Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)
Issued: 12/8/2023● SummaryAlpha-Win Capital Inc. Research Dept.
https://www.awincap.com/

Business Description
・YRGLM Inc. (hereinafter, the “Company”) plans, develops, and sells software related to Internet marketing. It islisted on the Growth Market of the Tokyo Stock Exchange. Its CEO, Susumu Iwata, started the business as a college
student and founded the Company in 2001.
・Its main product is its originally-developed Internet ad effectiveness measurement system (AD EBiS), which has anincredibly high market share (top share in the market). While small in scale, it is a leading company in a niche field.
・ Its strengths are its technological capability enabling highly accurate data measurement, employees with DX
expertise, the big data that it has accumulated as the frontrunner in the field, and its network with more than 500
corporate partners.
・As its main business, it provides cloud services to mid-tier and large companies, based on a subscription-based
business model. Therefore, its business is continuously stable and profitable.
・Since 2016, it had been working on a business model shift and the selection/focus of its business portfolio. Thisbusiness restructuring has already come to an end of a phase and has improved its business foundation and earning
power. The Company has developed business in two segments, the Marketing PF (platform) and the EC PF, and has
been steadily laying the groundwork for growth through M&As in both business segments.
・From its founding to the previous fiscal year, the Company has been hitting record-high sales for 23 consecutive
years (including the period during which results were non-consolidated). Since FY2020 (note that its fiscal year is
September-ending; i.e., FY2020 ended in September 2020), it has continued to stably post a profit and has been
increasing its dividend.
Last Fiscal Year’s Results and This Fiscal Year’s Financial Forecast
・Consolidated results for the previous fiscal year (FY2023: October 2022 to September 2023) were as follows: sales
increased by 8.8% YoY to 3,626 million yen, operating profit declined by 18.8% to 318 million yen, and net profit
also fell by 16.5% to 197 million yen. There were double-digit declines in profit despite an increase in sales. The
Company had revised its full-year forecasts downward (announced as ranges) at the time of the announcement of thefirst-half results, compared to which sales and profits resulted within expectations, with sales almost at the lowest
end of the range and profits at the upper end. Both were also mostly the same level as Alpha-Win Research
Department’s forecasts.
・Sales of the Marketing PF segment were 2,933 million yen (+0.3% YoY) and its profit was 255 million yen (-8.5%
YoY). Sales of the EC PF segment were 709 million yen (+71.2% YoY) and its profit was 66 million yen (-38.4%
YoY). Sales grew and profit declined in both segments.
・In the Marketing PF segment, the unit price of its core service AD EBiS rose (YoY) for the 42nd consecutive quarter,
but its number of accounts continued to decline as the Company struggled to acquire new clients. Since the sales ofthis highly profitable, ad effectiveness measurement business were lower than expected, profit resulted in a decline.
・On the other hand, in the EC PF segment, sales increased significantly due to the expansion of the E-Commerce
Website Building & Operation Support business, especially for EC-CUBE Innovations (former BOKUBLOCK).
However, profits declined due to increased hiring and personnel expenses to strengthen the organization.
・In terms of its financial position, the Company has continued to be essentially debt-free, having accumulated cash
& deposits as well as capital (through its profits). The equity ratio and current ratio are at sufficient levels, and its
financial standing is sound.
・The Company expects to post sales growth and profit decline again this fiscal year, with the achievement of recordhigh sales. It will proactively make the necessary investments under the theme of “refining the growth drivers andsolidifying the foundation for accelerated sales growth in the next fiscal year and beyond.” Consequently, theCompany expects to post a consecutive decline in profit despite an increase in sales. It forecasts sales of 4,100 million
1/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

yen (+13.1% YoY), operating profit of 240 million yen (-24.7% YoY), and net profit of 140 million yen (-28.9%
YoY). The first-half forecast is not disclosed.
・Setting its targeted consolidated dividend on equity ratio (DOE) to 2.5% again this fiscal year, the Company plansto pay an annual dividend of 7.9 yen per share, which is 0.5 yen greater than 7.4 yen per share paid in the previous
fiscal year. It also plans to resume the shareholder benefit program and buy back up to 100 million yen or 200,000
shares as treasury stock, clearly demonstrating its commitment to strengthening shareholder returns.
・We reviewed our forecasts for the current and the next fiscal years (sales are largely unchanged, while profit forecasts
have been revised down), and have prepared a new forecast for the fiscal year after the next. We lowered our sales
forecast for the current fiscal year to 4,000 million yen, which is 100 million yen below the Company’s plan, andlowered each of our profit forecasts to the same amount as the Company’s plan. Given that the current sales are below
the Company’s predicted annual sales growth rate and also the limited contribution of the new services in the current
fiscal year, we believe that sales may fall short of the Company’s forecast unless there is a new M&A during thisfiscal year. On the other hand, we believe that its profit forecasts are achievable through cost control. For dividend,
we expect 7.9 yen per share, which is the same as the Company’s forecast.

Business Strategy and Medium-Term Financial Forecast
・The new medium-term business plan, VISION 2027, aims to draw a clear path toward achieving sales of 10 billion
yen through the two growth drivers of Marketing Process Support and E-Commerce Website Building & Operation
Support.
・In the Marketing DX Support segment (former Marketing PF), the Company will provide a marketing process
support service as SaaS, which is currently under development, to support the customers’ needs for a continuous
cycle of improving advertising effectiveness in their marketing initiatives, along with human resources support. The
Company then plans to strengthen cross-selling in the Marketing Process business, but this would require increasing
the number of employees as well as strengthening its customer base by gaining a greater number of accounts.
・In the E-Commerce Website Building & Operation business of the E-Commerce Support segment (former EC PF),the Company will aim to create a vertically integrated model in which one-stop services are provided for building
and operating websites as well as for marketing activities. In addition, it intends to further expand sales and improve
profitability by developing and providing the EC-CUBE Enterprise Version for large e-commerce websites. It plansto rapidly expand the E-Commerce Website Building & Operation business from 50% of the total sales of the ECommerce Support segment in the previous fiscal year to over 80% in FY2027, the final year of the current mediumterm plan.
・Businesses related to Internet marketing, on which the Company is concentrating its management resources, ande-commerce have a high market growth potential over the medium to long term. Furthermore, since the Company
plans to actively pursue M&A as one of its growth strategies, it is expected to maintain a double-digit annual sales
growth rate (on average).
・Profits will be impacted by the level of investment in development and increase in personnel, since the Company isin its growth phase. The balance between profits and investment costs will be the key point in management. Currently,
it is in the stage of making upfront investments toward achieving high growth in the future. Once the current upfront
investments peak out, we believe that the Company will return to an upward profit trend starting next fiscal year due
to sales growth and profit margin improvement brought by the expansion of its conventional and new businesses inboth business segments.
Stock Price
・The stock price fell after the downward revisions of full-year financial forecasts at the time of the announcement of
the first-half results for the previous fiscal year, and had been at the lowest price range since the Company’s listingon the market. However, in the announcement of the full-year financial results for the previous fiscal year, theCompany presented results that were within expectations and also announced that while it plans to have sales growthand profit decline again for the current fiscal year, it will execute the abovementioned three measures to strengthenshareholder returns (dividend increase, reintroduction of shareholder benefit program, and share buyback). In
response to these, the share price sharply rose from below 500 yen to around 700 yen.

・ The Company’s stock is recognized as an AdTech/subscription-related growth stock oriented toward domestic
demand, which seems to be already reflected in the stock price to a certain extent. Considering the current business
2/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

situation, the stock price seems to be mostly within a reasonable range. In terms of the major valuation indicators, its
valuation is low compared to all stocks listed on the TSE Growth and compared to similar companies but highcompared to all TSE Prime stocks, based on the Company’s financial forecast for the current fiscal year.
・The Company’s stock price is expected to be influenced by the change in the number of accounts which is its new
KPI, profit trends (when profit will begin increasing), monthly sales trends (level of YoY change), and the level ofdividend.
・The launch of the new service of the Marketing Process business, which is expected to become a growth driver, andwhether the Company will succeed in expanding the E-Commerce Website Building & Operation business will be
the major factors that may impact medium-term business performance.
・If the Company returns to a continuous profit growth trend of over 10% and continues to increase dividend, its stock
price may rise over the medium term.
(Note) In this Report, figures for the same item may differ from each other, or from the figures disclosed by the Company, or have amargin of error due to rounding, fractional processing in the calculation process, or presentation methods in the text, figures, etc.

【3690 YRGLM Inc.

Sector: Information & Communication 】 Figure A

FY

Sales

YoY

O.P.

YoY

R.P.

YoY

N.P.

YoY

EPS

BPS

Dividend(million Y)(%)(million Y)(%)(million Y)(%)(million Y)

(%)

(Y)

(Y)

(Y)

2020

A

2,618

18.8

276

226.1

261

230.5

183

To profit

29.1

202.2

4.0

2021

A

2,957

12.9

365

32.0

364

39.5

239

30.7

38.0

257.5

5.2

2022

A

3,334

12.7

392

7.4

399

9.8

236

-1.5

37.7

283.3

7.0

5,000

-

750

-

Initial CE

3,900

17.0

400

1.9

390

-2.5

240

1.7

38.3

-

7.8

2023
2023
2023

OPM = 15% before ⇒ 10% now

DOE = 3.0% before ⇒ 2.5% now-

CE: Average

3,650

9.5

305

-22.4

305

-23.8

185

-21.7

29.5

-

7.4

CE: Lower End

3,600

8.0

280

-28.7

280

-30.0

170

-28.0

27.1

-

7.4

CE: Upper End

3,700

11.0

330

-16.0

330

-17.5

200

-15.3

31.9

-

7.4

2023

A

3,626

8.8

318

-18.8

329

-17.6

197

-16.5

31.4

309.1

7.4

2023

E (previous)

3,650

9.5

310

-20.9

310

-22.3

190

-19.5

30.2

305.4

7.4

2024

CE

4,100

13.1

240

-24.7

230

-30.2

140

-28.9

22.8

-

7.9

2024

New E

4,000

10.3

240

-24.7

230

-30.2

140

-28.9

22.8

323.8

7.9

2025

New E

4,400

10.0

300

25.0

300

30.4

180

28.6

28.6

344.6

8.5

2026

New E

4,850

10.2

350

16.7

350

16.7

210

16.7

33.4

369.5

9.1

2024

Old (previous) E

4,000

9.6

330

6.5

330

6.5

200

5.3

31.8

329.9

8.3

2025

Old (previous) E

4,350

8.7

365

10.6

365

10.6

220

10.0

35.0

356.6

8.9

(Ref) Figures A through C were prepared by Alpha-Win Research Dept.
(Note) “Old (previous)”: previous forecast. “New”: current forecast.
“A”: actual results. “CE”: the Company’s estimate (forecast). “E”: estimate (forecast) by Alpha-Win Research Dept.
“CE: Average” for FY2023: averages of the Company’s forecasted ranges for sales (3,600 to 3,700 million yen), operating profit(280 to 330 million yen), recurring profit (280 to 330 million yen), and net profit (170 to 200 million yen).

【 Stock Price and Valuation Indicators: 3690 YRGLM Inc.】

Figure B
Dividend Yield

Dividend Payout Ratio

Stock Price (Y)697

Last FY (actual)

22.2

2.3

1.1%

23.6%

Shares Outstanding (thou.)

6,372This FY (est.)

30.5

2.2

1.1%

34.6%

Market Capitalization (million Y)

4,442

Next FY (est.)

24.3

2.0

1.2%

29.7%

Dilutive Shares (thou.)

0.0

FY after the next (est.)

20.9

1.9

1.3%

27.2%

Equity Ratio at the End of Last FY

61.4%

2.5%

Lasts FY's ROE

10.6%

Item

12/1/2023

Item

Last FY's DOE

P/E

P/B

(Note) Forecasts/estimates were made by Alpha-Win Research Dept.

3/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【 Stock Chart (end-of-week prices): 3690 YRGLM Inc.】

Figure C

(Y)

3,000

1.20

2,500

Stock price (left axis)

1.10

Price relative to TOPIX (right axis)

1.00
0.90
0.80

2,000

0.70
0.60

1,500

0.50
0.40

1,000

0.30
0.20
1

2

3

08
/2

08
/2

08
/2

)

0
08
/2

Y

9
08
/1

/Y

8
08
/1

M

7
08
/1

(M

6

0.10

08
/1

500

(Note) From the fourth week of Aug. 2016 to the closing price at end of the first week of Dec. 2023 (12/1)【Performance】
PeriodReturnvs. TOPIX
1 month43.7%
35.9%
3 months
21.6%
19.1%
6 months
19.1%
6.5%
12 months
1.2%-15.7%(Note) Prepared by Alpha-Win Research
Dept. Reflects stock price and TOPIX values
through the closing price on 12/1/2023 (mostrecent value). In the calculation of
performance for each period, the stock priceand TOPIX at the end of the last month ofeach period were compared with their mostrecent values. For example, the performance
during the 1-month period is the comparison
between the closing price on the last day ofOctober and on Dec. 1. Similar for the rest.

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Disclaimer
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc.
(hereinafter “Alpha-Win”) on the request of the company presented in this Report.
This Report is not to be construed as a recommendation or solicitation of investment. Alpha-Win shall not beliable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or
reliance on this Report. Investors who read this report must make their own decisions on all investment mattersand take full responsibility regarding their investment.
This Report has been prepared with a focus on objectivity and neutrality based on the analysis of generally accessible
public information and supplemental information including interview(s) by the analyst. Alpha-Win, the writer, and/or
other persons involved in the publication of this Report may already hold, or buy and sell in the future, the stock of thecompany presented in this Report.
Contents of this Report are based on information current as of the issue date and are subject to change without
notice. For the latest (updated) report, please see our website (https://www.awincap.com/). We also do not
warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit forany purpose and do not accept any responsibility or liability.
Copyright of this Report belongs to Alpha-Win and no part of the publication may be copied, photocopied, cited,or translated without our consent.
For inquiries regarding this Report, please send us an e-mail to info@awincap.com. However, Alpha-Win and thewriter of this Report do not have any obligation to reply to inquiries.
MV2023-12-18-1000

4/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Contents
1．Company Overview ........................................................................................................................ P6
A Leading Company in a Niche Market ............................................................................................ P6
Business Philosophy .......................................................................................................................... P8
2．Business Contents and Business Model ........................................................................................ P9
Business Portfolio .............................................................................................................................. P9
Business Details: I. Marketing PF* Segment (New: Marketing DX Support) ................................ P10
Business Details: II. EC PF* Segment (New: E-Commerce Support) ............................................. P13
Change in Segment Names .............................................................................................................. P15
3．Shareholder Composition ............................................................................................................ P16
Change in Composition by Shareholder Type ................................................................................. P16
Major Shareholder Composition ..................................................................................................... P16
4．ESG and SDGs .............................................................................................................................. P17
Environment, Society, and Governance .......................................................................................... P17
SDGs (Sustainable Development Goals) ......................................................................................... P17
5．History of Growth ......................................................................................................................... P18
Past Transition in Financial Results ................................................................................................ P18
6．Market Environment .................................................................................................................... P19
Trends of Japan’s Advertising Market ............................................................................................ P19
7．Last Fiscal Year’s Results and This Fiscal Year’s Company Forecast ................................... P20
Consolidated Financial Results for FY2023 (last fiscal year) ........................................................... P20
The Company’s Forecast of Consolidated Financial Results for FY2024 (this fiscal year) ............. P24
Alpha-Win Research Dept.’s Financial Forecast for FY2024 (this fiscal year)................................ P26
8．Growth Strategy ........................................................................................................................... P29
The Company’s Medium- to Long-Term Business Plan and Strategy ............................................ P29
Alpha-Win Research Dept.’s Forecast of Medium-Term Financial Results ................................... P32
9．Analyst’s View ............................................................................................................................... P34
SWOT Analysis ............................................................................................................................... P34
Shareholder Returns ........................................................................................................................ P35
Stock Price, Trends, and Factors that May Impact Stock Price ...................................................... P35(Note) *PF stands for “platform.”
・On January 1, 2024, EC-CUBE Co., Ltd. (subsidiary for the E-Commerce Website Building & Operation and the Platformbusinesses) will absorb the consolidated subsidiary EC-CUBE Innovations Inc. (former BOKUBLOCK INC.).
・Upon translating to English, when the page numbers differed from the original Japanese version, they were adjusted to those of the
English version of this Report. Note that the Company’s fiscal year is September-ending (i.e. FY2024 ends in September 2024).

