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STRATEGY

01.Interview with the CEO
02.Medium-term Management Policy
03.Progress of Medium-term Management Policy
04.Interview with the CTO
05.Company-wide DX Project

01. Interview with the CEO

President
Executive Officer and CEOJun Tanaka

As a partner leading the DX of companies and local governments, we will create a society where everyone can easily use data and continue to grow towards the creation of better future.

Net profit for this fiscal year achieved a record high driven by strong demand for core systems modernization and data utilization.
In 2024, we prepared for expansion into the public sector by strengthening our internal framework.

In FY2025, WingArc1st achieved record-high sales and profits in both the Business Document Solution (BDS) and the Data Empowerment Solution (DE) segment.

One contributing factor is the strong growth of the core product of the BDS segment SVF (form infrastructure solution) licenses. An underlying reason to this success is the fact that maintenance support for major core systems ending in the next few years. In response to this environment, many companies continue to replace their core systems, and enquiries about SVF, which is often introduced at the same time as core systems, have increased. Meanwhile, the demand for data utilization to strengthen corporate competitiveness drove growth in the DE segment, and Dr. Sum (data analysis platform), in particular, achieved double-digit growth. These results show that there is growing public interest in the use of data in management. In addition, we acquired Tryserve Co., Ltd. (Tryserve) as our subsidiary in May 2024. Tryserve has a proven track record in business system development and IT infrastructure construction for public agencies. We aim to accelerate the promotion of DX in the public sector.

The demand for digitalization is expected to remain strong.
We will pursue further growth by strengthening AI-related services.

Amid the steady growth of the Japanese economy, the IT market continues to see steady investment, especially among large enterprises. Demand for cloud services and AI-related services remains particularly strong, and the market is expected to expand further. While new entrants continue to be active, there is a trend towards elimination. As the workforce continues to decline, the demand for labor saving measures through digitalization will likely continue. Under this environment, each company's ability to provide valuable solutions will be tested in the future.

On the other hand, the impact of rising costs is becoming more evident. The impact is significant for large enterprises, which have led them to re-evaluate the products they have been using to reduce costs. This is both a risk and an opportunity for us. With many companies considering switching from overseas products to domestic products due to the weak yen, we do not want to overlook this opportunity and will focus on capturing new customers.

Additionally, with AI attracting more attention from the public, we believe it is important to successfully integrate generative AI into business. Generative AI can reduce costs and improve efficiency only when it is integrated into operations. Since 2020, we have been offering dejiren, an AI platform that can be seamlessly applied to business operations without requiring users to be aware of AI. This product can be linked with our own products such as invoiceAgent, as well as products from other companies. This enables dejiren to act as a virtual assistant and automate data analysis, recording of activities, and form management. We will help our clients streamline their operations and contribute to their growth. Moving forward, we will further strengthen these initiatives and work even harder to develop and provide valuable AI services.

We will continue to meet DX needs through our existing businesses while we aim to become a pioneer in the DX of local governments.

In the BDS segment, invoiceAgent performed well, driven by legislative changes in 2023 and 2024. Although the special demands of compliance with legal changes have settled down, we expect that many companies will move forward with other digitalization activities in the future. In Japan, where paper culture remains strong, it is likely that future legal changes will be made to ensure all corporate activities are evidenced. It will still be some time before all corporate activities are digitized, and the demand for DX will continue. We intend to maintain steady growth by thoughtfully responding to each emerging need.
We also expect continued growth in SVF, which currently holds the no. 1 market share in Japan. We are sometimes asked whether forms will disappear altogether. However, even if paper forms may disappear, the forms themselves that support corporate activities shouldn't disappear. Because the format of forms establishes a style that clearly presents important business information that would be difficult to understand from data alone. However, since computer processing can only be done with data, an environment where both forms and data can be used will be needed in the future. Therefore, we expect continued demand for form infrastructure solutions like SVF.

As for the DE segment, there continues to be a high level of interest in the business intelligence field, including Dr.Sum and MotionBoard (BI dashboard). In response to this environment, we aim to develop products that are intuitive and usable for all, not just visually appealing, by leveraging the strengths of our BI products, which can be used in daily business operations. We will also provide thorough customer support to help customers establish data utilization practices and promote corporate growth. Many companies want to use data for their business strategies, but oftentimes, data is only used for management decisions. For this reason, we are committed to maximizing the value of data by achieving these goals and be the first to be chosen by customers.

