Sansan, Inc.

Thank you for joining our earnings results presentation today. I am Munayuki Hashimoto, CFO of the company. I would like to outline our results for the first quarter of the fiscal year ending May 31st, 2026. Let me begin with three highlights. The first of these is net sales. Growth rates in all segment were up from quarter four of fiscal year 2024 and remained steady. As of August 2025, annual recurring revenue exceeded ¥43,765 million. The second highlight is adjusted operating profit. Despite increased advertising expenses associated with large-scale promotions, we achieved a profit growth rate significantly greater than the sales growth rate. The third highlight is Sansan Business Database. The number of subscriptions and monthly recurring sales per paid subscription remained high, recording the highest growth rate of the past three fiscal years. Group-wide financial results are shown in the slide. Net sales grew steadily, rising 28.2% year-over-year. Gross profit margin increased by 1.2 percentage points year-over-year. This is mainly due to improved efficiency in Bill 1 data digitization operations. Adjusted operating profit increased by a significant 178.8% year-over-year due to net sales growth, an improved gross profit margin, and a lower ratio of personnel expenses, despite increased advertising expenses due to TV commercials and other large-scale promotions, continuing from the fourth quarter of fiscal year 2024. Ordinary profit and profit attributable to owners of parent were negative in Q1 of fiscal year 2024 due to a large one-off charge for share-based payment expenses. No such special factors were present in Q1 of fiscal year 2025, which resulted in significant increases in profits. I would like to discuss some details of adjusted operating profit. Net sales remained steady and gross profit margin increased by 1.2 percentage points due to an improvement in the cost of sales ratio. Breaking down SG&A expenses, advertising expenses increased by approximately 1,081 million yen. and the ratio to net sales rose by 6.3 percentage points. On the other hand, the increase in personnel expenses was limited to approximately 832 million yen, resulting in a 2.5 percentage point decrease in the ratio to net sales. Rents and relocation expenses decreased by approximately 258 million yen due to the elimination of expenses associated with head office relocation and double rent incurred in the same period of the previous year. As a result, the SG&A ratio declined by 6.5 percentage points, leading to a significant increase in adjusted operating profit. Due to these factors, the company was able to achieve high profit growth in quarter one of fiscal year 2025, while carrying out solid investments in growth for the future. I will now discuss results by segment. The Sansan slash Bill 1 business posted strong net sales growth and a significant increase in adjusted operating profit. The 8 business segment saw a significant increase in net sales and a narrowing of its loss. Looking at results by segment, net sales in the SanSan and BillOne business increased by 26.4% year over year. Looking at results by service, SanSan grew by 19.3%, accelerating its growth rate from quarter four in fiscal year 2024 and achieving its highest growth rate of the past three fiscal years. Bill 1 maintained a high growth rate, increasing its sales by 42.6%. Adjusted operating profit increased by 66.4% year over year due to net sales growth and an improvement in the gross profit margin of Bill 1, despite higher advertising expenses. In other areas, the AI-driven contract database service Contract 1 and the group company NineOut, Inc. both showed strong growth. The number of contract one subscriptions increased to 463, up from 218 at the end of the quarter one in fiscal year 2024. Here I would like to discuss KPIS for Sansan. Recurring sales, shown on the left side of the slide, delivered solid performance, increasing by 17.3% year over year. The number of subscriptions is shown in the center of the slide. Subscriptions grew by a steady 10.3% year over year, with a net increase of over 350 subscriptions for the quarter. Monthly recurring sales per paid subscription remained high, increasing by 6.6% year over year. The average monthly churn rate for the most recent 12 months, shown on the right side of the slide, was 0.52%, maintaining a low level of less than 1%. Although the rate increased by 0.12 percentage points year-over-year, this was due to a temporary increase in churn rate in the previous Q4, a period in which subscription renewals were concentrated. We believe that the increase presents no concern. For reference, I will provide an update on new contracts received in Q1. The amount of new contracts shown here is a metric similar to the recurring sales metric that will be additionally recorded from here on out, reflecting decrease due to cancellations. The metric includes items that have already been reflected in Q1 net sales and items that began to be recorded in Q2. That amount was up 20.8% year-over-year, indicating solid performance. Next, I will discuss KPIS for Bill 1. Looking at MRR on the left side of the slide, August 2025 results increased by 40.1% year-over-year to 985 million yen, recording a net increase for the quarter of 72 million yen. Quarter-over-quarter net growth has continued for three consecutive quarters since quarter three of fiscal year 2024 and remains solid. the number of paid subscriptions, shown in the center of the slide, increased by 40.2% year over year, recording a net increase of 320 subscriptions for the quarter. This number has continued to grow steadily by over 300 every quarter since quarter three of fiscal year 2024. On the other hand, monthly recurring sales per paid subscription declined by 0.4% year-over-year due to increased acquisition of smaller customers. However, monthly recurring sales by customer size remain high and present no particular problems. The average monthly churn rate for the last 12 months, shown on the right side of the slide, remained low at 0.33%. The amount of new contracts in Q1 declined by 3% year over year, mainly due to a number of expected order wins being pushed back to Q2. The factors behind the negative result are clear, and we believe that we are making steady progress toward achieving our full-year forecast. Next, I will discuss the eight business. Net sales of B2C services remained strong, rising 12.9% year over year. Net sales of B2B services were up 57.4% year over year, mainly due to the effect of several business events. As a result, net sales increased significantly by 52.4% year-over-year, with net sales growth narrowing the loss in adjusted operating profit by approximately 102 million yen. Finally, I would like to discuss our earnings forecast. First, regarding the medium-term financial policy, performance is progressing well, and there are no changes to figures at this time. For the fiscal year ending May 31, 2026, there is no change to the full-year forecast from that announced at the beginning of the fiscal year. Net sales are expected to increase by 22.0% to 25.0% year-over-year, and adjusted operating profit is expected to increase by 92.7% to 143.0%. Because the company's business is based on recurring revenue, its structure is such that performance builds and expands as the quarter progresses. The company plans large-scale advertising expenses in conjunction with the implementation of large-scale promotions in the first half of the fiscal year year under review, and thus expects the recording of profits to be weighted in the second half. Specifically, the company plans to book approximately 25% in the first half of the fiscal year and 75% in the second half. Therefore, although the rate of progress in adjusted operating profit for Q1 appears low, in reality it is at a very favorable level for the quarter, exceeding internal plans. In addition, advertising expenses are planned to peak in Q1 and profit is expected to remain at an even higher level from Q2. This concludes the briefing. Thank you very much.