5/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

1. Company Overview
w A company that provides

marketing DX support ande-commerce support
services. Top share in theJapanese software market
for Internet ad effectivenessmeasurement and opensource e-commerce website
building.
(1) DX (Digital
Transformation)：transformationand innovations of businesses
and lifestyles using digitaltechnologies(2) Internet advertising
effectiveness measurement tool:
Tool for comprehensively
measuring and evaluating theeffectiveness of various Internet
ads and SEO strategies.
(3) Open source: The source
code, which is basically the
blueprint of software, is madeavailable free of charge, allowing
anyone to revise and redistributeit.
(4) SaaS (software as a service):
A service in which software isused via the Internet (mostly
synonymous with the cloud).
Does not need purchasing of
packaged products. Only thenecessary functions, contents,
and quantity of service are used
via the Internet and paid for.

w Ambitiously developing

new businesses throughM&As. Currently, its main
service is its SaaS (cloud) forInternet ad effectivenessmeasurement. Evolving into
a corporate group ofcomprehensive marketing
DX support through M&A
and in-house development.

w Founded by its CEO
Susumu Iwata. Currently
listed on the TSE GrowthMarket.
w The Company’s group iscomposed of eightcompanies including theCompany.

◆ A Leading Company in a Niche Market
Company Overview
YRGLM Inc. (hereinafter, the “Company”) is a company in the business ofproviding marketing DX1 support and e-commerce support services. It plans,
develops, and sells software related to Internet advertising and e-commerce.
Under its vision to “become a company that supports corporate marketing
activities around the world through data and technology to bring happiness toboth the sellers and the buyers,” the Company has grown its business rapidly
through its originally developed software. It has the top market share withboth AD EBiS, its Internet advertising effectiveness measurement tool2, and
EC-CUBE, its open-source3 software series for building e-commerce
websites. It is a leading company in a niche field.
Currently, its main service is its Internet advertising effectivenessmeasurement system, provided as SaaS4 (cloud service). However, it has been
evolving into a corporate group of comprehensive marketing DX support
through active pursuit of M&A in addition to in-house development.

History
Susumu Iwata, the Company’s CEO, started a web design business in Osaka
as a college student. Following business expansion, he established theCompany in 2001. The Company became listed on the TSE Mothers Market
in September 2014 (now called the TSE Growth Market). It currently has two
main offices, one in Osaka and one in Tokyo.
Consolidated Companies and Trends in Consolidated Results
The YRGLM Group consists of a total of eight companies: the Company, six
consolidated subsidiaries (EC-CUBE Co., Ltd., YRGLM VIETNAM Co.,
Ltd., and the four acquired companies Spoo! Inc., TOPICA Inc., Far End
Technologies Corporation, and EC-CUBE Innovations Inc. which wasformerly BOKUBLOCK INC.), and one equity method affiliate (SAI Co.,
Ltd.) (as of the end of November 2023; Figure 1 on page 7).
During FY2019 (note that the Company’s fiscal year is September-ending),
the EC-CUBE business was carved out of the parent company (became aconsolidated subsidiary after the carve-out). This caused changes in thebalance between the parent company’s results and the consolidated results.
Due to the profitability and solid financial performance of EC-CUBE Co.,
Ltd., sales growth and profit have been maintained for the consolidated
companies excluding the parent (consolidated minus parent company) since
FY2019 (Figure 2 on page 7).
The subsidiaries, which have become included in the consolidated results
upon their acquisition, have expanded their business after the acquisition andhave been contributing significantly to sales growth in the Innovation and the
E-Commerce Website Building & Operation Support businesses. Currently,
each subsidiary seems to be posting a profit. Note that, like past years, theCompany has not announced the forecast figures for its first-half consolidated
results or non-consolidated results.
6/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 1】Summary of Consolidated Subsidiaries and Equity-Method Affiliate (Units: million yen or %)Business and Characteristics

Name of consolidated company

Form

Consolidated subsidiaries(6 companies ⇒ 5 companies)

Date of Acquisition / Spinoff / Merger / Sale

(Acquisition price estimated by Alpha-Win)

Location

Stake

CapitalFoundated Date

Fiscal Year

Sales

Operating Profit Net Profit Total Assets Net Assets

Most recent disclosed data or results as of the time of acquisition

Million yen

TOPICA

Planning and production of video contents and SNS management
service, provided in one stop

Company acquisition (220 million yen)

July 2021

Chiyoda-ku, Tokyo

Approx.
60%

37June 2016

Ended Apr. 2023

Spoo

Web media planning, editing, and production

Company acquisition (several dozen million yen)

December 2020

Chiyoda-ku, Tokyo

100%

10

March 2000

Ended Dec. 2023

78

Far End Technologies

Internet services and information security support services

Company acquisition (130 million yen)February 2022

Matsue-shi, Shimane

100%

8 September 2008 Ended May 2023

157

EC-CUBE

Succeeded the EC-CUBE business from EC PF.
Capital and business alliance with Orico.

Spin-off and business transfer

Kita-ku, Osaka City, Osaka

89.5%

30

October 2018

Ended Sep. 2021

358

119

Chiyoda-ku, Tokyo

89.5%

10

May 2007Ended Sep. 2021

139

-7

Ho Chi Minh City, Vietnam

100%

Acquired shares of EC-CUBE Innovations in Sept. 2023 (worth 100M yen) ⇒ Merger planned

EC-CUBE Innovations(former BOKUBLOCK)

E-commerce website building and cloud-based e-commerce service

YRGLM Vietnam Co., Ltd.

Offshore software development site

Company acquisition (150-200 million yen)Transferred shares of EC-CUBE Innovations (100M yen) from YRGLM to EC-CUBE

January 2019

230

249

January 2024 planned
May 2022
September 2023

Founded

0

171

63

USD 0.2M December 2013

Equity method affiliate (1 company)
SAI Co., Ltd.

Transferred the Company's prevoius e-commerce contractdevelopment businessSpin-off and business transfer

September 201520%

3

April 2004

13

(Ref) Prepared by Alpha-Win Research Department based on the securities report. Net profit of SAI Co., Ltd. is an estimate calculated from the previous fiscal
year's investment income under the equity method.

【Figure 2】Comparison of Consolidated vs. Parent Company’s Sales and Recurring Profit by Fiscal Year
(Units: million yen or %)
A
B
A-B＝C
A/B
A
B
A-B＝C
A/B

Units: million yen or %Consolidated sales
Parent company sales
Consolidated sales - parent company sales
Consolidated sales / parent company sales
Consolidated R.P.
Parent company R.P.
Consolidated R.P. - parent company R.P.
Consolidated R.P. / parent company R.P.

FY2014
1,360
1,360
0
1.00
233.6
245.2
-12
0.95

FY2015
1,437
1,437
0
1.00
352.0
359.0
-7
0.98

FY2016
1,613
1,613
0
1.00
250.3
252.1
-2
0.99

FY2017
1,719
1,719
0
1.00
106.3
106.8
-1
1.00

FY2018
1,804
1,804
0
1.00
-115
-110
-5
-

FY2019
2,204
2,010
194
1.10
79
19
60
4.16

FY2020
2,618
2,317
301
1.13
261
165
96
1.58

FY2021
2,957
2,532
425
1.17
364
278
86
1.31

FY2022
3,334
2,583
751
1.29
399
315
84
1.27

FY2023
3,626
2,476
1,150
1.46
329
232
97
1.42

(Ref) Prepared by Alpha-Win Research Dept. based on the securities report. (Note) Consolidated results starting in FY2014 (the same applies hereinafter).

w As of the end of September
2023, it was essentiallydebtless, with cash &deposits exceeding theamount of debt.

Financial StandingIts free cash flow (FCF) had been negative for some period due to M&As andlarge-scale investments, but since the second half of FY2020 the FCF has
been generally improving and the Company’s capital and cash & deposits
have been accumulating (Figure 3). As of the end of September 2023, its debt
totaled about 630 million yen, while its cash & deposits were about 1,450
million yen. Therefore, the Company is essentially debtless.

【Figure 3】Semi-Annual Change in Cash Flow and Balance of Cash & Deposits
Units: million yen
Operating CF ①
Investing CF ②
Financing CF
FCF（①+②）
Cash and Deposits (on B/S)

FY2015
H1
H2
15
148
-5
-27
-3
0
9
121
666
787

FY2016
H1
H2
48
93
-80
-69
-16
3
-32
24
738
762

FY2017
H1
H2
121
23
-88
-106
-31
-0
33
-83
764
681

FY2018
H1
H2
7
9
-94
-118
169
542
-88
-110
760
1,194

FY2019
H1
H2
99
109
-368
-158
162
-262
-269
-50
924
774

FY2020
H1
H2
92
429
-409
-101
391
-56
-317
328
847
1,119

FY2021
H1
H2
241
333
-35
-313
-1
-23
206
20
1,342
1,392

FY2022
H1
H2
141
292
-183
-261
-195
-121
-42
32
1,214
1,321

FY2023
H1
H2
356
209
-100
-57
-178
-115
256
152
1,408
1,452

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary. H1 = first half. H2 = second half.

w Equity ratio is about 60%,
indicating financial
soundness.

Its total assets are about 3.2 billion yen and its market capitalization is about
3.6 billion yen (based on the closing price of 569 yen on September 29, 2023),
both relatively small. However, its equity ratio is 61.4% and current ratio isgreater than 200%, indicating financial soundness (both as of the end of
September 2023).
Goodwill had increased due to the acquisition of companies and businesses,
but it is now decreasing due to amortization. Since the balance of goodwill asof the end of September 2023 was 360 million yen, which was about 60% of
the EBITDA for the full fiscal year, a lump-sum amortization of the goodwill
is also possible (Figure 4 on page 8).
7/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
Intangible fixed assets, which is a sum of goodwill and 400 million yen in
w Intangible fixed assets
including goodwill havesoftware and software in progress, total 780 million yen. Adding deferred tax
been smaller than the net
assets of 60 million yen to this, the total comes out to be 840 million yen,assets.
which is smaller than the net assets of 1,990 million yen (42%) and therefore

does not pose an issue.

【Figure 4】Change in the Balance of Goodwill and Amount of Amortization
Yearly Goodwill
Goodwill (balance on B/S: million yen) ①
Annual amortization of goodwill (on CF statement: million yen) ②
Average period of amortization (years) ③＝①/②
EBITDA ④
EBITDA/goodwill ⑤=①/④

FY2014000274
0FY2015000373
0FY2016000286
0FY2017000175
0FY2018000
60

FY2019
109
16
7.0
247
0.4

FY2020
316
55
5.8
513
0.6

FY2021
450
84
5.4
638
0.7

FY2022
484
108
4.5
677
0.7

FY2023
362
122
3.0
628
0.6

(Ref) Prepared by Alpha-Win Research Dept. based on information including the financial results summary and briefing materials.

w Estimated to have an
unrealized gain of a little
greater than 1.3 billion yen
owing to its subsidiary’s
shares.

Also, the Company owns 89.5% of the shares of its subsidiary EC-CUBE
CO., Ltd. Based on the amount for which a portion of the subsidiary’s shares
was sold to Orient Corporation (the amount as of November 2020), theCompany is estimated to own shares worth 1.4 billion yen in market value
and an unrealized gain of 1.37 billion yen.
Also, a comparison of the closing price of TOPIX on the last day of
November 2020, which was when the subsidiary’s shares were sold, and themost recent closing price (closing price on the last day of November 2023)
shows an increase of more than 20%, suggesting that the actual market value
and unrealized gain most likely exceed the above amounts.

◆ Business Philosophy
Under its mission, “Impact on the World,” the Company aspires to realize asociety in which companies can grow together with the society by creating
unique values. This philosophy encompasses the Company’s following
concept: “We shall continue to impact each and every thing that we are
involved in, because the accumulation of small impacts that move people’s
heart will eventually create a large momentum that will move the entire
world.”
Also, the Company’s vision is to “become a company that supports corporate
marketing activities around the world through data and technology to bringhappiness to both the sellers and the buyers.”

8/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

2．Business Contents and Business Modelw Worked on restructuring its
business portfolio.
Withdrew from non-corebusinesses andconcentrated businessresources on AD EBiS of
the Marketing PF segment.
In recent years, it has been
expanding its businessagain, including the EC PF,
through acquisitions ofbusinesses and companies
in related areas.

◆ Business Portfolio
Restructuring and Strengthening the Business Portfolio
Since FY2016, the Company had been actively restructuring andstrengthening its business portfolio. It had been increasing its focus on thecore businesses (shifting to AD EBiS of the Marketing Platform segment),
separating its non-core businesses (EC Platform segment), and conducting
M&As (Figure 5). This business restructuring has reached the end of a phase,though, and the Company is currently in the stage of expanding its businessfor the next level of growth.

【Figure 5】Business Restructuring and Segments (Businesses that it withdrew from are highlighted in gray)
Segment Name

Main Service (or company name)① AD EBiS: advertising effectiveness measurement tool

Business Category(1) Advertising Effectiveness Measurement(→ New: Marketing Process)(2) Advertising Agency DX (same as above)

Changes➁ THREe: paid-listing ad management

Withdrew (end of March 2020)① AdRepo: automatic report generation tool foradvertising analysis

Business acquisition (August 2018)➁ Ad-Knowledge: cloud-based project management tool

I. Marketing Platform(→ New: Marketing DX
Support)Started service in May 2020; changed name to ADHOOP in Jan 2021

② eZCX: e-commerce-specialized CX improvement PF

Official version released in July 2021

③ Spoo: web media/design & management services

Acquired as a wholly owned subsidiary (Dec 2020)④ TOPICA: SNS and video marketing support

II. EC Platform（→ New: E-Commerce
Support)Acquired as a wholly owned subsidiary (Jan 2022)(Former "SOLUTION"; transferred from SOLUTION and scaled down)

Parentcompany

EC-CUBE and ec-cube.co: open-source e-commerce
website building

Transferred to EC-CUBE Co., Ltd., in Jan 2019; about 10% of shares sold toOrico; planned to absorb EC CUBE Innovations (former BOKOBLOCK) (inJan. 2024)

Consolidated① EC-CUBE Innovation (former BOKUBLOCK): ecommerce webite building & operation and solutions

Acquired as a wholly owned subsidiary (May 2022) → Changed name to EC
CUBE Innovations (June 2023) → Shares acquired by EC-CUBE (Sept. 2023) → Consolidated
Planned to be closed① E-commerce contract dev. + consulting, etc.

Transferred to SAI Co., Ltd. (equity method; maintained) and Radical Opti Co.,
Ltd. (removed from equity method after transfer)

EquitymethodTransferred to Marketing Platform's *Other

Parentcompany

Former "Professional Service" (DMP business)(1) EC-CUBE（→ New: Platform)(2) E-Commerce Website Building & Operation Support（→ New: E-Commerce Website Building & Operation)

Consolidated

Acquired as subsidiary with about a 60% stake (July 2021)⑤ Far End Technologies: project management tool*OtherParentcompany

Started service in July 2020; ended in January 2023

① AD HOOP: marketing-specialized matching(3) Incubation(previously, "new services")

Note

ADPLAN business (acquired in Jan 2020; merged): ended in March 2021

(3) SOLUTION → withdrew(Of which, DMP business)(Ref) Figure 5-8 were prepared by Alpha-Win Research Dept. based on sources including the Company’s financial results summary and briefing
materials. Words in red in Figure 5 indicate recent changes and schedules.

Business Composition
As of the end of FY2023 (last fiscal year), the Company’s business wascomposed of two segments: I. Marketing PF (short for “platform”) and II. EC
PF.

[Figure 6] Sales and Profit Breakdownby Segment (FY2023: full year)
EC Platform
19.5%

MarketingPlatform

80.5%

20.7%

The Marketing PF segment accounted for about 80% of total sales and total
operating profit in the previous fiscal year (Figure 6). The segment has long
been the driver of the Company’s overall sales growth (transition in sales by
PF segment: Figure 7).

79.3%

FY2023 Full YearSales (outer circle)
Operating Profit (inner
circle)【Figure 7】Transition in Sales by Segment【Figure 8】Transition in Operating Profit by Segment(Units: million yen)
(Million yen)

4,000

Marketing Platform

300

414

3,000

709

150

301

1,000

422
666

0

FY2013

477
883

911

FY2014FY2015539
1,074
FY2016465

1,255

FY2017

142

50

275

1,530

214

100

253

526

1,951

2,318

2,599

2,925

2,933

0

75

107

210
38

FY2019

22

46

39

280

247

199

153

136

78

119

256
108

67

-1

-50

-60

-100

FY2018EC Platform

250
200

358

2,000

Marketing Platform(Million yen)

EC Platform

FY2020

FY2021

FY2022

FY2023-121-150
FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Note) Each segment's sales are a sum of sales to external customers + internal sales + transfers, and profits are before consolidation adjustments (the same shallapply hereinafter).

9/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
Each PF segment’s change in operating profit over the years is as shown in
w Excluding the period ofbusiness restructuring, bothFigure 8 on page 9. Excluding FY2017 and FY2018, during which business
PF segments have been
restructuring was conducted, operating profit (segment’s profit) has been
posting operating profits.
posted in both PF segments for each full fiscal year.

The Company’s business portfolio as of the end of the previous fiscal year is
as shown in Figure 9 (the numbers assigned to each business in Figure 9
match the numbers in Figure 5 and in the descriptions starting from thissection’s description of business contents).

