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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Tokyo Stock Exchange Prime Nagoya Stock Exchange Premier Securities Code: 4072 Forward-looking statements contained in this document are based on current estimates and projections and include potential risks and uncertainties. Future results are therefore not guaranteed. Please note that actual results may differ from projections due to changes in the business environment and other factors. Amounts are displayed rounded down to units of one million yen. Aggregate totals stated in charts may not tally with a result. Percentages are displayed rounded to the second decimal point. *Information from 2Q FY2021 and before is that of Densan System Co., Ltd.
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Table of Contents ● 2Q FY2025 Business Results Highlights P3 ● 2Q FY2025 Business Results Quarterly Trends P4 ● 2Q FY2025 Business Results Financial Condition (B/S) P5 ● 2Q FY2025 Business Results Information Services Segment Summary P 6 ● 2Q FY2025 Business Results Information Services Segment Quarterly Trends P 7 ● 2Q FY2025 Business Results Information Services Segment in Detail (Google Business) P 8 ● 2Q FY2025 Business Results Information Services Segment in Detail (BPO Business) P 9 ● 2Q FY2025 Business Results Payment Agency Services Segment Summary P10 ● 2Q FY2025 Business Results Payment Agency Services Segment Quarterly Trends P11 ● 2Q FY2025 Business Results Payment Agency Services Segment in Detail (Payment and Collection Agency Services / Online Payment Services) P12 ● Initial Plan for FY2025 P13 ● FY2025 Key Measures P14 ● Shareholder Returns P15 ● Sustainability Policy P16 ● Response to Achieve Management with Awareness of Capital Cost and Stock Price P18 ● Topics P19 2
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Highlights ● Net sales increased steadily due to growth of the Google business and payment agency services. ● Operating profit increased year on year driven by the increase in sales, despite higher unit purchase prices and labor costs. ● As net sales and each stage of profit are progressing largely in line with plans, the forecast for the current fiscal year remains unchanged from the plan at the beginning of the fiscal year. Unit: Millions of yen Net sales Operating profit Ordinary profit Net income 3 (Plan) (Plan) (Plan) (Plan) FY2024 First six months FY2025 First six months YoY Full-year plan Progress Amount Ratio Net sales 30,243 32,269 2,026 6.7% 67,500 47.8% Operating profit 1,548 1,641 92 6.0% 3,500 46.9% Profit margin 5.1% 5.1% 0.0% points 5.2% Ordinary profit 1,600 1,844 244 15.2% 3,530 52.2% Profit margin 5.3% 5.7% Up 0.4% points 5.2% Net income 1,086 1,252 166 15.3% 2,530 49.5% FY2021 FY2022 FY2023 FY2024 FY2025 FY2021 FY2022 FY2023 FY2024 FY2025 FY2021 FY2022 FY2023 FY2024 FY2025 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Quarterly Trends ● Net sales increased steadily every fiscal year. ● In 2Q, net sales increased by ¥1,141 million, or 7.3% year on year, marking a record high again following 1Q. Unit: Millions of yen ● In 2Q, higher sales in payment agency services and the Google business led to higher profits year on year. ● However, due to the cancellation of a system development project contract in the information services business, operating profit fell below the record high posted in 2Q two years ago (FY2023). Net sales Operating profit 4 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Financial Condition (B/S) ● Total assets at the end of 1Q increased by ¥14.7 billion from the end of the previous fiscal year. This was mainly due to increases in monetary trusts and cash and deposits. ● Liabilities increased by ¥13.8 billion from the end of the previous fiscal year. This was mainly due to increases in depositsreceived in payment agency services and short-term borrowings. ● Short-term borrowings arose from temporary overdrafts in connection with advance payments in payment agency services. Unit: Millions of yen *Deposits received in payment agency services refers to funds deposited with payment slips, etc. As they appear on the balance sheet, they are included in the calculation of the equity ratio for accounting purposes. 5 FY2024 FY2025 2Q Change in amount Total assets 61,747 76,478 14,731 Current assets 53,876 68,869 14,993 Non-current assets 7,870 7,608 (261) Total liabilities 39,452 53,281 13,828 Current liabilities 37,804 51,773 13,969 Non-current liabilities 1,648 1,507 (140) Total net assets 22,294 23,197 902 Equity ratio 35.8% 30.1% Down 5.7% points Deposits received in payment agency services 19,370 30,489 11,119 Equity ratio excluding deposits received in payment agency services 52.1% 50.0% Down 2.1% points
