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Ⓒ I’ll INC. June 6, 2025 Outline of Consolidated Financial Results for Q3 FY7/25 I'LL INC. (3854.T) Note : This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Summary
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Ⓒ I’ll INC. Caution concerning forward-looking statements The forward-looking statements including business forecasts stated in this document are based on information available to the Company at the present time and certain assumptions(suppositions)judged to be rational, and these statements do not purport to be a promise by the Company to achieve such results. Actual business results, etc. include, but are not limited to, the domestic and overseas economic situation, demand in the IT services market, competition with competitors, and changes in taxation and other systems. Note that the Company will not always revise business forecasts, etc. upon every occurrence of new information or event.
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Ⓒ I’ll INC. 2 Key Points Net sales and OP reached record highs for both YTD and QTD. Growth continues steadily, unaffected by macroeconomic fluctuations. Net Sales Operating profit(OP) (JPY million) (JPY million) 4,071 4,298 4,856 7,591 8,571 9,242 11,662 12,869 14,098 0 2,0 00 4,0 00 6,0 00 8,0 00 10, 000 12, 000 14, 000 16, 000 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 979 1,028 1,203 1,659 2,238 2,260 2,639 3,266 3,464 0 500 1,0 00 1,5 00 2,0 00 2,5 00 3,0 00 3,5 00 4,0 00 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 1H Q3 1H Q3 I. Review of Q1-3 FY7/25 ▌ System solutions business (p. 7) • Net sales and gross profit (GP) both rose, supported by progress in upstream project phases and growth in recurring revenue. • Order momentum remains strong, driven by new large-scale projects. • Gross profit margin (GPM) declined due to the loss of service sales from last year’s server replacement demand, higher personnel costs, and a smaller proportion of net sales coming from the delivery phase. ▌ Online solutions business (p. 10) • Sales and GP increased in line with our plan, driven by continued new client acquisitions. • Despite the price increase for CROSS MALL in Mar. 2025, GPM declined due to the cost of implementing third-party security verification. II. Investment for Sustainable Growth • Personnel expenses (COS + SG&A) rose ¥582M (+11.0%) YoY in 3Q YTD. • 67 new grads joined in Apr. 2025. Plan to hire 25–35 mid-career professionals annually. III. Impact of Macroeconomic Fluctuations on Our Business • No impact on either business segment. • We remain vigilant, as uncertainty may affect system investment, project progress, or customer continuity.
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Ⓒ I’ll INC. 3 Financial Trends (Q3 YTD) Personnel expenses rose due to strategic investment in salaries and recruitment. Despite a decline in profit margins, net sales and profits reached record levels. ■ SG&A (excl. personnel expenses) ■ Personnel expenses GP and GPMNet Sales SG&A Expenses OP and OPM (JPY million) (JPY million) (JPY million) (JPY million) 2,639 3,266 3,464 22.6% 25.4% 24.6% 0.0 % 5.0 % 10. 0% 15. 0% 20. 0% 25. 0% 30. 0% 0 100 200 300 400 500 600 700 800 900 1,0 00 1,1 00 1,2 00 1,3 00 1,4 00 1,5 00 1,6 00 1,7 00 1,8 00 1,9 00 2,0 00 2,1 00 2,2 00 2,3 00 2,4 00 2,5 00 2,6 00 2,7 00 2,8 00 2,9 00 3,0 00 3,1 00 3,2 00 3,3 00 3,4 00 3,5 00 3,6 00 3,7 00 3,8 00 3,9 00 4,0 00 4,1 00 4,2 00 4,3 00 4,4 00 4,5 00 4,6 00 4,7 00 4,8 00 4,9 00 5,0 00 5,1 00 5,2 00 5,3 00 5,4 00 5,5 00 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 11,662 12,869 14,098 0 2,0 00 4,0 00 6,0 00 8,0 00 10, 000 12, 000 14, 000 16, 000 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 6,378 7,231 7,774 54.7% 56.2% 55.1% 20. 0% 25. 0% 30. 0% 35. 0% 40. 0% 45. 0% 50. 0% 55. 0% 60. 0% 0 500 1,0 00 1,5 00 2,0 00 2,5 00 3,0 00 3,5 00 4,0 00 4,5 00 5,0 00 5,5 00 6,0 00 6,5 00 7,0 00 7,5 00 8,0 00 8,5 00 9,0 00 9,5 00 10, 000 10, 500 11, 000 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 2,628 2,809 3,032 1,110 1,154 1,278 3,738 3,964 4,310 0 500 1,0 00 1,5 00 2,0 00 2,5 00 3,0 00 3,5 00 4,0 00 4,5 00 5,0 00 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25
