Toward Achieving Our Long-term Vision, VISION 2031

SecondMedium-term Management Plan＋ Business Plan and Growth Potential

Second Edition

Sep. 13, 2023

Smaregi, Inc.
Securities code: 4431

Update history

Sep. 13, 2023

Mar. 15, 2023

2

ARR plan revised upward. (P8)(billion yen)

FY4/24

FY4/25

FY4/26

Previous

5.35

7.0

9.1

Current

5.59

7.27

9.46

First edition released.

Contents

3

P4

Updating the Medium-term Management Plan Ahead of ScheduleP5

Long-term Vision - VISION2031

P7

Second Medium-term Management Plan ̶ Plan for Increasing ARR

P14Business Outline

UPDATEUpdating the Medium-term Management Plan Ahead of Schedule

4For achieving VISION 2031

Active store

Toward the Second Mediumterm Management Plan

300,000

With a significant rise in the probability of achieving
the KPI of "ARR 5 billion yen" set out in our First
Medium-term Management Plan (FY4/22 - FY4/24)
with a view toward the achievement of VISION 2031,

Fourth Medium-termManagement Plan
Third Medium-termManagement Planas well as our success in reforming mindset
within the company, we will move to the Second
Medium-term Management Plan (FY4/24 - FY4/26)
ahead of schedule without waiting for the remaining
one year, toward the achievement of VISION 2031.

Mindset reform within the company

NEWTaking the next step
forward one year
ahead of schedule!

Second Medium-termManagement Plan

ARR

9.46billion
yen
Revised upwards
from 9.1 billion.

First Medium-termManagement Plan

ARR

5.59 billion
yen• From emphasis on net sales to emphasis on ARR.
• Liberation from the sense of despair and entrapment

Revised upwards
from 5.35 billion.

brought about by the COVID-19 pandemic.

• Focus on growth rate and investment in advertisingand publicity, etc. Stepping on the accelerator withthe readiness to sacrifice profits.

FY4/21
10thAnniversary

ARR：Annual Recurring Revenue

FY4/22

FY4/23

FY4/24

FY4/25

FY4/26

FY4/27

FY4/28

FY4/29FY4/30FY4/31
20thAnniversary

5

Smaregi aims to be the top in Japan
Dynamic stores bring about dynamic towns.
Dynamic towns bring about dynamic societies.
By supporting stores, we aim to revitalize society as a whole.

Smaregi aims to be the market leader in Japan. Based on our management philosophy of “OPEN DATA, OPEN SCIENCE!,”
we aim to carve out an “era of data access and utilization for everyone.”

Long-term Vision - VISION2031

6To become the top company in the POS market, we first
aim to be the top in the mid-size business category in Japan.
The target has been enlarged from the core midsize business category to include
big businesses and small businesses.

Goal
Active Store

Number of active stores

Market share in JP

300,000

300,000
StoresBig business(40 stores or more)

210,000 stores
Up about
10 times in
10 years

OUR MAIN TARGET

Midsize business

Share in the mid-sized category

38%

14% of(2-39 stores)

800,000 stores
Small business

24,000(1 store)

StoresFY4/21

1,180,000 stores
FY4/23

FY4/25

FY4/27

FY4/29FY4/31*1 Based on 2021 Economic Census conducted by the Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communications.

Prepared by Smaregi *1

The market
In Japan

Goalfor the main
target segment is38%

7

Second Medium-term Management Plan
FY4/24 - FY4/26

We continue to position ARR as the most important indicator.

