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ISB GROUP ISB Group Financial Results First Half of the Fiscal Year Ending December 31 , 2026 ISB Corporation August 7 , 2026 | Securities code : 9702 Disclaimer : This material has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated material and the Japanese original , the original shall prevail .
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2 ISB Corporation 8 Japan: 7 / Overseas: 1 June 1970 Kazufumi Wakao Representative Director and President ¥2,426.03 million (as of April 27, 2026) Prime Market, Tokyo Stock Exchange (Securities code: 9702) Information Services Business (software development) Security Systems Business (access control systems) Company Name Consolidated Subsidiaries Founded Representative Share Capital Stock Exchange Listing Business Description Number of Employees (Consolidated) 2,752 (as of December 31, 2025) Includes part-time and fixed-term contract employees. Company Overview Kazufumi Wakao, Representative Director and President Appointed January 2021
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33 (Billions of yen) (Number of employees) 1970 ISB was founded ISB Group's Milestones 0 500 1,000 1,500 2,000 2,500 3,000 0 10,000 20,000 30,000 40,000 '70 '80 '85 '90 '99 '03 '08 '12 '14'15 '17 '19 '22'23'24'25 Net sales Number of employees 40 30 20 10 2025 ISB relocated its corporate headquarters Net sales exceeded ¥37 billion 2017 ISB acquired ART 2019 ISB acquired QISB and TKS Net sales exceeded ¥20 billion 2022 ISB transferred to the TSE Prime Market 2024 ISB acquired AMBC1985 SMC founded 1990 ISB traded on the OTC market 1999 Net sales exceeded ¥10 billion 2003 IVC founded 2012 ISB acquired KNOX 2014 ISB acquired HISB 2015 ISB listed on the TSE 1st Section 2008 ISB listed on the Tokyo Stock Exchange (TSE) 2nd Section
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4 モビリティ ソリューション 事業 プロダクト ソリューション 事業 ■ IoT / Wi-SUN ■Public Services / Resident Services Systems ■Banking and Securities / Financial Systems ■IT Infrastructure / Mission-Critical Systems ■Access Control Systems / ALLIGATE ■Mobile Device Management (MDM) *Reporting Segments: Information Services Business Security Systems Business ■Telecommunications / Wireless Base Stations ■Automotive / Automotive Systems ■Business Systems / Digital Transformation & AI Integration ■Embedded Devices / POS & Communication Modules ■Medical Systems / Diagnostic Equipment Systems & Cloud Infrastructure ■Mobile Devices / Smartphones Business Areas of the ISB Group Mobility Business and Industrial Security Enterprise
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Agenda 01 First Half FY2026 Financial Results Overview Initiatives Under the Medium- to Long-Term Business Plan 203002
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Agenda 01 Initiatives Under the Medium- to Long-Term Business Plan 203002 First Half FY2026 Financial Results Overview
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7 First Half FY2026 Financial Results Highlights ¥19,171 YoY: 104.0% Progress: 49.8% ¥1,582 YoY: 112.3% Progress: 52.7% Orders remained broadly solid, driving first-half net sales to a record high, led by the Security Systems Business. Net Sales • Progress is largely on track against the full-year forecast. • Strengthening order acquisition efforts to secure projects from the second half onward, while monitoring the impact of changes in the global environment and market conditions. Summary Operating profit remained on track, supported by higher net sales in the Security Systems Business, while growth investments continued. Operating Profit million million
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8 First Half FY2026 Overview of Consolidated Financial Results FY2025 First Half FY2026 First Half YoY Change YoY (%) FY2026 First-Half Forecast % of Forecast FY2026 Full-Year Forecast Net sales 18,439 19,171 732 104.0% 18,700 102.5% 38,500 Operating Profit 1,409 1,582 173 112.3% 1,410 112.2% 3,000 Operating Profit Margin 7.6% 8.3% +70 bps - 7.5% +80 bps 7.8% Ordinary Profit 1,426 1,618 192 113.4% 1,430 113.1% 3,050 Profit Attributable to Owners of Parent 795 1,018 223 128.1% 860 118.4% 1,850 (Millions of yen) *Fiscal years are from January 1 to December 31. *The first half represents cumulative figures for January through June.