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Ⓒ I’ll INC. 4 P/L Highlights (Q3 YTD) The absence of special demand in Q3 FY7/24 and FY7/25 QTD enabled double-digit YoY growth. QTD YTD (JPY million) Q3 QTD FY7/24 Q3 QTD FY7/25 YoY Q3 YTD FY7/24 Q3 YTD FY7/25 YoY Diff. Change Diff. Change Net Sales 4,298 4,856 +557 +13% 12,869 14,098 +1,228 +10% Gross profit (GP) 2,377 2,655 +278 +12% 7,231 7,774 +543 +8% Selling and general administrative(SG&A) 1,348 1,451 +103 +8% 3,964 4,310 +346 +9% Operating profit (OP) 1,028 1,203 +175 +17% 3,266 3,464 +197 +6% Ordinary profit 1,035 1,186 +150 +15% 3,284 3,421 +136 +4% Profit 694 818 +124 +18% 2,184 2,356 +171 +8%
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Ⓒ I’ll INC. 5 Q3 YTD Drivers of OP (vs 2024) (123)+532 (222) OP 3,266 OP 3,464 ＋11 GP +543 Q3 YTD FY7/24 Q3 YTD FY7/25 SG&A (346) * For more details about the integrated production and sales, refer to p. 9. (JPY million) • Increased GP due to accumulation of recurring revenue. (+) • Improved GPM through the integrated production and sales.* (+) • Reduced cost of sales (COS) through efficient utilization of system development outsourcing. (+) • Achieved competitive differentiation through CROSS- OVER synergy strategy. (+) • End of special demand for server replacements in FY7/24 and completion of front-loaded projects due to concentrated system deliveries(-) • Incurred an increase in expenses due to higher cloud- related procurement costs(-) and raised monthly cloud usage fees. (+) ■ System Solutions Business ■ Online Solutions Business • CROSS MALL recurring revenue up 7% YoY (+) • CROSS POINT recurring revenue up 7% YoY (+) ■ Personnel expenses (SG&A) ■ SG&A (excl. personnel expenses) • Increased costs for awareness initiatives, including TV commercials and exhibitions. • Referral fees rose as large projects from partner companies (mainly banks) increased. • Increased costs for expanded recruitment activities. • +7.9% YoY due to continued salary increases and increased headcount. Note: Personnel expenses for COS: +¥360M (+14.4% YoY).
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Ⓒ I’ll INC. 6 Results by business Both businesses posted YTD and QTD growth in net sales and G P. QTD YTD (JPY million) Q3 QTD FY7/24 Q3 QTD FY7/25 YoY Q3 YTD FY7/24 Q3 YTD FY7/25 YoY Diff. Change Diff. Change Net Sales 4,298 4,856 +557 +13% 12,869 14,098 +1,228 +10% System solutions business 3,759 4,269 +510 +14% 11,239 12,393 +1,154 +10% Online solutions business 539 586 +47 +9% 1,629 1,704 +74 +5% Gross profit (GP) 2,377 2,655 +278 +12% 7,231 7,774 +543 +8% System solutions business 2,096 2,372 +276 +13% 6,395 6,927 +532 +8% Online solutions business 280 282 +1 +1% 836 847 +11 +1%
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Ⓒ I’ll INC. 7 System Solutions Business Results (Q3 YTD) While GPM declined due to a smaller share of delivery-phase sales, net sales grew by double digits. GP and GPMNet Sales (JPY million) (JPY million) 10,129 11,239 12,393 0 2,0 00 4,0 00 6,0 00 8,0 00 10, 000 12, 000 14, 000 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 5,606 6,395 6,927 55.3% 56.9% 55.9% 10. 0% 20. 0% 30. 0% 40. 0% 50. 0% 60. 0% 0 1,0 00 2,0 00 3,0 00 4,0 00 5,0 00 6,0 00 7,0 00 8,0 00 9,0 00 10, 000 11, 000 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 ▌ Overview • Net sales grew by double digits, supported by progress in upstream project phases and growth in recurring revenue. • GPM declined due to the loss of service sales from last year ’sserver replacement demand, higher personnel costs, and a smaller proportion of net sales coming from the delivery phase. Deliveries are expected to be concentrated in Q4. • Order momentum remains strong, driven by new large-scale projects. • As in Q2, hardware sales were still impacted by the recoil from last year ’sspecial demand, but the continued growth in software sales is helping to offset the decline. ▌ Enhancement Plan • Accept orders with consideration for engineer availability (SEs/programmers) to balance workload and enhance productivity. • Strengthen risk management as the customer base expands, to prevent project delays and inspection issues stemming from more complex approval processes. • Expanding the use of generative AI across more phases of system development to enhance efficiency.
