3Q FY12/2023
Business Results Briefing Material

November 9, 2023
Broadleaf Co., Ltd.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Table of Contents

FY12/2023
3Q Financial Results and Full-year Results Forecast

P3

Progress of Medium-Term Management Plan (2022-28)

P14

Supplemental Information

P21

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2

FY12/2023
3Q Financial Results and Full-year Results Forecast

P3

Progress of Medium-Term Management Plan (2022-28)

P14

Supplemental Information

P21

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

3

FY12/2023

PointsBusiness results for the cumulative third quarter are on track toward meeting the full-year earnings forecast.
“Dencho.DX,” a solution compliant with the Revised Electronic Book Storage Act, has facilitated additional sales opportunities,
but deviations from the original sales plan have emerged since September.
Item

Highlights

Lowlights

Environment

・Increasing interest in DX and adoption of cloud products
are spreading among our clients.

・Clients‘ cautious stances toward responding regulatorychanges in Japan such as the Invoice System and the
Revised Electronic Book Storage Act are seen.

・Transition of packaged software users to monthly
subscription contracts has progressed in line with plan.
Initiatives

・Industries provided with cloud-based software has
expanded.

・Business results for cumulative third quarter was steady.
Business results

・Sales forecast for “Packaged system” was raised due tostrong sales in the non-mobility sector.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

・The number of projects where sales resources areallocated to support clients responding to the Invoice
System are increasing.

・In consideration of the above variable factors, theCompany revised the sales plan of “Dencho.DX” for the
fourth quarter, and lowered the sales forecast for “Cloud
services.”

4• Highlights :The Company has promoted market-penetration and functional expansion of mainstay cloud
software without delay under a favorable business environment where clients are becoming
increasingly interested in DX and adoption of cloud products.

• 3Q cumulative financial result progressed steadily toward achieving the full-year forecast.
• Lowlights:
When responding to the Invoice System and the Revised Electronic Book Storage Act, there
is a conspicuous movement among our clients regarding adoption of the system compliant
with the Revised Electronic Book Storage Act.

• Some sales resources were allocated to support clients responding to the Invoice System.
• The Company provided an increasing number of clients with answers to questions andguidance regarding the Invoice System.

• These influenced the sales activities of “Dencho.DX,” and deviations from the sales plan
began to materialize in September.

• There is no change in the revenue forecast, as sales of the packaged software are expected
to cover the shortfall from “Dencho.DX.”

FY12/2023

Overview of Consolidated Financial Results for the 3Q
The Company achieved double-digit growth in revenue and reduced the amount of loss.
Steady progress has been made toward meeting the full-year earnings forecast.

FY2023Cumulative 3Q(Millions of yen)
Revenue

FY2022
Cumulative 3Q

YoY Change

YoY Ratio

11,24910,067+1,182+11.7%

Cloud services

3,624

1,767

+1,857+105.1%

Packaged system

7,625

8,300

-675

-8.1%

Cost of sales

4,520

3,902

+618

+15.8%

Gross profit

6,729

6,165

+564

+9.2%

SG&A expenses, etc.

8,250

8,028

+223

+2.8%

Operating profit *-1,522-1,863+341-

Profit before tax *-1,485-1,914+429-

Profit attributable to owners of the parent *-1,028-1,433+405--11.60 yen-16.23 yen--

Basic earnings per share**Minus (-) represents a loss

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

5• The Company recorded double-digit growth in revenue compared with the same period of
the previous fiscal year, and loss recovered as well.

• 3Q cumulative financial result progressed steadily toward achieving the full-year forecast,which was revised upward on August 10.

FY12/2023

Sales by Service Categories
Sales of “Software services” increased significantly due to increase in the number of contracts for monthly subscription software.
Sales of “Packaged system” decreased since multi-year lease contracts for packaged software was limited to non-mobility sector.

FY2023
FY2022
YoY
Cumulative 3Q Cumulative 3Q YoY change(Millions of yen)
Cloud services

YoY
YoY ratio

Reasons for the Change

3,624

1,767

+1,857+105.1%

3,138

1,261

+1,877+148.9%• Progress of transition to monthly subscription
software was steadyMarketplace

486

506

-20

-4.0%

• No significant change in number of users andfrequency of use

Packaged system

7,625

8,300

-675

-8.1%

Software sales

2,266

2,586

-320

Operation and support
service

5,359

5,714

-355

Total

11,24910,067+1,182

Software service• Leasing sales to mobility sector ended from 2023
-12.4% • Leasing sales to non-mobility sector remained
strong• Sales decreased in line with the transition to-6.2%
cloud software+11.7%

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6• Sales of "Software service" drove the revenue growth.
• Revenue growth is attributable to both the transition of clients of packaged software tomonthly subscriptions as lease contracts expire and steady progress in acquiring of newclients.

• Sales of “Software sales” decreased year-on-year due to the termination of leasing sales of
packaged software to the mobility sector clients and the shift to monthly subscriptions.

• Meanwhile, leasing sales of packaged software to non-mobility sector clients continued, andsales were firm.