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9 Consolidated Financial Performance Trends Operating Profit Profit Attributable to Owners of ParentNet Sales 15,919 16,673 18,439 19,171 0 10,000 20,000 30,000 40,000 FY2023 FY2024 FY2025 FY2026 First-Half Result Full-Year Result 1,315 1,537 1,409 1,582 0 500 1,000 1,500 2,000 2,500 3,000 3,500 FY2023 FY2024 FY2025 FY2026 First-Half Result Full-Year Result 762 1,120 795 1,018 0 500 1,000 1,500 2,000 2,500 FY2023 FY2024 FY2025 FY2026 First-Half Result Full-Year Result Progress: 49.8% Progress: 52.7% Progress: 55.0% 33,954 32,388 2,734 3,000 1,472 1,850 38,500 2,314 2,032 Full-Year Forecast Full-Year Forecast Full-Year Forecast 1,435 37,020 2,800 (Millions of yen)
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10 ⚫ Increase in new AI-related projects ⚫ Adjustments to development staffing during project transitions ⚫ Wi-SUN-related projects: Solid ⚫ Automotive: Slower growth ⚫ Finance / Securities and Public Sector / Standardization: Solid ⚫ Security Systems Business: Strong (Millions of yen) Net Sales: +732 Mobility Business and Industrial Enterprise Security FY2025 First Half Net Sales FY2026 First Half Net Sales Breakdown of First-Half Consolidated Net Sales Growth
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11 FY2025 First Half Operating Profit FY2026 First Half Operating Profit (+) Finance / Securities (+) Public Sector / Standardization (+) Security Systems (+) Lower office relocation expenses (–) Continued growth investments (compensation enhancement / recruitment & training) (–) Advertising expenses (+) Expansion of the recurring revenue business (–) Adjustments to development staffing during project transitions (–) Cost increases, including those from employee pay raises Net Sales Growth Profitability SG&A Expenses (Millions of yen) Operating Profit: +173 Breakdown of Consolidated Operating Profit Growth
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12 5,866 6,796 6,728 FY2024 First Half FY2025 First Half FY2026 First Half YoY 99.0% 2,593 2,655 2,665 FY2024 First Half FY2025 First Half FY2026 First Half YoY 100.4% Net Sales by Business Category: Mobility / Business and Industrial • Wi-SUN-related projects remained solid. • Automotive remained broadly flat year on year, reflecting market conditions. • With the decline in automotive expected to continue in the second half, focus on securing more projects in other embedded systems fields to achieve steady growth. • AI-related projects, such as image and video analysis, expanded steadily. • Overall net sales edged down YoY due to adjustments to development staffing during project transitions. • From the second half onward, focus on securing projects in the medical, DX, and IoT fields by leveraging strengths in cloud and embedded technologies, while continuing to build AI expertise and upskill engineers. Business and Industrial Includes: - Business Systems - Embedded Devices Mobility Includes: - Automotive - Mobile Devices - Wireless Infrastructure (Millions of yen)
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13 YoY 117.0% 2,630 2,910 3,377 330 181 238 FY2024 First Half FY2025 First Half FY2026 First Half 5,254 5,896 6,163 FY2024 First Half FY2025 First Half FY2026 First Half YoY 104.5% Net Sales by Business Category: Enterprise / Security (Millions of yen) Information Services Business (including MDM) • MDM remained solid, with its end-to-end service framework, including device kitting, continuing to generate inquiries from current clients. • Continue expanding services tailored to client needs. Security Systems Business (including access control systems) • One-time business sales increased, supported by continued efforts to secure renovation projects. • The recurring revenue business grew steadily by meeting diverse needs for authentication devices. • Finance remained solid, supported by major clients. Continued strategic upskilling to develop engineers capable of handling upstream processes. • Public sector drove overall growth, supported by growth in local government system standardization projects and steady regional expansion. Solid performance is expected to continue in the second half and beyond. • Focus on securing projects while monitoring the potential second-half impact of component shortages. Security Includes: - Information Services Business (MDM/IoT) - Security Systems Business Enterprise Includes: - Finance - Public Sector - IT Infrastructure *One-time business: Development, sale, and installation of access control systems under a one-time product sales model.
