Financial Report
1Q of FYE March 2024

2023.8.9

Ⅰ. Business Model and Strategy of DG

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

2Designing ‘New Context’ for a sustainable society
with technology

3 Core Technologies

Social implementation of new business context,
leveraging three technologies : IT, MT, and FT

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

4

History of DG Group’s Contextual Design and Social Implementation
Since its establishment in 1995, DG has been developing the latest internet business deploying cutting-edge
technologies based on marketing and payment. Our next-generation focus will be on Gen AI / web3, etc.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

5Overview of Payment Platforms and Next-Generation Businesses
Ⅰ Continue “DG FinTech Shift” strategy centered on our payment platform. Increase recurring revenue stream.
Ⅱ Social implementation of next-generation technologies / Develop non-linear businesses through Blockchain,

Gen AI, etc.

Ⅱ

web3/Crypto
Related Business

Non-Linear
Business Development

Blockchain / Gen AI

Combine payments and businesses generated
non-linearly with cutting-edge technologies

Marketing
DX Business

Strategic
JV

FintechBusiness

Ⅰ
Payment Platform
Investment/Incubation

Linear Developmentof Payment Platforms

Expanding the portfolio of strategic businesses
around the Fintech area, which creates a competitiveedge and contributes to the growth of the paymentbusiness

Payment Platform

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

6Overview of “DG FinTech Shift”

Designing ‘New Context’
for a sustainable society with technology
GlobalInvestment

Incubation

R&D

Context Company

Fintech Platform Solution＜Digital Ecosystem Context Design＞
Pursue business growth with sustainable value creation driven
by expanding Digital eco-system with internet-business incubation & providing Fintech Platform Solution
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

7

Ⅱ. Consolidated Financial Results Highlights

Copyright © 2023 Digital Garage, Inc. All Rights Reserved8

1Q of FYE March 31, 2024 Financial Results Highlights
1Q Consolidated Financial Performance•

Consolidated profit before tax for FY24.3, a starting year of Medium-term Plan, was 6.2B JPY（-44.8% YoY）•

Though consolidated profit before tax decreased mainly due to the decrease of fair value gain by foreignexchange rate compared with the previous year’s 1Q, the performance of PS segment and cash generationin GII segments are progressing steadily aligning with target of Medium-term Plan.
▶PS：Driven by payment business, profit before tax increased by 23.7％ YoY with steady growth towardachieving the target of FY24.3.
▶LTI：Early-stage investment into new businesses continues, aiming to create new business domains.
▶GII：Cash inflow of 2.2B JPY was generated from the sales of holding shares and cash distribution fromfunds.

Progress of Medium-term Plan B2B Payment service, “DGFT Invoice Card Payment,” has been expanding steadily.
▶“Tabelog Shiire” by Kakaku.com and Resona Group started to offer, following JCB, Orico, and Diners.
 “CloudPay Neo”, a device-free cashless payment service, has been launched.
 Partner program in “Musubell,” DX engagement platform for next-generation in real estate industry, hasbeen launched to drive innovation throughout the real estate industry.
 Strategic business JV for “Users Engagement” was established with Kakaku.com, leveraging nextgeneration technology. (July, 2023)
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

9

“DG FinTech Shift” Strategy – Progress and Highlights in 1Q
2023 Aug
Aug
Jul
June
May
May

• Launched Partner Program in “Musubell”, DX Engagement Platform for nextgeneration real estate to drive innovation throughout the real estate industry• Launched “CloudPay Neo,” a device-free cashless payment service• Launched “DGFT Invoice Card Payment,” B2B payment services, at somebranches of Resona Bank.

• Added B2B payment services to the service menu of “Tabelog Shiire”• Started to provide “DGFT Invoice Card Payment for Invoice Issuers,”
a rapidly-growing early payment collection scheme for SMBs
• Signed MOU to establish a joint company for smart e-commerce businesses
integrated with next-generation technologies• Expanded “DGFT Invoice Card Payment,” B2B payment services, to individual business operators andfreelancers
Launched “DGFT Invoice Card Payment,” B2B payment services, to customers of Orico
Launched “DGFT Invoice Card Payment,” B2B payment services, to Diners Club members

Apr

•
•

Apr

• Launched Digital Asset Custody and OTC trading services by Crypto Garage
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

10Consolidated Financial Results Highlights – Profit by Segment
・PS grew steadily driven by the payment business toward achieving FY24.3 growth target of 15% or more.
・LTI continues early-stage investment, aiming for medium to long-term growth.
・GII showed steady progress with targeted cash generation except for the decrease of fair value gain compared with theprevious year 1Q by foreign exchange rate.

Unit：M JPY

Consolidated
tax before profit

PS

FY23.3
1Q

11,2041,214

FY24.3
1Q

6,179

1,502

YoY

Increase/Decrease-5,025(-44.8%)Overview• Profit decreased due to the backlash of fair value loss by foreignexchange rate, recoded in 1Q of the last fiscal year.
• Performance of PS and cash-generation in GII grew steadily.
• Profit grew steadily by 23.7%, toward achieving FY24.3 plan (15% ormore growth).

+288(+23.7%) • The transaction volume grew significantly, focused on theestablishment of collaboration with marketing business.

LTI

GII

553
8,527

380
4,649

-173
(-31.3%)• Early-stage investment into new businesses continues, aiming tocreate middle-term profit.
• Development for Fintech-related businesses has been progressing.
• Cash inflow of 2.2B JPY was generated from the sales of holding
shares and cash distribution from funds.

-3,878(-45.5%) • Profit decreased due to the decrease of fair value gain by foreignexchange rate compared with the previous year’s 1Q.