As a new initiative, we will also strengthen our service offerings to the public sector (local governments). Since 2023, we have actively promoted DX projects in the public sector, including collaborations with Izumi City in Osaka Prefecture and Kitakyushu City in Fukuoka Prefecture. Moreover, we are working to build a regional creation model, the Kitakyushu Model, in Kitakyushu City. When we acquired Tryserve, a company with a proven track record in this field, as our subsidiary in 2024, we are positioned to expand into the public sector.

The Japanese government is currently promoting the standardization and commonality of local government information systems, with the deadline for compliance set at the end of FY2025. Under these circumstances, the demand for DX in local governments continues to grow. However, barriers such as strict data management make it difficult for some companies to get involved. Therefore, we would like to create a role model for DX in local governments and use this expertise to accelerate digital transformation among them. By achieving this transformation, many local governments can make headway in DX, policy studies can be conducted using data, and our company can contribute to building a better society. We hope you will look forward to our expansion into this large and rewarding field.

We strive to build a work environment that promotes both well-being and enthusiasm by listening to employee feedback.

We believe that securing and developing human resources are critical challenges for companies, and we intend to continue our efforts and move forward steadfastly. While there is growing concern over the difficulty of acquiring digital-savvy talent in recent years, we are working to create an exciting environment for engineers led by our CTO's leadership. At the end of 2023, we opened D.E.BASE, an innovation lab for engineers, in Akihabara. This has been well received in recruitment activities and has helped us secure and train human resources and boost the motivation of our engineers.

We have been actively striving to improve our working environment to ensure that our company is a pleasant and rewarding place to work. As a result, WingArc1st has been selected by the Ministry of Economy, Trade, and Industry (METI) and the Tokyo Stock Exchange (TSE) as one of the Health Management Stocks of 2025, a category that recognizes companies listed on the TSE that have excellent health management practices. In addition, we have also been recognized as one of the Excellent Health Management Corporations of 2024 (Large Corporations: White 500) for the fifth consecutive year. In 2024, we also obtained Tomonin, which recognizes our efforts in promoting the development of a workplace environment where employees can balance work and caregiving responsibilities. At the root of these activities is our desire for all our employees to continue working in good health and with enthusiasm.

To this end, we regularly conduct surveys for all employees and hold roundtables hosted by the CEO as part of our efforts to promote women's participation in the workforce, so that we hear real sentiments of our employees. At roundtable discussions, we can talk directly with employees who express their views on a variety of topics and gain a lot of insights. Systems and mechanisms are meaningful only if they are utilized. In the future, we plan to focus our efforts on creating an environment where everyone can thrive.

As we take on the challenge of global expansion and development into the public sector, we will continue to nurture the seeds we have sown for our next leap forward.

The current medium-term management policy will end in FY2027. 2025 will be the year in which we start formulating our next management plan while firmly executing the current plan. The next pillars of growth will be the expansion of the product business in existing industries, the strengthening of our initiatives in the public sector, and taking on the challenge of global business. In terms of global expansion, we would like to develop products for overseas markets, while also finding partner companies to collaborate with for overseas expansion.

Looking back, FY2025 was a year in which we grew our existing businesses while planting the seeds for a wide variety of challenges for our next stage of growth. We feel a great sense of fulfillment in each of these efforts, and we will continue to nurture them and have them grow.
I have always believed that there is no concept of stability for a company, and that there are two choices: growth or decline. Even if a company remains unchanged and stable, costs will increase and profits will be lost. For a company to continue to grow, it must constantly change. That is why we will continue to identify the changes and needs of the times and develop new solutions that only WingArc1st can provide. We will continue to deliver results that exceed expectations and earn trust in order to make the world a better place through the power of digitalization and data. We hope that all of our stakeholders will look forward to WingArc1st's new challenges and breakthroughs. We ask for your continued support.

WingArc1st Inc.
President, Executive Officer and CEO
Jun Tanaka

02.Medium-term Management Policy

To adapt to significant changes in the business environment following the COVID-19 pandemic, we announced our first medium-term management policy since being listed on the Tokyo Stock Exchange in January 2022. In this policy, we clarified our shift to cloud services and listed our goals of achieving a high cloud growth rate and establishing a data platform to support this growth.