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Ⓒ I’ll INC. 8 System Solutions Business Orders & Sales Channel While continuing to select projects with a focus on maximizing customer value, order volume has reached a record high. Trends in Orders Received (index*) Sales Channel Composition (Order Value) Striving for efficiency in sales activities A shift from a push to a pull sales In-house sales 18.9% Partner* Introduction 45.3% Homepage inquiry 35.8% This index sets the order results for the 1H FY7/21 at 100. ■ Recurring ■ Initial *FY7/24 Results *Figures in parentheses show YoY changes. (+2.6Pt) (-2.3Pt) (-0.3Pt) *Partners: Banks, SIers, office equipment manufacturers, consulting firms, accounting firms, etc. – Sources of new business. Q3YTD FY7/23 Q3YTD FY7/24 Q3YTD FY7/25 Q3YTD FY7/22 Q3YTD FY7/21 100 113 128 146 164 116 134 160 190 90 110 130 150 170 190 210 21/7期 3Q累計 22/7期 3Q累計 23/7期 3Q累計 24/7期 3Q累計 25/7期 3Q累計
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Ⓒ I’ll INC. 9 Stronger Profits and Positive Spiral for Sustained Growth Sales force and SEs have been integrated*, leading to enhanced collaboration and positive spiral Integrated production and sales 2. Selection and concentration • Examine the system requirements and package conformance rate before receiving orders. • Receive orders in line with SE’s operating status. • Include stable operations as an evaluation criterion for project members. 4. Stable operations and improvement in project turnover rate • Reduce problems accompanying decreasing customization and improving delivery quality. • Reduction in the man-hours associated with problems enables SEs to efficiently start on the next project, improving the project turnover rate. 6. Advancement with higher customer satisfaction • Expand new customer introductions and case studies by ensuring customer satisfaction through improved operational efficiency and generous after-sales support. • Customer satisfaction leads to partner satisfaction and facilitates referrals. 1. Abundant business deals • Enhance the Company’s website and promote effective marketing initiatives. • Focus on partner strategy. 3. Increase in receipt of orders in which I’ll can leverage its strength • Receive increasing Aladdin Office orders from target business sectors. • Reduce customization as much as possible for proposals in line with package functions. 5. Enhanced package functions • Expand templates by accumulating knowhow. • Continue to strengthen package functions and add options based on frequent customization cases and customer/market requests. • Expand the target customer segment while reducing customization through enhanced features and options. 1. 2. 3. 4. 5. 6. Strong order receiving Stable operations * Sales force and SEs were integrated in terms of the organizational structure and work floor in August 2022 at the Tokyo head office and in August 2023 at the Osaka head office.