FY12/2023

Factors behind Changes in Operating Loss
Increase in revenue absorbed upfront investment costs for software development and strengthening of the infrastructure forproviding services, etc.

Operating Loss

Cost of Sales(Millions of yen)・Development costs for expanding the menu of cloud services
and strengthening IT infrastructure increased.
FY2023Cumulative 3Q

FY2022
Cumulative 3Q・Amortization expenses increased due to expansion offunctions of cloud software, etc.

Increase inrevenue+1,182

Abolition ofshareholder
benefits+255-1,863

Increase in Increase incost of sales personnel Increase in-618
expenses operating Increase inactivities-108
outsourcing
relatedexpenses
expenses-190-124

SG&A Expenses, etc.
Others-57

Increase in amortization expense ofcloud software -133
Increase in development costs -337

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-1,522・Travel expenses, social expenses, and other operating
expenses increased due to active sales activities and sales
promotions.
・Outsourcing expenses for strengthening back-office functions
increased.

7• Amortization expenses increased due to the expansion of cloud software functions.
• Upfront investment in IT infrastructure, including the strengthening of processing
performance in preparation for future client growth, was booked as cost of sales.

• Upfront investments for future growth, such as active sales activities and strengthening of
back-office functions in preparation for an increase in the number of clients, have been
made and categorized as SG&A expenses.

FY12/2023

Balance Sheet Status
Non-current assets increased due to investment in software development and capitalization of office leasing fees.
Current liabilities increased due to the implementation of borrowing and rising ratio of long-term contracts for cloud software.
FY2023End of 3Q(Millions of yen)

FY2022Year-End

Change from the
Major Breakdown of Increase/Decrease
Previous Year

Current assets

6,926

6,555

+370

Cash and cash equivalents +164
Operating and other receivables +182

Non-current assets

29,23826,980+2,258Intangible assets +1,646
Property, plant and equipment +534

Total assets

36,16433,535+2,628Current liabilities

9,590

6,583

+3,007

Non-current liabilities

3,720

3,291

+429

Total liabilities

13,3109,873+3,436

Total equity

22,854

23,662-808

Total liabilities and equity

36,16433,535+2,628

Short-term interest-bearing debts+1,511
Contract liabilities +1,485
Long-term interest-bearing debts+420

Loss -1,062
Dividends payout -88

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8• Property, plant and equipment increased due to an increase in leased assets such as officeleasing fees, and intangible assets increased due to investment in the development of cloud
software.

• Interest-bearing debt increased due to borrowings from banks, and contract liabilities
increased.

• Contract liabilities consist primarily of advances received through a 5-year lump-sum
payment of cloud software.

• Accordingly, an increase in contract liabilities is a positive indicator of cash flow.
• The percentage of clients of cloud software who adopted a 5-year lump-sum payment rosefrom 29% in the previous fiscal year to 56% in the current fiscal year.

• Equity decreased due to the recording of loss and payment of dividend at the end of theprevious fiscal year, but remained at a level sufficient for business operations.

FY12/2023

Cash flows Status
Operating cash flow increased due to rising ratio of long-term contracts for cloud software.
Investment cash flow increased due to strengthening of investment in cloud services.
FY2023
FY2022
Cumulative 3Q Cumulative 3Q(Millions of yen)

YoY Change

Major Breakdown of Increase/Decrease
Increase in operating and other receivables 1,959
Increase in operating and other payables +1,161
Increase in contract liabilities +1,350

Cash flow from operating activities

2,079

644

+1,435

Cash flow from investment activities-2,573-2,173-400

Increase in payments for acquisition of
intangible assets -742

Cash flow from financing activities

655

1,157

-502

Decrease in short-term loans payable -798
Proceeds from long-term debt +500
Repayment of long-term debt -446

Free cash flow-494

-1,529+1,036

Cash and cash equivalents at the end of theperiod

3,621

3,153

+468

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9• Operating cash flow was negatively impacted by lower “Packaged system” sales, but thegrowth in recurring sales, driven by increase in monthly subscription contracts, was a moresignificant positive factor.

• Increase in contract liabilities corresponding to advances received for cloud software wasalso a positive factor.

• Cash flows from investing activities increased because the Company has strengthened
investment in cloud services development.

• Changes in borrowings were reflected in cash flows from financing activities.

FY12/2023

Full-Year Consolidated Earnings Forecast
Trends in IT investments such as growing interest in DX and cloud adoption is expected to continue.
Full-year forecast is unchanged considering the progress up to 3Q (revised upward when 2Q business results were announced).
FY2023Full-Year Forecast(Millions of yen)

FY2022Full-Year

YoY Change

YoY Ratio

Revenue

15,30013,833+1,467+10.6%

Cost of sales

6,100

5,346

+754

+14.1%

Gross profit

9,200

8,487

+713

+8.4%

SG&A expenses, etc.

11,40011,384+16+0.1%

Operating profit *-2,200-2,897+697-

Profit before tax *-2,300-3,005+705-

Profit attributable to owners of the parent *-1,900-2,431+531--21.42 yen-27.54 yen--

Basic earnings per share**Minus (-) represents a loss

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10• No change has been made to full-year forecast announced on August 10.
• The base business environment remains favorable.
• Considering the financial result up to the 3Q, the achievement of the full-year forecast isnearing.

