Transaction Media Networks | 5258 (TSE Growth)

Company Report Strategy Advisors Inc.

Hirotaka Kandachi
December 16, 2024 Takao Kanai

FY3/2025 Q2 Results are Within Expectations. TMN Will Stock Price and Volumes

Build a Stable & Robust Data Center and Become a Data

(¥)
800 2,000

Business Company, Aiming for Sales of ¥100 billion in 2030 600 1,500

400 1,000
For the period FY3/2025 1H (non-consolidated), sales grew 8.5% YoY to ¥5 billion, with
200 500
operating profit at -¥162 million (¥337 million in FY3/2024 1H). Consolidated accounting
began due to the M&A of Webspace in FY3/2024 Q3 and P/L inclusion began in FY3/2025 0 0
Q1. In FY3/2025 1H, consolidated sales were ¥5.7 billion and operating profit was -¥183
million.
Trading Volume (RHS) Stock Price (LHS)
Progress against the guidance for FY3/2025, is such that stock revenue is 47.7%,
Source: Strategy Advisors
progressing as expected, while flow revenue is 27.5%, lagging slightly behind.
Development sales, which make up flow revenue, are expected to increase in Q4 at the Key Indicators
end of the fiscal year when inspections tend to be concentrated. Similarly, terminal sales
have lagged behind due to the announcement of the company's new mobile terminal during Stock Price (12/12/24) 440
this fiscal year and clients refraining from purchasing payment terminal equipment due to YTD High (2/28/24) 743
the announcement of new payment terminals by other companies. However, we have
YTD Low (8/5/24) 345
strong expectations in the second half as orders are expected for full-scale installation at
large affiliated stores and other large projects announced in this financial statement. 10-Year High (7/4/23) 1,978

On the other hand, due to the data center relocation that has been underway since the 10-Year Low (8/5/24) 345

previous FY, there is the expectation of a one-time expense of ¥627 million for the current Shares on Issue (mn) 37.0
fiscal year, but only ¥257 million was recorded in 1H, which is about 41.0% of the current
Market Capitalization (\ bn) 16.3
fiscal year’s forecast. The remaining ¥370 million is expected to be recorded in the second
half. In addition, a failure related to the data center relocation occurred on September 20th EV (\ bn) 4.8
and the company is currently reviewing the overall relocation plan; including the accounting
Equity Ratio (3/24 Actual, %) 42.4
period and amount and the results of this review are scheduled to be disclosed in the new
year. PER (3/25 CoE, Times) 63.0

PBR (3/24 Actual, Times) 1.4

TMN's EV/EBITDA multiple based on company forecasts for FY3/2025 is 2.15x.
Competitors in the electronic payment gateway industry, based on company forecasts for Yield (3/25 CoE, %) 0.0
FY9/2025, are GMO Financial Gate (hereinafter GMO FG) (TSE G 4051) at 32.0x and GMO Source: Strategy Advisors
Payment Gateway (hereinafter GMO PG) (TSE P 3769) at 19.5x. TMN has remained at a
significantly low valuation and it appears that the growth potential of the payment
business, let alone information processing, has hardly been factored in.

Japanese GAAP
FY Period
- Consolidated Sales YoY OP YoY RP YoY NP YoY EPS DPS
(\ mn) (%) (\ mn) (%) (\ mn) (%) (\ mn) (%) (%) (%)
3/2024 Q2 2,304 19.3 168 -11.6 169 -11.5 157 -13.3 4.6 0.0
3/2025 Q2 3,006 - -126 - -130 - -131 - -3.5 0.0
3/2024 1H 4,609 27.2 337 36.3 332 33.8 318 34.3 8.6 0.0
3/2025 1H 5,738 - -183 - -190 - -202 - -5.5 0.0
3/2023 7,831 9.7 560 -21.2 535 -24.9 673 -274.4 21.2 0.0
3/2024 10,370 32.4 829 48.1 818 52.8 637 -5.2 15.85 0.0
3/2025 CoE 13,645 31.6 312 -59.7 286 -62.6 235 -59.7 6.38 0.0
3/2026 CoE 16,109 18.1 2,075 565.1 2,053 617.8 1,508 541.7 40.83 NA
Source: Strategy Advisors. Based on Company Data.