Others/Adjustments andEliminations

910

-352

-1,261• Fair value of shares denominated in foreign currency held by HQ
decreased due to the decrease of fair value gain by foreign exchange
rate.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

11

Highlight - KPI・The transaction volume grew steadily in both online payment with successful alliance strategy and offline payment
driven by travel industry.
・Cash inflow of 2.2B JPY was generated from the sales of holding shares and cash distribution from funds.
FYE24.3
1Q

YoY

YoY
% Change

KPIs

Unit

FYE23.3
1Q

Transaction volume

100M
JPY

12,368

14,648+2,281+18.4%

Online Payment

100M
JPY

9,466

10,677+1,211+12.8%

Offline Payment

100M
JPY

2,902

3,972

+1,070+36.9%

Operational Investment
Securities

M JPY

86,56572,594-13,971-

Investment Business
Income※

M JPY

236

2,185

+1,949-New Investment

M JPY

864

1,078

+215

-

KPIs for Investment-related※ Investment Business Income: Total of profit from the sales of holding shares and profit distribution from funds.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

12Performance Trend (excluding one-off gains/losses and investment businesses)
・“Performance in recurring businesses” remained steadily excluding one-off gains/losses and investment businesses.
・PS maintains continuous and stable growth, while focusing on creating new business in the LTI segment with the goal ofaccelerating growth in the medium term.

Revenue (excluding one-off gains/losses, and investment)

Profit before Tax (excluding one-off gains/losses and investment)（Unit：M JPY）

（Unit: M JPY)）

Others/adjustments and eliminations
LTI

1,300

PS

6,696

7,449

7,615

6,868
1,412

1,166

941

1,035

5,695

5,733

5,885

6,197

1Q

2Q

3Q

4Q

FY22.3

7,319

7,201

7,307

7,446

1,478

1,054

1,264

1,143

5,595

5,763

6,092

6,292

1Q

2Q

3Q

4Q

FY23.3

7,651

1,204

1,199

FY24.3

1,055

1,039

1,155
1,008

947

439

5,947

1Q

1,186

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q
FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

13

Ⅲ. Segment Performance Highlights

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

14Platform
Solution

Performance by Segment – Platform Solution

・Profit before tax in payment business increased by 32% steadily in both online and offline payments.
・Marketing business is driving efforts to strengthen and integrate with the payment business.

Segment Revenue（Unit：M JPY）

マーケティング
Marketing
決済
Payment
5,695

5,733

5,885

Segment Profit
YoY

6,197
5,595

5,763

6,092

6,292

5,947

+6.3%

1,597
1,334

3,403

3,283

3,298

3,673

3,113

3,103

3,522

2,977

-4.3%

2,292

2,450

2,587

2,524

2,483

2,660

2,906

2,769

2,969 +19.6%

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY22.3

FY23.3

FY24.3

1,949

YoY

決済
Payment

1,450

3,186

（Unit：M JPY）

マーケティング
Marketing

292

1,328

219

249

1,042

1,079

1Q

2Q

1,361

3Q

FY22.3341

1,644
1,502 +23.7%
512

1,214
330

1,231

509

91

-37.5%

146

1,031

1,068

4Q

1Q

1,257

2Q

1,440

1,411 +32.0%
1,132

3Q

FY23.3

4Q

1Q
FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

15

Long-term
Incubation

Performance by Segment – Long-term Incubation

・Early-stage investment into new businesses continues, aiming for medium to long-term growth.
・“Tabelog” and “Kyujin-box” of Kakaku.com grow steadily.
Segment Revenue
4,168

Segment Profit（Unit：M JPY）

一過性収益
One-off
revenue（Unit：M JPY）

YoY

持分法利益
Profitfrom equity method
Business
事業収益
Revenue

1,072

1,422
1,324

383

1,233

1,163

1,040
801

603

433

984

1,056

1,035
984

558

1,299

429

365

841

423

733

783

360

558

603

1Q
-190

2Q
3Q
-179
FY22.3
-276

1,040

801

841

783

4Q

1Q

2Q

-301

-323

661

733

-12.8%

661

438

394

471

+11.4%

一過性収益
One-off gains/losses

3Q

FY23.3
-369
-467

4Q

1Q
FY24.3-503-447

Profit from equity
持分法利益
method

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q
FY24.3

事業損益
Business gain/loss
セグメント利益
Segment Profit
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

16

Global Investment
Incubation

Performance by Segment – Global Investment Incubation

・Cash inflow of 2.2B JPY was generated from the sales of holding shares and cash distribution from funds, accelerating toachieve Medium-term Plan.
・The balance on operational investment securities increased by 4.9B JPY YoY due to increase of fair value by JPY depreciation.

Operational Investment Securities Details of Increase/Decrease
Fair Value(impact of foreignexchange)+4,369New
Investment+1,078Decrease in bookvalue due to thesales of shares▲1,056（Unit：M JPY）

Others+344

72,594

Fair Value(excluding foreignexchange)+181

67,676
Proceeds fromthe sales

1,087 M JPY

Cash distribution
from funds

1,098 M JPY

Investment business

2,185 M JPY

incomeCopyright © 2023 Digital Garage, Inc. All Rights Reserved

17

Ⅳ. Payment Business /Business Overview and Updates of DGFT

Copyright © 2023 Digital Garage, Inc. All Rights Reserved18About DG Financial Technology, Inc.

Innovation across Payment
DG Financial Technology, Inc. (DGFT), a wholly-owned subsidiary of Digital Garage managing the group’s core
payment service, was formed in Feb. 2021 through reorganization of VeriTrans and ECONTEXT.
Leveraging its highly available, functional and stable payment platform, DGFT will strive to design ‘New Context’ fora sustainable society and lead the creation of a new Fintech-based financial ecosystem.

Development（Offshore）
Recommendation

OnlinePayment

OfflinePayment

BNPL

Remittance

Security

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

19Overview of DG Financial Technology, Inc.
A wholly-owned subsidiary of DG, managing the DG group’s core payment business
Provide payment solution for various needs of clients, covering both online and offline merchants
Company Profile
CompanyName

DG Financial Technology, Inc.

Head Office

Shibuya-ku, Tokyo

Capital1.6845 B JPY

Business
Areas

Payment Information Processing Service
Agency Payment Service
Money Transfer Service

Registered
Businesses

Electronic Payment Services（Director of the Kanto
Finance Bureau No.25）
Funds Transfer Service Provider（Director of the
Kanto Finance Bureau No00094）
Business Operator for handling Credit Card
Numbers, etc.

