ZIGExN Co., Ltd. (3679) Q1 2027 Earnings Call Transcript

ZIGExN Co., Ltd. Q1 Financial Results Briefing for the Fiscal Year Ending March 2027 August 13, 2026

Event Summary [Company Name]

ZIGExN Co., Ltd.

[Company ID]

3679-QCODE

[Event Language]

JPN

[Event Type]

Earnings Announcement

[Event Name]

Q1 Financial Results Briefing for the Fiscal Year Ending March 2027

[Fiscal Period]

FY2027 Q1

[Date]

August 13, 2026

[Number of Pages]

31

[Time]

17:00 – 17:41 (Total: 41 minutes, Presentation: 28 minutes, Q&A: 13 minutes)

[Venue]

Webcast

[Venue Size] [Participants] [Number of Speakers]

2 Joe Hirao Sachiko Hatano

Representative Director, Operating Officer, CEO Director, Operating Officer

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Presentation Hatano: Welcome to the online briefing of ZIGExN Co., Ltd. Today, the presentation will be given by two of us: Representative Director Hirao, and myself, Director Hatano. First, let me explain the agenda for today. Hatano will explain the outline of the financial results, and Hirao will discuss the current business environment and the progress of our management strategy. Following that, we will move on to the Q&A session.

Now, I would like to proceed with the outline of the financial results. First, I will briefly explain the highlights. For Q1, revenue was JPY7,807 million. EBITDA was JPY1,986 million. Operating income was JPY1,601 million, and both revenue and all profit metrics reached record highs for Q1. All indicators are within the expected range relative to the earnings forecast. We have carried out the company split of Hoken Mammoth and the integration of URG’s job placement business into Ties. At MIRAxS, we have completely withdrawn from the temporary staffing business in addition to the job placement business, thereby promoting divestment to improve management efficiency. From an organizational perspective, we have introduced a virtual company structure to enhance management efficiency. In addition, we have established a new AX/AI and security promotion office to comprehensively promote AI transformation, AX, and AI initiatives, as well as security initiatives across the entire ZIGExN Group.

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As explained in our third medium-term management plan, starting this fiscal year, we have reorganized our business segments from the previous three into two: vertical HR and life service. In vertical HR, PMI is progressing smoothly at Ties, and the segment continues to maintain high growth. Ties is integrating the job placement business of its subsidiary, URG, into Ties, to accelerate the pace of its business expansion. M&A sourcing is also under way. In life service, demand in the moving and home renovation domains has declined slightly due to macroeconomic factors. On the other hand, cross-selling in the energy sector is performing well due to the surge in utility costs resulting from the situation in the Middle East. Furthermore, in the travel domain, while demand for leisure travel has been growing at a moderate pace due to the weaker yen, demand for business travel remains strong.

Next, quarterly financial results. For Q1, revenue was JPY7,807 million, up 16% YoY. EBITDA was JPY1,986 million, up 10% YoY. Operating income was JPY1,601 million, up 13% YoY. Revenue has increased significantly YoY, driven not only by growth in existing businesses centered on vertical HR but also by the effects of M&A. Regarding profits, while profit margins are trending slightly downward due to changes in the portfolio mix resulting from new M&A activities and strategic upfront investments, primarily in Ties, both operating income and EBITDA reached record highs for Q1.

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Next, progress rate against the full-year financial forecast. The progress rate against the financial forecast for the fiscal year ending March 2027 was 23% for revenue, 24% for EBITDA, 25% for operating income, and 24% for EPS. In vertical HR, we have achieved significant growth through organic growth, primarily in Ties, and the impact of M&A. On the other hand, life service has remained largely flat due to the temporary impact of divestment and a slowdown in demand in certain businesses.

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Next, number and unit price of corporate clients. The number of corporate clients stood at 23,059, representing a slight decrease YoY due to factors such as the withdrawal from the MIRAxS staffing business as part of portfolio streamlining efforts and the impact of non-core businesses, including the management integration of Sanko Ad. The unit price per corporate client increased steadily due to factors such as changes in the product mix resulting from the expansion of high-margin business segments. We will continue to work toward expanding our corporate client base and increasing average unit price per client.