Toward the Plan for Increasing ARR - Aiming for Annual Growth of 30% or More8Plan for ARR Growth
Goal*

ARR

9.46
billion yen（billion yen）

9.46
9.1

10

7.27
7.0

85.59
5.35

5

Aim to achieve growth
exceeding CAGR 30%
over the three-year period from FY4/24

3*Upward revision of ARR growth forecast.
(Disclosed on September 13, 2023)

0

ARR：Annual Recurring Revenue

CAGR
30%＋

4.1
4.66

4.3

1Q result

FY4/23

FY4/24

FY4/26

FY4/26(May 2022 - Apr. 2023)(May 2023 - Apr. 2024)(May 2024 - Apr. 2025)(May 2025 - Apr. 2026)

Basic Strategy for the Second Medium-term Management Plan

9

Increase the number of contracts

Increase customer unit priceMarketing, Sales strategy

Customer success, Upselling/cross-selling measures

UpsellExpand usage by
既存顧客の利用拡大
existingcustomers

Acquire new users

Cross-sellStrengthen targets throughmarket segmentation strategy

432 Approach EC businesses

Continue with S&M investment

NEWEnhance payment services

Continue

NEW

Strengthen App Market

Continue

Strengthen Smaregi TimeCard

Continue

ContinueToward the Plan for Increasing ARR - Market Segmentation Strategy

Second Medium-term Management Plan

Strengthen targets through market segmentation and enhance marketing efficiency

Market segmentation
strategy
Break down the broad target
segments of “retail stores” and“restaurants” by “type ofindustry/business” and “scale,”and strengthen the approach tospecific industries.
Strive to enhance sales and market
efficiency through the detailed
segmentation of targets.
Through the App Market, provide nichefunctions that the target industries/
businesses demand.

F&B/Accommodations 27.6%

Retail 42%
Food and drinks

Cars/Bicycles

Machinery &equipment

280,000

89,00044,00045,000

181,000

Apparel※Daily necessities

Medical/Cosmetic products

Specialty restaurants

Cafes

99,00030,00085,000198,000

60,000Agricultural
supplies/FuelEntertainment

Furniture & fittings

Takeaway/Delivery

Other

59,00040,00033,00052,00072,000Books/Stationery

Non-store retailers

Other

33,00034,00098,000

Medical care 10.7%

Accommodations

Bars

Services 19.7%
Hairdressing &beauty

Lifestyle

256,000

51,000

Clinics/Therapeuticbusinesses

Dental clinics

OtherEntertainment
facilities

Other

153,000

63,00020,00036,00089,000*Clothing, drapery, fabric, bedding, etc.

Prepared by Smaregi based on the "2016 Economic Census for Business Activity," Ministry of Economic, Trade and Industry/Ministry of Internal Affairs and Communications(stores)10

Toward the Plan for Increasing ARR - Approach EC Businesses

Second Medium-term Management Plan

Expand sales channels to EC businesses by strengthening EC functions

Enabling use of Smaregi
by EC stores through EC-EC
linkage and EC-store linkage

EC-EC linkage andSmaregi's full functionality

Store-EC linkage

Use byEC stores only

Use bystores + EC

EC functions were updated in August 2022.
This made it possible for EC businesses that
do not have physical stores to make use ofall Smaregi functions.
Inventory linkage had been the greatest issuefor EC businesses. However, by using
Smaregi, it is now possible to link inventoryin physical stores and EC stores easily. We
will promote the use of Smaregi among ECbusinesses as a store tool for the EC era thatmoves beyond the POS register mechanism.

Sales
売上Budget
予算

Shipping
発送

Centralized
management of EC sites

Mail
メール

ECサイト一元管理
ECサイト一元管理

PL
PL*We plan to update the functions successively, such as compatibility with mall EC carts, etc.

Inventory
在庫

Order management
受注管理機能受注管理機能featuresRealstores
実店舗Order受注11Toward the Plan for Increasing ARR - Continue with S&M Investment

Second Medium-term Management Plan

12

Contribute to service usage through marketing activities that engage with the leads from the awareness acquisition phase.

1AwarenessInterest/Concern• Advertising and publicity (Programs and commercials on mass media, social media
advertising, specialized magazines, food fair sponsorship, etc.)2Comparison/Review

Lead nurturing• Online marketing（Listing, affiliates, owned media, etc.)• Holding events such as exhibitions, seminars, etc.

