Financial Results
for the 6 Months Ended
June 30,2024
August 8,2024
SIOS ,Corp.

（Stock Code: 3744 on Standard Market of Tokyo Stock Exchange）© SIOS Corp. All rights Reserved.

Table of Contents
1. Summary of Business Results for the Six

Months Ended June 30, 2024
2. Consolidated Financial Guidance for FY2024
3. Progress of Growth Strategy for FY2024
4. Appendix© SIOS Corp. All rights Reserved.

1. Summary of Business Results for the
Six Months Ended June 30, 2024

© SIOS Corp. All rights Reserved.

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

Results for the
6 months
ended June
30,2023Net Sales

8,066

Gross profit

2,665

Operating income-106

Ordinary income-78

Profit attributable toowners of parent
EBITDA
ROIC(annualized)

-176
-60
-11.8%

Results for the
6 months ended
June 30,2024

11,804
2,667
-18
57
23
6
-1.9%

Change%Change＋3,738＋46.3%

＋1

＋0.1％

＋87

－

＋135

－

＋199

－

＋67

－

－

－

*EBITDA: Operating profit + Depreciation + Amortization of goodwill*ROIC: Operating profit after tax / (Shareholders’ equity + Interest-bearing debts)© SIOS Corp. All rights Reserved.

4

Consolidated Net Sales（In millions of yen）

11,804

Up 46.3%
YoY

8,066

2023年度1H FY2023

Q2累計

2024年度1H FY2024

Q2累計© SIOS Corp. All rights Reserved.

5

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

472

320

6
-106
△106

-60
△60

-18
△18

2023年度1H FY2023
Q2累計■Operating
Profit ■EBITDA
営業利益
EBITDA

2024年度1H FY2024
Q2累計

 R&D expenses
increased by ¥152M
YoY.
 EBITDA decreasedby ¥67M YoY.

R&D
Spending
研究開発費© SIOS Corp. All rights Reserved.

6

Consolidated Balance Sheets（In millions of yen）

Current
assets 5,741(including
cash anddeposits of
2,604)
Investment andother assets 760

Current
assets7,497(including
cash anddeposits of
3,063)

Total
liabilities
5,518(includinginterestbearing
debts of
181)
Total net assets
1,187

Total liabilities

Investment andother assets 782

Total net assets
1,226

Total liabilities

Total assets
and net assets
6,706
6,706

Total assets
and net assets
8,524
8,524

 Property, plant and equipment 132
 Intangible assets 72

 Property, plant and equipment 123
 Intangible assets 120

As of December 31, 2023
Total
liabilities
7,298(includinginterestbearing
debts of
143)

As of June 30, 2024

Current assets: Reflected an increase of ¥1,238M in notes and accounts
receivable trade, as well as contract assets.
Current liabilities: Reflected an increase of ¥1,342M in accounts payable trade.
© SIOS Corp. All rights Reserved.

7

Analysis of Consolidated Cash Flows（In millions of yen）

491
△8

2,604

Cash and cash
equivalents as ofDecember
31,2023

55

Cash flows fromoperatingactivities

Cash flows frominvestingactivities

3,063

△79

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

Effect ofexchange ratechange on cash
and cashequivalents

Cash and cash
equivalents as ofJune 30, 2024

8

Cash Flow Analysis
Cash flows fromoperating activities
Net cash provided or used

¥491M net cash provided•

BreakdownAmount of cash •provided••Amount of cash
used

Cash flows frominvesting activities¥8M net cash used

Increase in profit
before income taxes:¥80M
Increase in trade
payables: ¥1,342M
Increase in contract
liabilities: ¥305M•

Proceeds from sale ofinvestment securities:¥37M

Increase in tradereceivables andcontract assets:¥1,208M•

Purchase of intangible
assets: ¥43M

© SIOS Corp. All rights Reserved.