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Ⓒ I’ll INC. 10 Online Solutions Business Results(Q3 YTD) Both net sales and GP increased. The CROSS business continues to steadily expand its customer base. To ensure service security, third-party vulnerability assessments are conducted. GP and GPMNet Sales (JPY million) (JPY million) ▌ Overview • Online solutions business achieved net sales and GP growth, with results largely in line with plans. • Despite a monthly usage fee increase at CROSS MALL, GPM declined due to higher security verification costs. ▌ Enhancement Plan • With e-commerce expanding across industries and business categories, we plan to strengthen our approach to Aladdin Office users. *Including branding support services, we received 19 orders in Q3 YTD • By expanding our partner network, we aim for market leadership in the e-commerce support services sector. • Other online business will expand beyond e-commerce-related services and strengthen its value-added services, such as analysis support and branding support, with a view to the customer's overall business. • CROSS MALL revised pricing for existing customers in March in order to strengthen support services. ■ Other online business ■ CROSS business ■ Other online business ■ CROSS business 640 704 730 130 131 117 771 836 847 0 100 200 300 400 500 600 700 800 900 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 1,130 1,217 1,305 402 411 399 1,533 1,629 1,704 0 200 400 600 800 1,0 00 1,2 00 1,4 00 1,6 00 1,8 00 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 56.7% 57.8% 55.9% 52. 0% 53. 0% 54. 0% 55. 0% 56. 0% 57. 0% 58. 0% 59. 0% CROSS businesss GPM
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Ⓒ I’ll INC. 11 2,429 2,729 3,172 3,578 3,405 3,738 3,964 4,310 0 500 1,0 00 1,5 00 2,0 00 2,5 00 3,0 00 3,5 00 4,0 00 4,5 00 5,0 00 Q3 YTD FY7/22 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 2,053 2,429 2,729 3,172 375 300 442 406 2,429 2,729 3,172 3,578 0 500 1,0 00 1,5 00 2,0 00 2,5 00 3,0 00 3,5 00 4,0 00 Q3 YTD FY7/22 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 3,522 4,112 4,630 5,324 590 518 693 813 4,112 4,630 5,324 6,138 0 1,0 00 2,0 00 3,0 00 4,0 00 5,0 00 6,0 00 7,0 00 Q3 YTD FY7/22 Q3 YTD FY7/23 Q3 YTD FY7/24 Q3 YTD FY7/25 Recurring Revenue and GP Both Recurring revenue and recurring GP grew by double digits Yo Y. Recurring GP Recurring Revenue ■ Increase in recurring GP during the period ■ Recurring GP for the previous term ■ Increase in recurring revenue during the period ■ Recurring revenue for the previous term (JPY million) (JPY million) • Recurring revenue is increasing due to higher monthly maintenance fees from project expansion, greater adoption of cloud products, and continued growth of the CROSS Business. • Recurring profit covers at least 80% of SG&A expenses Recurring gross profit coverage of SG&A expenses (JPY million) 71％ 73％ 80％ 83％
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Ⓒ I’ll INC. 12 Trends in Net sales (QTD) YoY • Progress in upstream project phases and recurring revenue growth. • Production volume increased due to: – Increased headcount – Improved employee skills – Enhanced packaged software functionality • The absence of extraordinary demand in Q3 FY7/24 and FY7/25 QTD ■ System solutions business ■ Online solutions business QoQ • Progress in upstream project phases and recurring revenue growth. • Increased productivity as last year ’s new graduates began contributing to projects. • Growing internal recognition that software sales offset hardware sales decline. 3,097 3,472 3,559 3,727 3,743 3,737 3,759 4,099 3,993 4,130 4,269 500 520 511 534 542 548 539 539 557 560 586 3,598 3,993 4,071 4,261 4,285 4,285 4,298 4,638 4,550 4,691 4,856 0 1,0 00 2,0 00 3,0 00 4,0 00 5,0 00 6,0 00 Q1 FY23/7 Q2 Q3 Q4 Q1 FY24/7 Q2 Q3 Q4 Q1 FY25/7 Q2 Q3 YoY: +13% QoQ: +4% (JPY million)
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Ⓒ I’ll INC. 13 Trends in GP and GPM (QTD) ■ Gross margin ratio for the entire company ■ System solutions business ■ Online solutions business (JPY million) YoY • GPM declined due to higher COS from higher personnel expenses. QoQ • GPM decreased due to: – Lower sales mix in the high-margin delivery phase (System solutions business). – Costs associated with third-party certification for service security(Online solutions business) 54.6% 54.3% 55.1% 54.1% 56.8% 56.4% 55.3% 54.8% 54.6% 56.1% 54.7% 50. 0% 52. 0% 54. 0% 56. 0% 58. 0% 60. 0% YoY: +12% QoQ: +1% 1,707 1,907 1,991 2,053 2,168 2,130 2,096 2,264 2,198 2,356 2,372 258 262 250 250 267 288 280 277 287 277 282 1,966 2,170 2,242 2,303 2,435 2,418 2,377 2,541 2,485 2,633 2,655 0 500 1,0 00 1,5 00 2,0 00 2,5 00 3,0 00 Q1 FY23/7 Q2 Q3 Q4 Q1 FY24/7 Q2 Q3 Q4 Q1 FY25/7 Q2 Q3