Inside sales, field sales
3Purchase

Awareness acquisition• Lead acquisition and advertising from POS register comparison sites,
contents for various industries with cash register demand, SaaS
comparison sites, etc.（F&B, retail, medical care industry, etc.)• Showroom expansion/extension• Increasing the number of online business meeting points

Toward the Plan for Increasing ARR - Increase Customer Unit Price

Second Medium-term Management Plan

Improve competitive advantage and customer satisfaction by expanding usage by existing customers, andincrease unit price per customer through upselling and cross-selling.

App MarketPaymentservices

Improve customer
satisfaction customer• Aim to increase customer unit price andimprove customer experience (CX) byproviding industry-specific nichefunctions.

• Aim to strengthen collaboration withdevelopment partners and increase thenumber of apps.

• Strengthen EC cart and social media tieup for retailers. Enhance the OMO/omnichannel domains.

Expand revenue model• Build a revenue model with GMV as itssource.

• Continue to improve the business (PMIand rebuilding) of ROYAL GATE INC.
which Smaregi absorbed through amerger.

• Expand cross-selling with Smaregi,
centred on sales as a package with POSservices.

• Take up the challenge of the online
payment domain. (advance booking,advance orders, table orders, etc.)

Smaregi
TimeCard

Strengthen functionality forstores and strengthen HR• Develop functionality for retail, apparel,and F&B businesses, which is Smaregiʼsstrength.

• Strengthen employee management andoverall work attendance and salary
management as a means of acquiring CV
regardless of industry and preventing
cancellations resulting from scaling up.

• Air commercials, participate inexhibitions, and reinforce upselling efforts
to existing customers.

1314

Business OutlineBusinesses

Business Outline

With Smaregi (POS) and Smaregi TimeCard (HR) as the core cloud services businesses, we are aiming to expand
the Smaregi economic zone through venture investments and IT human resources discovery and training businesses.

Cloud Services
Smaregi (POS)

A new, cloud-based POS registersystem that enables efficient store
management and data
management through sales
analysis, advanced inventory
management, and other DX
transformations for the retail,restaurant, and service industries.

OthersPayment Service

A multi-payment service that
supports a variety of payment
methods such as credit card
payments, contactless payments,
and barcode payments.

Smaregi TimeCard (HR)An HR service that has beenrequested by stores andcompanies, which goes beyond theframework of attendance
management with features such as
payroll calculations, vacation
management, shift management,
daily reports, project management,and workflow.

ECSES

Online store forstore peripherals

IT and creative humanresources discovery
and training businessthrough SES

CVC

Venture investments
business andSmaregi economic
zone expansion
business15

Cloud Services

Business Outline

Society is moving towards an era of storing and utilizing data, andSmaregi supports store management based on data with a rich set of APIs that other companies lack.

Smaregi Platform
Smaregi provides a platform centered around the vast amounts of sales data and HR data that are accumulatedby Smaregi, and then flexible data input and output are realized through the app market and an open API.

HRPOS

Paymentservice

In-house apps

3rd Party apps

Linked apps

Smaregi (POS)Open API (Smaregi App Market)

Platform database
POS data, HR data, etc

16

Smaregiʼs Profit Structure

Business Outline

17

Adopt a freemium model that provides basic cash register functions for free while charging for additional functions corresponding to the industry
and need. The pillars of revenue are subscription revenues such as monthly usage fees, and peripheral equipment sales at the start of use.

Sales composition ratio (May 1, 2022 - April 30, 2023)

Earnings structure (May 1, 2022 - April 30, 2023)

Steady accumulation of subscription revenue.
Slight increase in “other” earnings such as through the SES business.

Increase in SG&A expenses from aggressive S&M investment（million yen）
6000

6000

Monthly fees and others (subscription revenue)

2.2%
OthersMonthly fees of Smaregi POS, Smaregi TimeCard, andApp Market and payment service commission revenue.

39.6%
4500

4500

Sales of products and others

38.8%
Sales of products
and others

Cost of sales
2,345

Hardwares, initial expenses, and STORE STORE revenue.