Cash flows fromfinancing activities¥79M net cash used••

Dividends paid:¥43M
Repayments oflong-term
borrowings: ¥33M

9

Open System Infrastructure BusinessNet sales

8,798 million yen, Up 76.0% YoY（In millions of yen）

8,798

 Sales of LifeKeeper* were up YoY, due tostrong perpetual license sales in Japan.

4,999

2023年度1H FY2023
Q2累計

 Sales of software products sourced from Red
Hat, Inc.*, jumped substantially to fulfill
major project orders.

2024年度1H FY2024
Q2累計

Note: See the Glossary on page 36 for descriptions of terms with an asterisk.
© SIOS Corp. All rights Reserved.

10

Open System Infrastructure Business
Segment income

94 million yen, Up 66.6% YoY（In millions of yen）

56

 Sales of software products sourced fromRed Hat, Inc., were bolstered by major
project orders, but had little impact on theGroup’s profitability as those were lowmargin projects.

94 Robust sales of LifeKeeper bolstered its
profit.

2023年度1H FY2023
Q2累計

2024年度1H FY2024
Q2累計© SIOS Corp. All rights Reserved.

11

Application BusinessNet sales

3,005 million yen, Down 1.8％ YoY（In millions of yen）

3,060

3,005

 Revenue in the API* Solutions Businessachieved solid growth, as our engineeringstrengths in the field of API economy met
surging business needs.
 Revenue from the Gluegent series* achieved
steady growth.
 Sales of software applications for multifunction
printers (MFPs)* achieved YoY growth.

2023年度1H FY2023
Q2累計

2024年度1H FY2024
Q2累計

 Revenue from the provision of support forsystem development and implementation tofinancial institutions and universities was below
the year-earlier level, and so were sales of the
management support system to financial
institutions.

© SIOS Corp. All rights Reserved.

12

Application Business
Segment income

Loss of 114 million yen, compared withon loss of 169 million yen the year before（In millions of yen）

 This segment posted a loss due todecreased revenue from the provisionof support for system development andimplementation to financial institutions
and universities, as well as from sales ofthe management support system tofinancial institutions.

△169
-169

2023年度1H FY2023
Q2累計

△114
-114
2024年度1H FY2024

 The amount of segment loss
decreased YoY as a result of thereassessment and reallocation of R&D
expenses.

Q2累計© SIOS Corp. All rights Reserved.

13

2. Consolidated Financial Guidance for
FY2024© SIOS Corp. All rights Reserved.

Update Business Forecasts for FY2024（In millions of yen）

Earlier Forecasts(announced
February 8,2024)

Net Sales

16,600Gross profit

250

Operating income

330

Ordinary income

220

Profit attributableto owners of parent
EBITDA

310
11.6%

UpdateForecasts

20,000
250
330
220
310
11.6%

% Change+3,400－－－－－

While robust sales of software products sourced from Red Hat, Inc., driven by major projects
orders, are projected to bolster the Group's net sales for FY2024, they will have little impact
on our profit as those were low-margin projects. Accordingly, we have updated the guidance
only for consolidated net sales for the year.
© SIOS Corp. All rights Reserved.

15

Cash Dividends for FY 2024

Annual cash
dividend per
share

Our dividend
policy27th term

28th term

Fiscal year ended
December 31, 2023

Fiscal year ended
December 31, 2024
(Forecast)

¥５

¥10

(unchanged)

We intend to provide a steady level of dividends
to our shareholders, while taking into
consideration the Group's consolidated financial
performance and guidance, its dividend payout
ratio and yield, and its equity capital ratio.
© SIOS Corp. All rights Reserved.

16

3. Progress of Growth Strategy for
FY2024© SIOS Corp. All rights Reserved.

Growth Strategies for FY 2024
We will continue to focus on our SaaS* and subscription-based*businesses while developing new businesses into growth drivers.

1

Continue to invest in our SaaS andsubscription-based businesses

2

Expand our API solutions business3

Maximize the benefits of generative AI*
solutions in our business development andoperations© SIOS Corp. All rights Reserved.

