Wider adoption of the EMC model

「The Company provides a DX accompaniment support service in 5 business areas: “Production/UIUX,” “Marketing DX,” “Digital Service Development,” “Data Utilization Support,” and “Decarbonization DX.” In this service, 3 or more digital creators (DCs) with a range of specialized skills, including data analysis, UX (※1), and engineering, form a team dedicated to each client company and promote and support the client’s digital transformation alongside the client in a hands-on manner.」

「As clients’ DX needs grow, the Company provides the Digital Growth Team (DGT) model, a client-accompaniment support model in which digital creators (DCs), specialists in digital technologies, provide hands-on, agile execution support in response to clients’ strong preference for in-house capabilities, ongoing support through dedicated client teams based on the “as-if employees®” (※2) concept, and appropriate cost performance through the planning and execution phases. The Company aims to increase the scale of transactions per client company.」

「At the end of the current fiscal year, the number of client companies generating annual revenue of at least ¥100 million reached 55, up 9 from the end of the previous fiscal year, representing steady growth.」

「Beginning in April 2024, the Company reorganized each division and specialized company into 4 business areas, “Production/UIUX,” “Digital Marketing,” “Digital Service Development,” and “Data Utilization Support,” in line with clients’ DX needs. In each business area, digital creators with a range of specialized skills form teams of 3 or more dedicated to individual clients and provide the DGT (Digital Growth Team) model, in which they improve and support clients’ DX projects hands-on alongside the clients, with the aim of increasing the scale of transactions per client company.」

「The client base expanded, with the total number of client companies reaching 441, up 91 from the end of the previous fiscal year, including 150 companies using the DGT model, up 34.」

「However, as a result of policies and initiatives aimed at improving profitability from the next fiscal year onward, the client base continued to expand, with the number of companies using the DGT model increasing by 25 from the end of the previous fiscal year to 141 and the total number of client companies increasing by 77 to 427. In addition, through the active rollout of high-value-added services for existing clients and other initiatives, value-added revenue per client company among the top 50 by revenue of those using the DGT model increased by 7.6% year on year.」

「In the first 2 quarters of the current consolidated cumulative period, value-added revenue grew 15.2% year on year, while value-added revenue per client company using the DGT model, a key KPI in the existing business, increased by 0.5% year on year. The number of companies using the DGT model increased to 132, up 16 from the end of the previous fiscal year, and the total number of client companies increased to 385, up 35, indicating steady expansion of the client base.」

「Beginning in the first quarter of the current consolidated cumulative period, the Company integrated the EMC and PGT businesses operated through the previous fiscal year and began providing DGT (Digital Growth Team) services. DGT is a hands-on service in which 3 or more digital creators with a range of specialized skills, including data analysis, UX (※1), and engineering, form a team dedicated to each client and promote and support the client's digital transformation by working alongside the client in practice, with the aim of contributing to the client's business growth.」

「Until the current consolidated fiscal year, the Company disclosed the EMC and PGT businesses separately. However, as clients increasingly required services spanning both businesses because of the broad range of specialized skills involved, segment-by-segment disclosure became difficult. Going forward, regardless of the digital fields covered, the Company will increase DGT (Digital Growth Team), in which 3 or more digital creators form a team dedicated to a client company, pursue the client's business results, and provide services, with the aim of becoming the world's leading provider of digital business operations support.」

「The number of companies using the Results-Based Team Model, in which 3 or more digital creators form a team dedicated to a client company and provide services while pursuing results, reached 103 at the end of the quarter, up 28 from the end of the previous fiscal year. The Company will accelerate the conversion of PGT business clients to the Results-Based Team Model, increases in unit prices, and the acquisition of new clients, with a target of 200 companies by the end of the fiscal year ending March 2024.」