Business Environment

Initiatives for DX and the use of the cloud have become the norm for companies. The market for WingArc1st's solutions is expanding dramatically, partly due to political measures to promote DX and the use of cloud services.

Medium-term management policy

As DX continues to be implemented, the value of data is increasing, but not many companies are able to use data effectively on their own.
WingArc1st will promote DX within more and more companies by sharing the expertise we have cultivated from our experience of data utilization as a platform.

Create a data platform that promotes DX

Strengthen our business model

*1 Includes subscriptions for our cloud services and software licenses

Medium-term Management Targets

*1 Actual results for FY2022, forecast for FY2023 and beyond
*2 Recurring revenue: Cloud services + Maintenance / Subscriptions

03.Progress of Medium-term Management Policy

1. Revenue

In FY2025, the third year of our medium-term management policy, revenue was ¥28.7 billion (+11.5% YoY). Licenses/Services increased by 13.9% YoY due to the sustained growth in domestic IT investment demand and the full acquisition of TRYSERVE Co., Ltd. in May 2024. Recurring also contributed to earnings growth, up 10.0% YoY, mainly in cloud services. Revenue for FY2026 is projected to increase by 5.5% YoY, reaching ¥30.3 billion. We will steadily build up sales to achieve its target of ¥32 billion for FY2027, the final year of the medium-term management policy.

2. Medium-term targets

Although the growth of invoiceAgent slowed due to the decline in demand driven by legal compliance in the previous year, other services remained strong, putting the overall cloud growth at 22.5% for FY2025. Although recurring revenue remained stable, its proportion of total revenue stood at 60.9%, falling short of expectations set at the beginning of the fiscal year. This outcome was primarily attributable to the strong performance of licenses/services, supported by the consolidation of a newly acquired subsidiary. We expect this ratio to increase steadily as recurring revenue continue to grow. EBITDA was ¥9.65 billion. This was a favorable result given that sales were strong and exceeded the revised earnings forecast announced in January 2025. In FY2026, we will steadily implement strategies to achieve our medium-term management targets.

3. Strategic Investments

Implementation of strategic investments
Investment Ratio (3-year Cumulative Total)

The three-year strategic investment period ended in FY2025, with total investments at ¥5.18 billion, due to partial efficiency gains against the original plan of ¥5.5 billion. Investments in Sales&Marketing focused on acquiring pipelines for cloud services, contributing to higher cloud growth rates. For development-related investments, we aggressively enhanced the functionality of cloud services and were able to release various products centered on invoiceAgent. Personnel expenses were for the 58 employees hired under the strategic investment framework and who are already making immediate contributions. Going forward, we aim to achieve further growth by effectively utilizing the various resources obtained through strategic investments.

04.Interview with the CTO

Director, Executive Officer and CTOKo Shimazawa

Using our technical expertise, we will continue to develop products that empower people,
even in the field of generative AI.

With our unique technical expertise, we will create things that do not yet exist in this world, contribute to our customers' growth and raise productivity throughout Japan.

WingArc1st's philosophy of Empower Data, Innovate the Business, Shape the Future is the core of our technological development. We want to use our unique technology to create new products that will contribute to the growth of our customers' businesses, thereby creating a bright future.

These days, the need for DX is being widely advocated. With the world overflowing with new technologies such as data utilization, automation, and generative AI, many companies are considering how to address them. In this context, rather than aiming to just implement or deploy these technologies, we support companies with the goal of helping them improve their productivity and achieve further growth through technology. By doing so, we hope to raise productivity throughout Japan.

For this reason, we are actively addressing the field of generative AI, which is attracting much global attention. The most important consideration for its future utilization is how it can be applied in business to raise productivity. At WingArc1st, as providers of software and cloud services including SVF, invoiceAgent, Dr.Sum, and MotionBoard to major companies, we must lead the way in this endeavor. Beyond that, we would like to contribute to the growth of companies and the Japanese economy. This is our mission.

Our integrated production and sales system supports our customers.
Truly useful products are born because of our respect for technological development.

Our customers choose WingArc1st over other companies largely due to our unique technology and high reliability. Since our establishment, we have consistently and sincerely sought to solve our customers' issues. To achieve this, we have worked together as a company to hone our solutions and technological capabilities. This approach has resulted in product quality and reliability. That is why we will continue to adhere to our Customer 1st policy and continue to earn the trust of our customers.