18

Gluegent Series
Standardizes workflows and helps achieve greater
enterprise productivity.

(1) Submit a
draft contract
for review andapproval(2) Manabers to
consult andreview it(3) Decisionmaker to approveand authorize it Enables the submission,
review, and approval ofrequests anytime, anywhere,
on any device, bringing greater
efficiency to businessprocesses.
 Visualizes workflows andconsolidates data tostandardize businessprocesses.

© SIOS Corp. All rights Reserved.

19

Gluegent Series
IDaaS* solution for single sign-on (SSO)*, multifactor authentication, and integrated ID management
Personal
identification

Deviceauthentication

IT infrastructureLoginauthentication(Multi-factor
authentication)

AccessCloud-based services（SaaS）

Access control
Access points

API
Integrated ID
management

SSO enables users to log in to a system once and gain access to all connected services.



Gluegent Gate enhances access security by setting a security level, such as multi-factor
authentication and access restriction, for each service.
© SIOS Corp. All rights Reserved.

20

Revenue from the Gluegent Series
Enhanced product development and user support havebeen keeping the ARR of the series on a solid growthpath.

【Combined ARR of Gluegent Flow and Gluegent Gate】（In millions of yen）

624

249

2019.6326

2020.6404

2021.6460

2022.6529

2023.6

Combined ARR for FY 2023 was
Up 18.0％ YoY
Gluegent Flow

Gluegent Gate

Up 32.8％

Up 12.3％

2024.6

1. ARR: Annual Recurring Revenue, obtained by multiplying MRR (monthly recurring revenue, which is a predictable revenue that a business counts onreceiving every month from subscriptions) by 12© SIOS Corp. All rights Reserved.

21

Actions to Drive ARR
Action: Work more closely with partner resellers and upgrade feature sets

Increase

Prevent

New

Revenue increase from new clients

UpgradeRevenue increase from clients who upgraded to ahigher-tiered subscription plan

Downgrade

Revenue decline from clients who downgraded to alower-tiered subscription plan

Churn

Revenue decline from cancellation of subscription

Action: Enhance support for customer success＜Formula for ARR＞
ARR

= MRR × 12months

MRR = MRR for the previous month + New ＋ Upgrade － (© SIOS Corp. All rights Reserved.

Downgrade＋ Churn )22

Awards and Recognition
Accorded to the Gluegent Series
Received many awards for providing an exceptionallyhigh level of customer satisfaction.

1.
2.



In the BOXIL SaaS AWARD 2024¹, Gluegent
Flow was top rated in the Case Studies
category for small and medium-sizedbusinesses².



Gluegent Flow was also rated highly in online
word-of-mouth review sites for IT products
and SaaS solutions.

The BOXIL SaaS AWARD is sponsored by SMARTCAMP Co., Ltd., which operates the BOXIL SaaS review site, and evaluates, selects, and recognizes high-performing
commercial SaaS solutions quarterly and annually.
In the Case Studies category, SMARTCAMP selects and recognizes high-performing commercial SaaS solutions from among those that submit case studies, from theperspective of how much positive impact their services for flexible working arrangements and DX support have on client success and social good. Small and mediumsized businesses are those that have 101 to 499 employees on their payroll.
© SIOS Corp. All rights Reserved.

23

LifeKeeper

High-availability cluster software for preventinga system failure from impeding business
operations


LifeKeeper monitors system operations,and when it detects a failure of a
primary system, it automaticallyswitches to a backup system to keep thesystem downtime and businessdisruption to a minimum.



It works in a variety of cloudenvironments and makes it easy for an
enterprise to switch to a cloudenvironment while maintaining the samelevel of availability as provided in an onpremise environment.

Backup system

Primary system

Automatic failover

Data replication© SIOS Corp. All rights Reserved.