「For the fiscal year ending March 2023, the Company adopted a policy of focusing on customer success and supporting clients in bringing their digital organizations in-house. In the digital marketing field, primarily within the marketing departments of large companies, it will provide long-term operational support through dedicated digital creator teams and develop CSV (※1) and decarbonization case studies. Revenue for the first 2 quarters of the current consolidated cumulative period was ¥5,392 million (IFRS; reference figure: up 12.9% year on year). The number of companies using the EMC model was 54, unchanged from the end of the previous fiscal year, value-added revenue per client company was ¥41,942 thousand, and the number of digital creators belonging to the EMC business increased by 227 from the end of the previous fiscal year to 1,127.」

「For the fiscal year ending March 2023, the Company adopted a policy of focusing on customer success and supporting clients in bringing their digital organizations in-house. In the digital marketing field, primarily within the marketing departments of large companies, it will provide long-term operational support through dedicated digital creator teams and develop CSV (※1) and decarbonization case studies. During the first quarter of the current consolidated cumulative period, revenue grew steadily above the level of the same quarter of the previous year to ¥2,486 million (IFRS; reference figure: up 16.8% year on year), mainly reflecting steady growth in existing clients against a backdrop of accelerating digital transformation among companies. Although proposals were made to new clients, the number of companies using the EMC model fell by 1 from the end of the previous fiscal year to 53 due to the transfer of some projects to the PGT business and other factors. Value-added revenue per client company was ¥36,659 thousand, and the number of digital creators belonging to the EMC business fell by 24 from the end of the previous fiscal year to 876.」

「In the current consolidated fiscal year, revenue grew steadily to ¥10,514 million (IFRS; reference figure: up 14.2% year on year), mainly reflecting steady growth in existing clients against a backdrop of accelerating digital transformation among companies. The number of digital creators belonging to the EMC business increased by 125 from the end of the previous fiscal year to 900. In addition, as a result of active proposals to new clients, the number of companies using the EMC model rose sharply during the fourth quarter to 54, up 7 from the end of the previous fiscal year.」

「The number of companies using the EMC model declined during the first 3 quarters of the current consolidated cumulative period, partly because some projects were transferred to the PGT business, but new client wins during the third quarter limited the decline, bringing the number to 46, down 1 from the end of the previous fiscal year. Revenue related to digital marketing among existing clients also grew steadily, and revenue for the first 3 quarters of the current consolidated cumulative period remained solid at ¥7,429 million (IFRS; reference figure: up 16.2% year on year). The number of digital creators belonging to the EMC business increased by 146 from the end of the previous fiscal year to 921.」

「Revenue from existing clients in the EMC business is growing steadily against a backdrop of accelerating digital transformation among companies. Although the number of companies using the EMC model fell by 3 from the end of the previous fiscal year to 44, partly because some projects were transferred to the PGT business, revenue related to digital marketing among existing clients expanded. Revenue for the second quarter of the current consolidated cumulative period remained solid at ¥4,777 million (IFRS; reference figure: up 15.9% year on year). The number of digital creators belonging to the EMC business also increased by 158 from the end of the previous fiscal year to 933.」

「Although the number of companies using the EMC model fell by 3 from the end of the previous fiscal year to 44, partly because some projects were transferred to the PGT business, utilization among existing employees, excluding new graduates who joined in fiscal 2021, improved significantly year on year for the quarter. As a result, revenue for the first quarter of the current consolidated cumulative period remained solid at ¥2,129 million (IFRS; reference figure: up 15.1% year on year). The number of digital creators belonging to the EMC business also increased by 175 from the end of the previous fiscal year to 950.」

「The number of companies provided with the EMC model decreased by 3 from the end of the previous fiscal year to 47 due to the scaling back of some projects as a result of the COVID-19 pandemic. However, revenue for the three months ended 31 March recovered its growth momentum, increasing 9.7% year on year to ¥2,814 million (IFRS; reference figure), while EMC business revenue for the fiscal year under review remained firm at ¥9,206 million (IFRS; reference figure: up 8.0% year on year). The number of digital creators belonging to the EMC business increased by 82 from the end of the previous fiscal year to 775.」

