Commerce One Holdings Inc.
Financial Results briefing for Q4 and Fiscl Year Ended March 31, 2024 [with Q&A]
May 18, 2024.

Event Summary[Company Name]

Commerce One Holdings Inc.

[Company ID]

4496[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Financial Results briefing materials for Q4 and Fiscl Year Ended March 31, 2024

[Date]

May 18, 2024

[Venue]Webcast[Speakers]

Kiwamu Shimizu

Director and General Manager of Administration
Headquarters

Mariko Masui

Economic Analyst and Management Consultant

Saori Arai

Freelance Announcer

Main Text
Shimizu: I am Shimizu, Director and General Manager of Administration Headquarters at Commerce One
Holdings Inc. Thank you for taking the time to join us today.
Without further ado, I would like to begin the presentation.

Table of Contents

Today, I will explain our company overview, the financial summary for the fiscal year ended March 2024, thefull-year performance forecast for the fiscal year ending March 2025, and our growth strategy and businessoverview.

Corporate Philosophy

Let me start with an overview of our company.
As previously introduced, Commerce One Group operates by supporting e-commerce businesses.
Our corporate philosophy is to be an e-commerce platform that maximizes the power of people using
technology. We aspire to build a society that is fair and empowers anyone to pursue self-realization.

Business Description

Under this philosophy, we operate our business with the five companies listed on the slide as part of ourgroup. Our main focus is the SaaS-based e-commerce platform business, which we offer to small and mediumsized e-commerce site operators in Japan.
Future Shop is a SaaS-based e-commerce site construction platform that accounts for about 70% of ourgroup’s sales.
Supporting this is Softel, which creates back-office solutions. They provide sales management, inventory
management systems, and customization services for e-commerce businesses.
TradeSafe is the original business of our group, offering e-commerce site certification services andmanagement support tools that display order trends and other data.
Additionally, Sorairo provides web customer service tools for e-commerce.
Samurai Technology is a company that provides the necessary engineering resources to create SaaS platforms,
and it has been integrated into our group.

Product Portfolio that Provides Total E-Commerce Support

This slide explains the products held by these companies. As front-end products for e-commerce site, we have“futureshop” and “omni-channel”, known as e-commerce platforms, and “WhatYa”, a web customer service
solution.
In the back-end products, we have “Tsuhan-Suruzo” and “Fast Connector”, a database support tool, as wellas TradeSafe’s “TradeSafe Trustmark”, which ensures safe and secure e-commerce transactions by certifying
e-commerce sites.
Our group’s business is to aggregate the data and know-how possessed by these products and support thedigital transformation (DX) and productivity improvement of small and medium-sized enterprises and ecommerce operators.

Group Business Model

This slide explains the distinctive features of our group’s business model. futureshop serves as the front-end
e-commerce site construction platform, while Softel provides the back-office integration system, TsuhanSuruzo, for unified management.
Businesses that have their own sites often also operate on e-commerce malls like Rakuten and Amazon,
leading to complicated inventory management across their own site and the e-commerce malls.
Therefore, our business model involves futureshop handling the front-end sales side and Softel managing theunified back-office operations such as inventory management.
Masui: Earlier, you introduced “futureshop” and “Tsuhan-Suruzo.” Could you tell us which industries yourcustomers mainly come from for each?
Shimizu: First, regarding futureshop, our customers are primarily those who want to create their own sites.
Companies that wish to showcase their brand more uniquely than on other e-commerce shops like Rakutenor Amazon often use our service, with a significant number from the apparel industry. Moreover, following
the COVID-19 pandemic, there has been a noticeable increase in companies wanting to sell their own brandof food products.
On the other hand, “Tsuhan-Suruzo” is used mainly by companies selling on e-commerce malls. Thus, while
many of these are also in the apparel industry, dealing in a wide variety of small quantities, we also see asubstantial number of sports goods companies.
Masui: For instance, golf equipment and other sports goods seemed to have had steady demand even during
the pandemic.
Shimizu: Yes, exactly. Additionally, camping gear has also been quite popular.

