and its products are trademarks
or registered trademarks of Digital Arts Inc.

•

Apart from this, the names of companies and products stated herein are trademarks or registered trademarks of their respective companies.

39

Copyright © Digital Arts Inc.

- For internet convenience, safety and security -Copyright © 2015 Digital Arts Inc.