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Next, please take a look here for the revenue and operating income trends by segment. Starting with this report, in addition to revenue, we are also presenting the trends in operating income. In vertical HR, revenue grew significantly YoY, driven by growth in existing businesses such as Ties and the consolidation effects of M&A. In terms of profits, we have achieved double-digit growth YoY while continuing to make growth investments, particularly in human resources. We will continue to increase our upfront investments to drive further growth. In life service, while the travel and used-car businesses performed well, revenue declined slightly due to the temporary impact of the divestment of non-core businesses. As part of our efforts to improve management efficiency, we also reorganized Hoken Mammoth during Q1.

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Next, financial strategy and strategic investments, as well as shareholder returns. For the fiscal year ending March 2027, we do not plan to conduct a share buyback in accordance with our financial policy. Regarding the dividend, we plan to raise it to JPY13.5, for a payout ratio of approximately 30%.

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Next, balance sheet condition. Goodwill amounted to JPY13.5 billion, and as of the end of June, the balance sheet showed a goodwill-toequity ratio of 0.6. The ratio of equity attributable to owners of the parent, that is, the equity ratio under Japanese accounting standards, stands at 56%, indicating that we continue to maintain strong financial health. That concludes my presentation. Next, Representative Hirao will discuss the current business environment and the progress on management strategy.

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Hirao: I am Hirao, Representative Director. I would like to talk about the business environment and our strategic progress. As for the business environment, as you can see, I believe vertical HR performed well on both the client side and the user side. We are involved in a variety of industries, and the HR market itself is very robust, especially in the mid-career market. I really feel like it is performing steadily. As for life service, it is also expanding into a wide range of markets. Particularly this time, we have listed several triangles on the user side. One of these is based on the situation in the Middle East, where certain businesses, such as some travel agencies and car exporters, are experiencing some impact from the situation in the Strait of Hormuz. Additionally, I believe that this situation in the Middle East is indirectly affecting businesses such as certain cross-border real estate brokerage services, as rising prices result from disruptions in the supply of resources. Also, while this has been the case for some time, given that prices are high in areas like home renovations, I think people are being a bit more cautious when it comes to making decisions on relatively high-cost expenditures.

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On business situation in mainstay business. This vertical HR report breaks down revenue growth into number of clients and unit price, and we were able to achieve record-high figures for both number of clients and unit price per client. The number of clients is growing steadily, and there is still room for growth in unit price per client. Since we are currently operating in a business model similar to that of a recruitment agency, I believe our average unit price per client, which is JPY0.94 million now, will undoubtedly reach the JPY1 million range very soon, even within this fiscal year. We view this as a model in which, over the medium term, we will increase the unit price per client while expanding our customer base in proportion to that growth. It is a strategy of gradually increasing the unit price while growing the number of clients.

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Here is an introduction to our core business, Ties. We report these figures both on an employment basis and an offer basis every quarter, and given that revenue increased by 24% this time, I believe we will be able to maintain this high level of growth going forward. We are an agency that is highly regarded by our clients, and as shown on the right side, we have received various awards. I believe we have a situation where our service is being used by clients who have a significant impact on Japan’s current market capitalization.

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On customer structure. We refer to our customers as loyal, repeat, and new here, and our business operations remain largely unchanged from the previous quarter, with a continued focus on our loyal customers. Of course, our business strategy is focused on steadily converting new customers into loyal, repeat customers. As for our loyal customers, while the average unit price per client is just under JPY1 million, as I mentioned earlier, they place orders totaling approximately JPY50 million annually. With large companies, orders are often in the hundreds of millions of yen. We plan to continue growing this area.

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To explain what kind of business model this is, it is a business that is very much people-centered, which we call Human Agent. This is also mentioned later in the section on ZIGExN Matching Agent in the medium-term plan. The basic structure is such that productivity increases over time as proficiency levels and average employee tenure rise. While the data for the fifth year and beyond varies somewhat, this model is basically designed to grow in direct proportion up through about the fourth year. Since this is an industry with very high demand, we are seeing our revenue grow as we increase the number of consultants while boosting productivity.

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On Ties. I would like to take this opportunity to present an update on our PMI status following the M&A. Please take a look at the line graph on the left. Revenue is shown in blue. Operating income is shown as the red line graph. As you can see, this is our strength that our PMI is fundamentally designed to steadily increase revenue. While many companies may focus primarily on cost reduction, we are implementing a PMI strategy that is designed to steadily grow revenue. With this, revenue quadrupled, and moreover, operating income increased twelve-fold. I think you can see that we are growing our business through increasing revenue. On the right, we have listed the positioning of vertical HR. REJOB had already been experiencing significant growth since its IPO. It is the largest business within our company, but with Ties now emerging as a key player, I believe we are beginning to see a horizontal expansion where people think of our service as the go-to choice for career changes in a certain industry. We identified vertical HR as a priority in the previous medium-term plan, and in this current plan, we have designated it as our core business. I believe our strategy is proving to be very successful. Following the success of Ties and REJOB, we hope to expand our other businesses in this way as well. We will do our best to become the number one in each industry.