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Transaction Media Networks | 5258 (TSE Growth)

1. Summary of FY3/2025 1H Results

Sales on a Non-Consolidated In FY3/2025 1H, sales on a non-consolidated basis increased 8.5% YoY to ¥5
Basis Increased, Driven by billion. Stock income consisting of Gateway Service Fees, registration setup fees
Steadily Accumulating Stock and QR/barcode settlement charges, which increased 16.4% YoY to ¥3.9 billion
Revenue thanks to steady accumulation. On the other hand, flow income consisting of
sales of payment terminals, development sales and other sales decreased
13.0% YoY to ¥1.1 billion, with the progress rate also stagnant.

Webspace, which became a wholly owned subsidiary from FY3/2025, has had
its P/L included in consolidated accounting, with consolidated sales of \5.738
billion and operating profit of -¥183 million.

Stock Revenues are Sales revenues for FY2025 1H broken down by business model are shown in
Accumulating Steadily Figure 1With regard to stock revenues, Gateway Service Fees, which are fixed
subscription fees mainly used for electronic money and credit card payments,
were ¥2.275 billion, +8.7% YoY, registration and setup fees incurred when
registering with the TMN Gateway were ¥254 million, -9.0% YoY and
QR/barcode settlement charge, which are a pay-per-use type of fee that is
proportional to the settlement amount, was ¥1.384 billion, +40.0% YoY.

Flow Revenues were Held Flow revenues were as follows: Development sales, mainly from system
Back by One-Time Factors customization for connecting gateways to merchants, were \198 million,
-38.1% YoY, while payment terminal sales were ¥627 million, -17.9%. Other
sales, mainly related to the information processing business such as nextore,
which is expected to grow in the future, were ¥260 million, +59.5%.

Inspections tend to be concentrated in Q4, at the end of the fiscal year. Payment
terminal sales were affected by the announcement of the company's own
payment terminal to be released next year and the introduction of terminals
from other companies, which is thought to have led to a reluctance to purchase.

Operating Income and On a non-consolidated basis, the operating loss was -¥162 million, the ordinary
Below Were in the Red Due loss was -¥171 million and the net loss was -¥176 million. In the same period
to One-Time Expenses of the previous year, the figures were ¥337 million, ¥331 million and ¥318
Related to the DC Relocation million, respectively. EBITDA, defined as ordinary profit + depreciation and
amortization + interest paid, was ¥687 million, -38.5% YoY.

On a consolidated basis, the operating loss was -¥183 million, the ordinary loss
was -¥190 million and EBITDA was ¥753 million.

Even Excluding the Cost of Excluding the ¥257 million cost of relocating the data center, standalone
Relocating Data Centers, operating profit was ¥95 million, down 71.8% YoY and ordinary profit was ¥86
Performance is Lagging million, down 74.0%. Similarly, excluding the one-off cost of relocating the data
Behind the Same Period center, consolidated operating profit was ¥74 million and ordinary profit was
Last Year ¥68 million.

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Transaction Media Networks | 5258 (TSE Growth)

Figure 1. Breakdown of Net Sales (Consolidated) & Achievements (\ mn)

FY3/2025 FY3/2025 Achievement
1H Forecast
Net Sales (Consolidated) 5,738 13,645 42.1%
Stock Revenue 3,913 8,209 47.7%
Gateway Service Fees 2,275 4,684 48.6%
QR/Barcode Settlement Charge 1,384 3,021 45.8%
Registration Fee 254 505 50.3%
Flow Revenue 1,086 3,956 27.5%
Terminal Sales 627 2,358 26.6%
Development Sales 198 648 30.6%
Others (nextore, etc.) 260 949 27.4%
WebSpace 738 1,480 49.9%
Gross Profit 1,679 NA NA
Operating Profit -183 312 NA
Ordinary Profit -190 286 NA
Net Income -202 235 NA
EBITDA 753 2,526 29.8%

Source: Strategy Advisors. Based on Company Data.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 2Quarterly Performance Trends (Non-Consolidated) (\ mn)
FY 3/2023 3/2024 3/2025

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Total Sales 1,691 1,932 1,919 2,287 2,305 2,304 2,917 2,842 2,354 2,646