【Figure 9】Business Composition (as of the end of September 2023)
Marketing DX Support Businesses
I. Marketing Platform Segment(1) Advertising(2) Advertising

EffectivenessAgency DX

Measurement

II. EC Platform Segment(3) Incubation

①

①
①

③

Automatic reporteffectivenessgeneration tool formeasurement platform

programmatic ads& Operationcommerce①

Advertising agency
matching platform④

Cloud-based e-

Decentralized video media

commerce platform

management service②

No. 1 sales share

Website Building
Open platform for e-

Creative Agency

AdRepo:Advertising(2) E-commerce(1) EC-CUBE①

No.1 open-source⑤

in Japanʼs ad
effectivenessE-commerce-measurement

specialized CX

market1

improvement platform

software for ecommerce website

Developing and providing

building in Japan byproject management tools

number of users2(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials with some edits and additions.
*1: According to the Japan Marketing Research Organization’s summary of its June 2021 survey on competition in designated areas*2: According to Information-technology Promotion Agency, Japan’s “3rd Open-Source Software Utilization Business Survey”◆ Business Details I. Marketing PF Segment(New: Marketing DX Support)
The Marketing PF segment’s breakdown of sales and change in profit over
the years are shown in Figure 10.

【Figure 10】Change in Sales and Operating Profit of the Marketing Platform Segment
Sales (million yen)

FY2014FY2015FY2016FY2017FY2018

Consolidated

Consolidated

Consolidated

Consolidated

Consolidated

883
883
722
27.3%
161

911
911
822
13.9%
89

1,074
1,074
1,012
23.1%
62

I. Marketing Platform(1) Advertising Effectiveness Measurement(1) ➀ AD EBiS + former ADPLAN (business acquired in Jan 2020)① AD EBiS's sales growth rate (YoY: %)② THREe (withdrew)(2) Advertising Agency DX(2) ① AdRepo➁ Ad-Knwoledge (withdrew)(3) Incubation(3) ① AD HOOP, ② EZCX, ③ Spoo, ④ TOPICA, ⑤ Far End*Other: former Professional Service (DMP)
Segment's Operating Profit
Segment's Operating Margin (%)

1,255
1,254
1,200
18.6%
54

1,530
1,445
1,402
16.8%
43

(Business acquired in Oct 2018 →)FY2019

1,951
1,775
1,747
24.6%
28
124
124

(Spoo acquired in Dec 2020; TOPICA acquired in July 2021; AD HOOP transferred from Advertising Agency DX
starting in FY2021; Far End acquired in Jan 2022 →)(Professional Service, transferred from EC PF →)

142
16.1%

214
23.5%

210
19.5%

153
12.2%

84
-121
-7.9%

FY2020

FY2021

FY2022
FY2023
Consolidated Consolidated
A
B
2,599
2,925
2,933
2,313
2,369
2,229
2,313
2,369
2,229
8.8%
2.4%
-5.9%
0
0
0
182
175
176

Consolidated Consolidated Consolidated

51
46
2.4%

2,318
2,135
2,127
21.8%
8
152
149
3
3

FY2023: YoY Change
B-A(B-A)/A

8
-140
-140

0.3
-5.9
-5.9

0

0.3

89

392

Withdrew
525

133

34.1

3

89

392

525

133

34.1

27
199
8.6%

247
9.5%

280
9.6%

256
8.7%

-24
-0.8%

-8.5

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials and interview. (Note) Includes Alpha-Win’s estimates.

w The Marketing PF segment
is composed of threebusiness categories. AD
EBiS (ad effectivenessmeasurement) is the main
business.

w

I. The Marketing PF segment currently consists of the three main businesscategories (1) through (3) described in Figure 9. During the previous fiscal
year, the breakdown of sales of this segment was as shown in Figure 10 and
Figure 11 on page 11. While the sales proportion of AD EBiS has decreased
compared to before, it still accounted for 76% of the Marketing PF segment’s
sales (61% of the Company’s entire sales).
10/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 11】Breakdown of the Sales ofthe Marketing PF by Business(2) Advertising Agency

6％(1) Ad EffectivenessMeasurement18％(3) Incubation

Marketing 76％
PF
Sales
Breakdown(FY2023)(Ref) Prepared by Alpha-Win Research Dept. based on thefinancial results briefing materials.

w Its core business is AD
EBiS, an originallydeveloped, Internet ad
effectiveness measurement
system. It has the top sharein the market and accounts
for about 60% of theCompany’s entire sales.
Highly stable businessbased on subscriptions.
(5) Subscription model: fees arepaid periodically for the rightto use the service for a certain
period.

(6) Programmatic advertising:An advertising method inwhich optimization of ads is
conducted automatically or
supported immediately. After
submitting an ad, optimizationis conducted, leading to better
results.
w The business foradvertising agencies
consists of only AdRepo,
which fully automates thecreation of reports for
programmatic advertising.
It withdrew from AdKnowledge, a cloud-based
project management
system specialized foradvertising agencies.

w The Incubation businessconsists of the businessesof the 3 consolidated
subsidiaries acquired
through M&As and theCompany’s originallydeveloped products AD
HOOP and eZCX. Total
sales of the Incubation
business grew by 34.1%
YoY.

Below are the current business categories of this PF and their main products(service or product name is in bold and underlined).
(1) Advertising Effectiveness Measurement①AD EBiS
・Internet advertising effectiveness measurement system
・The Company’s originally-developed, core product (incredibly strong
position in the Japanese market with the top share of 86.7 %, according
to the Japan Marketing Research Organization’s summary of its survey
on competition in designated areas for the period ended June 2021).
・ Enables the collective management, measurement, analysis, andvisualization of the effectiveness of Web ads, etc., and helps understandthe cost effectiveness of ads.
・Subscription-based business model5
・Business based on flat-rate, periodic payments. Its sales are determinedby average unit price times the number of active accounts. Both numbers
are key indicators that impact not only the performance of the AD EBiS
business but also of the entire company. Sales in the previous fiscal year
(FY2023) are estimated to have been 2.22 billion yen, having decreased
by about 6% from 2.37 billion yen in the fiscal year before the previous(FY2022) (Figure 10 on page 10).

(2) Advertising Agency DX
This business targeting advertising agencies consists of only the AdRepobusiness (AD HOOP has been moved to the new businesses category andthe Company has withdrawn from the Ad-Knowledge business). Sales in
the previous fiscal year are estimated to have been 176 million yen, which
was 6% of the Marketing PF’s entire sales (same sales proportion as the
fiscal year before the previous; sales have been flat).
① AdRepo
・Fully automatic report-generation tool for programmatic advertising6
・ Cloud service that has been developed to reduce the workload of
advertising agencies
・The business was acquired from another company in August 2018. The
Company plans to continue to focus on expanding this business.
② Ad-Knowledge
・An original, cloud-based project management system specialized foradvertising agencies
・Aimed to support advertising agencies that work with programmatic
advertising in improving their operation and efficiency
・Service was started in July 2020, provided as a subscription service(SaaS). However, the Company withdrew from this business in January
2023.

(3) Incubation (Figure 12 on page 13)① AD HOOP
・Marketing-specialized matching platform that introduces the optimum
solution partner to corporate advertisers to solve their problems and meettheir needs. Released in May 2020, and then moved from the Advertising
Agency DX business. Since March 2023, service domains have been
11/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

expanded significantly from three to twelve. Steadily expanding thebusiness through the acquisition of new projects and cross-selling.
・Sales in the previous fiscal year were 56 million yen (+35.5% YoY; 2%of the Marketing PF’s sales). The challenge is to turn the businessprofitable.
② eZCX・E-commerce-specialized CX improvement platform
・Helps improve CX (customer experience) on websites. Leads to greater
efficiency in acquiring new customers.
・It has been released in May 2021, but the Company is currently limiting
its sales due to the reconsideration of service (sales in the previous fiscal
year and the year before that were only 6 million yen and 4 million yen,respectively).
w Has been acquiring
companies in businesses
related to Internet
marketing as
consolidated
subsidiaries at a pace ofabout 1-2 companies per
year.
w All three acquiredcompanies have beensteadily expanding theirbusinesses, with doubledigit sales growth in theprevious fiscal year.

As described below, the Company has been acquiring companies ofbusinesses related to Internet marketing at a pace of one or two companies
per year as consolidated subsidiaries. All three recently acquiredcompanies are steadily expanding their businesses by leveraging their edge
and synergies.
③ Spoo (Spoo! inc.): consolidated subsidiary (wholly owned)
・Web media and design company. Founded in March 2000 and was
acquired by the Company in December 2020. Contract-development
service provided by a small team. Recruitment has been a challenge.
・Leveraging Spoo’s creativity and talents to integrate with the Company’s
data and technology. Plans to thereby create new values, expand into
more areas of business, and strengthen its competitive edge.
・Sales increased by 33.1% from 59 million yen in the fiscal year before
the previous to 78 million yen in the previous fiscal year.
③ TOPICA: consolidated subsidiary (60% stake)・Founded in May 2016. Acquired in July 2021.
・Developing a marketing support business that utilizes SNS and videos(ranging from the planning and production of video contents to SNS
account management services)
・With the acquisition, the Company plans to expand its business domain
into the rapidly growing social media marketing market and cross-sell
TOPICA’s services to its current client companies (around 1,300
companies). In addition to this, it plans to integrate its data andtechnologies with TOPICA’s SNS marketing business to create andprovide new services.
・Sales increased by 21.7% from 189 million yen in the fiscal year before
the previous to 230 million yen in the previous fiscal year. Steadily
expanding business.
④ Far End Technologies Corporation (hereinafter, “Far End”):
consolidated subsidiary (wholly owned)
・Founded in September 2008. Provides Internet services (SaaS) and IT
security support services.
・Acquired in January 2022 as a wholly owned subsidiary
・Its main business involves the development of the globally well-known,
open-source project management software Redmine and the paid, cloudversion of the software, My Redmine.
12/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

・In recent years, due to increased remote work in response to the COVID19 crisis, there has been greater demand for project progress management.
The number of accounts has been increasing steadily and significant
growth can be expected.
・By leveraging and integrating with the YRLGM Group’s technologies
and expertise, the Company plans to expand its business domains,
increase its competitive edge, and provide new value to customers.
・Sales increased by 61.4% from 97 million yen in the fiscal year before
the previous (sales for the eight months after the acquisition) to 157
million yen in the previous fiscal year (for the entire period).

【Figure 12】Comparison of the Incubation Business’ Sales
Sales of Originally Developed Services(Since May 2020)

Sales of Subsidiaries Acquired Through M&A(Since July 2021)(Since July 2021)(Since Dec. 2020)(Since Feb. 2022)

230
YoY

189

+61.4%
157

YoY

YoY

+35.5%+33.1%

YoY

41

56

（Million yen)

FY202259

Limiting sales due toreconsideration of service

6

4

FY2022

FY2023（Million yen)

FY202397 *+21.7%

78（Million yen)

（Million yen)

FY2022

FY2023（Million yen)

FY2022

FY2023

FY2022

FY2023*Total sales for the first 8 months after acquisition(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials with partial edits

w The EC PF segment consistsof EC-CUBE and the ecommerce website building& operation support services.

◆ Business Details: II. EC PF Segment(New: E-Commerce Support)
Previously, the EC PF segment had only consisted of EC-CUBE. However,with the acquisition of the former BOKUBLOCK INC. (now called ECCUBE Innovations Inc.), the Company has reentered the e-commerce website
building & operation support market (professional services7) (consolidated
starting in June 2022).

(7) Professional services: A
general term for services otherthan the cloud; includes
consulting, accountmanagement, and contractdevelopment.

Significant contribution to the segment’s performance has been achieved
thanks to large synergies with EC-CUBE (Figure 13).

【Figure 13】Change in Sales and Operating Profit of the EC Platform Segment
Sales(million yen)
II. EC Platform(1) EC-CUBE
EC-CUBE's sales growth rate (YoY: %)① Shopping settlement fee② Subscription③ Other
New: (2) E-Commerce Website Building &Operation (EC-CUBE Innovations)
Previous: (3) SOLUTION (transferred/withdrew)
Previous: ① E-commerce contract development,
e-commerce website consulting, etc.
Of which, DMP (transferred)
Segment's operating profit
Segment's operating margin

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022
Consolidated
A
358
414
358
414
18.9%
15.7%
290
253
12
29
54
50

Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated
477
245
18.3%

526
230
-6.1%

539
219
-4.8%

253
253
-0.4%

301
301
19.0%

B-A

(B-A)/A

295
295
55.5%
10
6
7

71.2
71.2

328

0

83

355

272

20

0

0

0

0

0

0

319

257

20

0

0

0

0

0

0

38
7.1%

104
-60
-12.9%

22
8.2%

39
15.4%

78
26.1%

119
33.1%

108
26.1%

67
9.4%

-41
-16.7%

296

319

232

296
136
25.8%

275
254
22.2%

FY2023: YoY Change

257

232

107
22.5%

465
208
-5.2%

FY2023
Consolidated
B
709
709
71.2%
262
35
57

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials and interview.
(Note) Includes estimates by Alpha-Win.

3.8
22.3
14.1

-38.4

13/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18① EC-CUBE
Service Overview
・EC-CUBE is a software platform whereby companies can build and manage
e-commerce (EC) websites on their own.
・The Company provides EC-CUBE as web design software for companies
that will begin selling and providing products or services online. It isprovided as either as the open-source, packaged download version ECCUBE or the cloud version ec-cube.co.
・Characterized by low cost, high customizability, and high usability, it has
the top share in the Japanese market and is the standard platform.

w The EC-CUBE businessprovides software forcompanies to build andmanage e-commerce
websites on their own.
w In addition to thedownload version, thecloud version has beenreleased.

Business Model and Sales Breakdown
・EC-CUBE is based on a freemium model8 in which software is offered for
free, but in return, revenue is earned from peripheral services.
・Revenue comes from shopping settlement fees from official partners using
the software for their Internet businesses (37% of the total sales of this PF
in the previous fiscal year), ec-cube.co’s monthly subscription income(similarly, 5% of the total), and other revenue (function addition fees forplugins, or programs to add functions to software; similarly, 8% of thetotal) (Figure 14).

w Gained top share in theJapanese market.
(8) Freemium model:“Freemium” is a coined wordthat combines “free” and“premium.” Refers to abusiness model that generates
revenue by offering basic
services free of charge whilecharging fees for moresophisticated or specially added
related services.

Each Business’ Financial Performance: II. EC PF Segment (2) ECommerce Website Building & Operation Support
Through an M&A, the e-commerce website building & support business of
EC-CUBE Innovations (former BOKUBLOCK) became included in thissegment starting in the fiscal year before the previous (Q3 FY2022). Fully
entering the professional services business, the Company has been working
on building a one-stop service under a hybrid model linked with EC-CUBE.

w Planning to expand theprofessional services
w The e-commerce website
building & operation
support business grew
sharply thanks to synergies
within the Group.

Sales of the E-Commerce Website Building & Operation Support businesstend to change depending on the orders received for website building projects
and their progress. Since the acquisition, sales have been significantly
growing thanks to synergies within the Group, as it successfully gained large
projects (from the fiscal year before the previous to the previous fiscal year,
its proportion of total sales has jumped from 20% to 50% and its sales haveincreased sharply from about 83 million yen to about 355 million yen).

【Figure 14】Breakdown of Sales of the EC PF Segment (Units: % or million yen)
Shopping settlement Fee

12%
7%

20%

EC PF
Sales
Breakdown(FY2022)

E-commerce website building & operation support

5%

50%

Other

8%

EC PF
Sales
Breakdown

61%

Subscription(FY2023)

EC PF
Sales
Breakdown

37%

80%

(Goal forFY2027)(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials

14/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Change in Segment Names
w Segment names havebeen changed starting thisfiscal year, consolidating
and integrating them into
two segments and fourbusinesses.

The Company has announced that it will change the names of its segments
and businesses starting in FY2024, in order to more clearly express its
business strategy for achieving the goals of its medium-term business plan
VISION 2027 (Figure 15).
The number of segments will remain the same (two segments), but theMarketing Platform will be renamed to Marketing DX Support and the EC
Platform will be renamed to E-Commerce Support.
In the Marketing Platform, the three businesses of Advertising EffectivenessMeasurement, Advertising Agency DX, and Marketing Process Support will
be integrated into Marketing Process. There is no change in the name of the
Incubation business. As a result, the four businesses will be consolidated intotwo.
In the EC Platform, EC-CUBE will be renamed to Platform and E-Commerce
Website Building & Operation Support will be renamed to E-Commerce
Website Building & Operation.
In addition, on January 1, 2024, the consolidated subsidiary EC-CUBE
Innovations Inc. (former BOKUBLOCK INC.) will be merged into ECCUBE Co., Ltd. (EC-CUBE Co., Ltd. will integrate the Platform and the ECommerce Website Building & Operation businesses of the E-Commerce
Support segment to manage them comprehensively.