Trajectory Since Establishment

Shimizu: As shown in the graph on the slide, our group has been growing steadily since its founding.
Our group was founded in 2006, gradually expanding various businesses while focusing on the theme of trustand safety in the e-commerce market. At the same time, we have steadily increased our sales.
By continuously building trust and gaining support, we have grown our diverse customer base. In 2018, wereleased our main solution “commerce creator,” which has significantly contributed to our business growth.
In the past three years, the impact of COVID-19 cannot be overlooked. The pandemic led to a surge in ecommerce demand, which increased consumer numbers and significantly grew our group’s business alongwith our customers.
In terms of the environment, internet security has become a social issue. Since around 2020, our group hasprioritized investing in security measures to create a safe transaction environment.
Arai: May I ask, what was the original impetus for founding the Company?
Shimizu: As I mentioned earlier, our basic philosophy is to aspire to build a society that is fair and empowers
anyone to pursue self-realization. Our CEO Okamoto often says, “We aim for the healthy development ofsociety.”
Our original business was TradeSafe. Around 2006, when TradeSafe was founded, internet shopping was still
fraught with issues such as undelivered goods and fraudulent payments. TradeSafe was established to provide
a certification service with the idea that “if this mark is in place, you can shop without worry.”
Maintaining this core management philosophy, we continue to strive to provide mechanisms that support
small and medium-sized enterprises in a healthy manner, ensuring they can compete with larger corporations.

FY3/2024 Full-Year Summary

Shimizu: This is the financial summary for the fiscal year ended March 2024. Consolidated net sales were
JPY3.55 billion, consolidated operating profit was JPY644 million, with a consolidated operating margin of
18.1%, and profit attributable to owners of parent was JPY414 million.
Compared to the same period last year, consolidated net sales increased by JPY360 million, an 11.3% increase.
Consolidated operating profit increased by JPY63 million. However, the consolidated operating margindecreased by 0.1%. Profit attributable to owners of parent decreased by JPY26 million, roughly a 6% decrease.
Regarding the e-commerce market, while the impact of the recent COVID-19 cannot be ignored, it isnormalizing, leading to a return of real consumption. Thus, although the e-commerce business saw a rapid
increase, it is now stabilizing.
However, the e-commerce penetration rate in Japan is still lower compared to Europe and the US. It is
expected to grow at an average annual rate of about 10.3% from 2023 to 2027, indicating a market withsustainable growth potential.
In this context, our group’s performance overview shows steady sales growth. The expansion of futureshop
services has increased average revenue per user (ARPU), and the acquisition of Samurai Technology andSorairo in 2023 has contributed to sales growth.
In terms of profit, despite an increase in costs due to upfront investments, the overall profit has increased
mainly due to the rise in ARPU of futureshop.
The slight decrease in profit attributable to owners of parent was primarily due to the substantial sale ofinvestment securities in 2023 rather than the impact of business operations.
Masui: The increased costs due to upfront investments, are they related to energy, among other things?

Shimizu: As I will explain later, part of the upfront investments includes investments in new businesses suchas energy, as well as research and development for providing financial services to e-commerce operators anddeveloping generative AI services for business efficiency. These upfront investments around the e-commercebusiness have led to a slight increase in costs.
FY3/2024 Q4 Highlights

Shimizu: Next, I would like to explain the current situation of each group company for the period. As
mentioned earlier, Future Shop has been developing new solutions due to a slight shift in consumption
towards the real side due to the impact of COVID-19, and has started providing “future M-App”.
This is an app creation tool that connects stores and e-commerce sites, enabling cross-channel sales
promotion both online and offline.
Softel has been actively investing in human resource development to leverage the engineering resources ofSamurai Technology, acquired in 2023, as immediate assets. As a result, we have increased development
outsourcing and enhanced the functionality of “Tsuhan-Suruzo,” with the total transaction volume handledby e-commerce operators using our service surpassing JPY300 billion.
Additionally, we are currently developing the next-generation backend platform “Commerce Connect” andare increasing internal resource investment in this area.
Masui: How much progress has been made in utilizing Samurai Technology's engineering resources?
Shimizu: Samurai Technology was not initially a group specializing in e-commerce engineering. Therefore,
they did not have extensive knowledge related to e-commerce operations.
Thus, including the current period, they have been learning various e-commerce business practices, which hasenabled us to invest resources more aggressively. The operating profit margin has been steadily improving.

FY3/2024 Financial Highlights

Shimizu: The financial highlights are as explained earlier.