FY12/2023

Sales Forecast by Service Categories
Taking into account client trends in response to regulatory changes (the Invoice System and the Revised Electronic Book
Storage Act), the Company revised the breakdown of sales forecasts after reviewing the sales plan for the solution compliant
with the Act.
FY2023Full-Year Forecast(Millions of yen)
Cloud services
Software service

FY2022Full-Year

YoY Change

YoY Ratio

Prior Forecast(August 10)

VS Prior
Forecast

5,300

2,628

+2,672+101.7%

5,900

-600
-600

4,650

1,958

+2,692+137.5%5,250

Marketplace

650

670

-20

-3.0%

650

±0

Packaged system

10,000

11,205-1,205-10.8%

9,400

+600

Software sales

3,000

3,539

-539

-15.2%

2,500

+500

Operation and support service

7,000

7,666

-666

-8.7%

6,900

+100

15,30013,833+1,467+10.6%

15,300±0

Total

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11• The number of contracts of monthly subscription-type business support software, amainstay product, is expected to increase as planned.

• Sales of the software compliant with the Electronic Book Storage Act, an ancillary product,
were revised downward because the timing of adoption by clients was longer than initiallyanticipated.

• As a result, the sales forecast for the “Software service” was lowered by 600 million yen.
• Sales forecast for the “Packaged system” was revised upward by 600 million yen because
leasing sales of software to non-mobility sector are expected to remain firm in the second
half of FY2023.

FY12/2023

Breakdown of Changes in Operating Loss Forecast
Increase in revenue is expected to absorb the costs of upfront investment and increase in operating expenses.

Operating Loss

Cost of Sales(Millions of yen)

FY2023
Forecast

FY2022・Development costs for expanding the menu of cloudservices and strengthening IT infrastructure are expected
to increase.
・Amortization expense is expected to increase due toexpansion of functions, etc. of cloud software.

Increase inrevenue+1,467-2,897

Abolition ofshareholder
benefits+256
Increase incost of sales Increase in
Increase in-754
personnel
operatingexpenses activities related-167
expenses

SG&A Expenses, etc.
Others+14-2,200-119

Increase in amortization expense of cloud software -118
Increase in development costs-378

・In addition to the strengthening of recruitment activities,
expenses related to share-based compensation are expected toincrease.
・Travel expenses, social expenses, and other operating
expenses are expected to increase due to active sales
activities and sales promotions.
・Outsourcing expenses for strengthen back-office functions
are expected to increase.
・As a result of the abolishment of the shareholder benefit
program in FY2022, its related expenses in FY2023 are
expected to decrease.

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12• Higher sales accompanying the accumulation of monthly subscription contracts are
expected to contribute to reduction of loss.

• Amortization and development costs for cloud software are expected to increase.
• While the abolishment of the shareholder benefit program is expected to contribute to a
reduction in loss, this will be offset by an expected increase in the cost of operating
activities.

• The current fiscal year is a year of transitioning to increased sales, so the Company plans toactively invest in strengthening sales and promotional activities to capture the DX needs of
its clients.

• As a result, operating loss is expected to decrease by 697 million yen year on year.

FY12/2023

Dividend forecast
The Company plans to pay a year-end dividend for FY2023, which is 1.00 yen per share.

Explanation

Dividend per ShareFY2023(Forecast)(Yen)• Although financial results for FY12/2023 is planned to be a loss,

FY2022

Interim dividend

0.00 yen

0.00 yen

Year-end dividend

1.00 yen

1.00 yen

1.00 yen

1.00 yen--

Annual dividend
Consolidated dividend
payout ratio

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the Company judged that it is possible to pay a dividend inconsideration of retained earnings and revenue plan, etc. in the
future.

• Annual dividend forecast for FY2023 is 1.00 yen per share(interim dividend :0.00 yen, year-end dividend: 1.00 yen).

13• For the current fiscal year, a dividend will be paid at the end of the current fiscal year, andis planned to be 1.00 yen per share.

• Although financial results for FY2023 are planned to show a loss, the Company decided to
implement shareholder return as much as possible in consideration of the progress made in
the medium-term management plan and the situation of retained earnings.

FY12/2023
3Q Financial Results and Full-year Results Forecast

P3

Progress of Medium-Term Management Plan (2022-28)

P14

Supplemental Information

P21

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14

Medium-term management plan (2022-28)

Points2 strategies: “Cloud penetration” and “Service expansion” are progressing as planned.
Concerns about the potential impact of clients’ response to regulatory changes on the cloud transition plan are transient,and the regulatory changes themselves provide the Company an opportunity for our business.
Item

Highlights

Lowlights

Environment

・New regulations such as “Specific Maintenance System”
and “New Vehicle Examination System” are implemented ・Some major clients are giving priority to taking actions
to respond to the Invoice System and the Revisedin Japan in line with the spread of CASE.
Electronic Book Storage Act (e.g. upfront renovation of・Car owners’ awareness towards automotive repair,core system).
inspection, and maintenance are increasing.