59.0%

Others

Net sales
3000

Monthly feesand others

Customization, system development,and SES (Smaregi Tech Farm)

Initial expensegross margin

SaaS
gross margin

37.4%

76.6%

3000

45.2%

5,914

SG&A expenses
2,675
1500

1500

15.1%
Operating profit89300Unique Features of Smaregi (POS) - Exceptional High Performance

Business Outline

18

The basic functions of Smaregiʼs POS are provided free of charge. Smaregi is a highly-functional cloud-based POS
register that uses sales data to make store management a science.
Retail stores
Operations

Orders/incoming deliveries

Restaurants
Operations

Merchandise
registration
Wholesale
operations

Sales area

Able tohandle thedemand ofbig business

Outstanding inventory
management Strength
Order/incoming
deliveries
Wholesale Ops

Customer arrival
Management

Multi-locations

Customer order input

Multi-store
management

User-centered designCustomer management

Menu registration

KitchenOpen API

Printer link

Easily linked with external
services, such as accounting etc
Extensive track record of linking
with systems such as CRM/ERP

Sophisticated salesanalysis

in the retailindustry

Resolves storesʼ challenges
with design concepts

Displays supreme performancein inventory management
coordinated with POS

Omni-channel

Customer successIntegrates inventory andcustomer information

Churn rate
0.58%*1

Table preparations
Table management

Checkout

Cash register function

Menu management

Customer seating

Sales analysis

Possible to confirm various
types of sales analysis fromanywhere, at any time

Improves quality of customer
contact by removing barriers
between online and realHigh level of customer
satisfaction resulting
from full-support structure

Smaregi App Market

From single-store
to large scale

Links with payment

Responds to store needs,
irrespective of their size.
Obtaining broad share

High compatibility between POS
and payment. Realizes enhanced
convenience and ARPU/ARPA

Cash register function

Consumers

Customermanagement

Checkout

Sales analysis
Multi-location
management

Online survey by Shopperʼs Eye Inc. (June 2021)

Purchase
whatstore wantRealizes multifaceted approaches
to various business categories
and enhanced user convenience

Our own
payment
service*1 MRR churn is the attrition rate calculated by using Smaregi monthly recurring revenue.
The average is from May 1, 2022 to April 30, 2023.

Domestic Market

Business Outline

Product distribution by store size and industry. Smaregi shows its strengths among retail and midsize businesses.

FewNo. Of stores and Employees

Many

Retail stores

Conventional
POS system

Restaurants
Enterprises

Convenience stores,
large general merchandise stores,
large clothing chains, etc.

ConventionalPOS system

Cash registers

Conventional
POS system
Dedicated device

Cloud-based
POS system
PC or tablet

LowLow¥10,000 - 100,000

High¥500,000 - millions +¥10,000 - 150,000

Replacement ofmalfunctioning
devices

Replacement ofmalfunctioning
devices / Separate
update fees required

Replacement by part.
No update fees
requiredComplicated to use
with many buttons

Complicated to use
with many buttons

Easy to use iOS app

Basic performanceHigh performanceHigh performance &freely expandable

Generally none

Help desk,
on-site support +Help desk, email
support, help site +Device priceMidsize
Conventional
POS system

Cloud-based
POS system
Cashregister

Cloud-based
POS system

Specialty clothing stores,
restaurant chains,
franchises, etc.

Conventional
POS system

Maintenance
costs

Small

Cloud-based
POS system

Ease of use

Private stores,
individuals.

Cashregister
Functionality

Conventional products in the POS system market are being swapped out forcloud-based ones. As the shift to the cloud and DX accelerate acrossindustries, cloud-based POS system manufacturers are expanding into newmarkets such as inventory management as they compete for market share.

Support19Smaregiʼs M&A Strategy

Business Outline

We are actively considering M&A with a focus on companies that have direct business synergies.
We are also considering acquiring IT engineers as well.

123

AcquireCustomer Numbers

Increase
Revenue per Customer(Full lineup of products/services)

AcquireIT Engineers

M&A to speed up
customer acquisition or
expand target areas.