Achievement Against FY3/2024 Plan

Shimizu: Let me explain the achievement against the full-year plan. The plan was revised in March 2024, andthe slide compares the actual performance against the revised plan. As you can see, the results are almost inline with the plan.
Compared to the initial plan, there is a significant overshoot. The main factors for the upward revision include
higher-than-expected ARPU for “futureshop” and a review of our marketing cost strategy, which helped
control expenses.

FY3/2024 Highlights of futureshop

Shimizu: This is the non-consolidated financial summary for “futureshop.” Net sales were JPY2.57 billion, an
increase of JPY130 million YoY. Operating income was JPY810 million, an increase of JPY110 million YoY, with
an operating margin of 31.8%, an increase of 3.1% YoY.
The gross merchandise volume (GMV) of our customers was JPY198.8 billion, an increase of approximately
JPY5.92 billion YoY. The number of contracts at the end of March slightly decreased to 2,881.
ARPU was JPY74,254, an increase of JPY4,690 YoY, indicating a steady but gradual increase.

FY3/2024 Highlights of SOFTEL

Shimizu: The slide shows the combined figures for Softel and Samurai Technology. Net sales were JPY860
million, a 0.1% increase YoY, approximately JPY800,000. Operating income was JPY85 million, a decrease of
approximately JPY26 million YoY, with an operating margin of 9.9%, a decrease of 3% YoY.
The decrease in operating profit margin YoY is due to the training of Samurai Technology's engineeringresources, as mentioned earlier. However, when looking at the quarterly progress for the current fiscal year,
the operating margin is gradually increasing, and we expect further improvement this fiscal year.
Masui: It says that the recurring revenue ratio is 48.8%. Does this mean you have a plan that continues tocharge after starting system operations?
Shimizu: Yes. Basically, we have a system called “Tsuhan-Suruzo” and there are individual requests from
customers, such as “I want to transfer data to an accounting system,” so we customize it slightly.
Recurring revenue refers to the maintenance and operation portion. Once development is completed, we
receive maintenance and operation fees for nearly 100% of the projects.
Therefore, sales other than recurring revenue come from one-time development. For example, when ecommerce malls like Rakuten or Amazon change their specifications, customers need to respond, so new
development is required for customization. We charge development sales fees for these services.
Masui: So, these are options or separate developments?
Shimizu: Yes, exactly.

FY3/2024 Balance Sheet Comparison to March 31, 2023

Shimizu: This is the non-consolidated balance sheet for Commerce One Holdings. Since we had the year-end
financial report recently, this slide shows the non-consolidated figures.
Cash and deposits have been affected by our investment in a related company called Enecycle, which I’ll
explain later. Enecycle has become an equity-method affiliate based on an investment of approximately
JPY250 million.
Our group started paying dividends from the middle of the previous fiscal year. We paid a total dividend of
JPY27 per share last fiscal year, including a commemorative dividend of JPY20, resulting in a cash outflow ofjust under JPY200 million.
Another significant change in the balance sheet is treasury stock. We started acquiring treasury stock in theprevious fiscal year, and during this fiscal year, we additionally purchased and retired approximately JPY248
million worth of treasury stock.

FY3/2024 Income Statement Compared to FY3/2023

Shimizu: This is the income statement. As Commerce One Holdings is a group, we omit sales details here.
However, I would like to explain that non-operating expenses, which were minimal in previous years, haveincreased significantly to JPY65 million this fiscal year.
This increase is due to the impairment loss on the shares of Sorairo, which we acquired through M&A in theprevious fiscal year. We have recorded a provision for doubtful accounts amounting to JPY65 million for loans
from Commerce One Holdings.
However, the decrease in Sorairo’s profitability pertains to their existing products. Our M&A objective was todevelop optional tools for “futureshop” through Sorairo, and this initiative is progressing well.

Comparison of Q3 and Q4 in FY3/2024

Shimizu: This is a comparison of the consolidated Q3 and Q4 results for Commerce One Holdings. Generally,
Q4 is always better than Q3. This is mainly because Softel's revenue from completed projects tends toaccumulate towards the fiscal year-end, resulting in higher sales and profits in Q4 compared to other quarters.
Profit attributable to owners of parent decreased in Q4 due to increased taxes related to the provision for
doubtful accounts for Sorairo.
Masui: Your operating margin is around 20%, which is relatively high in the industry. What factors contributeto this?