(YoY) NA NA NA NA 36.31% 19.25% 52.01% 24.27% 2.13% 14.84%

Development Sales 130 171 138 195 187 132 135 406 90 108

(YoY) NA NA NA NA 43.85% -22.81% -2.17% 108.21% -51.87% -18.18%

Terminal Sales 238 363 266 492 402 361 489 476 245 381

(YoY) NA NA NA NA 68.91% -0.55% 83.83% -3.25% -39.05% 5.54%

Registration Fees 179 168 156 142 138 140 133 124 130 123

(YoY) NA NA NA NA -22.91% -16.67% -14.74% -12.68% -5.80% -12.14%

Gateway Service Fees 932 938 967 983 1,033 1,059 1,085 1,105 1,129 1,146

(YoY) NA NA NA NA 10.84% 12.90% 12.20% 12.41% 9.29% 8.22%

QR/barcode Settlement Charge 167 229 338 412 461 527 609 633 669 714

(YoY) NA NA NA NA 176.05% 130.13% 80.18% 53.64% 45.12% 35.48%

Other 42 60 52 61 81 82 463 95 87 172

(YoY) NA NA NA NA 92.86% 36.67% 790.38% 55.74% 7.41% 109.76%

Gross Profit 494 667 624 775 789 763 790 977 653 669

(Gross Profit Margin) 29.21% 34.52% 32.52% 33.89% 34.23% 33.12% 27.08% 34.38% -17.24% -12.32%

SG&A Expenses 437 477 476 611 620 595 611 665 714 770

Operating Profit 56 190 148 164 169 168 179 311 -61 -101

(YoY) NA NA NA NA 201.79% -11.58% 20.95% 89.63% - -

(Operating Profit Margin) 3.31% 9.83% 7.71% 7.17% 7.33% 7.29% 6.14% 10.94% -2.59% -3.82%

Non-Operating Income (Loss) 0 1 1 -27 -7 1 1 -6 -5 -4

Ordinary Profit 56 191 149 137 162 169 180 305 -66 -105

(YoY) NA NA NA NA 189.29% -11.52% 20.81% 122.63% - -

(Ordinary Profit Margin) 3.31% 9.89% 7.76% 5.99% 7.03% 7.34% 6.17% 10.73% -2.80% -3.97%

Net Income 55 181 152 283 161 157 162 156 -69 -107

EBITDA 464 602 534 537 552 565 583 739 350 337

Number of Connecting Terminals (10,000) NA NA NA 83 87 90 93 96 99 101

Payment Processing Amount (GMV) (\ bn) 858 885 1,010 973 1,065 1,110 1,195 1,230 1,100 1,200

Number of Transactions (Millions) 480 490 510 500 560 600 600 640 600 600

Source: Company Data.

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Transaction Media Networks | 5258 (TSE Growth)

2. Earnings Forecast
Achievement on Sales is Sales are expected to be ¥5.7 billion, 42.1% of the ¥13.6 billion forecast for
42.1%. Stock Revenue, FY3/2025. Although sales appear to have stalled somewhat, stock income was
Which Accounts For 80% of ¥3.9 billion, 47.7% of the ¥8.2 billion company's forecast.
Sales is Expected to
Continue to Drive Sales Stock revenue, which account for approximately Figure 3The number of
in 2H of the Year connected devices in operation has been increasing at a rate of 10,000 per
month since Q4 of FY3/2023, and this trend is expected to continue, so stock
revenue in each quarter is expected to increase toward the end of the fiscal
year.

Steady Progress in Efforts Figure 3, the breakdown of stock revenues shows that Gateway Service Fees of
to Increase Pay-Per-Use ¥2.3 billion and QR/barcode settlement charge of ¥1.4 billion, which are mainly
Contracts fixed subscription contracts, account for 42.8% of the revenue generated from
pay-per-use contracts.

TMN had previously aimed to expand pay-per-use contracts to generate stock

revenue and the proportion of pay-per-use contracts, which was 17.0% as of
Q1 FY3/2023, has increased significantly. As a result, the company is making
steady progress in transforming its business model to one that will enable it to
benefit from the nationwide expansion of the electronic payment market in
order to generate stable stock revenue.