Initiatives

・Progress of the transition of packaged software users tocloud software is in line with plan.
・Currently the Company is in the process of coordinating・Total number of clients is increasing due to thethe start time for cloud software installation, etc. withstrengthening of acquisition of new clients.
clients whose above trend are becoming more・The Company is preparing for the launch of new services
pronounced.
(e.g. AI fraud detection service for vehicle examination
quotes).

Business results・Financial results are expected to exceed the original planfor second consecutive fiscal years.

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-

15• Highlights:
Social changes provide IT service companies with business opportunities.

• The inflow of new clients is continuing and transition of existing clients to cloud software isalso going smoothly.

• Progress of development for service expansion has been steady to this point.
• Financial results are expected to exceed the original plan for the second consecutive years.
• Based on these points, we judge that the two strategies of the medium-term management
plan are progressing as planned.

• Lowlights:
Adaptation to regulatory changes may affect the timing of clients installing cloud software,even though the influence will be short-term and transient.

• With some major clients, we are in the process of adjusting the timing of the installation ofcloud software.

Medium-term management plan (2022-28)

Medium-Term Management Plan (2022-28) Performance Plan
Following on from FY2022, financial result for FY2023 is expected to exceed the performance plan.

FY2022
Plan(Billions of yen)

FY2022
ResultFY2023Plan

FY2023
Forecast

FY2024Plan

22.0

FY2026Plan
25.5

FY2027Plan
29.0

FY2028Plan

Revenue

12.3

13.8

14.7

15.3

Operating profit *

-4.8

-2.9

-2.7

-2.2

1.0

3.3

6.7

10.0

13.0

Operating margin

-

-

-

-

5%

15%

25%

34%

40%

-5.0

-2.4

-2.9

-1.9

0.6

2.0

4.2

6.3

8.0

Profit attributable to owners of
the parent*

18.5

FY2025Plan

32.5*Minus (-) represents loss
NOTE) Figures of “Plan” were announced on February 9, 2022, and figure of “Forecast” was announced on November 9, 2023.

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16• Our group possesses excellent client assets and competitive cloud products.
• In addition, it will continue strengthening the competitiveness of cloud products by
expanding the menu.

• It also possesses sales resources for selling products and a management base for business
operations.

• Following FY2022, financial results of FY2023 are expected to exceed the initial
performance plan.

• The plan began smoothly and the Company progressed steadily toward achieving the plan.

Medium-term management plan (2022-28)

Medium-Term Management Plan (2022-28) Sales Plan by Service Categories
Coordination with major clients is under way to ensure that the schedule of transition to cloud software will not be affected by
the clients’ responses to regulatory changes such as the Invoice System and the Revised Electronic Book Storage Act.

FY2022
Plan(Billions of yen)
Cloud services

FY2022
ResultFY2023Plan

FY2023
Forecast

FY2024Plan

FY2025Plan

FY2026Plan

FY2027Plan

FY2028
Plan

2.6

2.6

5.9

5.3

10.4

15.2

19.9

25.0

29.1

Software service

1.9

2.0

5.0

4.7

9.0

13.6

18.0

22.1

25.0

Marketplace

0.7

0.7

0.9

0.7

1.4

1.6

1.9

2.9

4.1

Packaged system

9.7

11.2

8.8

10.0

8.1

6.8

5.5

4.0

3.4

Software sales

3.2

3.5

2.2

3.0

2.5

2.6

2.5

2.2

2.0

Operation and support service

6.5

7.7

6.6

7.0

5.6

4.2

3.0

1.8

1.4

Revenue

12.3

13.8

14.7

15.3

18.5

22.0

25.5

29.0

32.5

(Ref.) Recurring revenue ratio*

80%

74%

85%

80%

86%

88%

90%

92%

94%

*Recurring revenue ratio: (Software service, Marketplace, and Operation and support service) / Revenue
NOTE) Figures of “Plan” were announced on February 9, 2022, and figure of “Forecast” was announced on November 9, 2023.

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17• The majority of “Software service” sales comes from clients of packaged software
switching to cloud software.

• The number of contracts switching to cloud software is scheduled to increase between
FY2024 and FY2025.

• At present, there are some major clients who give priority to renovation of their existingcore systems and review of business processes in response to regulatory changes including
the Invoice System and the Revised Electronic Book Storage Act.

• Coordination with these clients is underway to ensure that they do not impact the scheduleof transition to cloud software.

Medium-term management plan (2022-28)

Cloud Penetration: Quarterly Trend of the Number of Clients
The ease of installing cloud software is highly evaluated, and the number of clients in the mobility sector continues to increase.
The number of non-mobility sector clients has decreased due to consolidation of companies, but the number of licenses is stable.
Quarterly Trend of the Number of Clients
Mobility Sector

Non-Mobility Sector(Companies)(Companies)
38,09537,64336,65038,28937,855
1,725

1,704

1,691

1,702

1,692

1,676

1,666

End of
1Q

End of2Q

End of3Q

End of4Q

End of
1Q

End of2Q

End of
3Q+1,916 companies
in 1.5 years

36,85836,373End of 1Q End of 2Q End of 3Q End of 4Q End of 1Q End of 2Q End of 3Q
FY2022

FY2023The ease of installing cloud software(e.g. scalable options and monthly billing)
has attracted new clients.
In the future, even though the consolidation of companies will
progress, the number of licenses will continue to increase steadily.