Highly Economically Rational, Multi-Tenant, Non-Customized SaaS-Type Business Model

Shimizu: One of the main factors is the business structure of futureshop, which accounts for 70% of ourgroup’s sales.
All customers share the same software and server environment in a SaaS model, which is essentially noncustomized. This means that we don’t create unique environments for each customer, allowing for centralized
development.
One advantage is secure and reliable systems. When we update the system, it applies to all users, maintaining
the latest secure environment without individual updates.
Another point, as mentioned on the slide, is speedy version upgrades. Because we don’t customize forindividual clients, we can provide high customer satisfaction by offering various advice and support.
As a result, we can maximize the profitability of our development resources. Since the environment is unified,engineers can focus on product development. This also leads to a lower turnover rate, reducing humanresource risks.
All customers being in the same environment allows us to accumulate knowledge of successful patterns. Byleveraging this in consulting, we can help customers replicate growth, maintaining high operating margins.
Masui: If you customize for each customer, you often need on-site support, which can lead to higher turnoverrates. In this sense, you’re providing a better environment for your employees too.

Analysis of Change in Operating Profit: FY3/2024 Against FY3/2023

Shimizu: This is the YoY analysis of operating profit. Consolidated operating profit for the current fiscal year
was approximately JPY644 million, up from JPY580 million in the previous year. The slide analyzes these details.
The JPY211 million increase in gross profit on the left side of the slide is the main factor driving the increasein operating profit.
A new factor is the amortization of goodwill resulting from the acquisition of Sorairo, as mentioned earlier.
There was no goodwill in the previous fiscal year, so the goodwill amortization incurred this fiscal year has an
impact.
Additionally, personnel-related expenses associated with M&A increased by approximately JPY95 million. As
a result, operating profit increased, landing at approximately JPY644 million.

YoY Analysis of Operating Profit to Profit Before Income Taxes

Shimizu: Regarding operating profit and other reportable profit categories, I’ll focus on the major points.
We recorded an extraordinary loss of approximately JPY30.51 million as a result of the impairment loss on
goodwill due to the inclusion of Sorairo in the Group. This was disclosed in a timely manner and reflects thedecline in profitability of their existing products.

YoY Analysis of Balance Sheet: March 31, 2024 Against March 31, 2023

Shimizu: This is the consolidated balance sheet. Apart from the cash flow analysis, there aren’t many points
to discuss.
The significant increase in net unrealized gains on available-for-sale securities is due to our holdings of stocks
listed on the Taiwan Stock Exchange, whose market value has increased slightly.

YoY Analysis of Cash Flows: FY3/2024 Against FY3/2023

Shimizu: This is the cash flow statement. To highlight the major points, the cash outflow for the acquisition of
intangible fixed assets is due to ongoing software development.
The cash outflow for the acquisition of investment securities was approximately JPY270 million, with most of
this being our investment in Enecycle. We also acquired and retired treasury stock this fiscal year.

Changes in Consolidated Operating Results for the Past 5 Years

Shimizu: This shows the consolidated performance trends. Although we generated a certain amount of profit
this fiscal year, the operating margin was 18.1%, roughly the same as the previous year.
While we expect SG&A expenses to increase slightly in the future, we aim to maintain and improve theoperating margin through cost reductions and other measures.

FY3/2025 Full-Year Earnings and Dividend Forecasts

Shimizu: This is the performance forecast for the fiscal year ending March 2025. We plan for net sales of
JPY3.815 billion, a 7.3% increase compared to this fiscal year, but operating profit is expected to be JPY604
million, a 6.1% decrease. We also expect a decline in ordinary profit.
One reason for this is that our group has traditionally not conducted much marketing, but with the increasein e-commerce platforms, we believe marketing is necessary to grow our customer base, so we have allocateda substantial budget for it.
However, we will continue to pay dividends, with profit attributable to owners of parent expected to increaseby about 9.6% to JPY454 million. As a result, while regular dividends will increase, the payout ratio will be
31.6%.
For the fiscal year ended March 2024, we paid a commemorative dividend of JPY20 and a regular dividend of
JPY18, so the regular dividend is planned to increase from JPY18 to JPY20. However, since the fiscal year ended
March 2024 included a commemorative dividend, the payout ratio was quite high at 66.1%, whereas for the
fiscal year ending March 2025, we plan for a payout ratio of 31.6%.
ROE is set at a target of 20% in our mid-term management plan announced last year. For this fiscal year andthe next, it is 15.2%, as we are in a phase of investment. We aim to improve investment efficiency and reach
20% in the fiscal years ending March 2026 and March 2027.