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On leading indicators. Here is order backlog for your reference. On the previous page, the progress rates for our management accounting and the employment-based financial accounting happened to be the same. Here, you can see that the order backlog has been rising as we approach June. Our business model inherently involves a time lag, and our financial revenue is generated when the candidates are employed. However, we internally track leading indicators for candidates who have already received job offers or whose hiring is virtually certain, even before they are officially hired.

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On the other hand, I think life service was the main challenge in Q1, and as Hatano mentioned earlier, we ended up with a decline in both revenue and profit this time. If we break this down by KPI, you can see that while the unit price per client appears to be increasing, the number of clients has decreased significantly. This is due in part to the business integration of certain operations and because we are intentionally reducing the number of clients in some areas. As a result, we believe the unit price per client has increased. This is not exactly a crisis situation; rather, we see this as part of our divestment aimed at improving profitability. We are in the process of scaling back some of our less profitable businesses. So, while the number of clients is intentionally shrinking, the clients who remain tend to have higher unit price per client, which makes the unit price per client appear higher when calculated on a per-client basis. In fact, life service’s unit price is about twice that of HR. There are various factors behind. Since vertical HR conducts some direct recruiting and offers services targeted at small businesses, this mix of activities tends to result in a lower unit price per client. I think life service tends to have a relatively large number of medium-sized clients. In addition, since we are in the sales promotion business, the more clients we refer, the more profit our clients make. Generally speaking, I believe that once we are able to effectively monetize the traffic we drive, the unit price per client tends to increase. This gap is currently about twice as much. Prior to the divestment, vertical HR had lower figures at that time. Still, the gap is about twofold, and even as vertical HR grows, I think you can consider it to be about twofold at present.

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From here, we are reintroducing the third medium-term management plan, which is in effect starting this fiscal year. Over the next five years, we will be working hard under the theme of ZIGExN Matching Agent, ZMA.

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In terms of business growth, our strategy is to focus on vertical HR as our core business, and we believe this strategy for vertical HR is proving to be very successful. Essentially, our core strategy is to rapidly expand this vertical business. While there are many HR companies across various industries, our approach is to become the number one player in each sector and thereby create a large number of niche-leading businesses. Also, as a company originally founded as an IT firm, we plan to leverage AI to boost productivity while scaling our business. Furthermore, using the 36 M&A deals we have completed since going public as a key asset, we aim to grow these three areas: M&A, the vertical, and AI. As for life service, we intend to expand our total addressable market, TAM, by following the vertical integration that we have already implemented in the HR business, and we believe we can continue to grow the market in the context of AI. We aim to enter our clients’ HR markets by helping them with AI automation and operational improvements. Basically, the strategy for life service is to pursue the same approach as that for vertical HR. As for investment and finance, we currently have cash on hand exceeding JPY10 billion, a level we have maintained over the past five years. Taking other sources of funding into account, we believe we can utilize funds amounting to the low tens of billions of yen. We intend to actively pursue M&A opportunities. In addition, as for organic growth, we plan to allocate capital by using an equivalent amount of cash. As for organization, we have been making quite a few major changes starting this year. These include optimizing our staffing to accommodate AI and implementing a virtual company structure. While I believe many companies are transitioning to a holding company structure, we feel that this virtual company model is a much better fit for our size, so we are giving it a try starting this fiscal year.

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As a firm engaged in M&A, we are increasing the number of management professionals and offering training programs to develop more entrepreneurs and business leaders.

I will omit the review of the previous medium-term plan here. We have included the same text as in the previous report.

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Even within vertical HR, there have been various changes, such as organizational restructuring. We are actively consolidating our operations into companies that have similar business models and the necessary expertise. We have acquired Ultimate Resources Group, URG, a company engaged in RPO business, through an M&A transaction by Ties. URG provides RPO and job placement services in the consulting sector. When it comes to recruitment, Ties has accumulated a great deal of expertise in this area with very high productivity, and the market, particularly the consulting industry, is experiencing significant growth. We have decided to integrate this area into Ties' job placement services, starting July 1. URG will transition to an RPO firm, and Ties will take over the HR and job placement services for the consulting industry. That is the framework. I think we will start to see the results soon.