24LifeKeeper
Global sales of LifeKeeper for cloud application
have been growing.
【Global Sales of the Cloud-based Version of LifeKeeper to First-time Clients】
Up 20.9%
YoY

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

2023年

1H FY2023
Q2累計

2024年

1H FY2024
Q2累計© SIOS Corp. All rights Reserved.

25

LifeKeeper
Subscription revenue of LifeKeeper has been
following a growth path outside Japan.
【Subscription Revenue of LifeKeeper Outside Japan】
Revenue for FY 2023:

Up 8.5％ YoY
CAGR: Up 43.4％

Sales of subscription-based
LifeKeeper on the flat-rate and payper-use bases have continued to
grow outside Japan, where thecloud is becoming widely used.

2020年度1H FY20202021年度1H FY2021

2022年度1H FY2022

2023年度1H FY2023

2024年度1H FY2024

Q2累計

Q2累計

Q2累計

Q2累計

Q2累計
© SIOS Corp. All rights Reserved.

26

API Solutions Business
API stands for application programming interface, which is a set of protocols
that enables different software programs and applications to share functions.
Example of How APIs Work in BusinessAPI

Map app
API

CompanyAPI
Onlinepaymentapp

 A company can launch a newservice by sharing data withother companies via APIs.
 An API economy thatfacilitates shared use of APIs
among businesses has been
gaining momentum.

© SIOS Corp. All rights Reserved.

27

API Solutions BusinessOur dedicated API infrastructure team uses their wealth ofprofessional business and API knowledge to assist corporate clients indesigning, developing, operating, and supporting API solutions.
One-Stop API Solutions
STEP 1

Assisting indeveloping abusiness
model

STEP 2

STEP 3

STEP 4

Assisting indeveloping
and testing asystemAssisting inencouraging
business
partners andusers to use
the system

Assisting inoperating thesystem© SIOS Corp. All rights Reserved.

28

API Solutions Business
Our sales growth has been driven by stepped-up sales efforts and the
expansion of service offerings.
Step up sales
efforts

Expand service
offerings

Worked more closely with system developers and consulting firms to
attract new corporate clients.



Won large projects from automakers and financial institutions.

Partnership with Aerospike, Inc.* now enables us to assist corporateclients in developing a high-quality infrastructure for big data analytics.



We will continue to expand API service offerings to meet increasingly
diverse business needs.

© SIOS Corp. All rights Reserved.

29

API Solutions Business【Revenue in Our API Solutions Business】
Revenue for 2023:

Up 39.1％ YoY
CAGR: Up 55.0％ YoY

The actions discussed on theprevious page have helped us grow
our API Solutions Business in arobust market.

2020年度1H
FY20202021年度1H
FY20212022年度1H FY2022

2023年度1H FY2023

2024年度1H FY2024

Q2累計

Q2累計

Q2累計

Q2累計

Q2累計

© SIOS Corp. All rights Reserved.

30

Generative AI Support BusinessStarted offering an end-to-end solution service for generative AI, in
collaboration with U.S.-based Elastic NV.
SIOS has become Elastic's first distributor in Japan andstarted offering a solution service based on the Elastic
Search AI Platform to assist corporate clients in using
generative AI in a safe and secure environment.

Company overview
Established in Amsterdam in 2012.



Listed on NYSE in 2018.



Elasticsearch is one of the most widely used
database search engines in the world.



Annual revenue for fiscal year ended April 30,
2024: 1,267 million dollars© SIOS Corp. All rights Reserved.

31

Generative AI Support Business
Use RAG technology to make generative AI more relevant to business
Retrieval augmented generation (RAG) is a technique to make generative AI
provide a more relevant response to a query by using searchable unpublishedinternal data as context.
Search documents
for relevant
information

Ask
generative AI
a question

User

Provide themost relevant
answer

Generative AI© SIOS Corp. All rights Reserved.

