Financial Results
for the 6 Months Ended
June 30,2023
August 9,2023
SIOS ,Corp.
（Stock Code: 3744 on Standard Market of Tokyo Stock Exchange）© SIOS Corp. All rights Reserved.

Table of Contents
1. Summary of Consolidated Business Results
for the Six Months Ended June 30, 2023
2. Key Initiatives Undertaken and Planned
3. Appendix© SIOS Corp. All rights Reserved.

1. Summary of Consolidated BusinessResults for the Six Months Ended June30, 2023

© SIOS Corp. All rights Reserved.

Consolidated Financial Results
for the 6 Months Ended June 30,2023（In millions of yen）

Results for the
6 months
ended June30,2022

Net Sales

7,256

Gross profit

2,298

Operating income-225

Ordinary income-207

Profit attributable toowners of parent-339

EBITDA
ROIC(annualized)-157-16.1%

Results for the
6 months ended
June 30,2023

Change

8,066
2,665
-106
-78
-176
-60
-11.8%*EBITDA: Operating profit + Depreciation + Amortization of goodwill*ROIC: Operating profit after tax / (Shareholders’ equity + Interest-bearing debts)© SIOS Corp. All rights Reserved.

%Change＋809＋11.2%＋367＋16.0％＋119－＋129－＋163－＋97－－－4

Consolidated Net Sales（In millions of yen）

7,256

2022年度1H FY2022
Q2累計

8,066

Up 11.2%
YoY

2023年度1H FY2023
Q2累計© SIOS Corp. All rights Reserved.

5

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

472353△106‐106-225△225‐60△60△157-157

2022年度1H FY2022
Q2累計

2023年度1H FY2023
Q2累計■Operating Profit ■EBITDA

営業利益

EBITDAR&D Spending
研究開発費⚫ R&D expenses
increased by ¥118M
YoY.

⚫ EBITDA increasedby ¥97M YoY.

© SIOS Corp. All rights Reserved.

6Consolidated Balance Sheets（In millions of yen）

Current
assets5,195(including
cash anddeposits of2,505)

Investment andother assets 634

Totalliabilities
4,778(includinginterestbearingdebts of222)
Total net
assets1,243
Total liabilities⚫
⚫

Current
assets5,331(including
cash anddeposits of2,717)

Totalliabilities
5,081(includinginterestbearingdebts of170)

Investment andother assets 645

Total net
assets
1,033
Total liabilities

Total assets
and net assets
6,022
6,022

Total assets
and net assets
6,114
6,114

◼ Property, plant and equipment 112◼ Intangible assets 79◼ Property, plant and equipment 90◼ Intangible assets 46

As of December 31, 2022

As of June 30, 2023

Current assets：An increase of 211 million yen in cash and deposits.
Current liabilities：An increase of 304 million yen in contract liabilities.
© SIOS Corp. All rights Reserved.

7

Analysis of Consolidated Cash Flows（In millions of yen）

117
259

-139

-24

2,717

Effect ofexchange ratechange on cash
and cashequivalents

Cash and cash
equivalents as ofJune 30, 2023

2,505

Cash and cash
equivalents as ofDecember
31,2022

Cash flows fromoperatingactivities

Cash flows frominvestingactivities

Cash flows fromfinancing
activities© SIOS Corp. All rights Reserved.

8

Cash Flow Analysis
Net cash provided or used

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities¥259M net cash provided¥117M net cash provided¥139M net cash used•

Depreciation: ¥45M••

Increase of contract
liabilities: ¥229M•

Amount of cash
provided•Breakdown••

Proceeds from refundof guarantee deposits:¥47M
Proceeds fromderivativetransactions: ¥103M

Increase of accrued
consumption taxes:¥67M
Income taxes refund:¥45M
Loss before incometaxes: ¥146M•

Payment of expenses•associated with sale ofbusinesses: ¥26M
•Amount of cashused© SIOS Corp. All rights Reserved.