Certification

PCIDSS Version3.2.1
ISO/IEC27001
Privacy MarkParticipating
Organizations

PCI Security Standards Council, LLC
Japan Credit Association
Japan Collection Agencies Association.
Japan Multi-payment Network Promotion
Association
Japan Payment Service Association
EC Payment Forum

Overview of DGFT’s Payment Business（FYE Mar 2023）
Payment Transaction Volume (JPY)

Yearly Total

5.3Tn

Offline

1.3Tn

Online4.0Tn

Number of Merchants（as of Mar 2023)

FYE Mar. ‘23

954K

Non-Face-to-Fac

Offline837K

Online117k

Number of Payment Transactions

Yearly Total

Offline980Mil390MilOnline590MilStatus of Systems（FYE Mar 2023）

System Uptime

99.99%# of available
Payment methods

40+# of partnered
Financial Institutions

1,000+

Major subsidiaries and Affiliates

Marketing tools
for e-commerce

India-basedtech support& engineering
service

Fraud detection
solutions for
Payment

Multi-payment
and mileage
programproviderMulti-payment
solution for
POS

BNLP payment
solutionsShareholder

Shareholder

Shareholder

Shareholder

Shareholder

Shareholder

DGFT: 100%

DGFT: 100%

DGFT: 100%

ANA: 51%
DGFT: 49%

Toshiba Tec: 51%

DGFT: 49%

Nissen: 51%
DGFT: 49%

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

20

Payment Methods and Major Payment Products
Handle 40+ major payment methods, raging from credit cards to convenient-store payment
Address the needs of clients with payment products designed for different industries and use cases
Payment Methods
Credit Cards

JCB, VISA, Mastercard, American Express,
Diners Club

ConvenientStoresSEVEN-ELEVEN, Lawson, FamilyMart,
Seicomart, MINISTOP, Daily YAMAZAKI

ID/QR

au PAY, Amazon Pay, Bank Pay, J-Coin Pay,
Rakuten Pay, d payment, LINE Pay, PayPay,
Smart Code, merpay, FamiPay, Apple Pay,
Google Pay, EPOS payment, COIN+

Carrier
Payments

au Easy Payment, d payment, Softbank Payment

Banks

Pay-easy, Rakuten Bank, SBI Sumishin Net Bank,
PayPay Bank

Electric Money

Rakuten Edy, Suica, nanaco, WAON

Overseas

Alipay, Alipay＋, WeChatPay, PayPal, Union Pay

Web AccountTransfers

About 290 Financial institutions in Japan（Major banks, Internet banks, Local banks,
Shinkin banks）

OthersVeriTrans BNLP, Credit cards for multi-currency,
Eikyufumetsu Point System

Major Payment Products

Patent-pending

Multi-payment service foronline merchants

Multi-QR Code payment
service for offline merchants

QR Code multi-payment
service for offline merchants

HotelPay
Account transfers overemails and cash receipt at
Lawson stores

Payment services for hotels &hospitality industry, integrated
reservation systems

Credit card payment solution
for real estate industry(rents and initial fees)

セレモニーPAY

IVR Paymente-mail link payment(Ceremony Pay)

Patented

Payment and financial
solutions specificallydesigned for funeral

Credit card payment solution for
telephone ordering

Payment solution to provide
payment URLs by emails.

Barcode payments for
PoS

OmniPAY

Fraud-detection Service

One-stop payment solution
to manage both online andoffline payments

Security solutions forfraud prevention and detection（ACI, ReD Shield, Sift, etc.）

One-stop installation of
ID Payment to PoS terminals

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

21

Overview of Payment System
Manage IT system risk through redundancy (2 data centers) with in-house system monitoring and operation
Achieve agility and cost competitiveness by building in-house engineering team and utilizing development base
System Overview
1

Active-Active Configuration

 2 d a ta c e n te rs w ith e q u iva le n t
c a p a b ilitie s in d iffe re n t lo c a tio n s
 8 0 0 k m+ d is ta n c e b e tw e e n th e 2
d a ta c e n te rs in c re a s e s to le ra n c e
to n a tu ra l d is a s te r a n d B C P

Merchants

Merchants

 S ta b le o p e ra tio n w ith n o d o w ntime
if o n e o f th e 2 d a ta c e n te rs
re ma in s u p a n d ru n n in g

3

Merchants

Data Center 2（Kyusyu）

Servers

Servers

Bi-directional data Sync

 B i-d ire c tio n a l d a ta s yn c b e tw e e n
th e 2 d a ta c e n te rs (e ve ry 1 -1 0 s e c .)Merchants

Data Center 1（Kanto）

Database 1

2

Operation Overview

Overview of DGFT Payment System

Storage①

Data
10秒以内にSynchronization
データを同期
every ten seconds

Database 31

 2 4 /7 s ys te m mo n ito rin g a n do p e ra tio n fro m in J a p a n a n d In d ia
 Ac h ie ve q u ic k re s p o n s e time a n d
c o s t c o mp e titive n e s s b y b u ild in g
in -h o u s e e n g in e e rin g te a m a n d
a ls o u tiliz in g o ffs h o re lo c a tio n2
Storage①

Storage②

Storage②

Storage③

Storage③

BackupBackupDatabase2

Database 4

Storage①

Storage①

Storage②

Storage②

Storage③

Storage③

System Operation Structures

Monitoring System

 Au to ma te d re a l-time mo n ito rin go f e n tire p a yme n t s ys te ms
 Qu ic k c h a n g e o ve r to ma n n e dre s p o n s e s o n c e s u rve illa n c e a le rtis d e te c te dMulti-layered Redundancy

 D a ta -tire w ith 1 2 -la ye r mirro rs
s tru c tu re （ D B : ４ u n its ×S to ra g e : 3
u n its fo r e a c h ） R e d u n d a nc y s tru c tu re tomin imiz e s ys te m in c id e n t a n do u ta g e

System Operation and Monitoring（Japan）（two-location system)（India）<System Downtime for FYE 23. 3>

Achieved the lowest industry rate due torobust structure with well-controlled
operations and monitoring system

20 seconds per year
（Uptime:99.9994%）

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

22

Details of Merchants
Possess diversified client portfolio less influenced by business segment of a certain customer or sector
Provide consulting service to various firms in different sectors leveraging deep knowledge and track records
Payment Transaction Volume by Industry (%, FY23.3）