Search engine

Internal
documents

32

Generative AI Support Business
Use Elastic's technology to assist corporate clients in implementing
RAG successfully
We provide corporate clients with an end-to-end consulting service for RAG implementation basedon the Elastic Search AI Platform. Our consulting service comprises the following three phases:

Implementation
planning phase
Understand a client's objective
in deploying generative AI, as
well as issues with their data
sources, as a basis fordeveloping a project plan andschedule

PoC phase
Build a PoC environment for
RAG based on the project planand evaluate the effectivenessof search methods and therelevance of AI-generated
responses© SIOS Corp. All rights Reserved.

Implementation phase
Based on PoC results, assist in
designing and building a
production environment basedon the Elastic Search AI
Platform, and train client users
in its operation

33

4. Appendix© SIOS Corp. All rights Reserved.

About SIOS Corporation
SIOS is Innovative Open Solutions
SIOS Corporation started as a system integrator that provided solutions based on Linux and other varieties of open
source software. Today, the company serves as a holding company of the SIOS Group, which includes technology
firms specializing in software products and SaaS solutions.
Under the mission of making the impossible possible for the people of the world, the SIOS Group is committed topursuing innovative solutions that resolve issues affecting people and contributing to a better society.
Visit https://www.sios.com/en to learn more about us.

Headquarters
CapitalEstablished
Stock listed on
No. of employees
Main consolidated subsidiaries

SIOS Building, 2-12-3 Minami Azabu Minato-ku, Tokyo, Japan
1,481 million yen
May 23, 1997
TSE Standard Market (stock code: 3744)
550 on a consolidated basis (as of December 31, 2023)
Japan:
SIOS Technology, Inc.
© SIOS Corp. All rights Reserved.

U.S.A.:
SIOS Technology Corp.
35

page
10
10
12

Term

Glossary

Description

Software products sourced
Open-source software products developed by Red Hat, Inc., a provider of open-source solutions
from Red Hat, Inc.
A failover software product that automatically switches a failed primary server to a backup server
LifeKeeper
API

12

Gluegent series

12

Software applications for
multifunction printers

18

SaaS

A set of protocols that enables different software programs and applications to share information andfunctions
Service products designed to assist corporate clients in achieving greater operational efficiency using
cloud solutions. The series includes the Gluegent Gate cloud-based management of user IDs, theGluegent Flow cloud-based workflow system, and the Gluegent Apps Group Scheduler, which
incorporated a function to manage schedules of team members into Google Calendar
A multifunction printer (MFP) is a piece of office equipment that incorporates print, scan, copy, andfax capabilities into one unit. The Group develops, markets, and updates document management
software applications, such as Quick Scan and Speedoc, that run on an MFP
Software as a Service. A software licensing and distribution model that allows users to connect toand use cloud-based software applications over the internet
A business model that charges customers a recurring monthly or annual fee to access a software

18 Subscription business model product or service
18

Generative AI

20

Single sign-on

20

IDaaS

24

On-premises

29

Aerospike, Inc.

An AI system capable of generating new data and content from learned data
An authentication method that enables a user to authenticate with multiple web and cloud services
by using just one set of user IDs and passwords
Identity as a Service. It is an identity and access management (IAM) solution delivered in the form of
a cloud-based service.
A user enterprise owns and operates servers and software on its premises
A global company based in Mountain View, California, that provides advanced highly scalable realtime data solutions© SIOS Corp. All rights Reserved.

36

Cautionary Statement
Forward-looking statements about the Company’s business outlook contained in this document
reflect management’s assumptions and judgments made on the basis of available information,and may include risks and uncertainties. Significant risks and uncertainties that might affectour performance include, but are not limited to, the economic environment
and market conditions in which we operate.

For inquiries about this document
Call the IR Section of SIOS Corporation on 03-6401-5111(+81-3-6401-5111 from outside Japan)
or fill in and send an online inquiry form available at:https://mk.sios.com/SIOS_Inquiry_english.html© SIOS Corp. All rights Reserved.

37