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Information Services Segment Summary ● Net sales amounted to ¥19,560 million, a 7.4% year on year increase. ● In SI and software development, system projects for the auto auction industry performed well, as did cloud services such as Google Workspace and Google Maps. ● Although sales of merchandise and finished goods exceeded last year, the introduction of GIGA School has been delayed, resulting in a low progress rate. However, recovery is expected from 3Q onward. ● Operating profit declined due to higher purchase prices and personnel expenses, new investments, and the cancellation of a system development project contract. Unit: Millions of yen Net sales Operating profit 6 (Plan) (Plan) FY2024 First six months FY2025 First six months YoY Full-year plan Progress Amount Ratio Net sales 18,220 19,560 1,340 7.4% 42,322 46.2% SI and software development 13,168 14,252 1,083 8.2% 29,475 48.4% Information processing 2,644 2,849 205 7.8% 6,397 44.5% Sales of merchandise and finished goods 2,354 2,413 59 2.5% 6,366 37.9% Other revenue 52 45 (7) (13.6%) 83 54.2% Operating profit 246 243 (2) (1.2%) 851 28.6% Operating profit margin 1.4% 1.2% Down 0.1% points 2.0% FY2021 FY2022 FY2023 FY2024 FY2025 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Information Services Segment Quarterly Trends ● Quarterly net sales has grown steadily every year, except for 1Q FY2022, when there was a reactionary decline from an increase in GIGA School revenue. ● 2Q net sales reached a record high, following 1Q. Unit: Millions of yen ● Higher purchase prices and personnel expenses, combined with the cancellation of a previously received system development contract, led to an operating loss in 2Q. Net sales Operating profit 7 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Information Services Segment in Detail (Google Business) ● Google Workspace saw steady growth in the number of business partners. ● Although we received orders for GIGA School projects, their implementation has been delayed. Recovery is expected from 3Q onward. Unit: Millions of yen - Number of Google Workspace adopter companies Net sales (Cumulative) Google Workspace adopter companies 2,226 Google business sales 20.0% up from the previous fiscal year FY2025FY2024FY2023 8 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Information Services Segment in Detail (BPO Business) Unit: Millions of yen ● Net sales in 2Q amounted to ¥974 million, an 12.3% year on year increase. For the cumulative total up to 2Q, sales increased by 15.2%. ● Invoice preparation services performed well in terms of acquiring new customers, with the number of items processed up 12.2%. ● Call centers remained flat, while data entry and invoice printing services declined. ● As a new menu item for call center order processing services, we have launched a fax order automatic reading service. – Number of items processed (in thousand items) Net sales FY2025FY2024FY2023 9 (Cumulative) FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Payment Agency Services Segment Summary ● Sales increased in payment and collection agency, online payment, and deferred payment services due to steady growth in usage by customers that started operations in the second half of the previous fiscal year and beyond. ● Sales in the deferred payment services increased by 95.4% year on year due to new customer activations. ● Operating profit also increased due to the increase in sales of each service. Unit: Millions of yen Net sales Operating profit 10 (Plan) (Plan) FY2024 First six months FY2025 First six months YoY Full-year plan Progress Amount Ratio Net sales 12,023 12,708 685 5.7% 25,178 50.5% Payment and collection agency service 11,121 11,718 597 5.4% 23,187 50.5% Online payment service 492 609 117 24.0% 1,067 57.2% Remittance service 154 31 (122) (79.5%) 49 65.0% Payment agency peripheral services 157 158 0 0.6% 315 50.4% Other revenue 96 189 92 95.4% 560 33.8% Operating profit 1,300 1,393 93 7.2% 2,649 52.6% Operating profit margin 10.8% 11.0% Up 0.1% points 10.5% FY2021 FY2022 FY2023 FY2024 FY2025 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Payment Agency Services Segment Quarterly Trends ● In 2Q, net sales increased by ¥427 million, or 6.5% year on year, marking a record high due to the launch of operations with new customers and revision of unit sales prices. Unit: Millions of yen ● Although net sales increased, higher purchase prices and other factors caused 2Q operating profit to decrease by ¥32 million, or 4.2% year on year. Net sales Operating profit 11 FY2021 FY2022 FY2023 FY2024 FY2025
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing 2Q FY2025 Business Results Payment Agency Services Segment in Detail (Payment and Collection Agency Services / Online Payment Services) Unit: Millions of yen ● The number of large customers that began operations last year increased, and new customers, primarily local governments, began operations smoothly. Although the number of payments decreased in the previous fiscal year, it increased in the current fiscal year. ● Furthermore, price increases to reflect higher unit purchase prices progressed, and sales growth continued from the second half of the previous year. ● 2Q of each year tends to see an increase in the number of transactions and net sales compared to other quarters due to the concentration of tax collections, including automobile taxes. – Number of items processed (in thousand items) Net sales FY2025FY2024FY2023 12