Transaction Volume in Top 10 Industries and Growth Rate (1Q of FY24.3)
+80%
+70%

Transaction
Volume for
FY23.3

4%
4%
4%
4%
5%

11%

5.3 T JPY
6% 6%

General Retail
Network & Communication
Tax
Digital Content
FashionFood & Beverage

10%

7%

TravelTicketingFurniture & Hime Appliance
Restaurant
Hobby
OthersTRX Value Growth Rate（YoY）

16%

23%

The size of bubble represents TRX value+60%

TravelRestaurant

+50%
+40%
+30%

Hobby

+20%

Fashion+10%+0%

DigitalContent-10%

Furniture &Home Appliance

-20%

0%

5%

GeneralRetailTax
Network &Communication
Ticketing

10%

15%

20%

TRX Value Share
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

23

Capital and Business Partners / Partner Companies
Create strong partnerships with leading payment, financial, and retails companies in Japan
Jointly develop efficient sales partnership and new businesses to address emerging market needs
Strategic Partners（Capital Alliance Partners）

Resona Holdings

Toshiba Tec Corporation

Capital and Business Alliance

Capital and Business Alliance

Capital and Business Alliance

Capital and Business Alliance

Sales collaboration and jointdevelopment of new payment services(Holding 5% of DG shares)

Provide payment service on an OEM
from DGFT and joint-development of
new payment services(Holding 2% of DG shares)

Operate “TD Payment,” an online
payment service joint venture(Mutual holding 2% of shares)

Joint-development of new payment
services such as “Ceremony Pay”
(Holding 1.7% of DG shares)

Business Partners

JV Partners

JV Partner

JV Partner

Jointly operate payment
JV for hospitality Industry

Jointly operate BNPL
JV for EC businesses

Business Partner
Promoting collaboration
on “DGFT Invoice Card
Payment,” a payment
service for B2B

Business Partner

Business Partner

Business Partner

Provide payment
service on an OEM
from DGFT

Provide payment
service on an OEM from
DGFT, jointly provide
B2B payment services

Provide ID/QR code
Payment to “AirPAY”,
offline payment service

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

24Partnerships with Major Overseas Payment Companies
Provide Japan-local payment solution to leading global 12 PSPs and support global firms’ Japan entry
Plan to expand DGFT’s businesses globally by leveraging the partnership with the leading PSPs
Support global companies’ Japan entry by partnering with the world’s

12 leading payment service providers(PSPs)

Europe3

North America
Asia

companies

53

companies

companies
Market Size of Payment Orchestration（M USD）
<Source: 360i Research>

The world

6,624.1

Japan

CAGR
The world

South America+17.2%
Japan

1,861.8
259.4

64.3
2022
Actual result

2023

2024

2025

2026

2027

2028

2029

+19.0%

1company2030

Forecast

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

25

Ⅴ. Strategic Initiatives / Incubation of New Businesses

Copyright © 2023 Digital Garage, Inc. All Rights Reserved26

Ⅰ. DGFT New Product “CloudPay Neo” / ’23.8.1 Release
Launched “CloudPay Neo,” a device-free QR-code-based cashless payment service
Multi-payment services for all payment methods including credit cards, PayPay, au Pay, Alipay and Apple Pay
Product Overview

Target Market & Future Plan

A device-free QR-code-based cashless payment
service utilizing consumers’ smartphones

Capture the needs for cashless payments previously
difficult to address due to the need of terminals

Service Offerings

Target Market

Cashless payments available only with a single QR CodeFood Delivery

Electrical works

Stadium＜Market Size＞＜Market Size＞＜Market Size＞

approx.

Device-free, easy and quick to installnext-generation cashless payment
service with simple scanning of
QR codeID payment
International
payments
Others(Plan to add banks,
convenient stores & BNPL)

Patent Pending

1.6Tn

approx.

1.0Tn

Cashless Payment %10% (estimate)Home care

Small Enterprises

Mid Enterprises＜Market Size＞＜Market Size＞＜Market Size＞

0.5Tn

Cashless Payment%
15% (estimate)

Support major payment methods, including ID Payment & Credit Cards

approx.

Cashless Payment %5% (estimate)approx.

Payment Method (Plan)
Credit Card

3.0Tn

Cashless Payment %60% (estimate)approx.

122Tn

Cashless Payment %40% (estimate)

Approx.

397Tn

Cashless Payment %60% (estimate)

Future Plan

1. Recurring Payment Function: Automates the second andsubsequent payments and streamlines payment operations
2. Multilingual support: Responds to inbound needs byswitching language automatically based on User Agent
3. System Integration: Automatically display the price to“CloudPay Neo” by integrating external systems

Copyright © 2023 Digital Garage, Inc. All Rights Reserved27

Ⅱ. Crypto Garage / Registered Crypto Asset Exchange Business in June ‘21“Digital Asset Businesses” and “web3 Service” for next-gen finance based on emerging tech
Expand service offerings for institutional clients and promote web3 projects with global leading companies
Digital Asset Businesses for Enterprises

web3 Business

Digital asset settlement and financial service forthe digital asset exchanges and enterprises

web3 DevOps services and solutions forthe enterprises promoting projects

Current services

Services

Intermediary & settlementfor digital asset trading

Blockchain
Back-end services

Digital asset custody forenterprises

Custody-typed
Key Management

Digital asset OTC (trading)for enterprises

web3 system development

Main topics

1. Commercial launch of SETTLENET
Launched SETTLENET to major Japanese crypt
asset exchange and the oversea businesses
2. New digital asset services for enterprises
Launched digital asset custody services and OTC(sales of digital asset) for institutional clients

Main topics

1. Establishment of DevOps service for web3

Registered Crypto Asset
Exchange Business“Crypto Business Enabler”
Support enterprises to build digital asset
businesses, leveraging deep expertise infinance and Blockchain technology

Launched “mahola”, DevOps tools and managed
services for enterprises developing web3 projects

2. Collaboration with global leading companies
Promoting joint development of web3 projects withmajor global companies and system integration
for web3 projects