【Figure 15】Change in Segment Names
Before Change (FY2023)
Segment Name

After Change (Starting in FY2024)
Business NameBusiness Name

Segment Name

(1) Ad Effectiveness Measurement
Focus

I. Marketing
Platform(MPF)(2) Advertising Agency DX

Integrate

1Marketing Process Support(1) EC-CUBE(2) E-Commerce Website Building &Operation Support

I. Marketing DX
Support(2) Incubation(3) Incubation

II. EC Platform(EC PF)(1) Marketing Process

Name
Change(1) Platform(2) E-Commerce Website Building& Operation

Focus

２

II. E-Commerce
Support(Ref) Prepared by Alpha-Win Research Dept. based on an excerpt from the financial results briefing materials with partial edits.

15/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

3．Shareholder Composition◆ Change in Composition by Shareholder TypeRegarding the shareholder composition by shareholder type as of the end of
September 2022 (Figure 16), the proportion of “individuals and others” is by
far the largest at about 92% (data as of the end of September 2023 have notbeen disclosed). The proportions of “financial institutions” and “overseas
corporate entities” are decreasing.

w Individuals hold anextremely high proportionof shares at about 92%.

[Figure 16] Change in Shareholder Composition by Shareholder Type (unit = %)End of Sept. 2014

End of Sept. 2015

End of Sept. 2016

End of Sept. 2017

End of Sept. 2018

End of Sept. 2019

End of Sept. 2020

End of Sept. 2021

End of Sept. 2022

87.90
3.12
0.35
4.49
4.13

94.69
0.47
0.54
3.2
1.10

89.48
1.49
1.07
2.96
5.00

94.69
0.47
0.54
3.20
1.10

93.62
1.40
0.56
1.99
2.43

81.51
8.95
5.88
1.85
1.81

83.29
7.84
2.64
1.78
4.46

91.42
3.91
1.32
1.80
1.55

91.93
2.06
1.34
2.08
2.59

Individuals and others
Financial institutions
Overseas corporate entities
Other corporate entities
Financial instruments business operators(Ref) Prepared by Alpha-Win Research Dept. based on information including the securities report.

◆ Major Shareholder Composition
The major shareholders as of the end of September 2023 are shown in Figure
17. Compared with one year ago, the major shareholders have not changed
except for the Custody Bank of Japan and some of the individual
shareholders.
・ The top three shareholders are Susumu Iwata, the Company’s CEO,followed by the Company’s executive officers (including former executive
officers). Together, they possess more than half of the outstanding shares.
・Previously, the Company’s shares were included as a small portion in
Japanese investment trusts such as “The 2020 Vision” managed by Commons
Asset Management and the “Rakuten Japan New Economy Index Fund
(JANE Index).” While their current status of shareholding is unknown, theshares are mostly likely no longer included in their portfolio.
・As of the end of September 2023, the Company owned about 84 thousand
shares of its own shares (1.34% of all outstanding shares; essentially the
fourth largest shareholder).
・ The Company may use the treasury shares in the future for stock
cancellation, M&A and alliance strategies, or stock-based compensation for
its executives and employees.

w No significant change tothe major shareholders.
Parties affiliated with theCompany (former andpresent directors andexecutive officers plus theemployee stock
ownership plan) possess
about 60% of all shares intotal.

w 複数の国内株式投資信[Figure17] Current Major Shareholders (units: thousand shares or %)託が投資。

(Note) Treasury shares are excluded from the list of major shareholders. Shareholding ratio has been calculated excluding treasury shares.

Susumu Iwata (president and CEO)Hiroichi Fukuda (former executive vice president)
Kanako Mataza (former director and senior executive officer)
YRGLM Employee Stock Ownership Plan
Yoshihisa Yamashita (indiv.)
Hakuhodo DY Media Partners Inc.
Tomonori Yamada (indiv.)
Satoshi Hasegawa (indiv.)
Mitsugu Shirai (indiv.)
J.P. MORGAN SECURITIES PLC
Custody Bank of Japan (trust account)
Custody Bank of Japan (securities investment trust account)
Rakuten Securities, Inc.
Yukio Tanaka (individual investor)
SBI SECURITIES Co., Ltd.
UEDA YAGI TANSHI Co., Ltd.
au Kabucom Securities
Mitsubishi UFJ Morgan Stanley Securities
Japan Trustee Services Bank (former name)
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)
Trust & Custody Services Bank (former name)
GOLDMAN SACHS INTERNATIONALUEDA YAGI TANSHI Co., Ltd.
Katsuyuki Ito (indiv.)
Akiko Takashima (indiv.)
Kenichiro Wade (former outside director)
Yoshio Takayama (indiv.)
Kayoko Nagano (indiv.)
SEPTENI CO., LTD
Matsui Securities Co., Ltd.
Japan Securities Finance Co., LTD.
Yoichi Nishikawa (indiv.)
Akio Shiojiri (former director: audit committee member)(Treasury shares: thousand shares)(Percentage of treasury shares: %)w自 社 株 保 有 比 率 は1.32％で、第 4 位株主に相当。

End of Sept.
2015

End of Sept.
2016

End of Sept.
2017

2,851
1,071
415
76
―
60
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
39
―
―
62
―
30
34
26
0
―

2,817
1,021
415
39
―
60
―
―
―
―
―
―
―
―
―
―
―
―
59
―
―
―
―
―
―
29
―
―
62
36
35
―
―
0
―

2,817
1,021
352
48
―
60
28
―
―
―
―
―
―
―
―
―
―
―
―
60
60
―
―
―
―
29
28
24
―
―
―
―
―
0.045
0.00%

End of Sept.
2018

2,819
961
354
69
―
60
―
―
―
―
―
―
72
―
―
―
―
―
60
―
29
―
―
52
29
―
―
―
―
―
―
―
―
0.983
0.02%

End of Sept.
2019

2,822
801
353
68
―
60
―
―
―
―
―
―
64
―
―
―
―
―
333
―
123
284
113
―
―
―
―
―
―
―
―
―
―
81.423
1.28%

End of Sept.
2020

2,825
781
352
71
―
60
―
―
―
―
221
169
―
―
―
86
62
58
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
64.493
1.01%

End of Sept.
2021

2,827
817
329
66
54
60
33
―
―
35
128
82
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
57.8250.91%

End of Sept.
2022

2,809
779
329
69
54
60
36
37
―
34
103
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
111.580
1.75%

End of Sept.
2023

2,753
805
329
79
68
60
53
37
36
34
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
84.068
1.34%

Shareholding
Ratio

43.77
12.80
5.23
1.26
1.07
0.95
0.84
0.58
0.56
0.53

Ranking

1
2
3
4
5
6
7
8
9
10

(Ref) Prepared by Alpha-Win Research Dept. based on materials including the notice of convocation of the shareholders’ meeting. Words in red
indicate groups and individuals affiliated with the Company, including its current and former directors/officers and the employee stock ownership plan.

16/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

4． ESG and SDGs
w Continuing to work on ESG.

The Company has been continuing to work on ESG as usual, and there has
been no notable change in the most recent year.

◆ Environment
Company’s business is not the kind that harms the environment. It works onconserving energy by saving electricity and other means.

◆ Society
The Company’s business contributes to its users’ operation efficiency
improvement and business expansion through Internet marketing tools.

◆ Governance
The Company has adopted a company system with an audit and supervisorycommittee and delegates board decisions on executions of important businessmatters to directors to enable quick decision-making. Also, by incorporating
an executive officer system and separating business execution fromsupervision, the Company aims to improve management efficiency and speed.

w Half of the directors areoutside directors.
(9) SDGs (Sustainable
Development Goals) are
international development goals
adopted at the UN Summit toachieve a sustainable and betterworld by 2030.
w Working on SDGs throughemployment and services

There are a total of six directors including the CEO Susumu Iwata. Of these
directors, three are outside directors who are also audit and supervisorycommittee members (director from Kobe Steel, Ltd., director from MUFJ Bank,
Ltd., and a certified public accountant). There is currently no woman or personfrom outside of Japan among the directors or the four executive officers who
do not concurrently hold position as director (including the CTO and CAO).

◆ SDGs (Sustainable Development Goals)
Regarding the SDGs9 (Sustainable Development Goals), the Company isworking toward creating a prosperous society by “providing marketing DX
support to contribute to job satisfaction and business growth for our company
as well as our customers,” which is the common goal for its achievement of
the SDGs through employment and services (Figure 18).

【Figure 18】SDGs and Their Initiatives
Our SDGs for Employment

Achieving SDGs through Our Services

Common Goal
NO
POVERTY

GOOD HEALTH
AND W ELL-BEINGQUALITYEDUCATIONDECENT WORK AND
ECONOMIC GROWTHGENDEREQUALITY

REDUCEDINEQUALITIESINDUSTRY,INNOVATION AND
INFRASTRUCTURE

PEACE, JUSTICEAND STRONG
INSTITUTIONSCreating an environment andsystems that support diverse
workstyles as our company grows
and creating sustainable
employment through enhanced
training for people development

Providing marketing DX
support to contribute to job
satisfaction and businessgrowth for our company aswell as our customers

PARTNERSHIPSFOR THEGOALSSupporting marketing DX
through data andtechnology to help
companies create their
growth platforms

Accelerating impact
creation through active
partnerships(Ref) Financial results briefing materials

17/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

5．History of Growth◆ Past Transition in Financial Results
Sales

w Posting record-high sales for

For 23 fiscal years since its founding, sales have been consecutively
increasing and hitting record highs every year. From FY2009 to FY2023, forwhich information is disclosed, sales have increased by about 6.3x from 570
million yen to 3,630 million yen (annual compound rate of +14.1%).

23 fiscal years in a row

w Expanded services throughM&As and developed andreleased unique products andservices that differentiate theCompany from othercompanies. Has grown
rapidly by predicting andmeeting the needs of society
ahead of others.

The Company has grown rapidly by developing and releasing uniqueproducts that can be differentiated from other companies, predicting andmeeting the needs of society ahead of others, as well as by conducting M&As
and increasing employees. Growth has been achieved due to the release andexpansion of cloud services, especially with the rapid growth of its originallydeveloped service AD EBiS of the Marketing PF; the steady growth of the
EC PF’s EC-CUBE along with the growing e-commerce market; and the ECommerce Website Building & Operation Support business that it acquired.

ProfitRegarding profit, the Company had stayed profitable both on a standalone
and consolidated basis up through FY2017. In FY2015, a record-highoperating profit of 350 million yen and a record-high net profit of 231 million
yen were achieved. However, starting in FY2016, the Company’s active
business restructuring and upfront investments had increased the expenses,
leading to a consecutive decline in profit despite increasing sales. In FY2018,
the Company recorded a loss (operating loss of 98 million yen and net loss of
88 million yen) for the first time since becoming listed on the market, due toupfront investments mainly to hire more employees for development andsales (Figures 19 and 20). In FY2019, the Marketing PF’s sales grew by 20%
thanks to its main product AD EBiS, and the Company was able to post bothan operating profit and a recurring profit for the full year in a turnaround.
However, due to extraordinary losses, it posted a net loss for the second
consecutive fiscal year.

w In FY2015, record-high profits
of the time were posted.

w Starting in FY2016, theCompany had conductedbusiness restructuring andupfront investments,
prioritizing acceleration of
future business growth overprofit. Net losses wererecorded consecutively in
FY2018 and FY2019.

w Then, sales increased andcosts improved in a V-shaped
recovery of businessperformance. In FY2021, sales
and profits hit record highs,
and in FY2022, operating andrecurring profit hit record
highs for consecutive years.
Sales growth and profit
decline have been seen sincethen.

In the following year or FY2020, consecutive growth of sales andimprovements in cost resulted in a 3x growth in operating and recurring profit
compared to the previous fiscal year. The Company posted a net profit for the
first time in three fiscal years in a clear, V-shaped recovery. In FY2021, theCompany posted record profits for the first time in six years, and in FY2022,
operating and recurring profits both hit record highs for consecutive years.
Since FY2023, sales growth and profit decline have been seen.

【Figure 19】Transition in Past Financial Results andthe Company’s Forecast for This Fiscal Year
(Units: million yen or %)【Figure 20】Change in the Number of Employees(Units: persons)
250

Sales (left axis: million yen)

Development

Operating profit (left axis: million yen)

Operating margin (right axis: %)

Other

200

5,000.0

50.0%

167

45.0%

4,000.0

40.0%
35.0%

3,000.0

141

150

25.0%
20.0%
15.0%

1,000.0

10.0%
5.0%

0.0

98

100

50

68

71

33

33

35

38

FY2014FY20150.0%-5.0%-1,000-10.0%
FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024
CE

58

184

149

146
141

122

30.0%

2,000.0

236

221

102

120

67

83

74

66

65

64

FY2018FY2019FY2020

FY2021425664FY2016FY201790

80

0FY2022

FY2023(Ref) Figures 19 and 20: Prepared by Alpha-Win based on the securities reports, financial results summary, and financial results briefing materials.
(Note) Consolidated results starting in FY2014; nonconsolidated prior to this. CE = the Company’s estimate/forecast.

18/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

5．Market Environment
Trends of Japan’s Advertising Market◆
w In 2022, Japan’s total

Total Advertising Expenditure
Total advertising expenditure in Japan in 2022 (calendar year; the same
applies to this entire section) hit a record high at about 7.1 trillion yen, having
increased by +4.4% from the previous year. Despite the negative impact of
the rebound of the COVID-19 outbreak, the situation in Ukraine, andinflation, the overall market remained firm thanks to the growth of Internet
advertising expenditure along with the digitalization of the society.

w Internet advertisingInternet Ad Market (Annual)With the digitalization of the society, the e-commerce market boom, andgreater demand for video ads, the Internet advertising market (sum of medium
cost and production cost) grew by +14.3% YoY to about 3.1 trillion yen,maintaining a double-digit growth. From 2005 (point of comparison, set at100) to 2022, the market has grown rapidly by 8.2x (annual growth rate ofabout +13.4%, on a simple average; compound growth rate of +17.6%)(Figure 22). Internet advertising expenditure accounts for about 43.5% of thetotal advertising expenditure (39.8% in the previous year) as the largest
medium. Its proportion has been steadily increasing by several percent every
year (source: Dentsu Inc.’s “2022 Advertising Expenditures in Japan”).

advertising expenditure
was solid and grew by 4%
YoY.

expenditure has been
continuing to grow at ahigh, double-digit rate. It
has become the largest
medium for advertising.

【Figure 21】Change in Advertising Expenditure by 【Figure 22】Change in Monthly Sales of Internet Ads
Medium (Indexation: the year 2005 is set to 100)
900%

(100 million yen)

850%

（％）

1,600

800%
750%

1,400

Internet ads

700%

50.0
Internet sales (left axis)
YoY growth (right axis)
YoY decline (right axis)

650%

The four mass media

600%

Total advertising expenditure

550%

Promotional media

40.0

1,200

30.0

1,000
20.0

500%

800

450%

10.0

400%

600

350%
300%

0.0

400

250%
200%

-10.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2013

2022

Jul

Apr

Jul

Jan

Oct

Apr

Jan

Jul

2021

Oct

Apr

Jan

Jul

2020

Oct

Apr

Jan

Jul

2019

Oct

Apr

Jan

Jul

2018

Oct

Apr

Jan

Jul

2017

Oct

Apr

Jan

Jul

2016

Oct

Apr

Jan

Jul

2015

Oct

Apr

Jan

Jul

2014

Oct

Apr

Jul

Jan

0%

Apr

0

50%

Jan

100%

Oct

200

150%

-20.0

2023

(Ref) Figure 21: Prepared by Alpha-Win Research Dept. based on Dentsu Inc.’s “2022 Advertising Expenditures in Japan”
Figure 22: Prepared by Alpha-Win Research Dept. based on the “Survey of Selected Service Industries” by the Ministry of Economy, Trade, and Industry(reflects monthly data through September 2023).

w The internet advertisingmarket had been solid after
turning to a positive trend(monthly sales), but its
momentum is declining.

Internet Ad Market (Monthly)
The COVID-19 crisis had caused the entire Internet advertising market toshrink on a year-on-year comparison (based on the sales of the advertisingindustry as announced by the Ministry of Economy, Trade, and Industry)
since the beginning of 2020, but the market came back to growth in Octoberof the same year. Since then, the market has maintained a positive growthtrend. It fell to a temporary -2.8% decline in March of this year, but then cameback to a positive trend in April (Figure 22). The Internet ad market is stillsolid, but the stay-at-home consumption has somewhat settled down and themomentum (sales growth rate) has been declining on a monthly basis.
Regarding the Company’s Internet ad business, the business environment ispredicted to remain advantageous for the Company due to the further
digitalization of the society.
19/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

7. Last Fiscal Year’s Results and This Fiscal
Year’s Company Forecast◆ Consolidated Financial Results for FY2023 (last fiscal
year)
Summary
Consolidated financial results for FY2023 (October 2022 to September 2023)
were as follows: sales increased by 8.8% YoY (+292 million yen) to 3,626
million yen, while operating profit declined YoY by 18.8% (-74 million yen)
to 318 million yen, resulting in a double-digit decrease in profit despite thesales growth (Figure 23).

w In the previous fiscal year,
sales increased but profits
declined. Sales reached arecord high.

