V cube : FY2023.Q3 Financial Results

Summary of Consolidated Financial Results

for the Nine Months Ended September 30, 2023 (Japanese GAAP)

November 14, 2023

Company name: V-cube, Inc.

Securities code: 3681

Stock exchange listings: The Prime Market of the Tokyo Stock Exchange

URL: (Japanese) http://jp.vcube.com/ (English) http://www.vcube.com/

Quarterly statement filing date (as planned): November 14, 2023

1.Results of the Second quarter ended September 30, 2023

(millions of Yen, except per share amounts)

(1) Consolidated quarterly operating results:

Net sales

Adjusted

Adjusted

Operating profit

EBITDA

Operating profit

Nine months

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

ended

Sep. 30, 2023

8,111

-10.8

864

-41.3

97

-87.8

-198

-

Sep. 30, 2022

9,093

6.9

1,474

-24.8

800

-33.7

551

-50.3

Note:

Comprehensive income For Nine months ended Sep. 30, 2023:

¥383 million

[-79.3%]

For Nine months ended Sep. 30, 2022:

¥1,849 million

[ 83.2%]

Ordinary profit

Profit attributable to

Basic earnings

Diluted earnings

owners of parent

per share

per share

Nine months

Millions of yen

%

Millions of yen

%

Yen

Yen

ended

Sep. 30, 2023

-234

-

-475

-

-19.61

-

Sep. 30, 2022

506

-50.5

384

-60.7

15.82

15.58

(2) Consolidated financial position:

Total assets

Net assets

Capital adequacy

Net assets per share

ratio

As of

Millions of yen

Millions of yen

%

Yen

Sep. 30, 2023

18,074

6,280

34.1

253.88

Dec. 31, 2022

16,891

5,989

34.9

243.12

Reference:

Owner's equity

As of Sep. 30, 2023: ¥6,161 million

As of Dec. 31, 2022: ¥5,900 million

2.Dividends

Annual dividends per share

First quarter-

Second quarter-

Third quarter-

Fiscal

Total

end

end

end

year-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

-

0.00

-

4.00

4.00

Dec. 31, 2022

Fiscal year ended

-

0.00

-

Dec. 31, 2023

Fiscal year ending

0.00

0.00

Dec. 31, 2023 (Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3.Consolidated forecasts

(millions of Yen, except per share amounts)

Adjusted

Profit

Basic

Adjusted

Operating

Ordinary

attributable

earnings

Net sales

Operating

EBITDA

profit

profit

to owners of

per

profit

parent

share

Millions

%

Millions

%

Millions

%

Millio

%

Millions

%

Millions

%

Yen

ns of

of yen

of yen

of yen

yen

of yen

of yen

Fiscal year ended

11,500

-6.0

1,570

-19.3

475

-53.7

100

-85.2

10

-98.4

-276

-

-11.37

Dec. 31, 2023

Note: Revisions to the forecasts most recently announced: Yes

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4.Others

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and restatement
4. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
5. Number of issued and outstanding shares (common stock)

1. Number of issued and outstanding shares at the period end (including treasury stock)

As of December 31, 2022

24,737,400 shares

As of September 30, 2023

24,737,400 shares

(ii) Number of treasury stock at the end of fiscal year

As of December 31, 2022	466,472 shares	As of September 30, 2023	466,472	shares
(iii) Average number of shares (quarterly period-YTD)
Nine months ended	24,270,949 shares	Nine months ended	24,270,928	shares
September 30, 2022	September 30, 2023

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Explanation related to appropriate use of results forecasts and other items warranting special mention

The above forecasts are based on the information available as of the date of the release of this document. As a result, a variety of factors in the future may cause actual results to differ from these forecasts.

2

Consolidated Financial Statements

(1) Consolidated Balance Sheet

		(Thousands of yen)
	As of December 31, 2022	As of September 30, 2023
Assets
Current assets
Cash and deposits	1,699,697	1,685,617
Notes and accounts receivable - trade	1,737,481	1,344,662
Advance payments to suppliers	1,200	－
Other	701,493	845,214
Allowance for doubtful accounts	△17,761	△5,275
Total current assets	4,122,111	3,870,219
Non-current assets
Property, plant and equipment	2,047,246	2,000,389
Intangible assets
Software	1,895,581	2,538,247
Software in progress	1,127,471	1,335,620
Goodwill	4,071,947	4,389,989
Total intangible assets	7,095,000	8,263,857
Investments and other assets
Investment securities	416,372	596,312
Shares of subsidiaries and associates	337,466	403,506
Leasehold and guarantee deposits	340,928	331,890
Long-term loans receivable	33,175	37,395
Deferred tax assets	1,875,064	1,939,815
Long-term prepaid expenses	58,889	59,762
Other	566,609	572,758
Allowance for doubtful accounts	△999	△1,234
Total investments and other assets	3,627,505	3,940,207
Total non-current assets	12,769,752	14,204,453
Total assets	16,891,863	18,074,673

