1. Revising our M&A strategy to align with the capital markets

Through the following three policy shifts, we will revise our M&A strategy to align with the capital markets by utilizing Free Cash Flow (FCF) and debt, thereby alleviating concerns regarding future equity financing. Meanwhile, by being more selective with the number of deals while increasing the transaction value per deal, we aim to achieve transformational growth without compromising our growth rate.

• Leveraging our debt capacity by being highly selective with M&A opportunities
• Strictly prioritizing growth investments for our existing businesses and aiming to generate 5.0 billion yen in FCF next fiscal year (The difference compared to this fiscal year is a plus of 15.0 billion yen)
• Implementing a 36-month freeze on public offerings intended for M&A standby funds

For more detail, please refer to Q2 of “Frequently Asked Questions and Answers (December 2025)” and page 9 of “FY2026/1 3Q Earnings Presentation.”

2. Transition to IFRS (International Financial Reporting Standards)

We will adopt International Financial Reporting Standards (IFRS) starting from the fourth quarter of the fiscal year ending on January 31, 2027. Consequently, we expect all income levels from operating income downward to increase compared to current levels – primarily due to the non-amortization of goodwill. As a result, we anticipate that our valuation metrics, such as P/E multiple on various financial databases, will decrease.

3. Full-year forecast: Switched to adjusted metrics only

Until the fiscal year ending on January 31, 2026, “our full-year earnings forecasts included M&A-related expenses, etc. (statutory figures).” Under this conventional method, forecasting M&A-related expenses – which can occur toward the end of the fiscal year – was difficult. This presented a challenge in making agile upward or downward revisions to our guidance that reflected new M&A activity mid-term.

To resolve this, starting from the fiscal year ending on January 31, 2027, we will transition to using only “Adjusted” metrics – which exclude M&A-related expenses – to more accurately reflect the actual state of our operations. Specifically, we will streamline our official earnings guidance to the following three items: (1) Revenue, (2) Adjusted EBITDA, and (3) Adjusted Net Income.

This will enable us to promptly reflect the impact of new consolidations from M&A into our earnings forecasts during the term. We are committed to providing all our investors with higher transparency and more agile information disclosure.

For more detail, please refer to page 26 of “FY2026/1 3Q Earnings Presentation.”

4. Towards inclusion in the new TOPIX (effective October 2026)

The Tokyo Stock Exchange is currently revising the TOPIX (Tokyo Stock Price Index) framework with the aim of enhancing its market representativeness and investment functionality. We are highly mindful of these new TOPIX selection criteria, particularly regarding liquidity.

Inclusion in such an index serves as a testament to the market’s trust in our company, while simultaneously providing a significant opportunity to increase our visibility among a broader range of investors. We will continue to build a solid track record, step by step, as we strive to meet the expectations of all our shareholders.