There was no major nonoperating profit/loss or extraordinary gain/loss posted.
Net profit resulted in a decrease of 16.5% YoY (-39 million yen) to 197
million yen. Full-year sales hit a record high for the 23rd consecutive year.

【Figure 23】Change in Full-Year Results and Comparison
FY2014(Units: million yen or %)Total Sales
I. Marketing Platform
II. EC Platform
Gross Profit
Gross Margin
SG&A Expenses
SG&A Expense Ratio
Operating Profit (by segment)
I. Marketing Platform
II. EC Platform
Operating Margin
I. Marketing Platform
II. EC Platform
Recurring Profit
Net profit

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result)

1,360
883
477
867
63.8%
618
45.4%
249
142
107
18.3%
16.1%
22.5%
234
138

1,437
911
526
956
66.5%
606
42.1%
350
214
136
24.4%
23.5%
25.8%
352
231

1,613
1,074
539
1,044
64.7%
796
49.3%
248
210
38
15.4%
19.5%
7.1%
250
169

1,719
1,255
465
1,123
65.3%
1,030
59.9%
93
153
-60
5.4%
12.2%
-12.9%
106
73

1,805
1,530
274
1,190
65.9%
1,289
71.4%
-98
-121
22
-5.5%
-7.9%
8.2%
-115
-89

2,204
1,951
253
1,561
70.8%
1,476
66.9%
85
46
39
3.9%
2.4%
15.4%
79
-35

2,619
2,318
301
1,832
70.0%
1,555
59.4%
277
199
78
10.6%
8.6%
26.1%
261
183

2,958
2,599
358
2,039
68.9%
1,674
56.6%
365
247
119
12.4%
9.5%
33.1%
364
240

3,334
2,924
414
2,260
67.8%
1,867
56.0%
392
279
108
11.8%
9.5%
26.1%
399
236

FY2023 Comparison with the (revised) Company FY2023 Comparison with AlphaForecast
Win's Forecast (previous)

FY2023

FY2022
Amount(result)

3,626
2,933
709
2,169
59.8%
1,850
51.0%
318
255
66
8.8%
8.7%
9.3%
329
197

Change inAmount or%% Change

YoY

YoY

292
9
295
-90
-8.0%
-17
-5.0%
-74
-24
-42
-3.0%
-0.8%
-16.8%
-70
-39

8.8%
0.3%
71.3%
-4.0%
-0.9%
-18.8%-8.5%-38.4%-17.5%-16.5%

Amount (forecast)

Diff. in Amountor %Deviation Rate

Lower
End

Upper
End

Lower
End

Upper
End

Lower
End

3,600

3,700

26

-74

0.7%

-2.0%

280

330

38

-12

13.6%

-3.6%

8.9% -1.0%

0.1%

-

-

-1
-3

17.5%
15.9%

-0.3%
-1.5%

7.8%

280
170

330
200

49
27

Amount(forecast)

Diff. inAmount or %

3,650
2,970
680
2,310
63.3%
2,000
54.8%
310
8.5%
310
190

-24
-37
29
-141
3.5%
-150
3.8%
8
-0.3%
19
7

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing materials.

w Both sales and profits
landed within expectations.

w The Marketing PF segment
and the EC PF segment
both posted higher sales
but lower profits due toworsened profit margins.

Deviation
Rate

Upper
End

Comparison of Forecasts and Results
The Company had revised its full-year forecasts downward (announced as
ranges) at the time of the announcement of the first-half results. Sales andprofits were within expectations, as sales (3,626 million yen) resulted almost
at the lower end of the forecast range (3,600-3,700 million yen) and profits
reached the upper end of the range (operating profit was 318 million yen
compared to the forecast range of 280-330 million yen; net profit was 197
million yen compared to the forecast range of 170-200 million yen). They
were also mostly the same level as our forecasts (3,650 million yen, 310
million yen, and 190 million yen, respectively).
Financial Performance by Segment: Overview
・Sales of the Marketing PF segment were 2,933 million yen (+0.3% YoY)
and its profit was 255 million yen (-8.5% YoY), while sales of the EC PF
segment were 709 million yen (+71.3% YoY), and its profit was 66 million
yen (-38.4% YoY). In both businesses, sales grew and profits declined.
・In the Marketing PF segment, the unit price of the core service, AD EBiS,
increased (YoY) for the 43rd consecutive quarter. However, the Company
struggled to acquire new customers and the number of accounts continued to
decline, resulting in lower-than-expected sales for the highly profitable
Advertising Effectiveness Measurement business. This was the main reason
for the decline in sales and profit.
20/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

-0.7%
-1.2%
4.3%
-6.1%
-7.5%
2.6%
6.1%
3.7%

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
However, significant growth of the Incubation businesses compensated for
w AD EBiS’s sales decreased.
This was offset by the large
the sales decline of AD EBiS (Advertising Effectiveness Measurement),
increase in Incubation’s
resulting in a slight sales growth for this PF overall. Regarding profit,
sales.
although the amount of loss of the Incubation business has improved, thew The amount of loss
improved for Incubation.
w In the EC Platform, profits
declined due to increased
costs to strengthen theorganization.

increase in costs due to the M&As and the depreciation of the yen also caused
profit to decline.
In the EC PF segment, sales grew significantly because orders increased for
the E-Commerce Website Building & Operation Support business, especiallyfor EC-CUBE Innovations (former BOKUBLOCK). However, profit
decreased due to an increase in hiring and personnel expenses to strengthen
the organization.
Financial Performance by Segment: Marketing PF Segment’s AD EBiSSales and profit growth of the Marketing PF used to be brought by the rise in
the average unit price of AD EBiS, the core business (Figures 7 and 8 on page
9 and Figure 26 on page 22).

w The unit price of AD EBiS
rose YoY, but its number ofaccounts have continued to
decline. Ad effectivenessmeasurement’s sales
declined by about 6% YoY.

However, while the rate of increase in the average unit price has slowed down,
the decline in the number of accounts could not be stopped, resulting in a
YoY sales decline of AD EBiS in the previous fiscal year (Alpha-Win
Research Department estimates this decline to have been about -6%) (forreference: quarterly change in estimated sales in Figure 26 on page 22).
The average unit price has increased from 164,745 yen as of the end of Q4
FY2022 (+Y12,609 or +8.3% YoY) ⇒ 163,200 yen as of the end of Q1
FY2023 (+10,964 yen or +7.2% YoY) ⇒ 167,976 yen as of the end of Q2
FY2023 (+10,655 yen or +6.8% YoY) ⇒ 169,264 yen as of the end of Q3
FY2023 (+9,461 yen or +5.9%) ⇒ 166,931 yen (+2,186 yen or +1.3%) as ofthe end of Q4 FY2023 (Figure 24 on page 22).
On the other hand, the number of active accounts has continued to decline, inthe same order, from 1,183 ⇒ 1,162 ⇒ 1,121⇒ 1,074 ⇒ 1,061 (-122 or 10.3% YoY as of the end of last fiscal year’s Q4) (net QoQ decline for 14
quarters in a row; Figure 25 on page 22).

w The churn rate hasremained flat.
w Struggling to acquire newcustomers.

(10) Third-party cookie
Regulations: Regarding privacy
protection regulations, see page
23 of Alpha-Win’s Company
Research Report published in
December 2022.

In addition, the churn rate has remained flat at around 2.3% to 2.5% since Q2
FY2022 and has shown no signs of recovery.
The main reason for the decline in the number of accounts in the previous
fiscal year was that the acquisition of new customers was below expectations,while there was a certain number of cancellations as usual.
With the third-party cookie regulations10, users have been consolidating theirad placements to major platforms, which have caused increasing market
domination by the major players (e.g., the migration to GA4, the Google
Analytics 4 property for access analysis). The Company analyzes that themain reason for the slow acquisition of new customers is that, as a result of
this trend, customer needs have been declining for AD EBiS whose strengthis its ability to measure across multiple media.

21/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 24】Change in the Average Unit Price of AD EBiS (quarterly; units of yen)(Y)

169,264
167,976 166,931

164,745
159,803

160,000

163,200

157,321

ADPLAN acquired

140,000

152,236

152,136
146,310141,086
135,930

120,000

126,825

Change in pricesystem100,000

124,032
120,070

Seasonalchange fromQ4 to Q1

111,587
107,143
102,262
98,042
86,62180,00084,91879,52560,00040,000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4期
2015/9FY2015期
2016/9FY2016期
2017/9FY2017期
2018/9FY2018期
2019/9FY2019期
2020/9FY2020期
2021/9FY2021期
2022/9FY2022期
2023/9FY2023(Ref) Figures 24 and 25 were prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing
materials. Figure 26 is based on Alpha-Win’s estimates.

【Figure 25】Change in the Number of Accounts of AD EBiS (quarterly; units of number of accounts)
ADPLAN

Change inprice system(# of accounts)

1600

acquired

1,569

1500

1,518
1400

1,513

1,543
1,464

1,516

1,451

1,433
1,425
1,438

1300

1,413
1,363
1,311
1,290 1,244
1,216
1,281

1,183

1200

1,162
1,121

1,074

1100

1,061

1000
900
800
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4期
2015/9FY2015期
2016/9FY2016期
2017/9FY2017期
2018/9FY2018期
2019/9FY2019期
2020/9FY2020期
2021/9FY2021期
2022/9FY2022期
2023/9FY2023【Figure 26】Change in Estimated Sales of AD EBiS (quarterly; units of million yen)
700

600

500

400

300

200

100

0

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3FY2011期 2012/9
FY2012期 2013/9
FY2013期 2014/9
FY2015期 2015/9
FY2015期 2016/9
FY2016期 2017/9
FY2017FY2018期 2019/9
FY2019FY2020
FY2021
FY2022
FY2023期
期 2018/9期 2020/9
期 2021/9
期 2022/9期 2023/9
2011/922/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Trends in Overall Profit Margin
Partly due to M&As causing changes in the business mix, the gross margin
fell by 8.0 percentage points from 67.8% in the fiscal year before the previous
to 59.8% in the previous fiscal year (Figure 27). Meanwhile, SG&A expenses
decreased by 0.9%, which was much smaller than the rate of increase in sales(+8.8%). Consequently, the SG&A expense ratio declined by 5.0 percentage
points from 56.0% to 51.0%. As a result, in the previous fiscal year, theoperating margin declined by 3.0 percentage points from 11.8% to 8.8%.

w Gross margin worsened,but operating margin
improved thanks to
improvement of the SG&A
expense ratio.

【Figure 27】Transition in SG&A Expense Ratio and Profit Margins (Units: %)Gross margin

（％）

90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
-10.0

66.5

63.8
45.4

64.7

42.1

65.3

71.4

70.8

65.9

66.9

SG&A expense ratio

70.0

68.9

67.8
59.8

59.9

59.4

56.6

56.0

10.6

12.4

11.8

FY2020

FY2021

FY2022

49.3

24.4

18.3

O.P. margin

15.4
5.4

3.9

51.0

8.8

5.9

-5.5
FY2014FY2015FY2016FY2017FY2018FY2019FY2023

FY2024 CE(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

Analysis of Factors that Increased/Decreased Last Fiscal Year’s Profit
Figure 28 shows an analysis of the factors that caused profit to increase or
decrease in the previous fiscal year. As mentioned earlier, sales of theMarketing PF only grew slightly (+8 million yen YoY), but the sales growthof the EC PF (+294 million yen YoY) contributed largely to profit. Reductionof rent expense and advertising expense also helped increased profit.

w Sales increased, but could
not absorb the increase incosts, which were mainly
due to personnel expense,
resulting in a double-digit
decline in profit.

On the other hand, the increase in personnel expense in both segments (totalof +344 million yen YoY) and the higher server management expense due tothe weaker yen (+23 million yen YoY) could not be offset, resulting in a profit
decline (-74 million yen YoY).

【Figure 28】Factors that Impacted Full-Year Operating Profit in FY2023 (YoY comparison)(Million yen)

800

294

700

-10
600

-67
Rent expensedecreased due torelocation of the
Osaka Office.

500
400

392

8

-277

300

Increase

200-34

Personnel expense increased dueto the expansion of the ECommerce Website Building &Operation Support businesses.

100
0Decrease

FY2022
Operating
ProfitMarketingPF sales

EC PF
sales

Cancellation Marketing EC PF
ofPF
personnel
intersegment personnel
expensesales
expense

32
-23

-13

30

0

318

-12

Server expense
increased due to theimpact of foreignexchange.

Transfer ofGoodwill
Serverin-house maintenance amortideveloped
zationexpenseassetsTravel andtransportation
expenses

Rent
Advertising Other
expenseexpenseexpenses

FY2023Operating
Profit(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

23/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Quarterly Change in Results
Both in the first quarter (Q1) and the second quarter (Q2) of the previous
fiscal year, sales and profit grew YoY at double-digit rates, profits were athigh levels, and sales reached record highs in both quarters.

w Sales and profit grew atdouble-digit rates in bothQ1 and Q2. Profits werealso at high levels. In
contrast, in Q3 and Q4
there was a slight increasein sales and a significant
decrease in profit.

In contrast, both the third quarter (Q3) and the fourth quarter (Q4) saw onlya slight, single-digit YoY increase in sales, resulting in a significant decreasein profit.
Regarding the quarterly trends in operating profit (Figure 29), in Q2 FY2019(January to March 2020) the Company became profitable for the first time inseven quarters. Since then, it has maintained an operating profit for 19
consecutive quarters in a row through Q4 FY2023 (July to September 2023).
The operating margin had also remained stably above 11% for 12 consecutive
quarters. However, although sales have continued to increase in Q3 and Q4of the previous fiscal year, the operating margin fell sharply to around 6%
due to upfront investment costs. Operating profit halved as a result.

w Operating margin declinedin the second half of theprevious fiscal year due toupfront investment costs,
and the quarterly
operating profit halved.

【Figure 29】Quarterly Transition in Operating Profit(Million yen)

Strategic Investment Phase

140

Growth Phase
Acquired
ADPLAN

Stepwise withdrawal
from e-commerce
contract dev. business

120
100

Changedcompany
name

43
35

80
41

60
22 19

9

33
22

40

24

20

41 35 41
28 35 36

11
4
67 69
36

Acquired
AdRepo

77
45 50

60

-40

EC Platform Segment

17

17
52
25

-1

Marketing Platform Segment

38

39

19

21 17 16 34

46 30

27
26

13

0
-20

35

15

14

-8 -11-38-44 -37

30 9 33
1-23-15 -21
-1

3

8

80

79
51 51

47 53

65 70 72 62 74 71

86

2

9

48 49

15
-4
Profit increased due to transfer
to assets associated with major
function development

-5

-3

-60

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summaryw Thanks to the business
transformation, it has beensteadily posting a profit.

w It expects double-digit
growth in sales anddecline in profit, whileachieving record-highsales. Profits are expected
to decline for the second
consecutive fiscal year due
to upfront investments.
However, the Company
plans to increase
dividends.

The Company has been stabling posting a profit mainly due to sales growth,
but also due to the firm profit of AD EBiS, withdrawal from the unprofitablebusinesses, improved profit of EC-CUBE, acquisition of promisingbusinesses, the development of new businesses, transition from a pay-as-yougo system to a subscription-based business model, and the improvement of
the gross margin and SG&A expense ratio through cost control.

◆ The Company’s Forecast of Consolidated Financial
Results for FY2024 (this fiscal year)
Full-Year Forecast
For this full fiscal year, the Company forecasts sales to be 4,100 million yen(+13.1% YoY), operating profit to be 240 million yen (-24.7% YoY),
recurring profit to be 230 million yen (-30.2% YoY), and net profit to be 140
million yen (-28.9% YoY). While it expects double-digit sales growth andconsecutive achievement of record-high sales, it expects a nearly 30% decline
in profit due to continued investment in growth areas. However, it intends toincrease dividend again for the current fiscal year, even though it will be thesecond consecutive fiscal year with a decline in profit (Figure 31 on page 28).
24/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w The Company plans tosolidify its foundation forgrowth in the current fiscal
year.
w For its KPIs, it plans toreverse the number ofaccounts and increase thesales proportion of ECommerce Website Building& Operation.
w The monthly sales
momentum (YoY) is
declining.
w Cumulative sales of Octoberand November of this fiscal
year have risen by 4.2% YoY.
The sales growth rate has
been lower than the
Company’s forecast of 13.1%
for the full fiscal year.