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Initial Plan for FY2025 ● Net sales are projected to increase by 10% or more due to growth in information services. ● Each stage of profit is projected to increase substantially amid improvement in negative factors associated with FY2024. ● The rates of increase with respect to ordinary profit and net profit are low relative to that of operating profit due to a reduction in dividend income and gain on sale of investment securities, which were recorded for FY2024. Unit: Millions of yen FY2024 FY2025 Plan Change in amount Y-o-y Net sales 61,256 67,500 6,244 10.2% Information Services Segment 37,281 42,322 5,040 13.5% Payment Agency Services Segment 23,974 25,178 1,203 5.0% Operating profit 2,311 3,500 1,188 51.4% Operating profit margin 3.8% 5.2% Up 1.4% points Information Services Segment (278) 851 1,129 - Operating profit margin (0.7%) 2.0% Up 2.8% points Payment Agency Segment 2,579 2,649 70 2.7% Operating profit margin 10.8% 10.5% Down 0.2% points Ordinary profit 2,534 3,530 995 39.3% Ordinary profit margin 4.1% 5.2% Up 1.1% points Net profit 1,850 2,530 679 36.7% Segment profit adjustment amount 10 0 Payment Agency Services Segment Sales FY2024 FY2025 Plan Change in amount Y-o-y Payment and collection agency service 22,204 23,187 983 4.4% Online payment service 982 1,067 85 8.6% Remittance service 226 49 (178) (78.5%) Payment agency peripheral services 321 315 (6) (2.0%) Other revenue 853 560 320 133.5% Information Services Segment Sales FY2024 FY2025 Plan Change in amount Y-o-y SI and software development 27,188 29,475 2,287 8.4% Information processing 5,850 6,397 547 9.4% Sales of merchandise and finished goods 4,138 6,366 2,227 53.8% Other revenue 104 83 (21) (20.3%) ● Robust performance is likely given substantial market needs with respect to the cloud, AI, and BPO. ● A substantial increase is projected in sales of merchandise and finished goods associated with NEXT GIGA. ● We will increase investment in new service platforms utilizing Web3, NFT, blockchain, etc. ● Upward momentum in sales persists due to a new large customer having embarked on operations and progress achieved in ensuring that prices reflect higher unit purchase prices. ● We are promoting differentiation through PAYSLE electronic payment slip services and TREE PAYMENT services for enabling customers to select preferred payment options. ● We are developing markets by enhancing functionality of our comprehensive payment services platform. 13
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Transforming into a Value Creator ● DSK Transformation Transition to a service-based business. Expansion of stock ratio. Establishment of a new Business Design Planning and Promotion Headquarters in charge of promoting the information processing service business. Planning and promotion of new business initiatives and services. ● Strengthening of coordination between Group companies. Assignment of a Director in charge of managing intra-Group coordination. Establishment of a new Sales Promotion Office inside of Densan System in charge of promoting the sales activities of the Group as a whole (under the direct control of the president). We will promote sales activities that aren’t restricted by organizational boundaries. ● Expansion into Adjacent Areas. Establishment of a Co-Creation Ecosystem Planning Office within the Business Design Planning and Promotion Headquarters. Planning and promotion of payment services utilizing web3 and blockchain technology. ● Human Resource Development Hired 36 new graduates in April 2025 (25 new graduates and 89 mid-career hires in 2024). Changes to education, incentives, etc.: Qualified Cloud Technicians: 545 (total) Since 2023, the Company has encouraged and supported the acquisition of cloud-related qualifications (incentives will be several times higher in 2023/2024 compared with 2022). FY2025 Key Measures 14 Qualified Cloud Technicians (Total)
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Shareholder Returns Our basic policy will be to conduct stable and continuous distribution of profits based on a comprehensive assessment of our financial position and business performance, while retaining sufficient reserves. Special dividend for listing on the First Section of the Tokyo Stock Exchange and the First Section of the Nagoya Stock Exchange Commemorative dividend for the transition to a holding company structure Commemorative dividend for stock exchange listings ● FY2024: Ordinary dividend: ¥60 per share per annum (interim ¥20, year-end ¥40) Shareholder benefits: Specialties of Gifu Prefecture or a donation equivalent to ¥3,000 (for shareholders who have held one unit (100 shares) or more for at least one year) ● FY2025 plan: Annual ordinary dividend of ¥80 per share (interim ¥40, year-end ¥40) Planned Planned Planned 15