Payment ofdividends: ¥86M
Repayment of longterm borrowings:¥33M

9

Open System Infrastructure BusinessNet sales

4,999 million yen, Up 16.2% YoY（In millions of yen）

4,999

Sales of our products and services for onpremise application picked up, as chip shortages

4,303

were resolved and the supply of hardware
products started to clear a backlog of orders. Asa result,⚫ Sales of software products sourced from RedHat, Inc.* increased from a year earlier.
⚫ Sales of LifeKeeper* were also strong for2022年度1H FY2022
Q2累計

2023年度1H FY2023
Q2累計

both on-premise and cloud application.
Note: See the Glossary on page 33 for descriptions of terms with anasterisk.

© SIOS Corp. All rights Reserved.

10

Open System Infrastructure Business
Segment income

56 million yen, Up 270.2% YoY

56Segment income was up YoY in15

the Open System Infrastructure

Business, driven by robust sales.
2022年度1H FY2022
Q2累計

2023年度1H FY2023
Q2累計© SIOS Corp. All rights Reserved.

11Application BusinessNet sales

2,947

3,060 million yen, Up 3.8％ YoY

3,060⚫ Revenues from the provision of support forsystem development and implementation
were up, especially from the support
provided for API* projects and business
management systems of stock brokeragefirms.
⚫ Revenues from the Gluegent series*

achieved steady growth.

2022年度1H FY2022
Q2累計

2023年度1H FY2023
Q2累計⚫ Sales of the management support system tofinancial institutions were slow.

© SIOS Corp. All rights Reserved.

12

Application Business
Segment income

Loss of 169 million yen, compared withon loss of 246 million yen the year before（In millions of yen）

⚫ Segment loss decreased in theApplication Business due torobust sales.
⚫ Posted a segment loss due to△246-246
2022年度1H FY2022
Q2累計△169-169

rising personnel expenses andmore aggressive investments indeveloping and marketing new

2023年度1H FY2023
Q2累計

products and services, mainly in
the Med Tech* business.

© SIOS Corp. All rights Reserved.

13

2. Key Initiatives Undertaken andPlanned© SIOS Corp. All rights Reserved.

Key Initiatives Undertaken in the First Half of FY 2023
We took a series of actions to give a further boost to our cloud-based business.

1. Continued to invest in our SaaS business.

⚫ Gluegent series⚫ Med tech solutions⚫ YourDesk system

2. Bolstered sales of the cloud- and subscription-based versions ofLifeKeeper
3. Expanded API (Application Programming Interface) support
services for corporate clients.

© SIOS Corp. All rights Reserved.

15

Gluegent Series
Both achieved consistent growth in revenue,
as a result of our stepped-up efforts
at product development and marketing.

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

574

624

690

471
333

2018.6381

2019.62020.62021.62022.62023.6

1. 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.

16

Actions to Drive ARR
To drive ARR, we must increase A while stemming B.
Formula for ARR
ARR = MRR × 12 months

AB

MRR = MRR for the previous month + New + Upgrade - (Downgrade + Churn)

New: Revenue increase from new clients
Upgrade: Revenue increase from clients who upgraded to a highertiered subscription plan
Downgrade: Revenue decline from clients who downgraded to a lowertiered subscription plan
Churn: Revenue decline from cancellation of subscription© SIOS Corp. All rights Reserved.

17

Gluegent Series
Developed new features and upgraded customersuccess services to drive ARR.

A. Increase revenue from new and upgrading clients⚫

Made the Gluegent series work better with groupware.
➢⚫

Added an automatic export function to Excel Online to make it work better withMicrosoft 365.

Made the Gluegent series work better with APIs.
➢Enhanced the benefit of its connected cloud services by making it work better with
SaaS apps and enterprise systems to help clients achieve greater efficiency in theirbusiness processes.

B. Stem a revenue decline from downgrading and churning clients⚫

Upgraded customer-success services.
➢Provided end-to-end client support from implementation to operation and end-user
experiences.
© SIOS Corp. All rights Reserved.

18

Gluegent Series
Gluegent Flow

Received a BOXIL SaaS Award for its highly rated
performance.

