インテリジェント　ウェイブ（4847） – Presentation material,Financial Results for the third quarter FY0622(presented on May 10,2022)

Financial Results for 3Q FY06/22(July 1, 2021 to March 31, 2022)[Non-Consolidated]Announced on May 10, 2022Intelligent Wave Inc.Financial Results 3Q FY06/22Key initiatives in 3Q FY06/22ReferenceOverviewNet salesOperating incomeOrdinary incomeNet incomeAmount of ordersOrders on handMillion yen3Q FY06/213Q FY06/22Change8,0677,834-233-2.9%678696470943＋265＋39.1%964658＋268＋38.5%＋188＋40.0%8,27911,768 ＋3,489＋42.1%5,5309,268 ＋3,738＋67.6%Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.3Sales by categories(＋) System Development increased sales for both new and existing customers.(△) Hardware sales decrease due to fewer large sized project, but expected to achieve the full-year forecasts.3Q FY06/213Q FY06/22ChangeNet SalesSystem DevelopmentMaintenanceIn-house productsCloud serviceHardwareThird-party productsSecurity products8,0673,7109922677021,339431622Million yen-2337,8343,859 ＋1491,111 ＋119＋52＋91-510-194＋61319793829237683Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.4Top three clients by sales3Q FY06/21 3Q FY06/22 ChangeMain projects1 . DNP1,2171,080-136Million yenTokenization Service system (for Smartphone payment transaction ) , System operations (24/7), Payment Platform*Disaster recovery System for FEP* and Fraud detection system2 .System Integrator3 .System Integrator992696-295 134505 ＋370 Initial development for deploying IOASIS＊Payment Platform: System services operated by DNP, which enables customers to launch cashless payment business.＊FEP（Front-End Processor）︓Sub-system, which communicates between network and main-frame and manages flood of transaction data. Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.5Operating income(+)Improved margin of System Development, Maintenance andCloud service. (△) Hardware sales decreased. SG&A increased■…Net Sales●…Operating margin8,0677,834Million yenOperating income 943, +265 YoYFactors for changes8.4%12.0%(Increase) Improved profitability of System Development and Maintenance Improved profitability in Cloud service(Decrease） Decreased in hardware sales Increased in SG&A3Q FY06/213Q FY06/22Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.6Orders on hand7,963 4,236 Million yen9,268 4,210 2,068 2,990 5,319 5,786 5,202 5,317 2,016 2,401 2,202 2,026 6,075 5,688 5,530 1,934 1,762 1,609 5,912 2,611 5,022 1,853 1,769 1,873 1,321 1,732 2,061 2,075 1,882 1,540 1,485 1,615 1,534 1,512 1,679 1,559 2,080 1,851 2,039 1,629 1,816 2,112 1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3QFY06/20FY06/21FY06/22■…Cloud services ■…System development ■…Security products, Hardware, In-house products, etcCopyright © 2022, INTELLIGENT WAVE INC. All rights reserved.7Amount of ordersMillion yen4,686 4,252 3,016 3,230 3,056 2,402 2,254 2,562 2,660 2,612 2,829 1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3QFY06/20FY06/21FY06/22Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.8Full-year ForecastsMillion yenFY06/21actualFY06/22forecast2H（Full year -1H actual）1H2HFull year1H(actual)Full yearYoY(full year)Net sales5,247 5,94011,1874,887 7,113 12,000+7.3%Operating income(OM)Ordinary income(OM)Net income(NM)405（7.7%）725（12.2%）1,130（10.1%)478 （9.8%)842 （11.8%)1,320（11.0%)+16.8%421（8.0%)750（12.6%)1,171（10.5%)499 （10.2%)861 （12.1%)1,360（11.3%)+16.1%285（5.4%)555（9.3%)840（7.5%)337 （6.9%)603 （8.5%)940（7.8%)+11.9%Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.9Full-year Forecasts by categoriesFY06/211H2HFull year1H(actual)Full yearYoY(1H)FY06/22２H（Full year-1H actual）Million yenNet Sales5,247 5,94011,1874,8877,113 12,000+7.3%2,4372,8355,2722,5193,3315,850+11.0%SystemDevelopmentMaintenanceIn-house productsCloud serviceHardwareThird-party productsSecurity products6472094708722403697101264727662691,3573359421,6385097282684932721684387121326371,440+6.1%400+19.4%1,130+20.0%1,4581,730+5.6%82250-50.9%7621,1317621,200+6.1%Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.10Financial Results 3Q FY06/22Key initiatives in 3Q FY06/22ReferenceCloud service businessStable progress of sales as the initial plan. Gross profit exceeded the plan by the sales growth and the streamlined operating job.FY06/21FY06/22Q1Q2Q3Q4Full yearQ1Q2Q3Q4Full yearMillion yen3431,1303380PlanPlanNet salesGross profitActual224246232239942Actual-37-12-28-3-81No. of customers by service lines (Actual)■IOASIS■IFINDS■IGATES■IPRETS53215341534153415341240243-18-1953412482501831634129629946847351Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.12Orders for Cloud servicesReceived satisfactory orders for IOASIS and large project for IGATES. These contracts start to be booked sales from April and contribute next fiscal year’s earnings.FY06/21Q1Q2Q3Q4Orders on hand1337379483Amount of orders1,9341,7621,6091,853FY06/22Q21,8764,236Q32734,210Q11,0002,611Million yenQ4No. of ordersNewQ3 total FY06/21Add, updateQ3 totalFY06/22■IOASIS■IFINDS5-2Overview4 ・New orders from a major credit card company and a retailer.1 ・Steadily increasing inquiries from credit card companies・Developing a shared score model generated by the aggregation of customers’ fraud transaction data.