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Ⓒ I’ll INC. 14 QoQ: +1% 728 930 979 908 1,142 1,096 1,028 996 1,074 1,186 1,203 20.2% 23.3% 24.1% 21.3% 26.7% 25.6% 23.9% 21.5% 23.6% 25.3% 24.8% -20.0% -15.0% -10.0% -5.0% 0.0 % 5.0 % 10. 0% 15. 0% 20. 0% 25. 0% 30. 0% 0 100 200 300 400 500 600 700 800 900 1,0 00 1,1 00 1,2 00 1,3 00 1,4 00 1,5 00 1,6 00 1,7 00 1,8 00 1,9 00 2,0 00 2,1 00 2,2 00 2,3 00 2,4 00 Q1 FY23/7 Q2 Q3 Q4 Q1 FY24/7 Q2 Q3 Q4 Q1 FY25/7 Q2 Q3 Trends in OP and OPM (QTD) YoY • OP has also increased due to the increase in GP. • Increase in SG&A expenses as follows: 1. Increase in personnel expenses. a. Increase in employee count. b. Total personnel expenses (COS + SG&A) increased by ¥582M Yo Y. 2. Introduction fees increased due to an increase in projects from partner companies (mainly banks) 3. Increased expenses due to intensified recruitment activities QoQ • Despite increased personnel expenses from hiring new graduates, OP rose thanks to higher GP and reduced ad and promotion costs, including TV commercials. (JPY million) YoY: +17%
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Ⓒ I’ll INC. 15 B/S Highlights Currentliabilitiesincreaseddue to an increasein short-term borrowingsas a resultof the establishment of the Impact NeutralizationTrust. Net assetsand the equityratioalso decreasedas the sharesheld by the trustare treatedas treasuryshares.Theseare temporaryand will be reversedas treasurysharesare soldin the market(trustperiod: untilthe end of July2025). FY7/24 (As of July 31, 2024) Q3 FY7/25 (As of April 30, 2025) Change Current assets 11,567 12,094 +526 Non-current assets 2,585 2,595 +9 Total assets 14,153 14,689 +536 Current liabilities 2,555 3,454 +899 Non-current liabilities 1,918 2,044 +126 Total liabilities 4,473 5,498 +1,025 Total net assets 9,680 9,191 (489) Current ratio 453% 350％ (103)Pt Fixed ratio 27% 28％ +2 Pt Equity ratio 68% 63％ (6)Pt (JPY million)
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Ⓒ I’ll INC. 16 ¥17 ¥18 ¥31 ¥41 ¥47 34.8% 32.7% 31.4% 35.5% 36.1% 10.3% 8.7% 11.5% 11.8% -60.0% -40.0% -20.0% 0.0 % 20. 0% 40. 0% 60. 0% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 FY7/21 FY7/22 FY7/23 FY7/24 FY7/25 (Forecast) DPS Payout ratio DOE Dividend Policy We plan to pay a dividend of ¥47 per share in FY7/25. FY7/23 FY7/24 FY7/25 (Forecast) 1H DPS ¥11.00 ¥16.00 ¥20.00 YoY +¥4.00 2H DPS ¥20.00 ¥25.00 ¥27.00 YoY +¥2.00 YTD DPS ¥31.00 ¥41.00 ¥47.00 YoY +72.2 ％ +32.3 ％ +14.6 ％ Payout Ratio 31.4 ％ 35.5 ％ 36.1 ％ DOE 11.5 ％ 11.8 ％ ー 35% or morePayout ratio: 30% or more 10% or moreDOE: 8% or more ＆ Net Sales • Aiming to maintain a payout ratio of 35% or more. • Aiming for a dividend on equity (DOE) of 10% or more. Dividend policy and trends in DPS and payout ratio
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Ⓒ I’ll INC. 17 Establishment of Impact Neutralization Trust for the Expansion of Circulating Shares To continuously meet the criteria for maintaining our listing on the TSE Prime Market and in light of the upcoming revision of the TSE TOPIX, we aim to enhance the liquidity of our shares and improve market supply and demand. Overview of the Impact Neutralization Trust At the time of trust establishment Dec. 6, 2024 During the trust setup period Until July 31, 2025 (planned) Upon trust termination July 31, 2025 (planned) i. Trust establishment and Monetary Trust ii. Trading of I’LL’s shares Issuing Company(I’LL INC.) Establishment of Impact Neutralization Trust® Share seller Seller: Founder (individual) Number of shares acquired: 1,250,000 shares Trustor/beneficiary: I’LL INC. Trustee: The Nomura Trust and Banking * The proceeds from the sale are distributed periodically even during the term. Ratio of shares in circulation (estimate) 42.26％ 47.25％ As of July 31, 2024 As of July 31,2025 (Estimated) On-exchange Market ii. Trading of I’LL’s shares iv. Distribution of residual assets (cash only*) 1. Increase in shares in circulation through market sale of acquired shares. 2. Enhancing market liquidity and minimizing the impact on supply and demand by selling shares gradually. 3. Ensuring equal sale opportunities for other shareholders. 4. Potential disposal profit if the share price rises. Benefits and features Disadvantages and considerations Other Important Notes 1,152,600 shares (progress rate 96.1%) Status of impact neutralization trust sales As of May 31, 2025 • The shares held by the trust are accounted for as treasury shares. • The impact on business performance due to the implementation of the trust was minimal as of Q3 FY7/25. 1. Until the sale through this trust is completed, there will be an impact on the market supply and demand for our shares. 2. There is a possibility of a capital loss due to a decline in the share price.