Note that the Company does not disclose its forecasts of sales, profit, grossprofit, and SG&A expenses by business segment for the current fiscal year,or the KPI goals that it plans to achieve by the end of the current fiscal year.
Since the theme for this fiscal year is “refining growth drivers and solidifying
the foundation for accelerated sales growth in the next fiscal year and beyond,”
the Company will focus on its areas of growth. As its KPIs, it plans to raise
the number of accounts in the Marketing Process business of Marketing DX
Support (aiming to reverse the trend) and the sales proportion of the ECommerce Website Building & Operation business of E-Commerce Support.
Current Situation (monthly sales)
Figure 30 shows the monthly sales trend for the current fiscal year as
announced by the Company.
On a companywide basis, sales have continued to increase at a single-digit
rate from October to November of this fiscal year (+4.2% YoY for the sumof the first two months). Momentum in terms of the sales growth rate has
somewhat declined compared to data over the past several years. The rate has
also been lower than the Company’s forecasted sales growth rate of +13.1%
for the current fiscal year.

【Figure 30】Recent Monthly Change in Sales (flash report)(Upper row is sales with units of thousand yen; lower row is YoY change with units of %)Calendar Year
Fiscal Year
Monthly Sales
Marketing DX Support(Previous: Marketing Platform)
E-Commerce Support(Previous: EC Platform)
Entire Company

October
232,034
93.5
72,280145.9
304,315
102.2

November
243,99198.1
65,678153.7
309,670
106.2

2023
FY2024
Cumulative Sum of the Two Months
476,025
95.8
137,958149.5
613,985
104.2

Units

thousand yen% YoY
thousand yen% YoY
thousand yen% YoY(Ref) Prepared by Alpha-Win Research Dept. based on the monthly announcements posted on the Company’s website.
(Note) The values shown for October and later are preliminary data before an audit by an auditor and may become revised in the future.

w Marketing PF ’s sales havecontinued to decline YoY in
October and November.

By business segment, monthly sales in October and November for the mainMarketing DX Support segment fell by -6.5% and -1.9% YoY, respectively,
marking the eighth consecutive month of YoY sales decline since April 2023.
Since the sales of Incubation and the former Advertising Agency DX of thissegment appear to be solidly growing, the sales decline is most likely mainly
due to the decreased sales of the former Advertising EffectivenessMeasurement. The downward trend in the number of AD EBiS’s accounts
may still be continuing in the current fiscal year.

w A high growth rate has been
maintained for the sales of
the E-Commerce Support
segment.

The E-Commerce Support segment has been performing well due to the ECommerce Website Building & Operation business, with double-digit sales
growth continuing even after July 2023, when the positive effects of theacquisition of EC-CUBE Innovations Inc. (former BOKUBLOCK INC.) had
faded.

25/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Alpha-Win Research Dept.’s Financial Forecast for
FY2024 (this fiscal year)
w Considering the results of theprevious fiscal year and thecurrent situation, we haverevised our profit forecasts
for this fiscal year downward.
w As our new forecasts, wepredict that sales will besomewhat lower than the
Company's forecast, but eachof the profits and dividend
will be the same as theCompany.

w The Company's profit
forecasts for this fiscal year
are conservative and seem
generally achievable.

w Profit margin is assumed to
decline sharply. There isroom for cost control andlimited downside risk.

w The sales situation of thethree new services of theMarketing PF segment will
be a key point.

w No details currently available
for the new service ofMarketing Process Support
that is planned to belaunched.

Revisions to This Fiscal Year’s Forecast
Based on the results of the previous fiscal year, the current situation, andinterviews with the Company, we reviewed our sales and profit forecasts forthe current fiscal year (Figure 31 on page 28). We maintained our sales
forecast of 4,000 million yen, but revised downward our operating profit
forecast (from our previous forecast ⇒ our new forecast) from 330 million
yen ⇒ 240 million yen and our net profit forecast from 200 million yen ⇒140 million yen. Our new forecast is 100 million yen (-2.4%) lower than the
Company’s forecast for sales, but the same as the Company’s forecasts foreach of the profits. We also expect dividend to be 7.9 yen per share, which isthe same as the Company’s plan.
Estimates/Assumptions Used in the Forecasts
We made the following estimates and assumptions in forecasting this fiscal
year’s financial performance.
1. Companywide sales: Judging from the rate of sales increase in October andNovember and the current situation, sales growth in the first half may fallshort of the sales growth rate of 13.1% that the Company expects for thefull year. Due to the investment cost of the new service and the timing of
its launch, both sales and profits for this fiscal year are expected to depend
largely on the second half. If development and sales of the new service
proceed smoothly, the Company may be able to mostly achieve its plan,
but we made a somewhat conservative forecast in light of the risks involved.
2. Companywide profit: The operating margin is expected to fall sharply
from 8.8% in the previous fiscal year to 5.9% planned for this fiscal year
(almost the same level as the margin of 6.0% in the second half of theprevious fiscal year), resulting in an operating profit decline of about 24.7%.
Since there also seems to be room for various cost control including
investments, the risk of a sharp decline from the forecasted profit seems
small.
3. New services: The following three new services of the former Marketing
PF segment need to be evaluated for their sales status.
・GSP (Growth Step Program) launched in late July 2023: A plan thatprovides AD EBiS at a special price of 50,000 yen/month for the first two
years to new customers in their growth phase, after which the plan will beshifted to a higher plan of 100,000 yen/month or more.
・CAPiCO, launched in late August of the same year: A conversion API
tool that compensates for conversion loss in advertising media due tocookie measurement restrictions, available for 15,000 yen/month on its
own or for an additional fee of about 5,000 yen/month when it comes as aset with AD EBiS.
・New service of Marketing Process Support that will be developed andlaunched this fiscal year: Its overview, pricing, etc.
However, we have not factored these new services into sales by a large
amount (we estimate the sales of GSP + CAPiCO to be 15 million yen forthis fiscal year). Sales prediction is especially difficult since the pricing
structure and service content of the new service of Marketing Process
Support have not been disclosed yet. Its impact on this fiscal year’s results
is also likely to be limited in terms of the proportion of the year (themaximum contribution to this fiscal year’s results is about three months;
26/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w The contribution of newservices to earnings is
expected from next year
onward.
w The new services, including
GSP and CAPiCO, are basedon the subscription model, so
their impact on earnings thisfiscal year is expected to belimited.
w We expect AD EBiS's unit
price based on theconventional standard togradually increase YoY.
w The unit price will appear to
decline due to the lowerpriced service.
w We expect the number ofaccounts under theconventional standard to
decrease again this fiscal year
on average.

we have included about 21 million yen as the sales of the Marketing
Process Support’s new service in this fiscal year’s forecast). Since all ofthese services are subscription-based businesses, there will be a certain
time lag before they contribute to earnings. We believe that they will notmake a full-scale contribution to earnings until the next fiscal year at theearliest.
4. Unit price of AD EBiS: This fiscal year’s average unit price of AD EBiS(average of the price at the end of each quarter) under the conventional
standard has been assumed to be 167,000 yen, down from 175,000 yen in
our previous forecast. We predicted that it will be flat compared to theprevious fiscal year’s actual average price of 166,843 yen (166,931 yen at
the end of last fiscal year’s Q4). Given the change in the product mix due
to the new, lower-priced service, the average unit price will most likely
appear to decrease. However, in order to ensure continuity between our
forecasts for the current fiscal year and beyond, we have made forecasts of
AD EBiS (under the conventional standard) and the new services separately
based on their unit price, number of accounts, and sales.
Number of Accounts of AD EBiS: On the other hand, the number ofaccounts of AD EBiS, under the conventional standard, has continued to
decline below our expectation. The number of accounts is expected toaverage 1,060 this fiscal year, decreasing by about 45 accounts from theprevious fiscal year’s average of 1,105 (for reference: our previous forecast
was 1,090 for this fiscal year’s average and the actual number at the end of
the previous fiscal year was 1,061).
However, since the standard for recording the number of accounts will bechanged from this fiscal year, the overall number of accounts is expected
to increase due to the increase in low-priced services (in calculating thenumber of accounts, when a user subscribes to a plan in which CAPiCO
comes as a set with AD EBiS, it is only counted once).

w We expect the number ofaccounts to reverse under the
new standard.

w The downward revision has
been made mainly due to therevised assumptions for AD
EBiS.

Our forecast is based on the assumption that CAPiCO’s number of accounts
will increase by approximately 100 accounts per year (however, since mostof these are assumed to come as a set, they will largely not be added to thenumber of accounts). Similarly, we assumed that the number of accountsof GSP will also increase by approximately 100 accounts during the fiscal
year. However, both of these services are cheaper in terms of unit pricethan AD EBiS. Estimating their sales based on the average number ofaccounts during the fiscal year (50 accounts each), their contribution tosales and profit growth can be expected to be limited.
Sales of AD EBiS: As a result, we expect the full-year sales of AD EBiS(based on the conventional standard) to decline by about 100 million yen
from 2,222 million yen in the previous fiscal year to 2,124 million yen in
the current fiscal year (we have revised down our sales forecast by about
200 million yen compared to our previous forecast). We have also lowered
our forecast for profits, given the high marginal profit ratio of AD EBiS.
This forecasted decline in profit from the previous fiscal year and the
downward revisions of this fiscal year’s sales and profit forecasts from ourprevious forecasts are mainly due to the revision of the assumptions for AD
EBiS.
5. Advertising Agency DX and Incubation: In the Marketing DX Support
segment, the former Advertising Agency DX is expected to post a slightincrease in sales (from 176 million yen in the previous fiscal year to 180
27/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Slight increase in sales is
expected for the entire
Marketing DX Support
segment.

w We revised the E-Commerce
Support segment's forecasts
upward, expecting growthin sales and profit.

w We forecast a decrease inprofit since increased costs
will negatively impact
profit.

million yen in the current fiscal year; the same order shall apply hereinafter).
Meanwhile, Incubation is expected to continue to post an increase in sales(from 528 million yen to 610 million yen), offsetting the decline in sales ofthe former Advertising Effectiveness Measurement. As a result, for theentire Marketing DX Support segment, we expect sales to slightly increase(2,933 million yen to 2,950 million yen).
6. E-Commerce Support segment: Performance of the E-Commerce Support
segment will be impacted by whether there will be large projects. However,orders for E-Commerce Website Building & Operation have been strong
and this segment is expected to continue contributing to earnings. For thesereasons, we have made upward revisions to our previous forecast for sales
and profits. For the current fiscal year, we forecast this segment’s sales andprofits to both increase, reaching sales of 1,050 million yen (+341 million
yen or +48.1% YoY) and profit of 100 million yen (+34 million yen or+51.5% YoY).
7. Profit margin and SG&A expenses: We conservatively forecasted thegross margin to be 56.0%, the same level as Q4 of the previous fiscal year.
We also assumed that SG&A expenses will increase significantly (from1,850 million yen to 2,000 million yen; +150 million yen or 8.1% YoY),
mainly due to personnel, advertising, and sales promotion expenses. We
predict that profit will decline because upfront investment costs will exceed
the positive impact of the increase in sales.
8. M&A: Sales and costs associated with acquiring companies and businesses
during the fiscal year are uncertain. However, we do not expect any new
M&A in the current fiscal year.

【Figure 31】Transition in Results and Forecasts for This Fiscal Year and the Medium Term
(Million yen)
Sales
I. Marketing PF

FY2022 Results

FY2023 Results

3,334

3,626

2,925

II. EC PF

414

Gross Profit
Gross Margin
SG&A Expenses
Ratio to sales
Operating Profit
Ratio to sales
Recurring Profit
Ratio to sales
Net Profit
Ratio to sales
Sales (YoY growth rate)
I. Marketing PF
II. EC PF
Gross Margin (diff. from last FY)
SG&A Expenses (growth rate)
Operating Profit (growth rate)
Recurring Profit (growth rate)
Net Profit (growth rate)
EBITDA
Estimates/Assumptions for AD EBiSAD EBiS: # of active accounts
Conventional standard% change for the above
AD EBiS: average unit price (yen)Conventional standard% change for the above
I. (1) Former Ad Measurement (AD EBiS):
Actual/Forecasted Sales
I. (4) Post-cookie (CAPiCO) + low price (GSP): Sales
I. (2) Former Advertising Agency DX: Sales
I. (3) Incubation: Sales
I. (5) Marketing Process and its new service: Forecasted Sales
I. Former Marketing PF （1）+ （2）+ （3）+ （4）+ （5）II. Former EC PF （1）+ （2）(1) Former EC-CUBE(2) E-Commerce Website Building & Operation; former BOKUBLOCK

2,260
67.8%
1,867
56.0%
392
11.8%
399
12.0%
236
7.1%
12.7%
12.5%
15.6%
-1.2%
11.6%
7.4%
9.8%
-1.5%
677
Annual Average(result)
1,231
-8.4%
158,527
10.2%
2,369

FY2024 CE

4,100
Empty cell: not
2,933
disclosed
Same as above for709
the rest
2,169
59.8%
1,850
51.0%
319
240
8.8%
5.9%
329
230
9.1%
5.6%
197
140
5.4%
3.4%
8.8%
13.1%
0.3%
71.2%
-8.0%
-0.9%
-18.8%-24.7%-17.6%-30.2%-16.5%-28.9%
628
Annual Average Annual Average(result)(forecast)
1,105-10.2%
166,843
5.2%
2,222

175
380

176
528

2,925
414
330
84

2,933
709
354
355

FY2024 New E

FY2025 New E

FY2026 New E

FY2024 Previous E

FY2025 Previous E

4,000

4,400

4,850

4,000

4,350

2,950

3,200

3,500

3,235

3,530

1,050

1,200

1,350

765

820

2,240
56.0%
2,000
50.0%
240
6.0%
230
5.8%
140
3.5%
10.3%
0.6%
48.1%
-3.8%
8.1%
-24.7%-30.2%-28.9%
540
Annual Average(forecast)
1,060
-4.1%
167,000
0.1%

2,500
56.8%
2,200
50.0%
300
6.8%
300
6.8%
180
4.1%
10.0%
8.5%
14.3%
0.8%
10.0%
25.0%
30.4%
28.6%
600
Annual Average(forecast)
1,080
1.9%
170,000
1.8%

2,800
57.7%
2,450
50.5%
350
7.2%
350
7.2%
210
4.3%
10.2%
9.4%
12.5%
0.9%
11.4%
16.7%
16.7%
16.7%
650
Annual Average(forecast)
1,090
0.9%
172,000
1.2%

2,455
61.4%
2,125
53.1%
330
8.3%
330
8.3%
200
5.0%
10.3%
10.3%
7.9%
1.6%
14.9%
3.5%
0.2%
1.5%
645
Annual Average(forecast)
1,100
-0.5%
175,000
4.9%

2,660
61.1%
2,300
52.9%
365
8.4%
365
8.4%
220
5.1%
8.7%
9.1%
7.2%
-0.2%
8.2%
10.6%
10.6%
10.0%
675
Annual Average(forecast)
1,115
1.4%
185,000
5.7%

2,124

2,200

2,250

2,310

2,475

15
180
610
21
2,950
1,050
355
695

100
200
650
50
3,200
1,200
360
840

170
210
770
100
3,500
1,350
370
980

25
200
650
50
3,235
765
365
400

50
205
700
100
3,530
820
370
450

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary and briefing materials. Sales of segments include estimates madeby Alpha-Win.
(Note) CE: the Company’s forecast/estimate. E: Alpha-Win’s forecast/estimate. The actual and forecasted figures for AD EBiS’s average unit price andnumber of active accounts are averages of each quarter of each fiscal year and therefore they differ from the Company’s announced figures (which are
the figures as of the end of the last month of each fiscal year).

28/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

8．Growth Strategy◆ The Company’s Medium- to Long-Term Business Planand Strategy
w Aiming for acomprehensive marketing
DX support business

w Planned to develop
multiple new services, inaddition to accelerating thedevelopment of its
conventional businesses,
through in-housedevelopment and M&A

w The numerical targets forthe final year of themedium-term plan (FY2023:
last fiscal year) had been
lowered in steps.
Compared to the mediumterm goals announced in
November of last year, itachieved DOE but fell
short for consolidated sales
and operating margin.

Previous Medium-Term Business Plan (VISION 2023): Strategy
The Company set out a plan called the MXP (Marketing Transformation
Platform) Strategy. In this strategy, the Company aimed to evolve its business
to not only provide specific services to its client companies but also provide
the optimal service as a comprehensive marketing DX support business.
By leveraging the strengths that it has developed, as well as through in-housedevelopment and M&A, the Company aimed to accelerate the growth of its
conventional services and develop multiple new services in the Marketing PF
and EC PF segments. It aimed to thus maximize its group’s assets andsynergies to accelerate growth.
Previous Medium-Term Business Plan (VISION 2023): Numerical
Targets
For the final year of its medium-term business plan (VISION 2023), or
FY2023 (last fiscal year), the Company had planned to achieve the following
goals: sales of 5 billion yen, operating margin of 15%, operating profit ofgreater than 750 million yen, and DOE of 3% or greater (Figure 32).
It then revised these medium-term goals at the beginning of the previous
fiscal year (November 4, 2022) and also revised the financial forecasts in May
of this year. Compared to the new medium-term goals announced in
November of last year, it achieved only the DOE and fell short of the goals
for consolidated sales and operating margin. As for the forecast announced inMay, the Company’s performance was within the expected range as alreadymentioned.