Regarding Flow Revenue, On the other hand, flow revenue, which accounts for approximately 20% of
We Expect a Recovery in 2H sales in FY3/2025 1H, is lagging significantly behind, at ¥1.086 billion, a
Due to Large-Scale Orders progress rate of 27.5%, compared to the forecast of ¥4.0 billion for FY3/2025.
and Seasonality
Development sales, which are part of flow revenue, were ¥198 million, a
progress rate of 30.6% against the company's forecast of ¥648 million.
Development sales tend to increase in Q4 when inspections by affiliated stores
tend to be concentrated, so they are expected to make a comeback in the
second half of the year.

Sales of terminals were ¥627 million, a progress rate of only 26.6% against the
company's forecast of ¥2.4 billion. This is thought to be due to the
announcement of the company's new mobile terminal during this term and the
announcement of new payment terminals by other companies, which caused
people to refrain from purchasing payment terminal equipment. On the other
hand, as announced in the earnings announcement for this term, full-scale
introduction of the new payment terminal UT-X20 will begin in the second half
of the year and so a recovery is expected in the second half of this term.

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Transaction Media Networks | 5258 (TSE Growth)
Other products sales (nextore, etc.) were ¥260 million, a progress rate of
27.4% compared to the company's forecast of ¥949 million. In addition to the
fact that sales of nextore devices have been delayed to the 2H of the year, the
introduction of the device to Kusuri no Aoki (TSE P 3549) began on September
30 as the first case of the cloud POS business for large-scale businesses, so
expectations for the second half are rising.

The Period and Amount of For this fiscal year, the data center relocation which has been underway since
DC Relocation Costs 1H of the year, only ¥257 million or approximately 41.0% of the estimated cost
Expected for FY3/2025 is expected to be recorded in 1H, with the remaining ¥370 million expected to
Have Been Revised. This is be recorded in 2H or later.
Due to the Time-Frame
Moving Out, So that Some Additionally, there was a failure at the TMN Center on September 20th and also
of the Relocation Costs May on November 4th. The former was acknowledged to be a failure related to the
be Recorded in FY3/2026 DC relocation and the latter was also indirectly affected by the DC relocation,
so the DC relocation has now been suspended and the relocation process,
verification process, etc. are being reviewed. Although it was previously
expected that the relocation would be completed within this fiscal year, there is
a possibility that the relocation timeframe and costs may change.

In terms of the impact on the current fiscal year's financial results, there are
two factors: a decrease in costs due to the suspension of the relocation and an
increase in costs due to a review of the relocation process, so there are likely
to be no major changes to the company's forecast for this fiscal year of ¥627
million. On the other hand, since the company had not previously planned for
DC relocation costs, it is possible that a new company target amount will be set
that includes the relocation costs in FY3/2026.

The Company Has Stock revenues are progressing smoothly and are generally in line with the
Announced that its Full-Year company's forecast for FY3/2025. On the other hand, Strategy Advisors
Forecast for FY3/2025 & believes that the key factors for flow revenues are: 1) a backlash against the
Its Full-Year Target for refrain from purchasing new devices, 2) orders for development projects toward
FY3/2026 Will Remain the end of the fiscal year and 3) the introduction of nextore and cloud POS.
Unchanged but May be
Revised in the New Year A review of the period and cost of the DC relocation is scheduled to be
announced after the new year. At the same time, there is a possibility that a
review of the guidance anticipated based on current order backlog, etc. will also
be announced, which is an immediate point of focus.

The Vision for FY2030: TMN disclosed its targets for FY3/2026 in its financial results briefing for
Steady Progress Toward FY3/2024. The company is targeting operating profit of ¥2.075 billion,
Consolidated Sales of ¥100 +121.0% from FY3/2025 forecast of operating profit of ¥939 million, excluding
Billion one-time costs for the DC relocation.

At the same time, the company also disclosed its long-term target of achieving

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Transaction Media Networks | 5258 (TSE Growth)
consolidated sales of ¥100 billion by FY2030. In particular, sales of terminals
related to nextore and the introduction of cloud POS this fiscal year are
essential sales for the data business and information processing business that
TMN has been aiming for since its founding, and the company is making steady
progress not only toward a stable payment business but also toward its ideal
future state.