「The EMC business temporarily experienced a decline in sales activity following the state of emergency declaration in April 2020, but revenue from existing customers has expanded steadily against the backdrop of accelerated corporate digital shifts. The number of companies provided with the EMC model decreased by 3 from the end of the previous fiscal year to 47 due to the scaling back of some projects as a result of the COVID-19 pandemic. However, revenue for the three months ended 31 December recovered its growth momentum, increasing 14.9% year on year to ¥2,270 million (IFRS; reference figure), while cumulative EMC business revenue for the nine months ended 31 December remained firm at ¥6,391 million (IFRS; reference figure: up 7.3% year on year). The number of digital creators belonging to the EMC business increased by 102 from the end of the previous fiscal year to 795.」

「The business was affected by lower revenue resulting from reduced sales and order-taking activity under the state of emergency declaration. However, total EMC business revenue during the six months ended 30 September remained firm at ¥4,121 million (IFRS; reference figure: up 3.5% year on year), and the number of digital creators belonging to the EMC business increased by 133 from the end of the previous fiscal year to 826. Going forward, the company expects recovery from October onward, primarily in the DX area.」

「As a result of these initiatives, during the three months ended 30 June, the EMC business was affected by the suspension of new projects and other factors related to COVID-19, and the number of digital creators belonging to the business decreased slightly to 678, down 15 from the end of the previous fiscal year. However, due to expansion of operations projects and other work acquired in the previous fiscal year, total EMC business revenue increased slightly to ¥1,850 million (IFRS; reference figure: up 3.6% year on year).」

「As a result of strengthening order-taking activities for new EMC customers, the number of companies provided with the EMC model reached the target of 50 for the fiscal year ending March 2020, an increase of 17 from 31 March 2019.」

「During the nine months ended 31 December, the number of digital creators belonging to the EMC business reached 691, up 85 from the end of the previous fiscal year. The 12 EMC customers acquired in the previous fiscal year continued to expand steadily, and total EMC business revenue progressed steadily at ¥5,959 million (IFRS; reference figure: up 15.0% year on year). The number of companies provided with the EMC model (*2) reached 40, up 7 from the end of the previous fiscal year, as a result of continued strengthened order-taking activities for new EMC customers from the first quarter, representing steady progress toward the target of 50 companies using EMC services in the fiscal year ending March 2020.」

「During the six months ended 30 September, the number of digital creators belonging to the EMC business reached 681, up 75 from the end of the previous fiscal year. The 12 EMC customers acquired in the previous fiscal year continued to expand steadily, and total EMC business revenue advanced substantially to ¥3,982 million (IFRS; reference figure: up 19.2% year on year). The number of companies provided with the EMC model (*2) reached 36, up 3 from the end of the previous fiscal year, as a result of continued strengthened order-taking activities for new EMC customers from the first quarter, representing steady progress toward the target of 50 companies using EMC services in the fiscal year ending March 2020.」

「During the three months ended 30 June, the number of digital creators belonging to the EMC business remained broadly flat at 600, down 6 from the end of the previous fiscal year. However, revenue from the 13 EMC customers acquired in the previous fiscal year performed strongly, and total EMC business revenue advanced substantially to ¥1,785 million (IFRS; reference figure: up 19.6% year on year). Some new graduates who joined in April 2019 were still in training and are scheduled to be added to the number of digital creators after completing their training. The number of companies provided with the EMC model (*2) increased to 34, up 1 from the end of the previous fiscal year, as a result of strengthened order-taking activities for new EMC customers, representing steady progress toward the target of 50 companies using EMC services in the fiscal year ending March 2020.」

「In the fiscal year under review, the EMC business had 606 digital creators, up 15.4% year on year, while total EMC business revenue was ¥7,549 million (IFRS; reference figure: up 11.4% year on year). The number of companies provided with the EMC model increased by 13 from 20 at 31 March 2018 to 33 as a result of strengthened order-taking activities for new EMC customers, representing steady progress toward the target of 50 companies using EMC services in the fiscal year ending March 2020. The company also actively expanded the scope of services provided, including the operation of marketing automation tools. In October 2018, it opened Web Garden Kobe, its fourth domestic location.」