【Figure 32】Numerical Targets of the Medium-Term Business Plan(as of the date of their announcement)
Consolidated
Sales

Consolidated
Operating Margin

Dividend on
EquityFY2020 Results

2.61B yen

10.6％

2.0％

FY2021 Results

2.95B yen

12.4％

2.3％

FY2022 Results

3.33B yen

11.8％

2.6％

FY2023 Medium-Term
Financial Targets

5.0B yen

15％

3％ or more

FY2023 Revised
Financial Targets

3.9B yen

10％

2.5％ or more

FY2023 Re-revised
Financial Targets

3.6-3.7B yen

7.8-8.9%

2.5%

FY2023 Results

3.62B yen

8.8％

2.5％

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials with partial additions/edits.
(Note) The “revised” forecast is the medium-term forecast for the previous fiscal year (FY2023) as of November 2022 andthe “re-revised” forecast is the forecast for the previous fiscal year as of May 2023.

w Achieved the goal for thesales proportion of the newservices, which used to be
one of its KPIs.

In this previous medium-term plan, in addition to strengthening the existing
businesses (especially AD EBiS), the Company focused on the new areas ofbusiness. As its companywide KPI, it newly added the proportion of the newservices (Marketing PF’s Incubation + EC PF’s E-Commerce Website
Building & Operation) in the consolidated sales.
29/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

It planned to raise this proportion from 3% in FY2021 and 14% in FY2022
to over 23% in the previous fiscal year (previous goal was 30%), but actuallyraised the proportion to 24% (Figure 33). Since the goal has been achieved,
the proportion was excluded from the KPIs in the new medium-term business
plan.

【Figure 33】Change in the Sales Proportion of the New Services
I. MPF （1） Adverting Effectiveness Measurement
I. MFP （2） Advertising Agency DX
I. MPF （3） Incubation
II. EC PF （1） EC-CUBE
II. EC PF （2） E-Commerce Website Building & Operation

Proportion of the newservices (%)

24％

MPF: Marketing Platform

14％

FY2023(result)

Proportion of the
new services (%)

3％

3.6 billion
yen
FY2022(result)

3.3 billion
FY2021(result)
2.95 billion
yen

MPF: 2.59 billion yen
EC PF: 350 million yen

yen

MPF: 2.93 billion yen
EC PF: 710 million yen

MPF: 2.92 billion yen
EC PF: 410 million yen(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.
(Note) The proportion of the new services is the proportion of the sum of the sales of Incubation and E-Commerce Website Building &Operation to the overall consolidated sales. “MPF” stands for the Marketing Platform.

w The Company aims to achievesales of Y10 billion at an earlystage (specific period is
undecided) through stable
growth of its conventional
businesses and expansion of
the new service.

New Medium-Term Business Plan (VISION 2027): Strategy
The Company created the new plan VISION 2027 (for the four fiscal years
from FY2024 to FY2027). The theme is to “draw a clear path for achieving
sales of 10 billion yen through the two growth drivers of Marketing Process
Support and E-Commerce Website Building & Operation Support.” While
there is no change in the medium- to long-term sales target (the timing forachieving it has not been determined yet), the Company aims to achieve
accelerated growth by strengthening the new service of Marketing Process
Support and expanding the E-Commerce Website Building & Operation
business (Figure 34).

【Figure 34】Image of Sales Growth in VISION 2027
Focus

1
New Service Development

Marketing Process
New service

Support customer needs fora continuous cycle ofimproving the effectivenessof marketing initiatives

Focus

２
E-Commerce Website Building& Operation
Platform

Expand E-Commerce Website
Building & Operation
Provide a one-stop service
specialized in e-commerce
websites

Incubation
Create Stable Revenue
Create stable revenue throughboth Marketing DX and ECommerce Support

Marketing Process

Now

FY2024FY2025(Ref) Excerpt from the financial results briefing materials, with partial edits.

FY2026FY202730/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w A new service of Marketing
Process Support, which is
expected to become a growth
driver, is scheduled forrelease in Q4 of this fiscal
year.

Strategy for the Marketing DX Support Segment
In the Marketing DX Support segment (Marketing Process + Incubation), a
new service for the Marketing Process business is scheduled to be launchedin Q4 of this fiscal year as one of the Company’s growth drivers (official
version to be offered for a fee) (Figure 35).
This service aims to comprehensively support the customers’ needs for acontinuous cycle of improving advertising effectiveness in their marketing
initiatives.
The new service supports the smooth and effective execution of the entire
marketing process, including adaptive learning and selection/execution of
measures in addition to measuring the effectiveness of advertising, Theconcept is to enhance the quality of marketing management through the
hypothesis/test-based cycle of Plan, Do, Check (measure and evaluate), andAction (fix and improve).
The Company is currently developing this service and plans to release thelimited beta version in Q1 of this fiscal year, after which it will make
improvements and release the product.

w The Company plans toprovide tools as SaaS,
provide human resources
support, and strengthencross-selling.

Details are undisclosed, but in addition to providing tools as SaaS, theCompany plans to provide human resources support (professional services)
as well as strengthening cross-selling to customers.

【Figure 35】New Service of Marketing Process and Its Schedule
First Half of FY2024
Expected
Schedule

Q1(As of Nov. 6, 2023)

Limitedrelease of thebeta version

Second Half of FY2024
Q4

Q2-Q3

Pilot operation / Updates(some for a fee)

Official version
release(for a fee)

Current customers of AD EBiS

TargetCompanies

New customers(Ref) Excerpt from the financial results briefing materials, with partial edits.

w For the Marketing Processbusiness, the number ofaccounts has been set as a
new KPI. The Company
intends to increase thenumber of accounts and reacha new record by FY2027.

To do so, the Company will need to increase the number of accounts.
Therefore, for the Marketing Process business, it has set the number ofaccounts as a new KPI. This KPI is the sum of the accounts of AD EBiS,
CAPiCO (excluding those in a plan in which CAPICO comes as set with AD
EBiS), AdRepo, and the new SaaS. The Company plans to halt the decline in
the number and reverse it in the current fiscal year. Furthermore, by FY2027,
it aims to break the previous record (1,666 in Q2 FY2022) (Figure 36 on page32; for reference, the number of accounts at the end of Q4 FY2023 was 1,198,
of which 1,061 was for AD EBiS alone).
31/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 36】Marketing Process’ KPI: Number of Accounts*The total number of accounts of AD EBiS, CAPiCO (excluding those also using AD EBiS),
AdRepo, and the new SaaS
1,666

1,198
Accounts will begin to
substantially increase
with the sales expansionof the new service.

Q1
1Q

Q2
2Q

Q3
3Q

FY2019

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

FY2020

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

FY2021

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

FY2022

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

Q4
4Q

FY2023

FY2024FY2025

FY2026FY2027VISION 2027

(Ref) From the financial results briefing materials, with partial edits.

w In E-Commerce Website
Building & Operation, whichis expected to become theother growth driver, theCompany plans to increase
sales through a verticallyintegrated model. It is alsoplanning to release a newservice.

Strategy for the E-Commerce Support Segment
For E-Commerce Website Building & Operation, which is one of the twomain businesses that the Company expects to develop as growth drivers, theCompany will expand sales through a vertically integrated model. In addition,it plans to improve profitability by launching EC-CUBE Enterprise, an ecommerce website building system tool for large-scale e-commerce websites.
In E-Commerce Support, EC-CUBE Co., Ltd. will absorb EC-CUBE
Innovations Inc. (former BOKUBLOCK INC.) in January 2024, after which
the organizational structure will be strengthened.
In addition, the Company has set the sales proportion of E-Commerce
Website Building & Operation in the E-Commerce Support segment as a KPI
and intends to raise it from 50% in the previous fiscal year to over 80% in
FY2027 (the final year of the medium-term plan).

◆ Alpha-Win Research Dept’s Forecast of Medium-Term
Financial Results
w We have reviewed ourforecasts for the next fiscal
year and have revised the
profit forecasts downward.

w In the next fiscal year andthe fiscal year after the
next, we expect sales,
profits, and dividends toincrease.

Medium-Term Forecast
We revised our previous forecast for the current and the next fiscal year andadded a new forecast for the fiscal year after the next. The assumptions for
AD EBiS (unit price and number of accounts) have been revised and changes
have been made mainly for the Marketing DX Support segment. For the ECommerce Support segment, we have made mostly no change to our previous
forecast. We slightly raised our forecast for companywide sales in the next
fiscal year, but we revised our forecast for profits downward due to continued
upfront investments (Figure 31 on page 28).
However, we expect consecutive growths in sales, profits, and dividend, as
well as record-high sales, in both FY2025 (next fiscal year) and FY2026(fiscal year after the next), due to the completion of investments, fullcontribution from the new service of Marketing Process, sales and profit
growth due to the strengthening of E-Commerce Website Building &Operation, the bottoming out of sales of AD EBiS, and sales growth due tostronger cross-selling.
32/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Unit price of AD EBiS
under the conventional
standard and the numberof accounts are expected toshow a gradual increase.
w The number of accounts
under the new standard is
expected to increase, but
sales of Ad EffectivenessMeasurement are expected
to remain flat.

In the main Marketing PF segment (former segment name), the annual
average unit price of AD EBiS based on the conventional standard and thenumber of accounts are expected to show a gradual increase. The annual
average unit price is expected to appear to decrease, following an increase in
the proportion of the lower-priced new service, while the number of accounts
is expected to increase (we expect the annual average unit price of each newservice to be flat and the number of accounts to increase by 100 to 200 peryear). Accordingly, we revised downward the sales forecast for the former
Advertising Effectiveness Measurement business (AD EBiS) for both fiscal
years.
For FY2025 (next fiscal year), we revised our forecast for sales upward from4,350 million yen to 4,400 million yen and revised our forecasts downward
for operating profit from 365 million yen to 300 million yen (operating
margin from 8.4% to 6.8%) and for net profit from 220 million yen to 180
million yen (Figure 31 on page 28).
For FY2026 (the fiscal year after the next), we made new forecasts that sales
will be 4,850 million yen, operating profit will be 350 million yen (operating
margin of 7.2%), and net profit will be 210 million yen.

w We expect a DOE of 2.5%
for now.

Regarding dividend, we assumed that the DOE will be 2.5% for both fiscal
years, which is the same as our previous forecast. In line with the change inour profit forecasts, we revised the expected dividend downward, but we havenot changed our forecast that dividend will continue to be increased alongwith the growth of profit. Once the phase of upfront investment ends, there isa possibility that the Company may raise its dividend again to a DOE of 3.0%,
which was its original goal.
Currently, the Company is in the stage of shifting resources to new or relatedareas of business by using the cash flow from its conventional businesses.
Going forward, in addition to the organic growth of its conventional
businesses, accelerated growth is expected through synergies created fromthe development of the new businesses and the active pursuit of M&A.

w We expect the mediumterm annual profit growthrate to be around 10%.

w At this point, it is difficult
to predict the impact ofMarketing Process, forwhich details have notbeen disclosed, on sales
and profit. However, we
expect the impact to belimited in the short termsince the services are basedon a subscription model.
w We plan to update our
medium-term financial
forecasts again in the next
fiscal year or later, when
we expect to find out thedetails and trends of the
new service to be launched.

Over the medium term, we believe that the Company may be able to maintainan annual profit growth rate of about 10% (previously, we had predicted 1520%). Whether there will be an M&A and whether that M&A will be
successful (PMI) are the factors that may impact financial performance in the
future.
As mentioned earlier, in Q4 of this fiscal year, the Company plans to releasea new marketing process service in the Marketing DX Support segment.
However, its impact on business performance in the next fiscal year andbeyond is currently difficult to evaluate because information such as theservice content, customer reactions, and pricing has not been disclosed yet.
However, GSP, CAPiCO, and the new service of Marketing Process Support
are cloud-based, subscription services, so their impact on earnings in the next
fiscal year and year after that is not expected to be large. We hope to update
our medium-term financial forecast as appropriate when the details, pricerange, and business performance of the new service of Marketing Process
Support become more revealed starting in the next fiscal year.

33/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

9． Analyst’s View

◆ SWOT Analysis
The Company’s SWOT analysis result is shown in Figure 37 (below is
supplementally information). There has basically been no major change since
the last report.
w The Company's strengths are
the data and technologies
accumulated over many
years, DX talents, external
network, the CEO’s
management skill, productstrength, support system,
business model, andbusiness strategy of actively
pursuing M&A.

Strengths

w On the other hand, risks
include stricter regulations
on the protection of personal
information, technologicalinnovations, intensifying
competition, and staff
shortage.

Risk Factors

w Clarified the scope ofPreviously, the management’s heavy dependence on its CEO Iwata had beena problem. However, the Company has shifted to a system in which
supervision and execution of duties are divided among its directors andexecutive officers, which would increase management speed and reduce risks.
As CEO, Susumu Iwata oversees the new areas of business and has beenshifting toward creating growth drivers.

responsibility of eachdirector and executive officer
and shifted to a moreorganized management
structure.

The Company’s main strengths are the following: data and technologies thatit has accumulated over many years through AD EBiS; talents with highexpertise in DX; rich network with numerous business partners; its CEO’s
management skill and expertise in leading technologies of Internet
marketing; its main products with proven and strong functions and theirsupport system (technological expertise, development speed, andresponsiveness to changes that only specialized major players like theCompany can provide); position in the market (No. 1 in the Internet ad
effectiveness measurement market with an extremely high share); stable,
subscription-based business model; and growth strategy to actively pursue
M&As and acquire businesses.

On the other hand, the main risks include further stricter regulations
pertaining to the collection and use of personal information due tostrengthened privacy protection (with regards to conducting Internet
advertising effectiveness measurement), the emergence of alternative
products due to the development of sophisticated AI technologies, the impact
of COVID-19, staff shortage, and intensifying competition.

【Figure 37】 SWOT Analysis (Words in red have been added/revised from the previous report)
Strength

・Data and know-how (potential usage as big data) that it has accumulated since foundation, as well as its technologies
・Recognition, strong customer base, proven track record, and product strength (No. 1 in the Internet ad effectiveness system tools market with an extremely high share)
・The main marketing platform business is subscription-based; stable revenue can be expected (subscription business)
・Network with numerous business partners (accesss to resources of external partners and collaboration with them)・ Potential to raise unit price through upselling and cross-selling and expand customer base

Weakness

・ CEO's management skills and expertise in leading-edge technologies of the industry; agile management strategies
・Enhanced working environment; engineers with expertise in leading-edge technologies; accumulation of know-how (competitive edge as a major, specialized company
with high capability in development and in meeting needs)
・Specialized in a niche market; small in scale (focused on specific services)
・Business management is largely dependent on the CEO (however, authority and responsibility have now become divided and delegated to other executive officers)
・ AD EBiS's number of accounts is on a declining trend (working on finding effective solutions to improve churn rate)

Opportunity

Threat・Employee shortage (engineers and sales reps)・Funding power (upfront investment costs and risks related to amount of capital and equity financing in large-scale M&As)
・ Internet ad marketing market's growth potential
・ Growth potential in new areas through its existing products and know-how( ⇒Business opportunities related to entering the marketing process support market and developing the E-Commerce Website Building & Support business)
・ Cross-selling through its customer base・ Business expansion and groupwide synergy through M&As and business acquisitions
・Impact of COVID-19 outbreak (cancellation by users with deteriorated financial performance, stopping services, etc.)
・Intensification of competition (esp. EC-CUBE-related businesses), launch of competing or alternative products/services, emergence of rivals, and weakened competitiveedge of existing products
・Tighter regulations related to stronger privacy protection in the use of personal information (restrictions on obtaining data)
・Defects in products/services and delays in development or in providing services with new function
・Large system troubles such as computer system stoppage(Ref) Prepared by Alpha-Win Research Dept.

34/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆

w DOE is maintained at 2.5%.

Shareholder Returns

At the beginning of the previous fiscal year, the Company had planned toincrease dividend to 7.8 yen/share (+0.8 yen/share YoY). However, due tothe downward revision of the financial results, dividend was lowered to 7.4
yen/share (+0.4 yen/share YoY), since a consolidated dividend on equity ratio(DOE) of 2.5% is set as the guideline for deciding the amount of dividend.
This dividend was paid as planned.

w This fiscal year, theCompany plans to increase
its dividend despite adecline in profit. We
reviewed the Company’s
financial performance andrevised down our dividend
forecast to be the same as
the Company's plan.