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Ⓒ I’ll INC. 18 Policy from FY25/7 onwards By making effective use of cash and stepping up investment in future growth, we aim to achieve OP ¥10B by 2030. Pursuit of net sales • Most of our customers were small businesses. • The main method of acquiring new customers was through our own sales force. • Our key performance indicators (KPIs) included sales and new customer acquisition. Phase 1 (up to FY7/19) Transitioning to a profit- driven organization Phase 2 (up to FY7/24) • Achieved ¥10 billion in net sales for FY7/19 and shifted focus to improving OPM. • Alongside the integration of production and sales, we also reviewed organizational systems and order-taking methods while enhancing packaged system capabilities. • Launched recurring revenue products such as Aladdin Cloud. • With the expansion of our target market, we have seen an increase in partner orders and website inquiries. • Initial gross profit and recurring revenue were the KPIs. Increase investment in growth ▌ To achieve further growth, we will continue to increase revenue and profits while accelerating strategic growth investments.. ▌ Invest in human capital to retain top talent and reward high performers. ▌ We aim to enhance our advertising strategy to increase brand visibility. ▌ Accelerate product development and reorganize the organization to increase cross-selling between the two businesses. ▌ M&A of companies that offer synergies in business and human resources is also an option. ▌ We have intensified our capital allocation discussions. Surplus funds will be used for shareholder returns. Phase 3 (from FY7/25) OP ¥10B
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Ⓒ I’ll INC. 19 FY7/25-27 Three-year Rolling Plan We will invest in human capital and raise brand awareness over the next three years. FY 7/24 FY 7/25 FY 7/26 FY 7/27 CAGR (FY7/24-27) Actual Plan Net sales 17,508 19,150 21,200 23,500 10.3% Gross profit 9,773 10,783 12,085 13,587 11.6% (margin) (55.8％) (56.3％) (57.0%) (57.8%) Operating profit 4,263 4,800 5,600 6,600 15.7% (margin) (24.4％) (25.1％) (26.4%) (28.1%) Net profit 2,887 3,257 3,798 4,473 15.7% Three-year plan (consolidated) ▌ Orders • Growing demand for digital transformation. • The demand to replace legacy systems will continue to accelerate. • We believe it is the right time to switch systems. This is because many companies upgraded their systems in 2020 due to the end of server OS maintenance and the introduction of a reduced tax rate. ▌ Development project • Ongoing expansion of the project scale. • Ensuring smooth deliveries to customers helps shorten delivery times. ▌ Investments and others • Continue to develop the Aladdin Office and other systems. • Implementation of TV commercials. • Expect to hire 70-80 new graduates and 25-35 mid-career hires each year. ▌ Purchasing cost • Considering passing on the cost of rising purchase prices to customers. • While there is a possibility that purchasing costs may increase in the future, we expect the impact on our business performance to be minimal. The premise of the plan (Million yen)