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing We will create new innovations through sustainability. Based on our Sustainability Policy, the Densan System Group considers diversity as an important management strategy because respecting the diverse individuality and values of each of our employees and maximizing each other’s strengths are essential to continue providing valuable services that meet the diverse needs of our customers. Furthermore, with the aim of achieving an organization where each of our employees can embrace their work and thrive in the company, we will continue to promote initiatives for human capital and health management. Initiatives in 2024 Sustainability Policy 16 Certified as a 2025 KIH Outstanding Organization (Large Enterprise Category) We were recognized as a company committed to health management with a 2025 KIH Outstanding Organization (Large Enterprise Category) certification. What is the KENKO Investment for Health (KIH) certification system? It is an award system operated by the Japan Health Council with the aim of creating an environment in which large corporations, small and medium-sized enterprises, and other corporations that practice especially excellent health management can receive social recognition from employees, job seekers, partner companies, financial institutions, and others by shedding a spotlight on these companies and their efforts. [Health Management Initiatives] https://www.ds-hd.co.jp/sustainability/social/health_management/ In order to realize sustainable corporate management, we will continue to build a safe and comfortable workplace environment where each and every employee can perform to the best of their abilities. We will also further promote health management through activities worthy of the title of KIH Outstanding Organization. 16 ● We strove to establish workplaces that enable all of our employees to work with peace of mind over the long term while fully demonstrate their individual abilities. We acquired L-boshi (two stars) certification as a company that promotes active participation of women in the workplace. ● Health Management Reduction in designated working hours (from 8 hours to 7.5 hours) / adoption of flextime system across the entire Company (overtime reduced by 3.8 hours) / paid leave granted upon joining the Company (ten days) / introduction of employee benefits club / employees provided with health and wellness application
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing The Group company, Densan System Co., Ltd., has obtained the two-star Eruboshi Certification (Level 2) established by the Minister of Health, Labour and Welfare for companies with excellent conditions for promoting the active participation of women in the workplace. We will further work to create a workplace environment where women and other diverse human resources can actively participate, and we will promote human capital and health management. Aiming for three-star Eruboshi Certification (Level 3) (key indicators) ● Ratio of female employees: FY2024 28.7% ⇒ June 2025 30.8% (up 2.1 points) ● Ratio of female managers: FY2024 7.1% ⇒ June 2025 9.1% (up 2.0 points) *Targeting the industry average of 12.6% We will enhance female employees’ trust in and engagement with the Company by appointing women to management levels. In addition, by developing an environment in which people who are raising children or considering doing so in the future can work comfortably with work-life balance, we will secure talented personnel and improve the motivation of employees toward their work. Aiming for Kurumin Certification (new) (key indicators) ● Childcare leave acquisition rate (men): target 30% or higher / June 2025 66.7% ● Childcare leave acquisition rate (women): target 75% or higher / June 2025 100.0% ● Annual paid leave acquisition rate: target 75% or higher / End of June 2025 71.7% ● Average monthly overtime hours: target under 30 hours / June 2025 8.3 hours(Full-time employees only) By considering measures such as developing systems for taking long consecutive leave, we will raise the annual paid leave acquisition rate and achieve employee well-being (physical and mental fulfillment). Sustainability Policy Aiming to be a company where women can actively participate 17 17
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Response to Achieve Management with Awareness of Capital Cost and Stock Price We will aim to further strengthen profitability while also steadily implementing measures to improve capital cost, including timely and appropriate disclosure of information as well as financial and capital policies. We will also continue to improve equity spread while “maintaining the 12% ROE.” 18 ▸ Current situation (for FY2024) = - Equity spread 2.4 % ROE 8.7 % Shareholders’ equity cost 6.3 % Corporate value ▸ Initiative policies: To achieve specific corporate value improvements Strengthen ability to generate profit Strengthen financial and capital strategies Reduce capital cost • Create and develop new business for continued business expansion • Strengthen our structure to be a highly profitable company • Fulfill shareholder returns with priority on continuing stable dividends • Strengthen investment in human capital • Reduce cross-shareholdings • Actively disclose risk information