This fiscal year, the Company plans to raise dividend by 0.5 yen/share to 7.9
yen/share, based on a DOE of 2.5% again. The dividend payout ratio will
increase from 18.6% ⇒ 23.6% ⇒ 34.6% from FY2022 to FY2024.

w Dividend is expected toincrease in the next fiscal
year onwards too.

However, since the YRGLM Group is still in its growth stage, it will need tocontinue with investment. However, we predict that it will return to a profit
growth trend starting in the next fiscal year as it begins to see the positiveeffects of its investments, which will likely lead to dividend hikes over the
medium term (Figure 38).

We, too, reviewed our financial forecast for this fiscal year and lowered ourdividend forecast from the previous 8.3 yen/share to 7.9 yen/share, which isthe same as the Company’s plan. We also revised our profit forecasts for
FY2025 and FY2026 and revised dividend forecasts based on a DOE of 2.5%.

【Figure 38】Change in Dividend and Dividend Payout Ratio
Dividend (left axis)（Y）

Dividend payout ratio (right axis)

DOE (right axis)

10.0

50.0
9.1

43.2

9.0

7.0

7.0

5.0

35.0
30.0

29.7

5.2

5.0

27.2

4.5
4.0

4.0

23.6

18.7

3.0

13.8

2.1

2.8

2.6

FY2015FY2016FY2017

0.0

0.0

0.0

0.0

0.0

0…

FY2018FY2019

25.0
20.0

18.6

12.2

1.0
0.0

40.0

7.4
34.6

6.0

2.0

45.0

8.5
7.9

8.0

5.0

（％）

15.0

13.7

10.0
5.0

2.0

2.3

2.6

2.5

2.5

2.5

2.5

FY2020

FY2021

FY2022

FY2023

FY2024 E

FY2025 E

FY2026 E

0.0(Ref) Prepared by Alpha-Win Research Dept. E: Alpha-Win’s forecast/estimate.

(11) Ad Technology: A generalterm for information
technology used in theadvertising business, referringto the digital technologies usedin Internet ads, etc.
w Volatility of stock pricehas been high. Stock priceweakened following theannouncement of thedownward revision tofinancial results.

◆ Stock Price, Trends, and Factors that May Impact
Stock Price
Stock Price and Trends
The Company’s stock is a small-cap, Ad-Technology11-related stock listedon the TSE Growth Market. Since becoming listed, the volatility of stock
price has been high (intraday stock price was at a max of 5,770 yen in
November 2014 and a min of 469 yen in October 2023).
Upon announcing the financial results for the first half of the previous fiscal
year, the Company revised down its financial forecast for the full fiscal year.
In response to this, the stock price decreased and hit the lowest price since
becoming listed on the market. Stock price had been in a low price range after
this.
35/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

However, when the Company announced its financial results for the previous
fiscal year, it also announced that, in addition to an increase in dividend forthe current fiscal year, it would resume the shareholder benefit program(shareholders who hold at least 100 shares will receive an Amazon gift cardof 1,000 yen twice a year) and buy back up to 100 million yen or 200,000
shares of its stock. In a positive response to this enhanced shareholder return
package, stock price turned around and is currently hovering around 700 yen.
Until the announcement of the full-year financial results (with the enhanced
shareholder return package), the Company’s stock had been underperforming
the TSE Growth, TSE Prime, and other major indices since the beginning of
the year, but it has been outperforming them since the announcement (Figure
39).

【Figure 39】Comparison of Valuation and Performance with Major IndicesClosing price of Dec. 1, 2023
YRGLM (G 3690)

Stock price or
index

This fiscal year's
forecasted P/E

Actual P/B

Simple average ofdividend yield

Return since thebeginning of the year

Return sinceNov. 6, 2023

697

30.52

2.25

1.13

7.73

34.8

TSE Prime Stock Average: P

1,225.90

15.18

1.29

2.24

25.95

0.9

TSE Standard Stock Average: S

1,163.06

14.34

0.97

2.27

16.85

3.1

TSE Growth Stock Average: G

892.09

55.52

3.36

0.51

0.20

0.5

TOPIX

2,382.52

25.95

0.9

TSE Growth 250 (former TSE Mothers)

700.75-4.06

1.1

Nikkei Stock Average

33,431.51

28.1

2.2

14.90

1.32

1.95

(Ref) Prepared by Alpha-Win Research Dept. The Company’s P/E is based on Alpha-Win’s EPS forecast. Note that November 6, 2023,
was the date on which the financial results for the previous fiscal year were announced.

(12) P/S: Ratio of stock price tosales = market capitalization /sales

w Valuation is higher than
the TSE Prime’s averageand lower than the TSE
Growth’s average.

(13) PEG ratio: P/E ÷
Expected medium-term profit(EPS) growth rate (per year)

w Valuation is slightly highin terms of the major
indicators, excluding P/S,
based on the forecasts forthis fiscal year and thefollowing two years

Comparison of Valuation with Major TSE Indices
Based on this fiscal year’s financial forecast, the Company’s valuation is asfollows: forecasted P/E of 30.52, actual P/B of 2.25, forecasted P/S12 of 1.08,
and a forecasted dividend yield of 1.13% (forecasts are based on the
Company’s plan).
The Company’s stock is slightly overvalued compared to the average of all
stocks on the TSE Prime Market (P/E of 15.18, P/B of 1.29, and simple
dividend yield of 2.24%). On the other hand, it is undervalued compared tothe average of all stocks on the TSE Growth on which it is listed (P/E of 55.52,
P/B of 3.36, and simple dividend yield of 0.51%).
Its EV/EBITDA is estimated to be 6.8 for the current fiscal year, 6.1 for the
next fiscal year, and 5.6 for the fiscal year after the next (Alpha-Win’s
forecasts), which seem to be within the general range (about 2 to 8).
Based on our new financial forecasts, the expected P/E would be 30.5 for thisfiscal year, 24.3 for the next fiscal year, and 20.9 for the fiscal year after the
next. If we assume the medium-term profit growth rate to be 10%, the PEG13
would be around 3.0 (based on forecasts for this fiscal year), indicating thatthe stock is somewhat overvalued (generally, a stock is said to be undervalued
if PEG is less than 1 and overvalued when more than 2).
The P/S is low at 1.08 (comparison with similar companies in Figure 40 on
page 38: the average P/E of 22 major listed AdTech companies is over 2).
36/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Future stock price will
depend on the profit anddividend levels.

w We believe the stock price
may rise if visibility ofsustainable, double-digit
profit growth increases.

The Company’s stock is recognized as an AdTech/subscription-related
growth stock oriented toward domestic demand, which seems to be alreadyreflected in the stock price to a certain extent. Based on the new forecasts forthis fiscal year, its valuation does not appear undervalued in terms of the
major indicators. Therefore, the future stock price is expected be impacted by
the level of profit and dividend in the next fiscal year and beyond.
Whether the new services (such as the new service of Marketing Process
Support), which are expected to become the growth drivers, will succeed willbe the key factor that may impact financial performance. Once the Company
completes its phase of upfront investment and becomes more likely to sustain
a double-digit profit growth, its valuation may rise such that the stock price
may rise over the medium term considering the potential for future dividend
increases.

Valuation Comparison with Similar Companies
w Comparison with similar
Japanese companies showsthat the Company’svaluation is somewhat
underpriced.

In Japan, there are no listed companies that provide similar AdTech tools
and are based on a subscription model like the Company.
Instead, we have compared the size, business, and valuations of listed
Japanese AdTech companies with business partly similar to the Company andlisted companies that compete with the Company in the e-commerce platformbusiness (packaged software for building websites for e-commerce stores,etc.) (Figure 40 on page 38).
As reference, comparison was also made with two companies listed on the
US market: HubSpot Inc. (ticker code HUBS; based in the U.S.; global
development of its original marketing PF based on a subscription model;
continuing to post a net loss; P/S of 14.3 and P/B of 25.7 based on the closing
price of Dec. 1, 2023) and Shopify Inc. (ticker code SHOP; based in Canada;
providing cloud-based e-commerce PF developed for small/medium-sizedbusinesses; expanding into Japan and competing with EC-CUBE; rapid
growth; P/S of 15.4 and P/B of 11.4 based on the closing price of Dec. 1,2023). Both companies are posting losses and their P/S and P/B are extremely
high compared to the Company.
Of the compared companies, the average figures of the 26 Japanesecompanies with net profit forecasted for the current fiscal year based oncompany forecasts (22 AdTech companies and four e-commerce companies)
are not very meaningful due to the large disparity between the companies.
However, at least based on this fiscal year’s expected P/E, P/B, P/S, anddividend yield, the Company’s valuation is relatively generally low and its
stock seems somewhat underpriced.

37/39
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18[Figure 40] Comparison with Similar Companies (AdTech-related companies + e-commerce-platform-relatedcompanies + 2 overseas companies)
AdTech-Related Companies
Code
2389
2461
2491
3134
3655
3690
3853
3923
4293
4395
4751
4784
6026
6031
6038
6045
6081
6094
6185
6533
6535
6562
3688
6550
NYSE： HUBS

Markets: P = TSE Prime, S = TSE Standard, and G = TSE
GrowthCompany NameBusiness Area
DIGITAL HD
Internet ad agency / ad measurement tool
F@N Communications
Affiliate (pay-per-performance) ad
ValueCommerce
Affiliate (pay-per-performance) ad
Hamee
Mobile accessories / E-commerce cloud support
BrainPad
Internet marketing / data analysis
YRGLM Inc.
Internet ad measurement tool
Asteria
Packaged software
RAKUS
Cloud service / Email delivery / IT engineer dispatching
SEPTENI HD
Internet ad agency / smartphone marketing support
AccreteSMS delivery service
CyberAgentInternet ad agency / smartphone / games
GMO AD Partners
Internet ad agency and related platform
GMO TECH
App-installation-type charging ad / SEO
Scigineer
Digital marketing solutions
iiD
Contents marketing platform
Rentracks
Pay-per-performance Internet ad service
Allied Architects
SNS-related marketing support
FreakOut HD
Internet ad delivery (DSP)
SMN
Retargeting ads and affiliate website services
Orchestra HD
Digital marketing for companies
i-mobile
Ad network (pay-per-click ad distribution)
GenieeAutomatic trading of media ad space / AdTech biz
Simple average of 22 AdTech-related companies (which have not forecasted a net loss)
CARTA HD (net loss)
Ad platform
Unipos (net loss)
Internet ad service; media monetization support
HubSpot Inc.
Cloud-based customer management platform

E-Commerce-Platform-Related Companies
Code

Company Name

3371

SOFT CREATE HD

4304
4057

EstoreInterfactory

4496

Commerce One Holdings

Markets: P = TSE Prime, S = TSE Standard, and G = TSE
GrowthBusiness Area

Unit: million yen(million USD for overseas companies)

Market Market Cap.
P
21,895
P
32,080P
46,570P
16,133
P
22,791
G
4,442
P
12,454
P
480,222
S
95,619G
6,272
P
438,767
S
6,217
G
4,347
G
7,475
S
3,640
G
3,757
G
6,825
G
15,716
S
4,265
P
11,222
P
28,005
G
18,70258,519P
32,713G
2,668
NYSE
26,019

Sales

Ratio

%

O.P.

O.P. Margin
210
1.3
2,100
27.6
4,700
16.2
2,086
12.4
1,100
10.0
240
5.9
－
Not disclosed
5,390
14.1
4,200
11.4
1,168
15.0
30,000
4.0
10
0.1
500
8.1
470
26.1
650
0.1
794
24.6
643
13.7
Not disclosed
100
0.8
1,150
10.0
3,800
19.0
1,800
21.4
3,056
12.1
500
2.1
-614
-63.1
-109
-6.3

Unit: million yen(million USD for overseas companies)

Market Market Cap.

E-commerce website building package / selling merchandise
B2B
E-commerce website building / online shopping support
Cloud commerce platform
Support services for e-commerce website mgmt SMEs / midtier companies

Sales
16,0007,600
29,10016,813
11,0004,100
4,500
38,29536,7007,784
750,000
15,500
6,200
1,800
6,700
3,232
4,686
51,00012,50011,50020,0008,400
48,337
24,200
973
1,730

P/S
1.37
4.22
1.60
0.96
2.07
1.08
2.8
12.54
2.6
0.81
0.6
0.40
0.70
4.15
0.5
1.16
1.46
0.31
0.34
0.98
1.40
2.23
2.01
1.35
2.74
15.0

%

O.P.

P/E
63.28
22.28
13.65
10.49
29.25
30.52
120.02
25.84
8.30
54.86
77.62
11.93
44.43
8.58
11.66
28.18
93.55
15.92
10.11
14.10
34.73
Ratio

O.P. Margin

P/S

P/E

Closing Price（ 12/1 ）%P/B
Dividend Yield
0.46
0.00
1.57
4.56
2.01
3.70
1.82
2.27
4.46
0.00
2.25
1.13
2.14
46.04
0.08
1.47
1.02
2.50
0.95
3.04
1.73
1.15
0.65
5.67
4.19
8.85
0.32
0.85
1.81
1.28
2.55
2.11
0.95
0.00
0.96
0.00
1.90
0.87
0.63
2.95
2.69
4.31
1.51
1.32
4.15
3.99
0.00
25.9
0.00

1,300
205
USD 516.97
Closing Price（ 12/1 ）%P/B

Stock Price
1,254
417
1,351
991
1,022
697
712
2,650
453
1,050
867
371
3,950
1,169
719
471
479
872
290
1,143
458
1,036

Dividend Yield

Stock PriceP

46,64327,702

5,079

18.3

1.68

13.71

2.52

2.84

1,693

S
G

7,132
2,235

12,498
2,883

835
69

6.7
2.4

0.57
0.78

8.91
48.87

2.01
2.14

0.00

1,210
542

G

Simple average of 4 e-commerce-platform-related companies (which have not forecasted a net loss)
4477
BASE (net loss)
E-commerce platform / online settlements
G
NYSE: SHOP
Shopify Inc.
Cloud-based commerce platform
NYSE

5,342

3,558

488

13.7

1.50

15.49

1.87

4.79

710

15,33828,45489,064

11,66011,5005,599

1,618-1,000
-822

10.3
-8.7
-14.7

1.13
2.47
15.91

21.74
-

2.13
2.17
11.4

2.54
0.00
0.00

247
USD 73.86(Ref) Prepared by Alpha-Win Research Dept. based on the companies’ websites, securities reports, financial results summaries, and financial results briefing
materials.
(Note) Generally, each company’s forecasted values from the latest financial results disclosure (latest quarterly financial results) or the most recent actual
results (BPS, etc.) were used (based on disclosed data available as of December 1, 2023). For forecasts disclosed as ranges, as a general rule, the median wasused for calculations. For the Company, Alpha-Win Research Dept.’s forecast was used. Values not disclosed are marked by “ND” (not determined) or “-”.
The average was calculated using only valid figures. For the two overseas companies, data (actual values) on business performance and finance in the mostrecent full fiscal year (ended December 2022) were used to calculate P/E, P/S, P/B, and operating margins.

Key Points Going Forward
・ The following are the factors that may impact stock price and areconsidered to be the key points to watch.
w Key factors that may impact
stock price are the numberof accounts, change in thesales proportion of ECommerce Website
Building & Operation, thecontribution of the newservices or products tofinancial performance,change in monthly sales,
M&A, and dividend.

1.

2.

3.
4.
5.

The number of accounts as generally defined for the Marketing Processbusiness as its KPI – especially AD EBiS’s number of accounts (whenit will turn from a net decline to a net increase), unit price (amount andrate of growth), and churn rate based on the standard used up to theprevious fiscal year, which constitute a part of this KPISales proportion of the E-Commerce Website Building & Operation
business, which is a KPI for the E-Commerce Support segment, and thecontribution to results by EC-CUBE Enterprise that is planned belaunched
Monthly sales trends (YoY change for both support segments,
especially the timing that the Marketing DX Support segment will turnto sales growth)
Quarterly trends in profit/loss (profit growth rate, profit margins,
EBITDA, and changes in each segment’s sales and profit)
The financial results for this full fiscal year and the profit forecast for
the next fiscal year and beyond (the timing when profit will begin
increasing again)
38/39

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/8/2023

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

6.
7.
8.

w We will continue watch theCompany’s stock as adomestic-demand-oriented
growth stock in themarketing DX support ande-commerce businesses.

Shareholder return measures and their level (possibility of dividend
increase or additional share buyback)Announcements of M&A or alliance
Strengthened regulations such as those for the protection of personal
information

Since it is a small-cap growth stock, the volatility of financial performanceand stock price is likely to remain high.
However, over the medium to long term, the Company’s business has a large
growth potential since the Internet advertising market and the e-commercemarket are expected to continue to expand. We hope to follow the Company’sbusiness development, change in sales, and change in profit growth rates as adomestic-demand-oriented growth stock in the business of marketing DX
support that is resistant to direct impacts by COVID-19, global situations,inflation, and foreign exchange.

39/39This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.