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FY2022

FY2023

Although the number of companies has decreased due toconsolidation of companies, the number of licenses has beenstable after the recovery from COVID-19 pandemic.
(End of 1Q FY2022: 11,547 → End of 3Q FY2023: 11,592)

In the future, the number of licenses is expected tostay flat or slightly decrease.
18• The ease of adopting cloud software for clients, such as scalability of menus and monthly
fees, leads to the acquisition of new clients.

• As a result, the number of clients in the mobility sector continues to increase.
• The number of clients in the non-mobility sector decreased due to consolidation ofcompanies, but the number of licenses remained stable after recovering from the COVID-19
pandemic.

Medium-term management plan (2022-28)

Cloud Penetration: Progress of cloud indicators
The current level of each indicator is in line with the type of cloud software that has already been released, and is trending inline with the plan.
Cloud Transition Rate

Number of Licenses (Standard Edition)(License)

12.9%

5,477

10.7%
8.6%

24,000

40%

6.5%
4.6%

4,441

2.9%

3,490

1.2%

End of
1Q

End of2Q

End of
3Q

FY2022End of4Q

End of
1Q

End of2Q

End of
3Q

FY2023

Target for
the End of
FY2024

Average Monthly License Sales (Standard Edition)

307

995

End of
1Q

End of2Q

1,790
End of3Q

2,523

End of4Q

End of
1Q

FY2022End of2Q

End of
3Q

FY2023

Target for
the End of
FY2024User Retention Rate

(Yen/Month)

21,561
99.6%

21,047 21,279 21,165 21,424
17,308 19,148

FY2022

FY202323,000None(disclosed from FY2023)

99.6% 99.6%

Target for
the End of
FY2024*Weighted average monthly user
retention rate for the cumulative
periods up to full-year

1Q*

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1H*
FY202399%
Or more(annually)

3Q*

Target for
the End of
FY202419• As an indicator of the penetration of cloud software, emphasis is placed on the four
indicators.

• Trends in all four indicators are within the range assumed.
• The targets for the end of FY2024 are as described on the material. To achieve these targets,
we will further expand the industries provided with cloud software and expand the functions
required by major clients. These are the prerequisites for achieving the targets.

Medium-term management plan (2022-28)

Service Expansion: Roadmap for Cloud Software Development
The Company released cloud software for auto recycle shops and auto glass shops as planned. Development for the expansionof functions for large-sized clients and release of cloud software to other industries is proceeding as planned.
FY2022
Auto maintenanceshops

FY2023

FY2024FY2025

Auto body shops① 1Q FY2024
Expansion of functions forlarge-sized clients ofauto maintenance shops

Auto recycle shops①①

Auto glass shops②

Auto parts dealers
Used car dealers

FY2026FY2027

FY2028② 2Q FY2024
Release of cloud software
for auto parts dealers

Released as planned

Auto electricalequipment shops
Radiator shops

Reference: Indicators for packaged software (comparison by industry)
Number of licenses per company(as of the end of 2022)
Average monthly amount Sales(average of 2015-2020 *)Number of companies(as of the end of 2022)

Auto parts dealers and auto recycle shops
About 2.5 times

When comparing with auto maintenanceand auto body shops
About 1.1 times
Auto maintenance and auto body shops:
29,182 companies

2,944 companies*Since monthly contracts and multi-year lease contracts are mixed from 2021 onward, comparisons are made using figures prior to 2020

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

20• The cloud software for auto recycle shops scheduled to be released in 4Q FY2023 wasreleased in October.

• As a result, the cloud ordering platform began operation.
• Cloud software for auto glass shops was also released in September.
As a whole, development of cloud software is progressing steadily as planned.

• Looking ahead, in 1Q FY2024, we will expand the functions of cloud software for auto
maintenance shops in order to provide them to major clients.

• Auto maintenance shops have the largest number of users, so they are expected to be thebiggest trigger for accelerating cloud indicators.

• The release of cloud software for auto parts dealers is scheduled for 2Q FY2024. Even
though the number of clients in auto parts dealers is smaller than auto maintenance shops, it
is also expected to contribute to the acceleration of cloud indicators because the number oflicenses per company and average monthly sales tend to be higher.

• By steadily implementing these plans, the Group will make an effort to achieve the target
for the end of FY2024 for cloud indicators, and to achieve profitability in FY2024.