FY3/2025 Full-Year Earnings and Dividend Forecasts

Shimizu: Here are the specific details of our full-year performance and dividend forecast. Regarding sales, weplan to monetize new ventures in the financial and generative AI sectors.
For “futureshop,” due to recent price increases, we plan to revise our usage fees. We expect a slight increase
in recurring revenue from this adjustment.
For Softel, we plan to prioritize the development of the new tool “Commerce Connect.”
For ordinary income and the reportable profit categories below it, we anticipate recording investment gains
from Enecycle. This will result in higher ordinary income compared to operating profit.
The dividend payout ratio is planned to be 30%. Our basic stance is to maintain a payout ratio of over 30%.
Arai: Regarding the generative AI business mentioned in the sales forecast, could you explain what this entails
and provide an update on its current progress?

Started Implementation Phase in Generative AI Projects for Commerce Connect and Tsuhan-Suruzo

Shimizu: We plan to incorporate generative AI into our back-office tools, “Commerce Connect” and “TsuhanSuruzo.”
Currently, the practical use of generative AI in business is mainly for efficiency improvements. For instance,
our e-commerce site customers often face the labor-intensive task of creating and inputting vast amounts ofproduct descriptions.
Generative AI can help by automatically generating product descriptions when details such as color, size, andmaterial are input. We aim to integrate these convenient features into our tools.

Background of Investment in Enecycle (Approaches to the Global Decarbonization Market)

Shimizu: Let me explain the investment income associated with our equity-method investment in Enecycle.
While this is a different area from our usual business, our core mission as a business infrastructure company
is to contribute to the healthy growth of society. Our original business, TradeSafe, was established to addresssocial issues related to online troubles and safety concerns.
Our fundamental approach is to address social challenges through business, generating revenue and growth.
Based on this philosophy, we have been solving safety and security issues for domestic e-commercebusinesses through the “TradeSafe Trustmark” and providing an e-commerce platform for small and mediumsized enterprises to expand their market reach nationwide.
Currently, by investing in Enecycle, which offers concrete solutions for the major social issue of
decarbonization, we are approaching the global decarbonization business market and contributing tosustainable societal development. This also aims to enhance the corporate value of our group.
Specifically, besides investment income, we expect synergies with TradeSafe in the growing carbon credit
market and raw material certification systems, projected to expand by 2030.
As a founder of Enecycle, we have observed its potential and steady growth over the past nine years,
reinforcing our commitment to this sustainable investment.

Enecycle’s BusinessShimizu: Enecycle has independently developed carbonization and gasification technologies for biomass
resources such as waste plants and holds patents for these technologies. This allows them to convert biomass
resources into next-generation energy (such as coal alternative fuel and hydrogen), providing various
decarbonization solutions.
As mentioned, they have been selected for demonstration projects by the Ministry of the Environment andhave developed new hydrogen production methods. Currently, they are engaged in projects with leading
global energy companies and major companies in various industries.
Enecycle is working on converting an estimated 2.5 billion tons per year of waste biomass resources into
decarbonized energy. This represents a scalable market with global energy demand. In Japan, the GX
Promotion Act (Act Concerning the Promotion of a Smooth Transition to a Decarbonized Growth-Oriented
Economic Structure) was passed last year, securing a significant budget.
Going forward, carbon credits and other decarbonization efforts will become global topics. Many waste plants
are located in developing countries and remote areas. By collaborating with these regions and bringing
business there, we aim to create local revitalization and job opportunities, contributing to the eradication of
global poverty. This alignment with our philosophy has led to our investment in Enecycle.
Additionally, leveraging our experience in providing safe and secure certification services through TradeSafe,
we aim to expand into certification areas ensuring traceability in the carbon credit market and raw materials.
Supporting companies that solve urgent global issues like achieving a decarbonized society through businessaligns with our fundamental approach of fostering a healthy e-commerce society as a business infrastructure.
In 2019, Enecycle’s business domain was recognized by the IPCC (Intergovernmental Panel on Climate Change)
as a key method for reducing CO2 in the atmosphere. This indicates the potential for business development
and expansion.

