1st Quarter ended June 30, 2020

Financial Results Supplementary Information

Digital Media Professionals Inc.
August 7, 2020
The views and forecasts that appear in these materials represent determinations made by the Company at the time the materials were created.
The accuracy of the information therein is not guaranteed.
Please be aware of the possibility that actual performance and results may differ considerably due to a variety of factors.
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Table of contentsGroup Business Description・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・3

1st Quarter ended June 30, 2020 Results Highlights
P/L・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・4
Net Sales by Business ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 5

B/S・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・6
1st Quarter ended June 30, 2020 Topics・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 7
Fiscal Year Ending March 31, 2021 Business Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 8

Blueprint for Future Growth・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 9Reference) Major Activities (Fiscal Year Ending March 31, 2021)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・10

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Group Business Description
Business
IP Core*1 License
Business

LSI Product Business

Description

Major Customers

Development and license offer of hardware IP (logic design data etc.) and software IP (mainly hardware
control drivers and supporting tools for contents creation) necessary for drawing detailed images and artificial
intelligence*2 (AI) such as deep learning*3a) License fee
Compensation through offering IP core license in the process of developing products such as home appliancesby customersb) Running royalty
Compensation received according to the number of products incorporating IP core shipped by customersc) Maintenance and service fee: Revenue from maintenance of IP based on maintenance contract, etc.

Semiconductor manufacturer/Manufacturer of final product withembedded semiconductor

Development, manufacturing (outsourced) and sales of graphics LSI*4 (SoC*5) mainly for amusement
equipment
Development, manufacturing (outsourced) and sales of AI LSI (FPGA*6) for AI equipment

Professional ServiceBusiness

Provision of design service of studying and optimizing the entire SoC system by integrating various IP cores of
the Company, software service of developing and optimizing algorithm based on GPU*7/vision /AI technology
cultivated through development of in-house products, etc.

Semiconductor trading
company/Manufacturer of final
product with embedded
semiconductor
Manufacturer of final product withembedded semiconductor*1: Partial circuit modules within an LSI, designed for a specific function (e.g. graphics IP core). IP stands for Intellectual Property.
*2: Software and system that enable computers to make human-like perceptions and judgments such as computer programs that understand and judge sentences, images, conversations,sounds, etc.
*3: A type of machine learning method that realizes artificial intelligence by utilizing human brain imitated neural network mechanism, which is being commercialized in the field of image
recognition*4: Large-scale integrated circuits composed of silicon wafers (materials with properties intermediate between conductors and insulators used in the manufacture of semiconductor
products). LSI stands for Large Scale Integration and is also called "semiconductor".
*5: Integrated circuit (design method) that integrates a series of functions (systems) required on one semiconductor chip. SoC stands for System on a Chip.
*6: Integrated circuit that allows buyers or designers to set and change the configuration after manufacturing. FPGA stands for Field Programmable Gate Array.
*7: Arithmetic unit or processor specialized in real-time image processing represented by computer games. GPU stands for Graphics Processing Unit. By utilizing its better performance inparallel computing performance than CPU, technologies called GPGPU (General-Purpose computing on GPU) that apply its computing resources to purposes other than image
processing are applied to the AI​​/deep learning field.
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1st Quarter ended June 30, 2020

Results Highlights: P/L
Shifted to a consolidated accounting system due to the start of business at the subsidiary in Vietnam(unable to simply compare figures with those in the same period last year)(However, sales of the subsidiary in Vietnam are currently design service income only to the headquarters with no external sales)(Unit: million yen)

1st Quarter ended
June 30, 2019(non-consolidated)

1st Quarter ended
June 30, 2020
(consolidated)

Net sales

61229

OperatingincomeOrdinary
income

△154

△114

△195

△93

Net income

△195

△93

⚫ Although sales of the IP license business and professional service business were almost the same as
those in the same period last year, sales of the graphic processor "RS1" for volume production whichwere not in the same period last year were recorded.
⚫ Non-operating balance improved due to a fall-off of share issuance cost recorded as non-operating
expenses in the same period of the previous year on one hand and the subsidy income from NEDO
recorded as non-operating income on the other hand.
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1st Quarter ended June 30, 2020

Results Highlights: Net Sales by Business
IP core license businessSales¥28 million

Same period last year(non-consolidated)¥34 million●Decrease in running royalties from digital equipment centered on digital still camera●Won new licenses for robotic vehicles

LSI product business

Sales¥166 million

Same period last year(non-consolidated)¥0.2 million●Recorded sales of “RS1” for volume production and “ZIATM C3” AI FPGA modules

Professional services businessSales¥34 million

Same period last year
(non-consolidated)¥26 million●Recorded commissioned revenue from NEDO’s “AI Edge Contest” and sales of AI-related
contract development service for robotic vehicles

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1st Quarter ended June 30, 2020