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14 (Millions of yen) 0 500 1,000 1,500 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 Construction site card reader ALLIGATE FiT SDM Steady revenue growth driven by three products: ALLIGATE, the construction site card reader, and FiT SDM. FY2026 Topics: Growth of Recurring Revenue Products Cloud-Based Access Control System “ALLIGATE” PICKUP TOPIC ● Expanded product lineup Expanded the product lineup to ensure stable operation and further improve customer satisfaction. ● Three models for diverse authentication needs Offers three models—Lock Pro, Face, and QR—with authentication options suited to different use cases and operating environments. ● Product Lineup Recurring Revenue Products: Net Sales Trend First-Half Result YoY 117%
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15 Assets As of December 31, 2025 As of June 30, 2026 Current assets 16,947 16,236 Non-current assets 4,663 4,569 Property, plant and equipment 1,923 1,889 Intangible assets 769 753 Investments and other assets 1,969 1,927 Total assets 21,610 20,806 Liabilities and Net Assets As of December 31, 2025 As of June 30, 2026 Current liabilities 6,109 4,911 Non-current liabilities 978 990 Total liabilities 7,087 5,902 Shareholders' equity 14,030 14,450 Accumulated other comprehensive income 492 454 Total net assets 14,522 14,904 Total liabilities and net assets 21,610 20,806 (Millions of yen) Total liabilities declining due to lower current liabilities and net assets increasing through profit accumulation. Consolidated Balance Sheets
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16 Dividend and Dividend Payout Ratio Trend FY2024 FY2025 FY2026 Forecast Dividend ¥54 ¥55 ¥70 Dividend Payout Ratio 30.4% 43.9% 43.4% 42 54 55 70 32.5 30.4 43.9 43.4 -30 -20 -10 0 10 20 30 40 0 20 40 60 80 FY2023 FY2024 FY2025 FY2026 Forecast Dividend Dividend Payout Ratio （Yen） Financial Forecasts Net Sales ¥38.5B (+¥1.5B) Operating Profit ¥3.0B (+¥0.7B) Ordinary Profit ¥3.0B (+¥0.7B) Profit Attributable to Owners of Parent ¥1.8B (+¥0.4B) (Change from 2025 Results) （%） FY2026: Forecasts of Consolidated Financial Results and Dividends *Figures as of the announcement on February 13, 2026
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Agenda 01 Initiatives Under the Medium- to Long-Term Business Plan 203002 First Half FY2026 Financial Results Overview
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18 Executing Three Key Strategies to Build a Resilient Organization Capable of Adapting to Future Risks Medium- to Long-Term Business Plan 2030 FY2025 FY2026 FY2028 FY2030 FY20XX ¥37B ¥50B ¥100B Achievement of Each Key Strategy Creation of Social Value Creation of Economic Value Building an Organization Capable of Agile Transformation in Response to Risks Medium- to Long-Term Business Plan 2030 Theme Three Key Strategies Business Strategy Financial and Management Foundation Strategy Human Capital Strategy ISB Innovation: Toward Breakthrough Growth — from challenge to breakthrough —
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19 Overview of the Medium- to Long-Term Business Plan 2030 Drive Change to Thrive, with ¥50.0 Billion in Net Sales as a Milestone Executing Three Key Strategies to Build a Resilient Organization Capable of Adapting to Future Risks 1. Business Strategy 2. Human Capital Strategy 3. Financial and Management Foundation Strategy ⚫ Information Services ⚫ Security Systems ⚫ Regionally Rooted Growth Strategy Core Businesses (Organic Growth) Consulting & Direct Client Contracts / Product Maintenance AI and Cybersecurity Enhancement of One-Stop Services × Core Businesses (Organic Growth) Strengthening Group Synergies Initiatives for New Businesses× ⚫ Fostering a Rewarding and Fulfilling Corporate Culture ⚫ Strengthening Recruitment ⚫ Training and Development ⚫ Improving Capital Efficiency and Market Valuation ⚫ Highly Transparent Governance ⚫ Addressing Environmental Challenges Key Strategies Strengthening the competitiveness of core businesses toward higher profitability Drive growth through organic growth, group synergies, and investment in new business creation ISB Innovation: Toward Breakthrough Growth — from challenge to breakthrough —