FY12/2023
3Q Financial Results and Full-year Results Forecast

P3

Progress of Medium-Term Management Plan (2022-28)

P14

Supplemental Information

P21

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21

Supplemental Information

List of Company’s Indicators ①
FY2022

FY2023(Millions of yen)
1Q

1H

Cumulative 3Q

Full-year

1Q

1H

Cumulative 3Q

Recurring revenue

2,367

4,766

7,481

10,294

2,876

5,844

8,983

Recurring revenue ratio (%)

73%

73%

74%

74%

79%

79%

80%

FY2022

FY2023(Companies)
End of 1Q

End of 2Q

End of 3Q

End of 4Q

End of 1Q

End of 2Q

End of 3Q

Target for the
End of FY2024

Companies using business support software

38,09838,35438,54939,34539,547

39,771

39,955ー

Mobility sector *36,37336,65036,85837,64337,85538,09538,289ー

Non-Mobility sector *

1,725

1,704

1,691

1,702

1,692

1,676

1,666

ー

33,57833,85334,06634,357

34,61834,88735,127ーTarget companies for cloud software**

395

991

1,557

2,231

2,973

3,744

4,527

ー

Standard edition

274

867

1,433

2,099

2,831

3,604

4,382

ー

Existing client

118

405

721

1,094

1,492

1,937

2,370

ー

New client

156

462

712

1,005

1,339

1,667

2,012

ー

Specific edition

121

124

124

132

142

140

145

ー

Companies using packaged software

33,18332,86232,50932,126

31,64531,14330,600

4,520

4,501

4,483

4,988

4,929

4,884

4,828

ー

1.2%

2.9%

4.6%

6.5%

8.6%

10.7%

12.9%

40%

Companies using cloud software

Non-Target companies for cloud software
Cloud transition rateー*Mobility sector: auto maintenance shops (& service stations), auto body shops, auto parts dealers, auto recycle shops, used car dealers, auto electrical equipment shops, radiator shops
Non-mobility sector: 13 industries: Mobile phone shops, machine tools dealers, travel agencies, and bus operators**Of the 13 industries, the industries targeted for cloud software in the medium-term management plan are auto maintenance shops (& service stations), auto body shops, auto parts dealers, and auto recycle shops
FY2022
1Q

1H

FY2023Cumulative 3Q

Full-year

1Q

1H**

Cumulative 3Q**

When packaged software contract expires*switch to cloud software

ー

35%

45%

44%

76%

78%

76%

switch to packaged software (monthly contract)

ー

65%

55%

56%

24%

22%

24%

*The denominator is the industry in which the cloud software has been released (e.g., auto maintenance shops and auto body shops).

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

22

Supplemental Information

List of the Company’s Indicators ②
FY2022

FY2023End of 2024

(license)
End of 1Q

End of 2Q

End of 3Q

End of 4Q

End of 1Q

End of 2Q

End of 3Q

TargetNumber of cloud software licenses*

1,306

2,056

2,857

3,620

4,656

5,649

6,721

ー

Standard Edition

307

995

1,790

2,523

3,490

4,441

5,477

24,000Existing client

136

950

1,381

1,970

2,552

3,166

ー

New client

171

512

840

1,142

1,520

1,889

2,311

ー

999

1,061

1,067

1,097

1,166

1,208

1,244

ー

Specific edition

483* License refers to “Company license” and “Job license”
FY2022

FY2023End of 2024

(yen/month)
March

June

September

December

March

June

September

Target

ー

ー

ー

ー

ー

ー

17,30819,14821,047

21,27921,165

21,424

21,561

23,000Existing client

18,80821,15023,326

24,074

23,837

24,32424,553ーNew client

16,115

17,261

18,47017,90017,701

17,507

17,461

ー

ー

ー

ー

ー

ー

ー

ー

ー

Average monthly license sales*
Standard Edition

Specific editionー* License refers to “Company license” and “Job license”

FY2022

FY2023End of 4Q
Cloud software user retention rate*
Number of cloud software users (companies)

1Q

End of 2024

1H

Cumulative 3Q

Target

-

99.6%

99.6%

99.6%

99% or more

2,099

-

-

-

-

**Cloud software user retention rate: Weighted average monthly user retention rate for the cumulative periods up to full-year
Monthly user retention rate: 1-{number of monthly cancellations/ (number of cloud software users at the end of the previous fiscal year + number of newly acquired companies}

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

23

Supplemental Information

Licenses of DX Solutions
By aggressively proposing secondary products (various DX solutions), the company aims to realize upsells.

Future Outlook

DX Solutions(license)

Electric
Book.DX
Dencho.DX

BL.Homepage

Solution compliant with
the Electronic Book Storage Act(“Dencho.DX”)

Google Workspace™

(Premium Edition)

3,040
2,694

2,570

Grace period will be abolished at
the end of December 2023, so
we anticipate a surge in lastminute demand.

2,358
2,189

2,145
Website creation tool(“BL.Homepage”)

1,924
1,724

With the tailwind of DX demand,
we anticipate a gradual increase
will continue in the future

1,459

1,449
1,078
912

958

978

225 589

634

683

707

2Q

3Q

4Q

1Q

864

890

553

1Q

920

FY2022

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

976

1,018

718

770

2Q

3Q

Groupware(“Google WorkspaceTM ”)

Driven by DX demand andbranding power, we anticipate
continued growth in the future.

