Both businesses achieved sales growth and double-digit profit growth
Aiming for further growth through new challenges including Spin-Off Listing

　The Company has been preparing for the stock distribution spin-off and listing (“Spin-Off Listing”) of its consolidated subsidiary AGEST, Inc. since May 2023. In FY2024, as part of these preparations, the Company shifted to a new management structure and began to operate two independent groups, the DH Group Business and the AGEST Group Business. One year has passed since the establishment of this new management structure, and as we had initially envisioned, these independent management systems have enabled us to pursue our respective specialties and make prompt management decisions in line with our growth strategy, and I feel that we are now able to manage our business at a enough speed to catch up with the environmental changings.

　In the DH Group Business, the domestic debugging service, our core business, grew solidly, winning large orders, and this year was the period that we could take a major step forward in expanding our share of the global service in the market. For example, we actively participated in the largest game shows held in Europe, China, Japan and South Korea to increase awareness of the “DIGITAL HEARTS” brand among overseas game makers. In addition, we have been strengthening the promotion of our translation and LQA solutions, for which demand is growing. In FY2024, we launched the translation service utilizing “ella,” which is our unique game-specialized AI translation engine, and it already received more than 70 orders, including trial orders. The speed and quality of this new translation service has been highly evaluated and attracted a great deal of interest from our clients. Unlike ordinary machine translation, the most important feature of “ella” is that it enables the expression of the game's world view and characterization, which is essential for game translation. We are confident that this will be an innovative service in the current game development field, where simultaneous global release in multiple languages is the norm. On top of these existing businesses, we have also aggressively taken on challenges in new growth areas, including accelerated investment in new areas such as eSports, Web3, and AI.

　Meanwhile, AGEST Group Business has been pursuing its technological capabilities as a “testing specialist company,” taking advantage of the increasing demand for testing in domestic businesses against the backdrop of a shortage of IT personnel and accelerating investment in DX. Specifically, we have worked to provide high value-added solutions in response to “Shift-Left,” which supports quality improvement from the upstream process of software development, and we have promoted test automation and utilizing AI in the testing domain. We launched the β version of our original AI test tool “TFACT” in January 2025, which can reduce testing man-hours by about 30% through automation, etc. TFACT is a unique tool that no other company has, and it provides a one-stop service for everything from test case creation to test execution, results analysis, and report generation, as well as test case management. We have applied for patents for some of TFACT functions.

　As a result of these growth strategies focused on their respective business areas, both businesses achieved sales growth and double-digit profit growth in FY2024, with consolidated net sales of 39,748 million yen (YoY 102.5%) and consolidated operating income of 2,430 million yen (YoY 119.1%). We recorded consolidated net profit growth in FY2024, but we had to record a loss on valuation of investment securities of companies invested in DH Group Business. However, these invested ones are very interesting companies who are taking on the challenge of building completely new business models that have never existed before, and we look forward to continuing to work with them to create businesses for the future.

　For FY2025, we plan to achieve consolidated net sales of 39,750 million yen (YoY 100.0%) and consolidated operating income 2,640 million yen (YoY 108.6%) by maintaining the sales growth and profit growth trend in both businesses. Consolidated net sales are expected to be at the same level as the previous year, partly due to the impact from the sale of non-core subsidiary’s share as a selection and concentration in FY2024. As its core business base excluding this share sale impact, the Company plans a nearly double-digit sales growth, YoY 108.5%. The consolidated net profit growth is also expected to be YoY 263.7% due to the absence of extraordinary losses recorded in FY2024. By considering these forecasts, we plan to increase FY2025 ordinary annual dividend to shareholders by 2.0 yen to 23.0 yen.

　Regarding one of our group's biggest strategies, Spin-Off Listing, we have made steady progress in building the management foundation required as an independent listed company, including the construction of back-office functions and the strengthening of governance through the appointment of outside directors. Although the recent trends in the stock market have become somewhat difficult to read due to the policies of the U.S. government and other various factors, we will continue to aim to find the optimal timing and to be listed in the Growth Market.

　We hope that our shareholders will continue to look forward to our new challenges and give us their continued support.

May 13, 2025
President & CEO
Toshiya Tsukushi