「During the nine months ended 31 December, the EMC business had 609 digital creators, up 12.8% year on year, while total EMC business revenue was ¥5,183 million (IFRS; reference figure: up 8.2% year on year). The number of companies provided with the EMC model (*2) increased by 9 from 20 at 31 March 2018 to 29 as a result of strengthened order-taking activities for new EMC customers, representing steady progress toward the target of 50 companies using EMC services in the fiscal year ending March 2020.」

「During the six months ended 30 September, the EMC business had 618 digital creators, up 14.2% year on year, while total EMC business revenue was ¥3,340 million (IFRS; reference figure: up 4.3% year on year). The number of companies provided with the EMC model (*2) increased by 7 from 20 at 31 March 2018 to 27. As a result of pursuing a policy of strengthening order-taking activities for new EMC customers from the start of the period, the number of customers provided with the EMC model increased substantially and is expected to contribute to expansion of the EMC business for the full year. The company also made steady progress toward its target of 50 companies using EMC services in the fiscal year ending March 2020.」

「In the EMC business, the number of digital creators belonging to the business was 548, up 0.9% year on year, while total EMC business revenue was ¥1,493 million (IFRS; reference figure: up 6.4% year on year), and the number of companies provided with the EMC model (*3) was 21, up 1 year on year. The company pursued a policy of expanding existing EMC customers. Although this resulted in expansion from the previous year, growth remained moderate, partly due to changes in the investment cycles of several major customers. However, from the three months ended 30 June, the company strengthened order-taking activities for new EMC customers and expects to steadily acquire new EMC customers and expand the EMC business in its full-year consolidated results.」

「In the core EMC business (*2), the number of digital creators belonging to the business was 525, up 24.4% year on year, total EMC business revenue was ¥6,777 million (IFRS reference figure: up 8.0% year on year), and the number of companies provided with the EMC model was 20, up 5 year on year.」

「Revenue from customers provided with the EMC model during the nine months ended 31 December was ¥4,687 million (Japanese GAAP: up 20.2% year on year), while the number of customers was 20, up 6 year on year (*2).」

「Revenue from customers provided with the EMC model during the six months ended 30 September was ¥3,126 million (Japanese GAAP: up 20.5% year on year), while the number of customers was 20, up 6 year on year (*2), indicating continued steady growth.」

「Revenue from customers provided with the EMC model during the three months ended 30 June was ¥1,358 million (Japanese GAAP: up 28.2% year on year), while the number of customers was 20, up 6 year on year (*2), indicating continued steady growth.」

「Revenue from clients provided with the EMC model was ¥5,581 million in the fiscal year under review, up 37.0% year on year, while the number of clients was 15, up 1 year on year, indicating continued steady growth.」

「Revenue from clients provided with the EMC model during the nine months ended 31 December was ¥3,900 million, up 37.2% year on year, while the number of clients was 14, up 1 year on year, indicating continued steady growth.」

「Revenue from clients provided with the EMC model during the six months ended 30 September was ¥2,595 million, up 44.2% year on year, while the number of clients was 14, up 1 year on year, indicating continued steady growth.」

「Revenue from clients provided with the EMC model during the three months ended 30 June was ¥1,059 million, up 52.6% year on year, while the number of clients was 14, up 1 year on year, indicating continued steady growth.」

「Revenue from clients provided with the EMC model was ¥4,066 million in the fiscal year under review, up 32.2% year on year, and the number of clients was 14, up 1 year on year. The EMC model is a corporate website operations service that aims to improve customers’ marketing results by forming dedicated units for individual client companies, comprehensively combining specialized functions related to website operations, including strategy planning, design, and engineering, and running a data-driven PDCA cycle.」