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Here are two highlights of our organization for this term. We have implemented the virtual company model starting this fiscal year. Currently, we have five companies, which amounts to about 20 in terms of strategic business units or about 30 in terms of the number of subsidiaries, and we have consolidated them into these five companies. Since we operate Incubation on a supplementary basis, we have divided our business domains into roughly four. We have appointed a president for each company and are working to develop management talent and grow the business by forming teams within each. Since we are still in the early stages, we are in the middle of a reorganization right now. I believe this will lead to accelerated progress and faster decision-making through the delegation of authority. And then, of course, there is the issue of shared costs. I believe these costs inevitably existed separately for each group company, so in this age of AI, I expect that further cost reductions will boost profit margins. I also believe that under the leadership of the head of each virtual company, strategic focus will accelerate even further. I am really looking forward to seeing how this plays out. The third point is very close to a simulation of running a business. Although this is a virtual setup, the structure is designed so that each company can implement the consolidated management approach that I am pursuing. We have been keeping track of the quality of their comments, and I already have the distinct impression that, as business leaders, their decision-making has become much sharper. As for AI transformation, or AX, there are a few things I will be introducing later, but the key is to break it down into offense and defense. Also, since cross-functional initiatives are currently scattered across various areas, we plan to promote business growth, operational reform, data and AI infrastructure, and security governance within the Group while using sub-themes to tie these cross-functional initiatives together.

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In this presentation materials, we have outlined AI utilization over several pages. While I believe various IT companies are leading the way in adopting and promoting these technologies, our company has also made significant progress in AI, and we currently classify our level of advancement on a five-point scale ranging from zero to four. This is just our own assessment, but I think we are probably somewhere between level two and level three. At level three, operations simply cannot function without a significant amount of AI. As for the product division, and this may be true for other companies as well, productivity has increased tremendously. You can safely assume that AI has more than doubled the productivity. On the other hand, level two indicates a situation where, although everyone uses AI in their work and it has led to greater efficiency in tasks such as document creation, they have not yet reached the stage where they are fully leveraging its potential. We believe level two is the most common. Our self-assessment is that, while we do use AI on a daily basis, we have not yet reached the point where it is leading to increased revenue or cost reductions.

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However, we are currently conducting an internal survey to determine how we can translate it into increased productivity and enhanced business performance going forward. I think what to do with the time we actually save is a very hot topic, specifically, how much room there is for improving operational efficiency. While much of this is qualitative, based on estimates from internal discussions, given that we currently have just over 1,080 employees, if we apply the annual scheduled working hours for that workforce and factor in improved operational efficiency, it appears we could generate the equivalent of 800,000 hours of additional labor. However, this is a point that often comes up in discussions. Does using spare time actually lead to operational improvements? This leads to the question of whether there are tasks that can be done in spare time without reskilling. As mentioned in the survey on the lower right, I think this is a very important point. For example, enhancing client proposals, sales engagements, and support. This is also essentially necessary, but they just did not have the time to do it. I believe there are quite a few employees and businesses among us who have been so swamped with work that they have not been able to focus on their customers, so we will use the time for this purpose. I think the key will be to focus on creating new value by determining which tasks to delegate to AI and which to leave to humans during that freed-up time. Also, although this overlaps with what I said earlier, I think we need to focus on improving the quality of our work, increasing accuracy, managing risks, and perhaps shifting our focus a bit more toward prevention. We have not yet quantified the specific benefits in terms of direct revenue figures or similar metrics. However, while there are currently many B2B companies that are successfully monetizing their services, as a B2B2C

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company, we are able to help our customers increase their productivity and improve their return on their labor. Since we possess technology geared toward consumers, I believe our potential is actually quite substantial. If you look at the graph on the left, it seems difficult for a B2B company to increase its conversion rate severalfold. For example, by incorporating AI features into a form, the conversion rate increased by 1.6 times compared to a standard form. We are already starting to see success in boosting conversion rates by leveraging technologies such as image recognition and large language models, LLMs.