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20 Initiatives for Key Strategy 1: Business Strategy Under the Medium- to Long-Term Business Plan 2030, we will accelerate the shift to high-value domains and strengthen the competitiveness of our core businesses, thereby enhancing profitability. Expanding Consulting Projects ⚫ Expand participation in consulting projects, primarily SAP implementation projects, through collaboration with AMBC - ISB Certified as SAP PartnerEdge Service Partner ⚫ Drive group-wide talent development and reskilling through training sessions to build capabilities needed for high-value projects ⚫ Strengthen group-wide proposal and development capabilities to drive growth in high-value projects Cybersecurity ⚫ Strengthen the organizational framework and capabilities for cybersecurity ⚫ Enhance and optimize cybersecurity policies in line with current requirements ⚫ Provide ongoing education, training, and awareness programs ⚫ Integrate cybersecurity into selected businesses and projects 1 2 3 Key Strategy Topics
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21 Enhancing Development Productivity Building an Organization Resilient to Change Becoming a Trusted Partner that Strengthens Clients’ Competitiveness and Supports Value Creation Achieve higher productivity and quality by: • Transitioning to Specification-Driven Development (SDD), which integrates AI from requirements definition through testing • Redefining human roles in areas such as function definition and quality assurance Changes in the System Integration Market Moving Beyond the Time-and-Materials Model • Partial AI automation reduces billable hours, lowering project revenue • Compensating with a higher volume of short-cycle projects risks engineer burnout ↓ Shift from a time-and-materials model to a value-based business model by integrating AI across the development process. • Develop upstream-capable talent by fusing senior business expertise with young engineers’ AI skills • Build an autonomous, AI-driven organization that rapidly adapts to technological shifts • Shift to high-value creation, avoiding the pitfall of labor-hour reductions that ultimately lead to burnout Milestones Toward Realization System Development Technology and Processes Talent Development People and Organization ⚫ Use AI in development processes ⚫ Conduct validation and PoCs for AI use cases ⚫ Research and develop AI technologies ⚫ Conduct AI utilization seminars tailored to different proficiency levels ⚫ Establish AI usage guidelines ⚫ Support AI adoption in administrative functions ⚫ Roll out initiatives across the Group 2026 2027–2028 2029–2030 AI Implementation & Standardization Implement Specification- Driven Development (SDD) internally Expansion and Acceleration Expand and standardize AI use and accelerate efficiency gains through company-wide rollout Evolution into an AI- Driven Organization Create value, strengthen competitiveness, and complete the transformation into an AI-driven organization ISB’s Approach: Advancing Technology and Talent in Tandem Initiatives for Key Strategy 1: Business Strategy — AI
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22 Initiatives for Key Strategy 2: Human Capital Strategy Develop highly skilled talent through engineer recruitment and strategic upskilling in specialized fields, while enhancing engagement through talent development system reforms and workplace improvements. 1 2 3 Talent Acquisition and Retention ⚫ Invest approximately ¥270 million in employee pay raise - base salary increases and enhanced benefits ⚫ Advance engagement and retention initiatives based on the 2025 employee engagement survey results ⚫ Continue improving workplace environments at the corporate headquarters and other office locations ⚫ Recruit and develop engineers capable of handling upstream processes ⚫ Share recruitment expertise across the Group Talent Development ⚫ Drive strategic upskilling of specialized talent in priority fields (AI, cybersecurity, SAP, cloud, etc.) ⚫ Rebuild the company-wide education and training framework to support upskilling in specialized fields and foster continuous learning ⚫ Use the i Competency Dictionary (iCD) to visualize skills, analyze organizational capabilities, and effectively deploy talent Topics Key Strategy