■IGATES1 ・Ordered large scale project from an international credit company・Strong inquiries from Fintech Start-Ups.Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.13Reference) our cloud services ■IOASIS- SaaS product for providing operation system and supporting customers to launch acquiring business- Offer 24/7 system operation- System launched in 2016■IGATES- Provides 24/7 non-stop switching operation for payment network transaction internationally. – SaaS product derived from NET+1, in-house product enjoying the overwhelming domestic market share.■IFINDS- Credit card fraud detection solution- SaaS product derived from ACEPlus, in-house product with the highest market share.Rule-based methodIFINDS automatically detects frauds by referencing the record of frauds cases.＋AI scoring method- Next generation fraud detection servicealgorithm- Utilizing AI with advanced Generates score of the fraudulent rating of the transaction automatically. Detecting the unknown frauds methods.Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.14To grow our businessSet up divisions to enhance payment solution business since April.Started inclusive project to establish work-style for “post-pandemic”.①Business Development OfficeWorks for enhancing payment solution business and developing new solutions to achieve the goal of “15 ALL”. In charge of business development for payment solution.②Global Business Promotion OfficeDeveloping overseas business. Introducing our payment solutions to SE Asian market at first. ③New work-style of IWI projectStarted to achieve “happiness and improvement for each” ideas in new normal, “post-pandemic”.Establish self-disciplined work-style over diversity.Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.15New product and serviceLaunched new product and service for cyber-security and broadcasting.Implemented macro virus sanitization function to “Resec”, Israeli file sanitizing product, as the answer to the request from financial institutions.Reeled attentions from financial, defense, medical industry.Introduces Recorded Future, US security intelligence service, over 1000 installations world-wide.Earned the order from medicals a month after the launch.Release of the reporting service enhanced by IWI.Software version of EoM, in-house developed IP flow monitoring device.Applied network protocol for web broadcasting.Available on cloud base.SecuritySecurityBroadcastingCopyright © 2022, INTELLIGENT WAVE INC. All rights reserved.16Financial Results 3Q FY06/22Key initiatives in 3Q FY06/22ReferenceCost of manufacturingFY06/21FY06/22Q1Q2Q3Q4Q1Q2Q3Q4Thousand yenMaterials cost4,8906,3378,2558,9407,1948,162Labor costExpensesSubcontracting costTotal manufacturing costWork in progress (beginning of period)Work in progress (end of period)Transfer to other accounts708,202739,778712,358732,866718,848734,397363,448353,011368,936399,624431,898413,397581,894546,583565,629555,601603,162668,3631,658,4351,645,7111,655,1801,697,0321,761,1051,824,322 1,886,826381,557515,004503,982534,449209,668283,587279,908515,004503,982534,449355,789283,587279,908100,02087,206124,252182,951247,200344,25111,264714,332403,356757,872324,040396,910Cost of sales1,424,9671,569,5261,500,4591,692,7411,439,9851,483,749 1,445,783Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.18SG&A expensesSalariesTraining and recruitingRentAdvertisingR&DDepreciation and amortizationSG&AFY06/21FY06/22Q1Q2Q3Q4Q1Q2Q3Q4287,425323,927312,972339,842290,810310,527335,648Thousand yen5,32117,46313,35216,78910,33213,98917,62117,61517,91818,16418,79318,3281,5864,2393,2287,14512,69111,4328,72322,25419,25030,2329,3015,5139,4579,95210,29110,6749,5709,70524,04616,82212,1791,85510,193Q3 total FY06/21Q3 total FY06/22ChangeMillion yen1,477（breakdown）1,569salariesTraining and recruitingAdvertisingResearch and developmentOthers＋92＋12＋12＋27-34+75Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.19Cash flows4,307＋770-1,127Million yen-3483,602Income before taxesD&AA/R increaseA/P increaseInventory increaseIncome taxes paid964580-313147-118-382Purchase of PP&EPurchase of intangible assets-197-945Dividends-341JPY 704mil decrease30‐Jun‐2121年6⽉期末Operating activities営業活動Investing activities投資活動Financing activities財務活動31‐Mar‐2222年6⽉期2Q末Cash and cash equivalentsCash and cash equivalentsCopyright © 2022, INTELLIGENT WAVE INC. All rights reserved.20Net sales forecasts by categoriesFY06/213Q total4QFull year3Q