3

			(Thousands of yen)
		As of December 31, 2022	As of September 30, 2023
Liabilities
Current liabilities
Accounts payable - trade	494,496	335,257
Short-term borrowings	2,627,160	3,907,497
Current portion of long-term borrowings	3,998,600	4,038,600
Contract liabilities	922,951	987,579
Provision for bonuses	91,824	119,091
Income taxes payable	75,007	36,316
Other	1,114,427	1,135,427
Total current liabilities	9,324,467	10,559,769
Non-current liabilities
Long-term borrowings	953,000	710,800
Lease liabilities	310,631	212,999
Asset retirement obligations	296,136	289,904
Other	18,098	20,309
Total non-current liabilities	1,577,866	1,234,012
Total liabilities	10,902,333	11,793,782
Net assets
Shareholders' equity
Share capital	92,190	92,190
Capital surplus	2,831,834	2,831,834
Retained earnings	2,500,230	1,927,193
Treasury shares	△794,791	△794,791
Total shareholders' equity	4,629,464	4,056,427
Accumulated other comprehensive income
Valuation difference on available-for-sale	52,826	89,840
securities
Foreign currency translation adjustment	1,218,365	2,015,578
Total accumulated other comprehensive	1,271,192	2,105,418
income
Share acquisition rights	2,160	8,410
Non-controlling interests	86,713	110,634
Total net assets	5,989,529	6,280,890
Total liabilities and net assets	16,891,863	18,074,673

4

1. Consolidated Statement of Income and Comprehensive Income (Consolidated Statement of Income)

			(Thousands of yen)
		Nine months ended	Nine months ended
		September 30, 2022	September 30, 2023
Net sales	9,093,315	8,111,356
Cost of sales	5,012,469	4,647,888
Gross profit	4,080,846	3,463,467
Selling, general and administrative expenses	3,528,975	3,662,110
Operating profit (loss)	551,870	△198,643
Non-operating income
Interest income	2,463	5,803
Insurance claim income	3,722	1,571
Foreign exchange gains	－	8,884
Subsidy income	5,745	1,726
Gain on valuation of investment securities	7,004	15,353
Other	2,421	2,031
Total non-operating income	21,357	35,371
Non-operating expenses
Interest expenses	33,918	35,356
Foreign exchange losses	6,497	－
Commission expenses	229	748
Loss on valuation of investment securities	－	18,592
Rents	3,979	－
Share of loss of entities accounted for using	17,736	9,032
equity method
Other	3,976	7,477
Total non-operating expenses	66,337	71,207
Ordinary profit (loss)	506,891	△234,480
Extraordinary income
Settlement income	－	10,000
Total extraordinary income	－	10,000
Extraordinary losses
Loss on retirement of non-current assets	759	4,200
Loss on cancellation of leases	9,371	4,941
Settlement payments	7,685	18,852
Office relocation expenses	6,111	10,245
Loss on business restructuring	－	7,065
Extra retirement payments	－	133,000
Other	630	－
Total extraordinary losses	24,559	178,305
Profit (loss) before income taxes	482,331	△402,785
Income taxes - current	52,608	13,157
Income taxes - deferred	16,351	35,036
Total income taxes	68,960	48,193
Profit (loss)	413,370	△450,979
Profit attributable to non-controlling interests	29,361	24,974
Profit (loss) attributable to owners of parent		384,009	△475,953

5

(Consolidated Statement of Comprehensive Income)

					(Thousands of yen)
				Nine months ended	Nine months ended
				September 30, 2022	September 30, 2023
Profit (loss)				413,370	△450,979
Other comprehensive income
Valuation difference	on available-for-sale	45,446	37,014
securities
Foreign currency translation adjustment	1,390,491	797,212
Total other comprehensive income		1,435,937	834,226
Comprehensive income			1,849,308	383,247
Comprehensive income attributable to
Comprehensive	income	attributable	to owners	1,821,597	359,326
of parent
Comprehensive	income	attributable	to non-	27,711	23,920
controlling interests

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1. Notes to Consolidated Financial Statements (Segment Information)

Nine months ended September 30, 2022

							(Thousands of
							yen)
			Reportable segments			Per quarterly
						Reconciling	consolidated
		Enterprise	Event DX	Thirdplace	Reportable
		items	financial
		DX Segment	Segment	DX Segment	segments		statements
Sales
Revenues	from	3,253,040	3,750,515	2,089,760	9,093,315	－	9,093,315
external customers
Transactions	with	－	－	－	－	－	－
other segments
Net sales		3,253,040	3,750,515	2,089,760	9,093,315	－	9,093,315
Operating profit	454,670	178,272	440,747	1,073,689	△521,818	551,870

Notes:

1. The ¥521,818 thousand downward adjustment to segment income reflects corporate expenses not allocated to segments. Corporate expenses mainly include general administration costs of administrative departments.
2. Segment income (loss) has been adjusted for the operating income figure on the consolidated income statements.

Nine months ended September 30, 2023

							(Thousands of
							yen)
			Reportable segments			Per quarterly
						Reconciling	consolidated
		Enterprise	Event DX	Thirdplace	Reportable
		items	financial
		DX Segment	Segment	DX Segment	segments		statements
Sales
Revenues	from	3,223,134	3,080,607	1,807,614	8,111,356	－	8,111,356
external customers
Transactions	with	－	－	－	－	－	－
other segments
Net sales		3,223,134	3,080,607	1,807,614	8,111,356	－	8,111,356
Operating profit	370,351	△555,339	523,568	338,580	△537,224	△198,643

Notes:

1. The ¥537,224 thousand downward adjustment to segment income reflects corporate expenses not allocated to segments. Corporate expenses mainly include general administration costs of administrative departments.
2. Segment income (loss) has been adjusted for the operating income figure on the consolidated income statements.

7