Results Highlights: B/SEquity ratio remains high at 93.6%(Unit: million yen)

End of March 2020
(Non-consolidated)

End of June 2020
(Consolidated)

Major breakdown
Cash & deposits 2,182, Securities 444
Accounts receivable - trade 187

Current assets

3,077

2,939

Non-current assets

763

745

3,841

3,684

Current liabilities

279

216

Accounts payable - trade 171

Non-current liabilities

1818

Asset retirement obligation 16

Total liabilities

297

234

Total net assets

3,543

3,449

Total liabilities andnet assets

3,841

3,684

Total assets

Investment securities 499
Software 140

Capital stock 1,804, Capital surplus 1,823
Retained earnings -169

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1st Quarter ended June 30, 2020

Topics⚫ Subsidiary for development in Vietnam started business• Utilizing high quality human resources in Vietnam to strengthen and complement the development system• In the mid term, aiming to develop the local market in Southeast Asia including Vietnam and making it abridgehead for the overseas business⚫ Approaches to Robotic Vehicle and Safe Driving Assistance• Upgrade of IP core (ZIA™ DV740) and release of new IP core (ZIA™ ISP) were carried out.
• Won stock business (subscription model) related to safe driving assistance, which contributes to stablerevenue from the second half

⚫ Partnership in development with overseas tech-companies• Partnered with Prophesee in France to develop embedded machine vision and artificial intelligence (AI)applications using Prophesee’s Event-Based Vision sensors with high dynamic range, high data efficiency, andultra-low power consumption• Partnered with Basemark in Finland to develop smart mirror for commercial vehicles such as trucks and buses• Promoting discussions for mid-range monetization
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Fiscal Year Ending March 31, 2021

Business Forecast
Business forecast for the fiscal year ending March 2021 remains undecided because it isdifficult to reasonably calculate the impact of the new coronavirus infection at this stage.
It will be disclosed as soon as reasonably predictable.
FY 03/2020(Actual)(Non-consolidated)

FY 03/2021(Forecast)(Consolidated)

1,328

TBD

Operating income

82

TBD

Ordinary income

85

TBD

Net income

65

TBD

(Unit: million yen)

Net sales⚫ At the request of the National Police Agency and the efforts of the industry group, it is expected that the removal of old-rule gaming
machines and the replacement by new-rule gaming machines will be carried out in a planned manner. Although the declaration of astate of emergency has been lifted, the number of infected people is increasing nationwide recently. Accordingly, the occupancy rate
and gaming machine purchase policy of halls, and product plans of gaming machine manufacturers are still uncertain.
⚫ There is a tendency for some customers to restrain development investment.
⚫ DMP continues to work on deep digging of domains such as safe driving assistance and robotic vehicles, and horizontal developmentof customers.
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Blueprint for Future Growth
Evolve into the world's leading "AI Computing Company"
Integrated development of AI algorithms, software and hardware
Expansion into the growing IoT/AI field
Development of ZIA platform
••••
•

AI

Processor IPSoftware
ModulesStrengthening of ecosystem with partners
Overseas expansion

AI solutions for Mobility / Industry

Stable management foundation in theamusement market where we can win
Muti-platform
Aiming for top share in amusement SoC

Phase 1

• Autonomous driving• Robotic vehicle• Safety / DMS

Expansion of the SoC / Module Business• High value-added modules• High-volume AI products

Current position
Phase 2Phase 3Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

9Reference) Major Activities (Fiscal Year Ending March 31, 2021)
Each item is linked to PR/IR news (in Japanese or English) of DMP’s website.
Date ofAnnouncement/EventDetails

April 1, 2020

Establishment and business start of subsidiary in Vietnam

May 11, 2020

Hold 3rd AI Edge Contest with METI, NEDO, and SIGNATE

May 14, 2020
June 8, 2020

Prophesee, DMP partner to accelerate development of embedded machine vision and artificial intelligence (AI) applications using EventBased Vision approach
DMP, Silex Technology, and PALTEK jointly developed vehicle AI evaluation kit to support development of safe, remote, and automated AI
solutions

July 1, 2020

Hold 4th AI Edge Contest with METI, NEDO, and SIGNATE

July 1, 2020

Basemark and DMP Partner to Develop Smart Mirrors for commercial vehicles

July 13, 2020

DMP releases IP Core "ZIA™ ISP"

July 13, 2020

DMP releases IP Core "ZIA™ DV740"

July 15, 2020

Website renewal

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<Inquiries>
Digital Media Professionals Inc. Corporate Planning Department
Tel. +81-3-6454-0450

URL: https://www.dmprof.com/en/ir/

Forward-looking statements contained within this document are based on currently available
information and involve risks and uncertainties, including macroeconomic conditions andtrends in the industries in which we are engaged. As such, actual results may differ
materially from those anticipated.

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