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

28

Ⅲ. “Musubell”(DX engagement platform for next-gen real estate transactions)“Musubell”, Japan’s leading DX engagement platform for next-gen real estate transaction
Accelerate DX of entire real estate industry by promoting Open Innovation with industry-leading companies
Real Estate DX Businesses

Engagement Platform
The Partner Program to accelerate DX of the realestate industry with industry-leading companies

Leading real estate focused vertical SaaS serving
150 locations of the major real estate companies

Overview of Partner Program

Services

The 2 programs to foster partnership for building newservices to address pain points in the real estate industry

for the New Condo

1

for Real Estate Agent
2

for Property Survey
Implemented Companies
Introduced by leading real estate businesses
Sales grew 350% (YoY)“Real Estate DX Platform”
Provide digital solutions, centered on
e-contract, to modernize end-to-end
real estate transactions

Open Innovation led service growthDX

Enhance usability by system

Partner

integration with “Musubell”

Innovation
Partner

Led innovation though data/tech
integration with “Musubell”

1st Partner Program/Future Focus Area

DX Partner
Service
Provider:

Focus
Area

 System connection with Cocolive’s
marketing automation service focusing
on real estate Improve operational efficiency throughunified management of customer data
Mortgages

Insurance

Commercial
Real Estate
Rent

Rent
Management

Copyright © 2023 Digital Garage, Inc. All Rights Reserved29

Ⅳ-i. Initiatives for the next-generation technology and startups ①“Open Network Lab” – Japan's first accelerator
暗号資産 program for seed/early-stage startups
Through our Seed Accelerator Program, create an ecosystem for social implementation of new technologies
Seed Accelerator Program

Investment

Open Innovation

 Based on the knowledge of
ESG investing/management
learned from the global
players, the fund helps theportfolio startups to implement
and apply ESG management.

 Onlab, Japan's first seed accelerator program launched in
2010, has invested in over 140 startups and supported
and nurtured their businesses since then.
 Onlab has produced numerous successful startups,
including unicorns, those who did IPO, and did M&A in theUS.
 Onlab also works with DG717 in San Francisco to support
startups challenging global markets.

Examples of successful startups from Onlab
IPO

M&A(US)

Unicorn

Latest Onlab Seed Accelerator startups

Social implementation

 The fund works with Onlab toinvest in program recipientsand graduates as well as theother ESG-related startups.

ESG Support

Onlab & ESG I“Earthshot Fund”

Investment< Japan's first seed accelerator established in 2010 >Selected for “Be Smart Tokyo”- a Tokyo Gov. program to
implement smart services
Overview
 A business co-creation
program in which startups andlarge companies work
together to implement the
new technologies in society.
 A total of 312 startups fromaround the world applied tothe program.

Examples of the sectors
Smart city

web3 /
Metaverse

Big data
analysis・・・

Copyright © 2023 Digital Garage, Inc. All Rights Reserved30

Ⅳ-ii. Initiatives for the next-generation technology and startups ②
The cutting-edge tech’s R&D lab “Digital Architecture
暗号資産 Lab” and initiative of next-generation AI
DG717 as Strategic HQs for Incubation/R&D in the U.S. and launched STARTUP STUDIO “GenLab,” specializing in Generative AI

DG717＜Global Incubation/R&D HQs＞
Overview

Incubation Center, “DG717” located in the main street in San Francisco as
Global Incubation /R&D HQs, promoting business and R&D with major
partner companies, startups, research institutions and IT industry pioneers.

Overview

This lab fosters social impact in which
everyone can participate through researchand development of next-generation
technologies, collaboration with startups
and major companies, community building,and collaboration with DG projects throughindustry-government-academia
collaboration.

Leadership
Joichi Ito■STARTUP STUDIO to support forstartups that create new value throughGenerative AI and its related technologies
in collaboration with pioneers and top
research institutions in the technology/IT
industry.

Keep evolving the unique deal sources developed since DG’s founding inNorth America and Japan, Asia, and Europe■DGUS plans to establish a Generative AIfocused fund in conjunction with “GenLab”
to invest in and incubate startups fromaround the world.

Digital Garage
Member of Board of Directors
Chief Architect

Leadership- President of the Chiba Institute of Technology- Member of Digital Society PlanningCouncil, web3 Research Group, Digital Agency- Head of Corporate DX Promotion
Committee, Japan Association of Corporate
Executives

Daniel Riedel

strengthen initiatives through industry,
academia, and government collaboration

Brady Forrest

Executive Director, “GenLab”
ex-CEO, NCS

Founder,
Ignite Talks

Hiroki Mitsuhashi
President,
Digital Garage US<Origination>, <Incubation>, and <Implementation> of new technologies on a global scale

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

31

Ⅵ. Sustainability

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

32Sustainability
Investment in ESG-related startups and funds globally
Events and providing information about ESG and impact investments

ESG Investments■Aurelia Foundry I, L.P. （DG Ventures）

Events and Publications
NEW

Venture Capital Fund for Space & Climate
Deep Tech<Core Investment Areas>
・Space Infrastructure + OSAM・Climate Tech, Health care +■ Presented at European ESG and Impact Funds events＜Co-host session with＞Presenting examples of initiatives shownin the company's Impact Report with
Tommy Andersen.

＜Latitude59＞

Introduced ESG and impact-related
investment case studies at a large
European startup event.

<GP Member> Ariel Ekblaw

She graduated with a B.S. in Physics, Mathematics andPhilosophy from Yale University and designed a novel spacearchitecture habitat for her MIT PhD in autonomously selfassembling space structures. Her research work and thelabs she leads build towards future habitats and spacestations in orbit around the Earth, Moon, and Mars.

■ESG-related startups portfolio■Publishing ESG contents in Onlab Journal

https://onlab.jp/journal/

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

33Sustainability
Establishment of Sustainability Committee

New committees and specialized departments was established to further promote sustainability
management （June 1, 2023）
DG Group’s Main Priorities
Information Security
Privacy Protection

Effective Utilization of Human Capital
Improvement of Working Environment

Promotion of Structure
for Sustainability Management

Board of Directors

Oversee・Control

President Executive
Director

Management
Committee

ReportCooperate

Consult

Sustainability
Committee

Risk Management
Committee

ReportManagement
OfficeExecutive Officer

Sustainability
Management Office

Building on Ecosystem with Startups

Management
OfficeRisk Management
OfficeDG segments, departments, offices, and group companies

 Established sustainability committee andsustainability management office tofurther promote sustainability
management.

