March 12, 2021

Long-term Vision And Medium-term Management Plan
Q&A

Q 1. Please explain the reasons for your decision to change your previous stance andbegin making business investments consisting mainly of substantial advertising andmarketing activities
February 2021 was the second anniversary of our IPO. The IPO generated cash of about 1.5 billion yen to 2.0billion yen. In the first year after the IPO, the demand for our products and services was high because of

one-time demand created by the consumption tax hike and associated reduced tax rates. There was no needto spend money on advertising. In the second year, we decided to use TV commercials and other marketing

activities on a trial basis. But this quickly ended because of the state of emergency and the remainder of theyear was impacted by the COVID-19 crisis. As a result, most of the funds procured at the IPO are still unused.
In our third year as a publicly owned company, based on the outlook for the effects of the COVID-19 crisis toslowly decline, we have decided to step up our expenditures when the timing is right.

Since before the IPO, our goal was to maintain an operating margin of 20%. We are still aiming for rapid sales

growth but are instead placing emphasis on the growth of annual recurring revenue (number of customers) asa SaaS business. Consequently, we are no longer aiming to maintain a 20% operating margin and instead plan
to take on new challenges with the understanding that our initiatives will result in lower earnings.

Q 2. Why did you decide to announce your medium-term plan nowWe are now in the last quarter of this fiscal year, so we have a good idea of what our fiscal year sales andearnings will be. This is a time when everyone at Smaregi needs to start taking many actions to prepare forthe next fiscal year. Announcing our plan in the third quarter demonstrates our desire to enable our people tostart measures early to prepare for activities beginning in the next fiscal year.

Q 3. There is a chronic shortage of engineers at many companies in Japan.
Recruiting talented people is very difficult. What are you doing to differentiate Smaregi
from other companies in order to attract these peopleThere is no doubt that the increasing demand for IT engineers is making it difficult to hire these engineers.

But we do not have a negative view of this situation. To help end the IT engineer shortage, we believe that weshould start by taking the initiative to increase the number of people who want to become an IT engineer. In
2020, Smaregi joined the Computer Software Association of Japan and became a member of the Executive
Committee of the U-22 programming contest and a sponsor of this contest. We also operate programmingclasses for students, have sponsorship activities for non-profit organizations, and help hold events whereengineers gather to share their ideas.

To train large numbers of engineers, we first need to create a culture that makes people realize that softwareis interesting work. We are determined to take the initiative to be a source of information within ourorganization and externally that will play a role in the invigoration of the entire software industry.