Furthermore, as the interface evolves into what is commonly referred to as a chat UI, it will become more interactive, leading to higher conversion rates and making it easier for customers to find what they’re looking for. This will improve the user experience for information searches and drive up conversion rates. Another example is a slightly more technical. As we referred to it as LTR, we handle a massive volume of data, which is central to our business, and we have been able to significantly increase the conversion rate for unique users. We believe that the real challenge lies in determining which data points among the vast amount available are the best fit for our customers, and this is precisely where AI is starting to make a difference. I believe that improving labor productivity from this point on will be the next major challenge, and as shown on the right, product development for improving on-site operations is the key. For example, at our company, the time it takes to create job postings has been significantly reduced. Compared to when I was at Recruit, the way we handle these tasks has changed completely, and we are now able to use that extra time to focus on customer success. I just said we were able to cut costs this time, but in reality, I believe the results will start to show based on KPIs, such as a lower churn rate moving forward. I hope we will be able to share the news with you. So, I think

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the key is figuring out how we can create a system where manual labor is reduced and the benefits of that are properly passed on to customers. Things got a little rushed, but that concludes my explanation. Thank you very much for your attention.

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Question & Answer

Hatano [M]: We have concluded our presentation. We will now move on to the Q&A session. We have already received three questions, so I will read them out in order. Participant [Q]: First question. While you are proceeding with the sale, divestiture, and integration of the businesses, you are concentrating the management resources on vertical HR. Going forward, when deciding whether to nurture, integrate, exit, or divest existing businesses, what quantitative criteria, such as growth rate or ROIC, will you prioritize? Also, to what extent do you believe the current portfolio restructuring has progressed? Hatano [M]: There are three questions in total, but I think it would be best to address each one separately, so I would like to ask Hirao to start with the first question.

Hirao [A]: I will answer that. We have begun operating the ZPM matrix that you are currently viewing. We plot our businesses on a graph with growth rate on the vertical axis and return on capital on the horizontal axis, which, in our terms, is similar to IRR, and use these metrics to evaluate them. Specifically, we manage our investments internally by examining the sum-of-the-parts valuations for each business segment, looking at comparables, considering what the approximate market capitalization should be based on those figures, and incorporating bubble charts into our analysis.

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Basically, the bottom-left segment is one where we need to consider whether to maintain discipline regarding business withdrawals while exploring opportunities for expansion or whether to sell it. Internally, we use growth rate and return on capital as our hurdle rates. Alerts are triggered twice per quarter. Also, when looking at profit growth rates, an alert is triggered if the rate remains below 25% for six consecutive months. In addition, there are criteria regarding accumulated losses, so we are thoroughly reviewing the bottom-left section to ensure that decision-making is not unduly delayed. The top right is so excellent that I do not think I need to explain it. Then, the lower right and upper left. Within our company, there are also business units like the one shown in the lower right corner. As in the question, we have been able to maintain a high degree of discipline in the lower-left. While there are still a few unprofitable businesses in certain areas, even if we add up all the losses, the total is probably around JPY50 million right now on an annual basis. So, if we stop them, profits tend to go up accordingly. Actually, when you factor in the expected value, I think we have already managed to reduce that JPY50 million cost by about one-third to one-half. We will have to wait and see what the benefits of the merger will be, but the lower-left shows what the actual deficit looks like so far. There has been a lot of internal discussion about how to handle the lower-right, as in the question. As for the businesses highlighted in this ZPM, we intend to manage them using a compound growth strategy. Also as in the next question, we ultimately place a high priority on this cycle of reinvesting the profits generated from our organic business to generate even greater profits through M&A. Please consider the business in the lower right corner as the source of funds for reinvestment. However, if holding such an asset would result in significant impairment of its value, it would fall into the divestment category in the lower-left quadrant, so we would essentially begin preparing for that. If the growth rate of the area where reinvestment is made is high, investing from the lower right to the upper left could create a virtuous cycle. So, it depends on the project in the upper left, but if we can consistently target projects on the left that show significant growth, and as long as the project in the lower right remains profitable and it does not keep dropping by 50% every year, for example, we plan to maintain the operation to some extent. When we were considering our medium-term plan, one strategy we considered was to phase out all operations in the lower-left and lower-right quadrants and focus entirely on the upper-right quadrant. We discuss this extensively within the company. Since M&A is a central pillar of our strategy, we think it is very important that this area serves as the source of funds driving the cycle from the bottom right to the top left. So, it is crucial to manage the area effectively as a cash cow, and I believe many of the life service business fall into this category. That concludes my response to the first point. Hatano [M]: Now, we will move on to the second question. Participant [Q]: In vertical HR, Q1 revenue was up 41%, posting strong growth. What is the organic growth rate, excluding the consolidated impact of M&A? Also, looking ahead over the next two to three years, what do you consider to be the most important KPI for maintaining the current high growth rate, particularly at Ties?