 Under the supervision of president

executive director, accelerating
sustainability management of the Group.

 The outside directors, who haveprofound expertise about sustainability,
join as advisory.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved34

Reference Materials

ご参考資料
Reference Materials①: Supplementary Data

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

36Segment Classification after FYE March, 2024
・Consolidated business segments to further accelerate its business strategy, integrating payments and data as well as marketing.
・Consolidated new businesses and next-generation media business, aiming for vertical launch by leveraging DG Group’s businessassets as strategic businesses for enhancement of its corporate value in five years.

New Segments

Until Last Fiscal Year

Financial Technology

Platform Solution
(PS)

•
•

Integration of payment and marketing businesses
Thoroughly strengthening cross-selling andestablishing recurring revenue model•

Incubation and new strategic businesses
leveraging the Group synergy with Kakaku.com
Developing commerce and fintech productservices that contribute to multi-layering andrecurring revenues, mainly in Japan

Marketing Technology

Long-term Incubation

Headquarters Costs
New Business

Incubation Technology

Long-term
Incubation(LTI)

Global Investment
Incubation
(GII)

•

•
•

Global startup investments
Have a reach to the technology and services by
the alliance with startups having a overwhelming
speed

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

37Platform
Solution

Payment Transaction Volume – Trends for Non-face-to-face and Face-to-face Payments

・Non-face-to-face area: Kept stable growth due to diversified customer portfolio with less impact from COVID-19
・Face-to-face area: Grew significantly due to increased number of merchants driven by successful alliance strategy（Unit：100 M JPY）
14,135

12,133
10,545

GRP
0.30%

6,278
Face-to-faceNon-faceto-face

485

9,768

0.30%

6,660
534

5,793

6,126

1Q

2Q

0.27%

8,124

8,333

7,281

692

1,091

8,962
1,476

586

6,695

3Q

FY20.3

1,794

0.22%

7,432

7,242

7,486

4Q

1Q

2Q

8,752

3Q

FY21.3

1,688
0.22%

10,482
1,960

10,1482,746

12,36812,424

11,585
2,549

2,902

14,648YoY+18.4%

3,972+36.9%

13,848

3,584

3,457

0.21%

0.20%

0.20%

10,550

10,39010,677

3Q

4Q

1Q

3,123

2,219
0.24%

0.22%

8,080

8,522

4Q

1Q

0.21%

9,387

3Q

7,929

2Q

FY22.3

0.22%

0.20%

0.21%

9,036

9,466

9,301

4Q

1Q

2Q

FY23.3+12.8%

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

38

Platform
Solution

Payment Transaction Volume – Trends for Merchandise and Services

・Service area: Grew significantly from FY23.3 despite a temporary stagnation in travel industry due to COVID-19
・Merchandise area: Continued to acquire merchants successfully, especially general retail (supermarkets and department
stores, etc.) by alliance strategy（Unit：100 M JPY）
14,135

12,133
10,545
9,768
8,124
6,278

6,660

8,333

10,482

12,368

13,848

YoY
14,648 +18.4%+6.5%

12,424

11,585

10,148+17.4%

8,962

7,281

OthersMerchandise+24.3%

Services

1Q

2Q

3Q

FY20.3

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q
FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

39Platform
Solution

Payment Transaction Volume: Increase / Decrease by Sector

・Transactions in travel and food services recovered due to containment of COVID-19.
・The number of new merchants increased due to successful alliance strategy, including with Toshiba Tec.

Payment Transaction Volume: Increase/Decrease by Sector（Unit：100 M JPY）

Eating Out
General Retail+29.6%+56.6%

Food+38.0%

Entertainment,
Hobby+30.0%

Public Fund+14.1%

Others※% compared to FY23.3

14,648Travel+59.7%

12,368

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

40Platform
Solution

Payment Transaction Volume – in Non-face-to-face and face-to-face by Industry

・ Non-face-to-face area: Transaction volume increased in wide range of industries, centered on travel industry, in which the Company has strength.
・ Face-to-face area: Transaction volume mainly in general details increased as well as food and facility use-related due to containment of COVID-19.

Face-to-face Payment

Non-face-to-face Payment（Unit：100 M JPY）

その他
Others

10,677

エンタメ・ホビー
Entertainment,
Hobby
Home
appliances,
家電・家具インテリア
Furniture, Interior

施設・チケット予約
Facilities,
Ticket booking

YoY+12.8%（Unit：100 M JPY）

その他
Others外食
Eating Out

3,972

施設・チケット予約
Facilities, Ticket booking

9,466

YoY
+36.9%

車関連
Automobile-related

公金 FundPublic

旅行系
Travel-related

情報通信・ASP ASP
Telecommunication,

総合小売
General retail2,902+110.3%+30.6%+2.7%

旅行系related
Travel+51.9%-13.6%+14.0%+31.5%+10.2%+61.5%

FY23.3 1Q

FY24.3 1Q

FY23.3 1Q

FY24.3 1Q
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

41Platform
Solution

Payments related to Inbound Tourism

・Though the number of foreign visitors is on recovery, Chinese visitors with high consumption remains around 30% of pre-COVID level.
・High potential for recovery is expected in Alipay/WeChat Pay services that the Group is dealing with.

The Number of Visitor Arrivals to Japan (by area)
Source：JNTO

Transaction Amount in Face-to-face Payment（Unit：100 M JPY）

その他
Other countries
欧州
Europe126

北米
North America

43

その他アジアOther Asian countries
中国・香港
China, Hong Kong

48

35

インバウンド関連QRコード決済
QR Code payment by Inbound Visitors
その他対面決済
Other face-to-face payments

31

17
22
15

21

23
24

17
13
292
306 287
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5
2017

2018

2019

2020

2021

2022

2023

1Q

2Q

3Q

FY20.3

159

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q
FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

42Capital Expenditures and Depreciation related to Payment Business

Platform
Solution・Continue to invest in payment systems to ensure stable 24/7 operations and enhance robustness of security.
・It is expected that fixed costs may show gradual increase due to redundancy of system operations and marginal profit ratio
remains at a current level.