M&A of companies that canfunctionally complement Smaregi.
Aim for cross-selling and up-selling.

Companies that have web engineers.
The companies don't have toown a product.

Target Companies

Target Companies

Target Companies

Cloud-based POS vendors.

Companies that have software
for stores and that likely havedirect synergy with Smaregi.

System development companies,systems integrators, andproduction companies.

20Business Risks and Measures Policy

Business Risk Information

Major risks affecting the realization of growth and the execution of the business plan
Key risks

Securing Technicians(Software engineers)

Reliance on SpecificSuppliers

Likelihood ofccurrence

Potential impact

Risk management measures

MediumOperates "Smaregi Tech farm" for the purpose of
discover and develop young talent.We will work to train
entry-level engineers while striving to secure
outstanding human resources by utilizing various
recruitment methods

Medium

We have strengthened cooperation with suppliers(detailed delivery management, etc.) and established asystem allowing us to always secure our required
volumes. We will also aim to quickly build out analternative supply system with multiple suppliers.

Large

Because the Companyʼs core business is a stablesubscription-type business that covers a great variety ofmember stores, the Company is endeavouring tostabilize its revenue base through share expansion. We
will engage in strengthening the business model in orderto minimize impacts on the Group as a whole

Large

In order to eliminate the potential for businessperformance to be affected accompanying legislative
revisions, regulatory changes and so on, we will
strengthen our framework for gathering information
through lawyers and various external organizations,while also striving to expand the legal department inorder to respond appropriately.

There is a risk that business operations will be affected by alack of progress in securing and training human resources in

Mediumline with the scale of our business.

There is a risk that changes in transaction volumes or terms
and conditions may affect our business and performance.

Economic fluctuation/customer trends

The electronic payments market is growing steadily as aresult of increasing demand, but in cases where contractionsin the value of payments or number of member stores occur
accompanying market downturns triggered by economic
fluctuations and so forth, there is a risk business performance
will be affected.

Regulation by laws andordinances

In the payment agency business, there is a risk the Groupʼsbusiness performance could be affected as a result ofcontrols on member stores being strengthened accompanying
a revision of the Act for Partial Revision of the Installment
Sales Act (Revised Installment Sales Act), which was enacted
in 2018, or further revisions in the future.

MediumLow

Medium

Impact of COVID-19: As a result of a careful review of the degree of impact for "COVID-19 Impact 1 and 2" described in the Consolidated Financial Results for the Year Ended April 30, 2022, disclosed on June 13, 2022, we havedecided to suspend publication of the impact from this report and thereafter. With the abolition of travel restrictions accompanying the review of border measures, changes to the positioning of the novel coronavirus disease
under the Infectious Diseases Act, and other factors, economic activities in Japan are on a recovery trend. In view of that, we expect the impact of COVID-19 on the store opening trends of retail stores and restaurants, which areSmaregi's main customers, to be alleviated over time. Moreover, with regard to the diversification of sales format associated with changes in social structure, we will continue to put in place risk mitigation measures such asworking with developer partners to actively promote function development.

Please refer to the "Risks Related to Our Business" section of our securities report for information on other business risks. (In Japanese)

21

22

Disclaimer
Business plans, forecasts and other forward-looking statements in this presentation are based on thereasonable judgments of Smaregi based on information that was currently available. Actual results ofoperations may be different because these statements include uncertainties involving market conditions,political events, the economy and other items. The purpose of this presentation is not to encourage
investors to buy or sell Smaregi stock or make any other investment decisions. Investors are responsible
for making these decisions on their own.

Disclosure Policy
The Company plans to disclose the latest information, including the status of progress, at the end of eachfiscal year under the section of “Business Plan and Growth Potential”. However, the Companyʼs financial
data and key performance indicators are planned to be disclosed at the end of each quarter.

Second Medium-term Management Plan＋ Business Plan and Growth Potential

Smaregi, Inc.