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Ⓒ I’ll INC. 20 Strategies for Increasing Profits Increase recurring revenue, which has a higher profit margin than initial revenue. 0 5,000 10,000 15,000 20,000 0 3,000 6,000 9,000 12,000 15,000 売 上 粗 利 9,773 FY7/24 FY 7/24 17,508 Net sales ：¥7,212M GP ：¥4,264M GPM ：59.1％ Recurring Initial Net sales Net sales ：¥10,295M GP ：¥5,508M GPM ：53.5％ Gross profit (Million yen) By actively developing cloud products, we will increase the proportion of recurring revenue, which has a relatively high gross profit margin compared to initial sales. We will improve GPM by reducing customization through the enhancement of standard package functions and refining project management through integrated production and sales. Increase in recurring revenue Further improvement in GPM
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Ⓒ I’ll INC. 21 5,134 5,509 5,983 6,485 6,987 72% 77% 50% 51% 52% 53% 54% 55% 56% 57% 58% 59% 60% 61% 62% 63% 64% 65% 66% 67% 68% 69% 70% 71% 72% 73% 74% 75% 76% 77% 78% 79% 80% 81% 82% 83% 84% 85% 86% 87% 88% 89% 90% 91% 92% 93% 94% 95% 96% 97% 98% 99% 100 % 101 % 102 % 103 % 104 % 105 % 106 % 107 % 108 % 109 % 0 100 200 300 400 500 600 700 800 900 1,0 00 1,1 00 1,2 00 1,3 00 1,4 00 1,5 00 1,6 00 1,7 00 1,8 00 1,9 00 2,0 00 2,1 00 2,2 00 2,3 00 2,4 00 2,5 00 2,6 00 2,7 00 2,8 00 2,9 00 3,0 00 3,1 00 3,2 00 3,3 00 3,4 00 3,5 00 3,6 00 3,7 00 3,8 00 3,9 00 4,0 00 4,1 00 4,2 00 4,3 00 4,4 00 4,5 00 4,6 00 4,7 00 4,8 00 4,9 00 5,0 00 5,1 00 5,2 00 5,3 00 5,4 00 5,5 00 5,6 00 5,7 00 5,8 00 5,9 00 6,0 00 6,1 00 6,2 00 6,3 00 6,4 00 6,5 00 6,6 00 6,7 00 6,8 00 6,9 00 7,0 00 7,1 00 7,2 00 7,3 00 7,4 00 7,5 00 7,6 00 7,7 00 7,8 00 7,9 00 8,0 00 8,1 00 8,2 00 8,3 00 8,4 00 8,5 00 23/7期 24/7期 25/7期 計画 26/7期 計画 27/7期 計画 28/7期 予想 Aim for Recurring GP to Exceed SG&A Expenses We are aiming to strengthen sales of cloud products and to create a system where SG&A expenses can be covered by recurring G P. In the future, we aim to achieve an OPM over 30%. SG&A Expenses Coverage of SG&A expenses by recurring GP Over 100％ ~83% ~89% ~97% (Million yen) FY7/23 FY7/24 FY7/25 (Plan) FY7/26 (Plan) FY7/27 (Plan) FY7/28 (Forecast)
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Ⓒ I’ll INC. 22 Overview of Recurring Revenue Growth Although the pace of customer growth is slowing, the size of the customer base is increasing, so recurring revenue is growing. ■ Cloud service usage fees (System solutions business) ■ Cloud service usage fees (Online solutions business) ■ Aladdin Office maintenance fee (System solutions business) ・・・ As of now (companies) ■ Number of customers in the System solutions business ■ Number of client companies in the Online solutions business 4,591 4,773 4,920 5,054 5,152 1,751 2,001 2,155 2,253 2,297 0 1,0 00 2,0 00 3,0 00 4,0 00 5,0 00 6,0 00 7,0 00 8,0 00 20/7期 21/7期 22/7期 23/7期 24/7期FY7/23 FY7/24FY7/22FY7/21FY7/20
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Ⓒ I’ll INC. 23 Contact Information Osaka Head Office: 34F, Tower B, Grand Front Osaka, 3-1, Ofukacho, Kita-ku, Osaka-shi, Osaka Tokyo Head Office: 15-17F, 20F, Shibakoen Front Tower, 2-6-3, Shibakoen, Minato-ku, Tokyo Nagoya Branch: 3F, Urbannet Fushimi Bldg., 1-10-20, Nishiki, Naka-ku, Nagoya-shi, Aichi I'LL Matsue Lab: 201, Tonomachi, Matsue-shi, Shimane https://www.ill.co.jp/ir/