Payment-related Expenditures・Depreciation（Unit：M JPY）

設備投資額
Capital expenditures

Payment-related Costs・Marginal Profit Ratio（Unit：M JPY）

限界利益率
Marginal profit ratio

一過性費用
One-off cost
変動費
Variable cost

減価償却費
Depreciation

固定費
Fixed cost

264

275

293

297

302

293

302

302

88.0%

1Q

321

2Q

89.1%

85.0%

88.1%

88.7%

88.2%

87.2%

85.9%

288

142

349

344
282

3Q

FY22.3

297

294

4Q

1Q

2Q

3Q

FY23.3

4Q

378

297

301

344

356

419

355

281

974

1,017

1,075

1,115

1,118

1,103

1,122

1,139

1,139

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

275

398
331

85.5%

336

1Q
FY24.3

FY22.3

FY23.3

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

43Profit in Marketing Business・Transaction Volume in Digital Advertising

Platform
Solution

・Digital Advertising, the main stay of the Company’s business, continues to transit steadily despite quarterly fluctuation in bothprofit and transaction volume of the advertisement.
・The transaction volume of advertisement in the financial area in 1Q decreased due to the budgetary austerity of the Company’sclients.

Profit in Marketing BusinessTransaction Volume in Digital Advertising（Unit：M JPY）

不動産広告
Real estate

YoY

EC支援/CRM
EC support/ CRM
デジタルアドDigital advertising
3,403

3,283

3,673

3,298

1,025

1,154

1,105

1,101

962

1Q

2Q

3Q

FY22.3

金融領域
Financial area

3,522
3,113

1,326

993

金融領域以外
Non-financial area

3,103

3,186

1,202

2,977

-4.3%

921

+0.6%

1,153

916

966

1,124

1,034

1,088

1,064

1,200

1,063 +2.8%

4Q

1Q

2Q

3Q

4Q

1Q

FY23.3

FY24.31Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
FY16.6

FY17.3

FY18.3

FY20.3

FY20.3

FY21.3

FY22.3

FY23.3

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

44Trends in Operational Investment Securities/by Currency and Area

Global Investment
Incubation

・Fair value of operational investment securities denominated in foreign currency increased due to JPY
depreciation in 1Q.
・Fair value of operational investment securities at the end of June 2023 was 72.6 B JPY.（+4.9 B JPY YoY）
Balance of Operational Investment Securities
866

その他
Others
印ルピー
INR

722
667

米ドル
USD

363

406

（Unit：100M JPY）
798

780

日本円
JPY

Investees by Area (%)

726
677

（Unit：M JPY）

Europe0.2%

Others

14.6%

615

438

472

508

North America

Japan

45.3%

17.7%

Asia

22.1%
1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3

4Q

1Q
FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

45

Global Investment
Incubation

Trends in Top 5 Companies by Balances in Investment

・Have diversified portfolio of 200 or more startups mainly in seed and early stages besides LP.
・Investment balance is expected to gradually decrease due to cash generation by investment exit and strategic selection of
new investees.

Shares of Top 5 Portfolio Companies
86,566
77,950(Unit：M JPY）

79,76972,19367,79572,594Top 5
companies

Others

56.0 %

56.0 %

65.1 %

65.1 %

64.0 %

63.5 %

22.3

22.6

22.9

22.12

23.3

23.6

FY22.3

FY23.3

FY24.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

46

ご参考資料
Reference Materials②: Business Model

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

47

Platform
Solution

The Structure of Transactions by Credit Card

Contract
Brand membership contract

International brands

Money
お金

Brand membership contract

VISA/MASTER/AMEX/DINERS/JCB
Pay feePay fee
Payment

IssuerIssue credit cards

Pay on behalf（fee cost deducted）

Representative
contract

Payment Service
ProviderPay on behalf（fee deducted）
Purchase goods & services

Payment
agencycontract

Merchant contract（ Direct contract）

ConsumerAcquire and manage merchants（ fee deducted）
Payment

Credit card Payment

Credit card contract

Credit card member

Acquirer

Pay feeMerchant
E-commerce & In-store businesses

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

48Platform
Solution

Commercial Distribution of Payment Service Provider

A service that acts as an intermediary between e-commerce site operators and face-to-face merchants and payment service
providers such as credit card companies and convenience stores, enabling the introduction of a number of payment methods,
including credit card payments, through a single contract and system.
Electronic message
Money

Consumer

Payment service
providerMerchant

Payment
networks
Credit card companies① Order

EC website② Settlement
information③ Settlement
information

Bank Payment
Convenience stores Payment
E-money Payment⑦ Offer goods⑤ Notify result④ Notify result

Real storesTelecom Carriers Payment
ID Payment⑨ Pay theamount lessthe settlement
agent's fees

⑧ Pay sales
proceeds
less fees

International Payment
QR Code Payment
BNPL (Buy Now Pay Later)⑥ Payment

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

49Platform
SolutionContract Type of Payment Service Provider
Storage agency type （Representative
contract）(Representative contract)
Acting as an all-in-one agent for contracting
procedures with various settlement institutions andpayment of sales amounts• Single point of contact for payment• Streamline operations such as payment management andconfirmation

Payment
service provider

Payment dataprocessing

Payment dataprocessing

Monthly fee
Pay sales
proceeds lessfees

Pay the amountless thesettlement
agent's fees

Payment
institutions• Monthly sales proceeds are deposited to the merchant in a lump-sum
payment from our company

Merchant• We handle all contracting procedures with payment providers such as
credit card companies and financial institutions

Merchant
contracttype (Direct contract)
Payment data processing type（Directcontract）• Merchants sign contracts directly with credit card companies• Provide the necessary software and transaction management tools• Also provide support for software installation

Electronic
message
Money

Payment dataprocessing

Payment
service provider

Payment dataprocessing

Monthly fee,
Processing fee
Merchant contract
Pay sales proceeds less fees

Payment institutions• Provide payment systems and automate card payment processing

Data processing
contract

Merchant

Based on the merchant agreements with credit cardcompanies signed by the merchants, credit card
payment processing is automated through theintroduction of a payment system provided by PSP

Copyright © 2023 Digital Garage, Inc. All Rights Reserved50Platform
Solution

Market Size of Payments for C2C Consumers

Cashless payment markets are expected to grow significantly in both non-face-to-face and face-to-face.