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23 Initiatives for Key Strategy 3: Financial and Management Foundation Strategy We aim to strengthen the management foundation that supports sustainable growth by improving capital efficiency, establishing highly transparent governance, and addressing environmental challenges. 1 2 3 Topics Strengthening Information Disclosure on Highly Transparent Governance ⚫ Enhancing Information Disclosure Expanded ESG and non-financial disclosures, including disclosures aligned with the TCFD recommendations. ⚫ Promoting Engagement with Shareholders and Investors Feedback and requests received through dialogue with shareholders and investors are shared with management. Addressing Environmental Challenges ⚫ Establishing TCFD Disclosures Completed TCFD scenario analysis and disclosures for the domestic Information Services Business in the FY2025 Annual Securities Report (filed in March 2026). ⚫ Advancing Decarbonization and Reducing Environmental Impact Continue initiatives to reduce GHG emissions and other environmental impacts by incorporating identified risks and opportunities into specific measures. Key Strategy
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24 FY2024 Investment FY2025 Investment FY2026 First Half Investment FY2024–FY2026 Planned Total Recruitment & Training ¥70 million ¥260 million ¥50 million ¥530 million Compensation Enhancement ¥450 million ¥520 million ¥270 million ¥1,390 million Workplace Environment ¥310 million ¥700 million ¥270 million ¥1,540 million IT ¥30 million ¥50 million ¥30 million ¥200 million Other ¥40 million ¥30 million ¥30 million ¥120 million Total ¥900 million ¥1,560 million ¥650 million ¥3,780million First Half FY2026 Investment: ¥650 million allocated in 1H FY2026 for building a sustainable growth foundation and driving future expansion. Progress: Reached 82% completion against the 3-year cumulative investment plan of ¥3.78 billion. *Growth investment amounts are based on expenses recognized. Growth Investment
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25 Medium- to Long-Term Business Plan 2030: Group Targets and KPIs 1. This figure does not include the part-time and contract employees. 2. Calculated on a non-consolidated basis for ISB Corporation (the reporting company). 3. Management positions include those at manager level and above (excluding outside directors). 4. Represents the Job Satisfaction Index derived from the Engagement Score (maximum score: 5.0). 5. This calculation includes Scope 1 and Scope 2 emissions in comparison to 2024. 6. This figure reflects Scope 1 and Scope 2 emission from our domestic operations. FY2030 Business and Human Capital Targets FY2030 Financial and Management Foundation Targets Net Sales ¥50.0 Billion or Higher Percentage of Women in Management Positions2, 3 7.0% ROE 14% or Higher Operating Profit ¥4.5 Billion or Higher Percentage of Female New Graduate Hires2 30% Dividend Payout Ratio 50% or Higher Net Sales per Employee ¥17.60 Million or Higher Number of Employees1 2,850 or More DOE (Dividend on Equity) Minimum of 4% Employee Engagement Score2, 4 3.6 or Higher GHG Emissions5 30% Reduction Operating Profit per Employee ¥1.60 Million or Higher FY2025 Result: ¥37.0 billion FY2025 Result: ¥2.3 billion FY2025 Result: Approx. ¥16.50 million FY2025 Result: Approx. ¥1.00 million FY2025 Result: 2,246 FY2025 Result: 5.7% FY2025 Result: 17% FY2025 Result: 3.2 FY2025 Result: 10.2% FY2025 Result: 43.9% FY2025 Result: 4.5% FY2024 Result: 593.8 t-CO2 6
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⚫ This material is intended to provide information on our company's business performance for the first half of the fiscal year ending December 31, 2026, and to promote a deeper understanding of our company. It is not intended as a solicitation to invest in any securities issued by our company. ⚫ This material has been prepared based on the situation as of the end of June 2026. The opinions, forecasts, and other stateme nts contained in this material are based on our judgment at the time of the preparation of this material. We do not guarantee or promise the accuracy or completeness of the information, which is subject to change without prior notice.