FY202324

Supplemental Information

Sales Trend of Cloud Service Expected in the Future
Sales plan of “Cloud service”（Billions of yen）

New platform services※Not included inAuto financing, logistics MaaS, etc. the performance plan
Marketplace
Ordering platform

4.1
2.9

Software service
Cloud software and DX solutions
1.9

1.6

25.0
22.1
1.4

18.0
13.6

0.7
0.7
2.0

4.7

FY2022(Result)

FY2023(Forecast)*

9.0

FY2024(Plan)FY2025(Plan)FY2026(Plan)FY2027(Plan)FY2028(Plan)NOTE) Figures of “Plan” were announced on February 9, 2022, and figure of “Forecast” was announced on November 9, 2023.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

25

Supplemental Information

Expansion of Broadleaf’s Service Area
“Seller” and “buyer” groups thatcan be matched by digitization ofordering businessAccounting system
Electronic book storage act

Website creation tool
Mobile phone shops

Ordering of parts
Electronic book storage act

Groupware(GWS)

Auto body shops

Travel agencies

Non-mobility sector

Mobility sector

Broadleaf’sServices

Bus operators
Work analysis
software (OTRS)Human resources system

Website creation tool
Auto maintenance shops
Service stations

Machine tool dealers

Ordering of vehicles

Radiator shops
Groupware(GWS)

Auto electricalequipment shops

Auto recycle shops
Car dealers

Auto glass shops

Financial system

Auto parts dealersetc

Ordering of services
Work analysis
software (OTRS)

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

etc
etc

26

Supplemental Information

Service Expansion: Scalability of the Platform Service
The range of services that can be provided, including the ordering platform, has been expanded.
Expansion

RecipientIndustries that cloud business support software are provided or planned to be provided

Automaintenance shops

Auto body
shops

Used cardealers

Auto parts
dealersAutorecycleshops

Auto glass
shops

Electricalequipment
andradiator
shops

Open EDI

1

2

2

1

2

2

2

EC

2

2

2

1

1

2

2

Software for the ElectronicBook Storage Act

2

2

2

2

2

2

2

Website creation tool

1

1

3

3

3

1

3

Work analysis software

3

3

3

3

3

3

Settlement agency

2

2

2

1

1

2

The Company’s service

Industries provided withpackaged business support software

MobileMachinephone shop tool dealers

Travelagenciesand bus
operators

OthersFinancecompany

Systemcompany

3

Others3

Ordering platform

General-purpose
software

Other service

AI function

Data linkage(Finance)

3

3

3

3

3

3

3

3

1

2

3

3

3

1

1

1

Data analysis

3

3

3

3

3

3

3

Employee benefits

1

1

1

1

1

1

1

3

Operational assistance

2

2

2

2

2

2

2

Generative AI

2

2

2

2

2

2

2

Fraud detection

2

2

2

3

Loan

2

2

2

2

Insurance

3

3

3

3

3

3

3

Operating environment

2

3

2

2

2

IT infrastructure
Development environment

2

Expansion
1

Conventional service range+

2

New service range expanded by cloud transition

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

+

3

Range where services can be further expanded27

Supplemental Information

Service Structure (Cloud Software)
Job license

Company license

Additional Employee
Account

Select the required licenses and options
according to the business size and contents
Select a plan according
to the business size
(mandatory)＋

Select a license
according to the job
type of an employee
経営者

Clients will select a plan from the company license
menu and select necessary job licenses in addition.
When multiple people use the functions of company
license and job license, purchase of additional
employee account is necessary according to thenumber of users. There are also other service menus
such as database and client support.

＋

Added when
multiple people use
the functions ofcompany license andjob license
アカウント①

Start plan

Corporate manager

Account-1

Standard plan

Front desk

Account-2

Total plan

Mechanic

Account-3＋

OptionOnline reservation
Vehicle examinationline linkage

Select required
functions

Database

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Insurance linkage

ClientsupportSlip
issuance28

Supplemental Information

Understanding of Cloud Transition Rate
Switching to cloud-based software will not proceed at a constant pace.
Clients switch when 6-years contracts expire, so the number of switching users depends on the number of deals 6 years ago.

Understanding of cloud transition rate

Early stage
Smaller numberof users
will switch to
cloud software

Middlestage
中期
Largernumber『.cシリーズ』
of users
切り替え対象
will switch to
ユーザー数が多い
cloud software

Reference: Revenue from FY2016

Late stage
Smaller numberof users
will switch to
cloud software(Millions of yen)

22,586
21,285100%

21,162

20,652

FY2020

FY2021

18,195
16,76040%

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028FY2016FY2017*FY2018FY2019* Tajima Inc. became consolidated subsidiary of Broadleaf Group from 3Q FY2017.
Note) cloud software for auto parts dealers and auto recycle shops have not yet been provided.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

29

Supplemental Information

Understanding of Changes in Software Sales due to Cloud Transition(The Case of Auto Maintenance Shops and Auto Body Shops)

If the Company continues to sell packaged software in 2022 and beyond
About 1/6 of user companies renew their contracts each year,
but there is a wave in the number of contract renewals depending on
the year.
Sales of licenses (6-year usage rights)
Target of each year: Companies who renew the contract for packaged software (About 1/6 )Accounting method: License fee for 6 years is booked in lump-sum as sales
in the year when the contract is renewed.

