Digital Garage (4819) investor relations material

Executive summary

• Treated as a transition year ahead of a new Medium-Term Management Plan, focusing on cost efficiency and resource reallocation to next-generation growth areas, especially AI and digital infrastructure.

• Streamlined business portfolio by consolidating unprofitable operations and divesting select securities and non-current assets.

• Revenue for the three months ended June 30, 2026, was ¥9,432 million, down 1.4% year-over-year.

• Loss before tax improved to ¥428 million from a ¥1,345 million loss in the prior year period.

• Net loss attributable to owners was ¥587 million, compared to ¥673 million loss year-over-year.

Financial highlights

• Consolidated pre-tax loss of ¥0.4 billion, mainly due to investment business losses.

• Payment transaction volume reached ¥2.9 trillion, up 41.3% year-over-year.

• Recurring business revenue increased slightly to ¥8,481 million from ¥8,342 million year-over-year.

• Loss in operational investment securities dropped sharply to ¥105 million from ¥1,866 million.

• Basic business profit dropped 44.9% YoY to ¥680 million, impacted by lower PS segment profit and HQ optimization costs.

Outlook and guidance

• Expect a challenging first half in FY27.3 due to lingering effects of customer churn and contract revisions, with a return to growth projected in the second half.

• Full-year payment transaction volume forecasted at ¥11.5 trillion, up 26% YoY, driven by KDDI Group projects.

• Medium- to long-term growth to be secured by deepening strategic alliances and deploying next-gen technologies.

• No consolidated financial results forecast disclosed due to difficulty in estimating fair value of startup investments.

• Dividend forecast for fiscal year ending March 2027 not yet determined.