Private final consumption
expenditure

305（Unit：T JPY）

289
Target by Japanese
Government
Cashless rate
～80％

Room for Cashless Payment(Cash payment, etc.)

EC payment market
Face-to-face cashless payment
market

2018
18年

2019
19年

21

23

65

72

2020
20年

2021
21年

27
79

31
86

36
92

2022
(Forecast) 2023
22年(予想)23年(予想)24年(予想)(Forecast) 2024
(Forecast)40

99

25年(予想)2025(Forecast)

26年以降
after
2026

Calculated by the Company referred to the following materials.
“National Accounts 2021” by Cabinet Office/ “Status of Domestic Cashless Payment Markets and Forecast” by Yano Research Institute Ltd./ “Cashless Roadmap 2022” by METI
“e-commerce Market Survey 2021” by METI / Deloitte Tohmatsu Consulting LLC / MIC Research Instituite “Current Status and Future Prospect for Internet Payment Service Providers in EC”
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

51Platform
Solution

Business Model: Marketing Business・Supporting client business growth through a comprehensive digital marketing service
・Providing solutions utilizing CRM and data, and Fintech solutions which connect with the payment business
Promoting interest and purchaseintent in all touchpoints with consumers

Clients

Marketing business

Bank/Card
Securities/Payment/
Other financial services

Outsource

RetailOthers (HR/Public
transportation/Hotels/Travel, etc.)

Customer databasedevelopment and analysis
Application
development

App/Game/E-book/Contents services
Real estate developer

Consumer

Overall internet advertising(Purchase promotion/customer
attraction/brand recognition)

Cosmetic/Consumer goods
manufacturer
E-commerce

Contact points

Work
togetherin DX area

Web media

SNS

Search engine

App

Mass media

Store

Media
development

AI solutions

Competing platforms for GAFA

Joint projects in DX and IT

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

52

Multi-layered Businesses and Profit Opportunities based on Payment Business

PS

LTI

・Establishment of platform to continuously generate stable profits from payment business・Aiming to generate multi-layered profit opportunities from the existing businesses as well as DX, financial fintech, andnext-generation media, etc.

AcquiringMembers
Opening
Accounts
・Credit Cards
・e-Money・Bank・QR payment
etc.

Payment Partners

Platform
Solution
Marketing Services

Marketing Service

Products for DX/ Cashless

Co-development of
New services

Payment

Payment Platform

Long-term
Incubation

B2B Payment
Improvement of cash flow
Next-generation media

Business
Operators(Merchants)

DX
Cashless

Attracting
customers

Consumers

Payment
Companies
Financial
Institutions

Consumer Behavior Data
from awareness to purchase

B2B transactions

Wholesalers
MakersData for Payment
and Purchase
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

53

ご参考資料
Reference Material③:
Cash Flow Allocation / Shareholder Returns

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

54

Definition of Business Cash Flow
Formula for Calculation from Base Business Cash Flow

Base Business
Cash Flow

Cash Flow fromPS Segment※※Excluding profit from equity
method and one-off profit/loss
from EBITDA

Cash Flow from
New Business (LTI)

Dividend Income
from Associates

HQ Costs

If the cash flow from new businesses ispositive, it will be added to base businesscash flow.

Formula for Investment Business Cash Flow

Investment
Business
Cash Flow

Income from
Investment
Business
・Proceeds from the salesof securities
・Distribution income
from funds
・Dividend Income

Costs forInvestment
Business,
Corporate Tax, etc.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved55

Cash Flow Allocation
・Segregate resources into recurring cash flow from base business and investment business cash flows
・Plan to allocate resources, considering growth opportunities and financial situations.
Cash Flow Allocation
Investment in Existing Business －Maintain and expand revenue base
GrowthBase Business
Cash Flow

Investment in New Business
GrowthImprovement of Financial
Structure
Shareholder Returns

Investment
Business
Cash Flow－Develop next-generation businesses that create
corporate value－5Y dividends total at least 10B JPY－Dividend payout ratio of at least 20% or more ofbase business cash flow

Investment in Growth /－Decide strategically, considering business environment
and investment opportunities
Additional Shareholder Returns
Investment in Startups－Up to 30% of investment business income

Strategic Investments(M&A・Capital Alliance, etc.)

Copyright © 2023 Digital Garage, Inc. All Rights Reserved56

Shareholder Return Policy・Dividend Policy: Aiming for additional dividend distribution from new businesses in addition to stable dividend from PS cash flow
・Additional shareholder returns (Special dividends･acquisition of treasury stock, etc.) will be considered positively from investment business CF.

Shareholder Return Policy

Shareholder return based on base business CF

Additional Returnfrom Investment
Business

2nd Layer

Additional dividend
from new businesses(LTI)

businesses)

Base Business CF

Stable divided from CF from PS Segment, etc.

(New

Investment for growth or additional shareholder returns
will be determined, considering business environment
and investment opportunities

Aiming to increase dividends bygenerating cash flow throughlaunch of strategic businesses
Annualsingle-year Policy

1st layer(PS)

Planning to pay stabledividends from cash flow of PS
Segment, which is expected ascontinuous profit growth

Dividend
payout ratio

20% or more

10B JPY or more
FY24.3Medium-term Plan

FY28.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved57

Please note that the business forecasts and strategies covered in today’s presentation are based on our current evaluation and future results may vary significantly depending on unforeseeable
events or circumstances. This announcement is solely for the purpose of the investors relationship and is not for making any solicitation for investment in any securities. This announcement does
not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of any such jurisdiction. Any securities of our consolidated subsidiaries have not been registered under the U.S. Securities Act of 1933, as
amended (the “U.S. Securities Act”) and may not be offered or solid in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.
Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer andits management and financial statements.