Figure 3. Stock Revenue & Number of Connected Terminals (\ mn)

3,000 1.2

2,500 1

2,000 0.8

1,500 0.6

1,000 0.4

500 0.2

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY3/2023 FY3/2024 FY3/2025

Gateway Service Fees Registration Fees

QR/Barcode Settlement Charge Num of Connectiong Terminals(mil, right axis)

Source: Strategy Advisors. Based on Company Data.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 4. Changes in The Ratio of Stock Income and Pay-Per-Use Income

Source: Company Data. Compiled by Strategy Advisors.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 5. Change in Operating Income Through till FY3/2026 (\ mn)

Source: Strategy Advisors. Based on Company Data.

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Transaction Media Networks | 5258 (TSE Growth)

3. Valuation
Market Expectations are the The company published financial statements for FY3/2025 1H on November 13,
Company Will Achieve 2024 and held a financial results briefing on November 18. The company
Long-Term Goals announced losses of operating profit of -¥183 million and net profit of -¥202
million. But as of December 12, 2024, the declines from the publication of the
financial statements and the holding of the financial results briefing were only
-1.35% and -0.90%, respectively.

This is a result of the announcement of the financial results for FY3/2024, which
revealed a forecast of a significant decrease in profits for FY3/2025, while also
disclosing a target of record-high profits for FY3/2026. The company also
disclosed its vision for FY2030 and its sales target of ¥100 billion, which has
raised expectations from the market. This is also an indication of favorable
sentiment toward the steady progress of cloud POS and nextore for the
information processing business.

Continues to Remain at a Even at this point, it is difficult to factor in the expected cash flows of
Lower Valuation than its Information Processing, but even looking at just the cashless payment business,
Peers, Just in Terms of the its valuation remains low compared to its peers. Based on the closing price of
Electronic Payment Business ¥440 on December 12th, the PER is 74.0x for the company's forecast EPS of
Alone ¥6.4 for FY3/2025, but the PER is 19.4x for EPS of ¥19.4 excluding the impact
of one-time costs (estimated) related to the DC relocation; and the PER is 10.8x
for EPS of ¥40.8 calculated based on the company's target for FY3/2026. GMO
FG and GMO PG's PER for the company's forecast base EPS for FY9/2025 is
74.0x for ¥103.41 and 42.3x for ¥204.68, respectively.

TMN’s EV/EBITDA Multiple However, since the net income attributable to the parent company, which is the
is One-Third that of Peers basis for EPS, is affected by depreciation expenses such as development
investments, it is better to compare it with EBITDA, which is also TMN's KPI.
TMN's EBITDA forecast for FY3/2025 and FY3/2026 is ¥2.526 billion and ¥5.030
billion, respectively; but GMO FG and GMO PG do not have forecast EBITDA,
Figure 8calculated using depreciation expenses, goodwill amortization
expenses, and interest paid for the past 12 months as of September 2024 and
the company's forecast ordinary profit and the EV/EBITDA multiple was
calculated using EV (market capitalization + interest-bearing debt - cash and
deposits) as of the end of September. Compared to GMO FG's 31.2x and GMO
PG's 21.5x, TMN's is left extremely low at 1.9x. We believe that the growth
potential of the cashless payment business, which is expected to experience
stable and high growth over the next five years or so, has not been factored in
at all.

Focus on Further Expansion TMN will probably attract attention in the stock market in the future when its
of Cloud POS cloud POS business starts operating in earnest. At the financial results briefing
for FY3/2024, it was mentioned that a gradual introduction of 5,000 units is
planned and if there are no major issues, it will be possible to collect purchase
data along with payment data.

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Transaction Media Networks | 5258 (TSE Growth)
The firm is already purchasing house prepaid data and storing this data in the
new DC with its increased capacity will become the foundation of the
information processing business that the company is aiming at. In addition, this
will have an impact on the development of other information processing
businesses, such as Data Hub, which stores POS data. Strategy Advisors
believes that the future potential of the information processing business will
become more and more real over time.