Sales of operation and support services
Target of each year: All users of packaged software
Accounting method: Monthly sales

FY2021

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

If the Company starts selling cloud software (Green) from 2022
About 1/6 of companies using packaged software will switch to cloud
software each year. Average sales are expected to rise after thetransition completes due to different licensing systems
・For the year in which the contract is switched, the period after the contract isconcluded will be is booked as sales ().
Therefore, sales from the following year onward () will be roughly doubled
because sales for 12 months are fully booked
・Sales of operation and support services are received from users of packaged
software, so it will gradually decline as the transition proceeds.

FY2021

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY202830

Supplemental Information

Cases of Offering Packaged Software under the Monthly Subscription Contracts
In certain cases, some clients may continue to use packaged software under monthly subscription contracts for a limited period.

Case 1

A client who wishes to use a specific function on cloud software
Packaged software
monthly contract

If a client's contract for packaged software
expires before a desired function is
implemented:

The client may continue to use the packaged software undermonthly subscription contract until the desired function
becomes available on our cloud software.

Packaged software
6-year contract

Cloud software
monthly contract

Switch after the desired function
is implemented on cloud software
January
2016

January2022

Case 2 A single client who has multiple lease contracts
Packaged software (A)monthly contract

If a client has multiple 6-year contracts
for packaged software, each with
Packaged software (A)6-year contract

different expiration dates:

Cloud software （A/B）
monthly contract

Packaged software (B)6-year contract

The client may continue to use the packaged software undermonthly subscription contracts after each contract expires,
until all their contracts have expired.
Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Switch after all the client’s
contracts have expired
January
2016

January
2017

January2022

January2023

31

Supplemental Information

Reason for Switching to Cloud Software when the Previous Contract Expires
・If existing clients who have lease contracts of packaged software for 6 years switch to cloud-based software before theexpiration of the contract, negative sales will be recorded.

In the case of cloud software*

Usage fees - trade-inrecorded as sales

Usage
fee for
6 years

In the case of packaged software with multi-year lease contract

If the contract was changed at
this timing, usage fee will bemonthly while trade-in will be
one year, so trade-in becomeslarger than usage fee, resulting
in recording of a negative sales

Usage
fee for
6 years

Usage
fee for
6 years

Trade-in

下取り
Trade-inContract
concluded six
years ago

Fifth year of
the contract+Additional license+Volume charge
Monthly
usage fee

Trade-inTrade-inContract
concluded six
years ago

Fifth year of
the contract

Expiration ofcontract

Switch tocloud software
upon expiration ofcontract

Sales recorded(monthly)

Expiration ofcontract

Renewal ofcontract before
expiration*The same applies when selling packaged software under a monthly subscription contract

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

32

Supplemental Information

Explanation of Service Category

Packaged system

Cloud services
Software service

Software sales

・Provision of cloud software*
・Sales of packaged software under monthly contract
・Provision of DX solutions*・”Dencho DX,” a solution compliant with the Electronic Book
Storage Act
・”BL.Homepage,” a website creation tool・Sales of packaged software under multi-year lease contract
・Sales of “OTRS,” a work-analysis software
・Sales of PCs and other devices

Marketplace

Operation and support service

・Provision of platforms for ordering auto repair parts
・”BL Parts Order System,” a transaction system for auto parts
・”Parts Station NET,” a transaction network for recycled auto parts
・Cloud ordering platform
・Provision of settlement agency service

・Ancillary services of packaged software such as support service
・ Sales of supplies such as forms and toners*Include initial installation costs

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

33

Supplemental Information

Corporate Profile

Company Name

Broadleaf Co., Ltd

Representative

Kenji Oyama, Representative Director and President

Listed on

Tokyo Stock Exchange Prime Market (3673)

SectorInformation and telecommunication

Founded/established

December 2005/September 2009

Capital stock

7.148 billion yen (consolidated)

Business Year

From January 1 to December 31

Business Outline

Based on our proprietary Broadleaf Cloud Platform, we provide SaaS cloud services, marketplace services, andpartner programs that enable functions and service collaboration with a diverse range of players. Mobility sector isused as a IT solution that leads to business opportunities in various industries and industries.

Head Office

8th Floor, Glascube Shinagawa, 13-14, Higashi-Shinagawa 4-chome, Shinagawa-ku, Tokyo

Domestic sites

26 sales offices/3 development offices

Main Subsidiaries

Tajima Co., Ltd, SALES GO Corporation, SpiralMind Corporation

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

34

Disclaimer

Statements contained in these materials regarding operating results and future projections,
These are estimates based on information available to the Company at the time the materials were prepared,
Which are subject to potential risks and uncertainties.
Accordingly, due to a variety of factors, actual results may differ materially.
Please note that these forecasts may differ from the forecasts.

Contact Information
Broadleaf Co., Ltd
Investor Relations Department
E-mail:mailto:bl-ir@broadleaf.co.jp

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

35