Our integrated production and sales system contributes greatly to building trust with our customers. Through this system, a collaborative approach is established, where the Sales Department identifies customer issues and themes to tackle, the Technological Development Department generalizes this, incorporates it into product specifications, and packages it so that it becomes a shared asset with the customer. Following provision, the Support Department helps roll out the use of the product and make it self-sufficient.

Our goal is not for customers to purchase or implement a product. Our goal is to bring better results to our customers. Because we share the same belief throughout the company, we can work together with our customers to achieve their goals, even in challenging conditions. This leads to deep trust.

We have earned this trust in our technological capabilities through our continued efforts to refine our technologies with an emphasis on speed and improvements to our proprietary technology, thereby producing reliable products and services.

An example of this is our world-class high-speed database processing technology. We are able to deliver such technologies because of our corporate culture that respects technological development. Although developing new technology takes time, WingArc1st understands this and encourages it while seeing how far we can push ourselves to continue. This is why our engineers can immerse themselves in their own development and create technology and products that cannot be found anywhere else.

We train engineers with an emphasis on quality.
We will nurture individuals who can create new technologies.

While the lack of digital human resources has become a major corporate issue, we believe that we should aim for quality, not quantity. Our key criterion for hiring engineers is to select people who love to create things. We believe that the people who will flourish in the times ahead are not just those who can accurately and speedily perform a given task, but those who can create things from scratch to solve the problems in front of them.

For example, we established the Data Empowerment BASE (D.E.BASE) as an innovation lab for engineers. It is equipped with metal processing machines and 3D printers, so those who are excited to step into this space where new value can be created through the fusion of hardware and software must have the aptitude to make something. At WingArc1st, we already have many engineers with these qualities and are nurturing them. That is the source of our technological capabilities.

Additionally, although most engineers generally advance their careers into the management field, we also offer career steps for those who want to become specialists. Our engineers also hold this environment where they can continue to hone their skills in high regard. In the future, we hope to broaden our engineers' perspectives and expand their growth potential by giving them opportunities to learn the work of other departments.

We want to develop new services in the field of generative AI and create a society where people can utilize AI without even realizing it.

Over the next five years, we will strengthen our efforts in the area of generative AI in addition to improving the products we currently sell. Our goal is to create a society in which people can use AI technology without them even realizing it. By naturally incorporating generative AI into new and existing services, we hope to create scenarios in which our customers' productivity can be improved.

We are considering the use of generative AI through examples such as showing the key points of data analysis to generative AI to automatically generate insights on anomalies or non-issues and having it suggest the direction of information utilization. If we can achieve this, people will be able to process several times more data than before. Our goal is to use generative AI to create functions that assist users, to hopefully empower people.

WingArc1st will continue to boldly take on the challenge of new technologies, so please look forward to what we have in store.

WingArc1st Inc.
Director, Executive Officer and CTO
Ko Shimazawa

05.Company-wide DX Project

WingArc1st believes that DX is a data-centered transformation that aims to create better companies and a better society by maximizing the value of data. Through DX, the company aims to maximize human performance, improve corporate performance by using data as a weapon for business, and also speed up the distribution of information and the transformation of business transactions across companies and society.

To achieve these goals, WingArc1st is promoting a company-wide DX project. The project is led by a steering committee comprised of CEO Jun Tanaka, CTO Ko Shimazawa and CFO Taisuke Fujimoto.

Under the leadership of the steering committee, this project supports a project management system that aims for transformation in terms of both business reform and the development of digital infrastructure. The Corporate Planning Group and the Corporate DX Division are at the center of this initiative.
Cross-departmental projects are underway and monitored regularly.

We are working on transformation through business reform by developing a system and culture that will realize diverse careers and workstyles for employees, creating a system that improves skills and knowledge, eliminates routine work, and creates a business platform for inter-company creation.

Meanwhile, we are promoting transformation through the development of digital infrastructure by consolidating customer data for data-driven management, renewing core systems to boost business growth and advance business management, and automating IT delivery to support flexible work styles.

Through these efforts, WingArc1st aims to focus on what only humans can do, while maximizing the value of human capabilities.