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Topics ● January 6, 2025: DSK We expanded our convenience store payment agency business with a contract for national tax collection agency services! We expanded our role as public infrastructure with a new contract for national tax collection agency services. We aim to further expand the business by contributing to improved convenience for society as a whole, strengthening our stable revenue base, and building trust and our track record in the public sector. ● March 11, 2025: DSK We were recognized as a 2025 KIH Outstanding Organization (Large Enterprise Category) Improving the wellbeing of employees is an important initiative that will lead to higher productivity and corporate value. We will continue to promote it further to enhance our corporate value. ● March 21, 2025 DSK We were contracted to develop systems for GYOSEI CORPORATION’s “My Roppo” mobile app - Development of a legal code reader app utilizing generative AI - This is an example of the use of generative AI leveraging Amazon Bedrock’s RAG (Retrieval Augmented Generation) technology to enable natural language searches. ● April 17, 2025 DSHD, DSK Announcement of increases to employee base pay and starting pay for new graduates Based on the belief that people are the source of our sustainable growth, we have revised our salary system with the aim of improving employee engagement and securing quality talent. In addition to increasing base pay for current employees, we have also raised starting pay for new graduates with the aim of enhancing our long-term corporate value. ● April 28, 2025 DSK We opened a Kyushu Branch in Fukuoka Prefecture, making a full-scale entry into the Kyushu/Okinawa DX market, promoting DX of local governments and companies in the region We aim to further accelerate customers’ promotion of DX by building a service provision system rooted in the region. ● April 28, 2025 DSK Start of acceptance of the SaiCoin local digital currency in our Payment Agency Services This will enable citizens to pay their municipal and prefectural taxes using SaiCoin by scanning a barcode through the Saitama City App. DSHD: Densan System Holdings / DSK: Densan System 19
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Densan System Holdings Co., Ltd. Presentation Materials for the 2Q FY2025 Results Briefing Topics ● June 2, 2025 DSHD, DSK Launch of EZASSIST FAX Order Automatic Reading to streamline fax order processing We will support the promotion of DX and improvements in operational efficiency in the manufacturing and wholesale industries by drastically reducing the time and effort required for analog tasks in fax order processing and streamlining operations through paperless and digitized workflows, reducing the burden and errors of manual entry. ● June 12, 2025 DSHD, DSK Entered a collaboration agreement with Gifu Pharmaceutical University to promote DX utilizing AI and cloud services This agreement aims to contribute to the development of the local community and the development of highly specialized human resources by enhancing the university’s education, research, and administrative systems through the use of Google Workspace and AI. We plan to create advanced DX cases in the pharmaceutical field by combining the expertise of Densan System and the cooperation of Gifu Pharmaceutical University. ● June 18, 2025 DSHD, DSK Began offering two support packages for Google Cloud’s new service, Google Agentspace. There are two types of packages, the Quick Start Support Package and the Utilization Promotion Support Package, which provide support tailored to the needs and implementation stage of each company, with the goal of promoting DX through AI adoption. Densan System will maximize the potential of AI agents to strongly support companies in improving productivity and solving business challenges. ● June 30, 2025 DSHD, DSK Joined the ERP Cloud 360 Consortium to promote cloud ERP for mid-sized companies We aim to strengthen our presence in the mid-sized company market by handling everything from sales to support for the cloud ERP solution ERP Cloud 360, which is built on Salesforce. ● August 1, 2025 DSK Started providing an integration service between Google Agentspace and the cloud-based data integration tool Reckoner This service enables data from domestic SaaS (such as kintone and kaonavi) and on-premises environments to be easily utilized in Google Agentspace. DSHD: Densan System Holdings / DSK: Densan System 20