BOXIL

⚫

Gluegent Flow received a Good Service Award in
the workflow system category for the third
consecutive year in BOXIL SaaS Award Summer2023.

⚫

Rated No. 1 in six evaluation criteria.

Ease of initial setting

No. 1
BOXIL

Summer 2023

BOXIL
Responsiveness ofvendor sales reps

Ease of use

No. 1

No. 1

Summer 2023

Summer 2023

BOXIL

Good Service
Summer 2023
BOXIL

BOXIL
Support quality

Reasonable service
fees

No. 1

No. 1

Summer 2023

BOXIL
Usefulness

No. 1
Summer 2023

Summer 2023

1. Evaluation period: From April 1, 2022, through March 31, 2023
2. A Good Service Award is given to the service that was rated the highest in agiven category by users who posted comments to the BOXIL SaaS website.
3. A service product that received the highest average rating for an evaluation
criterion is rated No. 1 for that criterion. Gluegent Flow received No. 1 ratings in
the following six criteria: Ease of use; ease of initial setting; usefulness; support
quality; responsiveness of vendor sales reps; and reasonable service fees.
© SIOS Corp. All rights Reserved.

19

Gluegent Series
Glugent Gate

We are developing a versatile integrated ID
management system.

A. Increase revenue from new and upgrading clients

We are developing a capability to be
added to Gluegent Gate to centrally
manage IDs of all employees of a clientcompany, as well as those of its affiliates
and business partners.

Personal
identification

Deviceauthentication

IDaaS

IT infrastructure

AccessCloud-based services(SaaS)

Access control

Glugent Gate

Access points

B. Stem a revenue decline from downgrading andchurning clients

⚫

Login
authentication(Multi-factorauthentication)

APIAPI

Integrated ID
management

Factories(suppliers)

Regional offices(contractors)

Head office(employees,temporary workers)

Held briefing sessions for existing users.
➢Educated them on the importance of IDaaS* in a zero-trust* environment.

➢

Demonstrated new features and their application.
© SIOS Corp. All rights Reserved.

20

Med Tech
Added new features and upgraded existing ones in
preparation for its full-scale commercial launch.
⚫

⚫

Product development➢

Updated user-interface designs.

➢Added new features and upgraded existing ones.

Marketing
At the International Modern Hospital Show
2023 in Tokyo, we showcased INDIGONOTE and Gluegent Gate as solutions forproviding hospitals with a safe, versatilesystem environment.

© SIOS Corp. All rights Reserved.

21

YourDesk
Upgrading features and revamping sales
teams helped bolster the sales.
【Sales of YourDesk】

Up 650.6%
YoY

2022年度1H Q2累計
FY2022

Sales for the first halfof FY 2023 soared
from the same period
the previous year.
2023年度1H FY2023
Q2累計© SIOS Corp. All rights Reserved.

22

Example of upgradedfeatureYourDesk

YourDesk
Made it work better with Microsoft 365 and released
iPhone and Android apps.

All the great features of the standalone YourDesk are now available on smartphones.

Menu bar
Click to viewthe floor
seating layout

Select from avariety offeatures on
the menu

Jump to home page, message,
setting page, QR code scanning,and help page

Turn on and off
user namedisplay; chooseseats byattributes

Screenshot of iPhone app© SIOS Corp. All rights Reserved.

23

LifeKeeper
Global sales of LifeKeeper for cloud application havebeen growing.
【Global Sales of the Cloud-based Version of LifeKeeper to First-time Clients 】
Up 14.8%
YoY

Sales of the cloud-based version ofLifeKeeper have been growing globallyto first-time clients who have switched
their enterprise systems from onpremise to cloud environments.

2022
1HFYFY2022
First Half

FY 2023

1H FY2023
First Half

© SIOS Corp. All rights Reserved.

24LifeKeeperLifeKeeper

We have been pushing subscription-based sales ofLifeKeeper in Japan, which have already gained momentum
outside Japan.