total(actual)Full yearYoY(1H)FY06/224Q（Full year-3Q total）Million yenNet Sales8,0673,12011,1877,8344,16612,000+7.3%SystemDevelopmentMaintenanceIn-house productsCloud serviceThird-party productsSecurity products992267702431622Hardware1,3393,7101,5625,2723,8591,9915,850+11.0%1,3571,1111,440+6.1%36568240299783359421,6385093197938292376833298133790113400+19.4%1,130+20.0%1,730+5.6%250-50.9%5091,1315171,200+6.1%Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.21Full-year ForecastsFY06/21actualFY06/22forecast4Q（Full year-3Q total）3Q total4QFull year3Q total(actual)Full yearYoY(full year)Million yenNet sales8,067 3,12011,1877,834 4,166 12,000+7.3%Operating income(OM)Ordinary income(OM)Net income(NM)678（8.4%）452（14.5%）1,130（10.1%)943 （12.0%)377 （9.0%)1,320（11.0%)+16.8%696（8.6%)475（15.2%)1,171（10.5%)964 （12.3%)396 （9.5%)1,360（11.3%)+16.1%470（5.8%)370（11.9%)840（7.5%)658 （8.4%)282 （6.8%)940（7.8%)+11.9%Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.22Revised the category of salesRevised categories to show the classification of sales based on the so-called “stock” and “flow” type in more detailed. Judged from the type of contract and the actual status of the services, we have classified projects and contracts that generate a certain amount of sales on a regular basis as “stock” and the rest of those as “flow”.Old CategoryCategorySystemDevelopmentMaintenanceIn-house productsCloud serviceHardwareThird-party productsSecurity productsFlowStockFlowStockFlowFlowFlowNew CategoryCategorySoftware Development FlowIn-house productsSystem ServiceThird-party productsSum of “flow” type salesMaintenanceMaintenance of Third-party productsOwn ServicesOher ServicesFlowFlowFlowStockStockStockStockSum of “stock” type salesMillion yenFY03/20223,046338306564,0721,9514579893633,76238.9％4.3％0.4％8.4％52.0％24.9％5.8％12.6％4.6％48.0％23Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.Historical net sales （Stock/Flow）■Stock ■Flowthe rate of stock businessMillion yen10,603 9,176 10,443 8,682 10,920 8,846 11,187 8,888 8,469 7,371 13.5%16.9%19.0%20.6%13.0%1,098 1,427 1,761 2,074 2,299 7,834 5,930 24.3%1,904 3Q FY06/22FY06/17FY06/18FY06/19FY06/20FY06/21Stock（YoY）Flow（YoY）1,0987,3711,427＋30.0%9,176＋24.5%1,761＋23.4%8,682-5.4%2,074＋17.8%8,846＋1.9%2,299＋10.8%8,888＋0.5%1,904＋12.4％5,930-7.0％* Stock: categories with contracts that allow us to record sales of a fixed amount on a regular basisFlow : categories with contracts that are not stationary in terms of the amount and timing Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.24Historical performance■…Net sales■ …Operating incomeMillion yen11,18710,92010,60310,4437,1376,6956,3675,8915,5054,8445,2575,1745,5275,2414,9564,7628,4697,2056,5586,1605,8701,8541,5281,1771,482678371389 417228 358 321131145484731 702 547921 1,036 1,130010203040506070809101112131415161718192021Note: Consolidated results are shown through FY06/15.(677)Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.25Company overviewAs of Dec 31,2021EstablishedDecember 27, 1984LocationEmployees434Kayabacho Tower, 1-21-2 Shinkawa, Chuo-ku, TokyoParent companyDai Nippon Printing Co., Ltd. (50.71%)Capital stockJPY843.75kShares outstanding 26,340,000Shareholders9,536Individuals, othersJapanese financial institutionsOther Japanese corporationsForeign corporationsJapanese securities firmsTreasury stockOwnership (%)% of shareholders37.45%7.70%51.06%2.10%1.48%Individuals, othersJapanese financial institutionsOther Japanese corporationsForeign corporationsJapanese securities firms0.20%Treasury stock98.29%0.10%0.41%0.87%0.31%0.01%Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.26These materials were produced to provide information concerning the company and its businesses. They These materials were produced to provide information concerning the company and its businesses. They are not intended as a solicitation for investment in securities issued by Intelligent Wave Inc.are not intended as a solicitation for investment in securities issued by Intelligent Wave Inc.The opinions, forecasts, and other forward-looking statements in these materials are based on the The opinions, forecasts, and other forward-looking statements in these materials are based on the company’s judgment at the time they were produced, and Intelligent Wave Inc. makes no guarantees company’s judgment at the time they were produced, and Intelligent Wave Inc. makes no guarantees concerning the accuracy and completeness of the information contained herein. Please be aware that this concerning the accuracy and completeness of the information contained herein. Please be aware that this information may also be revised without prior notice in the future.information may also be revised without prior notice in the future.Intelligent Wave Inc.Management Planning Office E-mail: ir_info@iwi.co.jp