While such investments are rare, creating touchpoints with the e-commerce business to contribute to societal
betterment and improving profitability will enhance corporate value in the medium to long term.
Growth Policy

Shimizu: Let me highlight the key points of our growth strategy.
Firstly, our growth policy. As stated on the slide, we aim for solid growth in all areas, including futureshop,
Softel, TradeSafe, and engineering.

Medium-Term Policies for Achieving Growth

Shimizu: This is our medium-term growth policy, focusing on how we plan to grow in the near future. The
primary revenue driver is “futureshop.” We aim to enhance synergies by integrating specialized services fromeach company into the futureshop platform.
Historically, each company operated independently. Moving forward, we plan to integrate the solutions ofour group companies into the futureshop platform more consistently.
futureshop is a platform for creating own websites. E-commerce operators who have their own sites often
also operate on malls like Rakuten and Amazon and may have physical stores. By covering this with “TsuhanSuruzo,” we can centralize the management of all sales and product data held by e-commerce operators.
We believe this will enable us to provide appropriate consulting and business support to e-commerce
operators, making it a core component of our medium-term growth strategy.

Commerce Connect

Shimizu: This is “Commerce Connect,” as mentioned earlier. E-commerce businesses tend to be laborintensive. We aim to transform them into “data-intensive” operations.
We plan to offer this through a SaaS model. Many customization requests from customers are accumulated
in Softel. By modularizing the most frequently requested features, we believe we can offer a SaaS system thatmeets customer needs.
Currently, we are providing customized solutions, but we also aim to offer a parallel SaaS system.

ARPU (Average Revenue Per User)

Shimizu: Our business is progressing little by little.
Although we’ve prepared many slides, we won’t be able to go through all of them today. We appreciate it if
you could review the materials later.

Please refer to “Financial Results briefing materials for Q4 and Fiscl Year Ended March 31, 2024” for more
information.

Question & Answer
Q&A: Characteristics and Strengths
Masui: We received the following question: There are many companies supporting e-commerce site
operations. What are your company’s characteristics and strengths?
Shimizu: One of our main strengths is that we have both front-end and back-end capabilities. Looking forward,
we aim to leverage this by integrating data use across these platforms.
We believe we are unique in our ability to handle and aggregate all product data from front-end platforms,
malls, and physical stores into a comprehensive platform.
Although we haven’t fully utilized this strength in the past, we are now developing internal technologies toprocess data in various ways. We plan to effectively return this value to e-commerce operators by supportingthem robustly.
Q&A: Differences Between “Commerce Connect” and “Tsuhan-Suruzo”
Masui: A follow-up question: What is the main difference between “Commerce Connect” and the existing“Tsuhan-Suruzo”?
Shimizu: “Tsuhan-Suruzo” is customized to fit the tools that our customers already have. While this meets
their needs, the landscape is constantly changing, and security requirements also arise, necessitating
customization with each change. This inevitably leads to higher running costs, which can be considered adrawback.
In the SaaS model, we include frequently requested features from the start and control all updates on ourend, significantly reducing running costs. The main difference lies in this aspect. Additionally, the SaaS model
offers both time-consuming, large-scale customizations and convenient, light-use features.
Masui: With this integration, companies aiming for DX-like reforms can transition smoothly.
Shimizu: Exactly.
Q&A: Overseas Customers
Arai: There’s another question: Do you have overseas customers for your e-commerce business?
Shimizu: We basically don’t have overseas customers. As mentioned earlier, the strength of futureshop lies incustomer success.
In customer success, our in-depth knowledge of Japanese commerce is key. While we do engage in crossborder e-commerce, we are not focusing on overseas businesses but rather on supporting small and mediumsized e-commerce operators in Japan. Our customer success team, well-versed in Japanese commerce,
engages daily with these operators, advising them on how to increase their e-commerce sales.
We offer SaaS systems along with academy courses and email support to help businesses grow. In this sense,
our target is more on Japanese small and medium-sized enterprises rather than overseas customers.
Arai: That means the yen’s depreciation doesn’t affect your company.
Shimizu: That’s correct. There is minimal impact.