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Hatano [M]: Hirao will take this question, too. Hirao [A]: I will answer that. First, I will discuss the organic growth rate for this quarter in vertical HR. Given the business restructuring at Sanko Ad, and taking that into account, organic growth stands at roughly 15% when excluding newly consolidated subsidiaries. I believe that, broadly speaking, both revenue and profits are converging to a point where, at the current pace of M&A, organic growth and M&A each account for roughly half. Although this represents 15% out of 41%, which is not quite half, with some dispatch operations being included, we believe that trend is somewhat more pronounced. Regarding the question about what the KPIs for Ties' growth are. The unit price per client and the number of clients, which we disclose in our investor relations materials, are critical KPIs for us on the client side. We have some very large customers using our service, so there is definitely significant demand, but unfortunately, we currently lack the resources to meet the needs of all our customers. On the other hand, since we operate a two-sided platform, I will also discuss the KPIs on the customer side or the users’ side. We use the term, candidate, in the recruitment industry, and we see the business by breaking down our efforts into candidate acquisition and the high productivity I mentioned earlier. In terms of people, we break it down by multiplying the number of highly productive individuals by their level of productivity. Since productivity is based on client acquisition, if we do not improve our ability to attract clients, an increase in the number of people will not necessarily lead to a corresponding increase in productivity. These three attributes are required: the number of customer orders, the level of employee productivity and the number of employees, and the ability to attract clients. I believe that as these three areas continue to grow, we will be able to keep expanding indefinitely. Given that our current revenue share within TAM is still quite small, we plan to keep these three cycles spinning steadily as we work to scale up our business. That concludes my response. Hatano [M]: Now, we will move on the third question. Participant [Q]: In vertical HR, you are expanding the scope of services to include job placement and RPO, while in life service, you are expanding to include conversions and BPO. Given this shift to the conversionbased model, to what extent do you expect to increase commission rates, profit margins, and retention rates in the medium term compared to the traditional matching-based model? Hatano [M]: Hirao will answer this question, too. Hirao [A]: Thank you for the question. I think it is fair to assume that the unit price per client will increase significantly. As we discussed last quarter, after reviewing the results of our previous medium-term plan, we found that unit price per client had grown significantly, more so than the number of clients. Consequently, the unit price per client has been the primary driver of our revenue growth. I believe this is precisely because we have adopted a vertically integrated, conversion-based model, which has led to an increase in the unit price per client. Depending on the segment, unit prices have increased by about double-digit multiples. You can think of it as having a leverage effect on unit price per client ranging from several times to about 10 times, depending on the segment.

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On the other hand, our profit margin is currently around 25%, and we are also making investments. So, from a gross-margin type perspective, I believe the profit margin will initially tend to decline. However, by leveraging AI, we can maintain performance on par with our existing business model, where we relied solely on online digital marketing and lead generation with minimal resource allocation. In particular, I think we have a clear path to reaching a profit margin of around 30%. On the other hand, I think it will be difficult to reach levels like 40% or 50% unless we make even greater use of AI. Therefore, while the unit price per client will rise significantly and the profit margin may drop slightly at first, it will eventually catch up and end up at the same level as it is now or perhaps even higher. As for the retention rate, given the nature of our business, which involves sales promotion, and the fact that in the staffing industry some customers cancel their services once they have secured the necessary personnel, it is difficult to measure accurately. However, we believe the retention rate will continue to rise in the future. In particular, since this B2B business involves working closely with our clients to improve their operations, we believe the service will result in an extremely low churn rate. Our goal is to leverage our B2C capabilities to expand into B2B segments characterized by low churn rates and high unit price per client. That concludes my response. Hatano [M]: There appear to be no further questions, then we will now conclude the online briefing of ZIGExN Co., Ltd. Thank you very much for your attention. Hirao [M]: Thank you. [END]

Document Notes 1. 2. 3. 4.

Portions of the document where the audio is unclear are marked with [inaudible]. Portions of the document where the audio is obscured by technical difficulty are marked with [TD]. Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides an answer from the Company, or [M] neither asks nor answers a question. This document has been translated by SCRIPTS Asia.

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