【Sales of Subscription-based LifeKeeper Outside Japan】⚫
CAGR 67.3%

Up 25.3%
YoY⚫

1H FY2019

1H FY2020

1H FY2021

1H FY2022

Sales of subscription-based
LifeKeeper have been gaining
momentum outside Japan, where
the cloud is more widely used.
➢Flat-rate subscription➢

Pay-as-you-go subscription

We have started pushingsubscription-based sales ofLifeKeeper also in Japan.

1H FY2023© SIOS Corp. All rights Reserved.

25

API Support Services
We have been upgrading our API-related technologies since we startedoffering API support services in 2017.
⚫

SIOS launched API support services in 2017 in anticipation of the emergence ofAPIs that connect many systems to make them work with each other.

⚫

Since then, we have been hiring and developing talent to continually upgrade ourAPI-related technologies.

⚫

We have designed and developed cutting-edge applications.

APIs© SIOS Corp. All rights Reserved.

26

API Support Services
An API economy has been gaining momentum in scope and scale.
An API enables communications and data exchange among different services. A
company can launch a new service by sharing data with other companies via APIs.
A company makes
its API available toother companies

A company uses APIs ofother companiesAPI

Map appAPICompany

Onlinepaymentapp

Travel service

API© SIOS Corp. All rights Reserved.

27

API Support Services
SIOS provides end-to-end assistance to corporate clients planning tolaunch new services in an API economy.
SIOS leverages its wealth of experience and expertise in building a system inan API economy to provide corporate clients with end-to-end assistance indesigning, developing, and operating an API-based system.

Step
1

Step
4

Assisting in developing
a business model

Assisting indeveloping andtesting a system

Step
2

Assisting in operating
the system

Assisting inencouraging business
partners and users to
use the system

Step3© SIOS Corp. All rights Reserved.

28

API Support Services
Our revenue from API support services has been soaring
after expanding the scope of our services to meet increasingly diverse
corporate needs.
Revenue from Our API Support Services

CAGR 48.2%

Up 46.0%
YoY

1H FY2019

1H FY2020

1H FY2021

1H FY2022© SIOS Corp. All rights Reserved.

1H FY2023
29

Business Forecasts for FY 2023 and Medium-TermBusiness Plan
As stated in the Consolidated Financial Result for the fiscal year ended December
31, 2022, announced on February 2, 2023, the Group has been restructuring its
business operations and bolstering its cloud-based business in order to make its
revenue and profit base more robust.
During the six months ended June 30, 2023, the Group reallocated internal
human resources and chose to focus on businesses that offered a greater chanceof growth and success.
As we are still in the middle of restructuring and are unable to make reasonableassumptions or estimates of forecasts, we are not disclosing at this time theGroup's business forecasts for the fiscal year ending December 31, 2023.
As soon as we are able to make reasonable assumptions and estimates, we will
announce updated forecasts.
© SIOS Corp. All rights Reserved.

30

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 serves as a holding 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

Stock listed on

TSE Standard Market (stock code: 3744)

No. of employees

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

Main consolidated subsidiaries

Japan:
SIOS Technology, Inc.
© SIOS Corp. All rights Reserved.

U.S.A.:
SIOS Technology Corp.

32

GlossaryPage
10101212

132020Term

Description

Software products sourcedOpen-source software products developed by Red Hat, Inc., a provider of openfrom Red Hat, Inc.
source solutions.
A failover software product that automatically switches a failed primary server toa backup server.
A mechanism for software and applications to exchange information with eachAPI
other.
Service products designed to assist corporate clients in achieving greater
operational efficiency using cloud solutions. The series includes the Gluegent Gate
Gluegent series
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.
Short for medical technology.
Med TechIt refers to technology that delivers medical services through software
applications.
A security framework that assumes there is no traditional network edge andrequires all users, whether inside or outside the organization’s network, to be
Zero-trust environment
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
IDaaS
identity and access management of users of multiple services.
LifeKeeper© SIOS Corp. All rights Reserved.

33

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. Significant risks and uncertainties that might affectour 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.

34