Q&A: Application for Prime Market
Masui: There’s another question: Are you considering applying for the Prime Market?
Shimizu: We are currently listed on the Growth Market, and for a company listed there, our earnings are
relatively stable. However, in terms of the Prime Market, our top line is still somewhat small. Before
considering such a move, it is important for us to focus on the steady growth of our business. While we do
consider it for the future, we believe we are not yet at that level.
Q&A: Reason for Holding Taiwanese Company Shares
Arai: There’s a question: Why do you hold shares in a Taiwanese company?
Shimizu: This is because our CEO, Okamoto, had invested in this company before our listing. It was an old
business relationship, and we have been trading with this company, particularly entrusting them with
developing engineering resources. Fortunately, the company has grown and gone public, significantly
increasing its stock value.
So, it wasn’t a case of buying publicly traded stocks, but rather that a company we were trading with happened
to go public and their stock value rose significantly.
Arai: So, it’s a company that has created synergies in terms of development.
Shimizu: Exactly.
Arai: Will you continue to hold these shares in the future?
Shimizu: Rather than continuing to hold them, it might be more accurate to say that we plan to monetize
them effectively.
Q&A: Future Expansion Strategy Considering Customer Cost Burden
Masui: There’s another question: Unlike large corporations, the small and medium-sized enterprises you
support face a heavier cost burden. What are your plans for future expansion and growth strategies?
Shimizu: As our main offering is the platform provided by futureshop, we charge customers for services that
become part of their expenses. We constantly emphasize within our group that our business can only succeed
if our customers grow, and we actively support their growth.
Therefore, helping e-commerce operators grow is our primary focus. We provide academy courses, daily
phone and email support, consulting, contracted advertising operations, and some free services, all aimed atrunning alongside our customers’ e-commerce businesses.
Our approach is to increase sales alongside managing expenses. We are committed to ensuring that while
expenses are controlled, sales are also robustly increased.

Q&A: Sales Approach
Masui: There’s another question: You mentioned that you haven’t focused much on marketing so far, yet you
offer over 100 e-commerce support services. What has been your sales approach until now?
Shimizu: Mostly through word-of-mouth. Many customers have started using futureshop because they heard
from others that our support is excellent.
We haven’t done much online advertising for a long time, so futureshop isn’t widely known. Those who know
about it are aware, but if you search online, many other SaaS platforms come up, and futureshop often
appears lower in the results. That’s why word-of-mouth has been significant for us.
It’s encouraging to hear that people say, “Using futureshop helps increase e-commerce sales.”However, unlike in the past, there are now many platform options available. Amidst the growing number ofplatforms, we recognize the need to engage in proper marketing to attract new customers.
Other Questions and Answers from the Day
Here are additional questions and answers that we couldn’t cover during the session but were answered by
the Company afterward.
Question 1
Question: You’ve mentioned a focus on security. Can you provide specific details on your initiatives?
Answer: For futureshop, we conduct regular server maintenance to enhance server security. We also provide
our customers with security guidelines and hold security workshops to help them protect consumer personal
information and safely run their online shops.
By regularly hosting these security workshops online, we share the latest security information and teachmethods to improve the security levels of e-commerce sites, which are important to keep in mind on a daily
basis.
Question 2
Question: Will you disclose specific numbers for the growth businesses, futureshop, Softel, and othersubsidiaries?
Answer: In the appendix of the medium-term management plan disclosed on November 14, 2023, we haveprovided the sales and operating profit trends for futureshop, Softel, and new businesses.
These figures include targets up to the fiscal year ending March 2027, and we aim to achieve them byexecuting the growth strategy outlined in the same document. For quarterly disclosures, please refer to eachcompany’s financial summaries.
Question 3
Question: Regarding the transcript of the briefing, is it intended for institutional investors or individual
investors? Could you specify in future IR announcements whether the briefing is for institutional investors,
individual investors, or both?

Answer: Currently, we don’t differentiate between briefings for institutional and individual investors. We
apologize for any confusion. Going forward, we will focus on hosting briefings for individual investors andensure that our announcements are clear.
Question 4
Question: Will you consider introducing shareholder perks in the future? Many shareholders prefer that yourhigh dividends remain focused on dividend returns.
Answer: We are not considering the introduction of shareholder perks. As mentioned, we aim to maintain adividend payout ratio of 30% as stated in the medium-term management plan announced in November 2023
and return value to our shareholders through dividends.