Figure 6TMN's Share Price & TOPIX in FY3/2025

650 3400

600 3200

550 3000

500 2800

450 2600

400 2400
FY3/25 Q2 Financial
Results Briefing
350 2200
FY3/25 Q2
FY3/24 Full year FY3/25 Q1
300 2000
2024/4/1 2024/5/1 2024/6/1 2024/7/1 2024/8/1 2024/9/1 2024/10/1 2024/11/1 2024/12/1

Stock Price TOPIX(right axis) Date of announcement of financial results

Source: Prepared by Strategy Advisors.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 7Comparison of Valuations with Peers (9/2024)
Transaction GMO GMO Block Adyen Block Adyen

Media Payment Financial (Square) (Square)

\
Networks Gateway Gate base
Equivalent

1$=161.07\ 1€=172.33\

FY LTM 9/2024 9/2024 LTM LTM LTM LTM

Market capitalization (\mn) 15,240 667,460 59,490 5,905,910 6,944,758 52,191 $ mn 48,660 € mn

EV (9/2024) 3,795 580,055 56,974 5,485,244 5,670,106 49,244 $ mn 40,665 € mn

EBITDA (\mn) 2,009 26,925 1,825 168,461 140,030 2,129 $ mn 786 € mn

Net income (\mn) 142 17,209 993 97,166 131,651 499 $ mn 698 € mn

EV/EBITDA 1.9 21.5 31.2 32.6 40.5 23.1 51.7

PER 107.3 38.8 59.9 60.8 52.8 104.7 69.7

EPS (CoE) 6.4 204.7 103.4 491.5 4,508.1 3.4 28.3

* Forecasts for TMN, GMO PG, and GMO FG are based on company estimates, while those for Block and Adyen are based on the
Fact Set consensus estimates.

Source: Prepared by Strategy Advisors.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 8Comparison of Valuations with Peers (EV/EBITDA)

200

180

160

140

120

100

80

60

40

20

0
21/03 21/06 21/09 21/12 22/03 22/06 22/09 22/12 23/03 23/06 23/09 23/12 24/03 24/06 24/09 24/12

TMN GMO PG GMO FG

Source: Prepared by Strategy Advisors.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 9Statement of Income (\ mn)
3/24
3/24 3/25 3/26
FY 3/18 3/19 3/20 3/21 3/22 3/23 (Non-
(Consolidated) CoE CoE
consolidated)

Total Revenue 4,068 4,977 8,169 6,451 7,139 7,831 10,370 10,370 13,645 16,109

(YoY) NA 22.35% 64.14% -21.03% 10.67% 9.69% 32.42% - 31.58% 18.06%

Development Sales 1,470 1,235 1,116 820 897 636 861 861 648 780

(YoY) NA -15.99% -9.64% -26.52% 9.39% -29.10% 35.38% - -24.74% 20.37%

Terminal Sales 1,077 1,574 3,266 1,459 1,364 1,360 1,730 1,730 2,358 1,997

(YoY) NA 46.15% 107.50% -55.33% -6.51% -0.29% 27.21% - 36.30% -15.31%

Registration Fees 268 473 1,209 631 728 647 537 537 505 599

(YoY) NA 76.49% 155.60% -47.81% 15.37% -11.13% -17.00% - -5.96% 18.61%

Gateway Service Fees 1,209 1,608 2,367 3,133 3,496 3,822 4,285 4,285 4,684 5,209

(YoY) NA 33.00% 47.20% 32.36% 11.59% 9.32% 12.11% - 9.31% 11.21%

QR/Barcode Settlement Charge 0 0 22 188 486 1,147 2,231 2,231 3,021 4,052

(YoY) NA #DIV/0! #DIV/0! 754.55% 158.51% 136.01% 94.51% - 35.41% 34.13%

Other 41 85 188 216 165 216 723 723 949 1,872

(YoY) NA 107.32% 121.18% 14.89% -23.61% 30.91% 234.72% - 31.26% 97.26%

Gross Profit 2,214 2,358 2,862 1,915 2,279 2,562 3,321 3,321

(Gross Profit Margin) 54.42% 47.38% 35.03% 29.69% 31.92% 32.72% 32.03% 32.03%

SG&A Expenses 1,457 2,063 1,219 1,760 1,568 2,002 2,544 2,544

Operating Profit 757 295 1,643 154 711 560 829 777 312 2,075

(YoY) NA -61.03% 456.95% -90.63% 361.69% -21.24% 48.04% - -62.36% 565.06%

(OPM) 18.61% 5.93% 20.11% 2.39% 9.96% 7.15% 7.99% 7.49% 2.29% 12.88%

Non-Operating
-2 -1 5 4 1 -25 -11 -12 -26 -22
Income/Loss

Ordinary Income 755 294 1,648 158 712 535 818 765 286 2,053

(YoY) NA -61.06% 460.54% -90.41% 350.63% -24.86% 52.90% - -65.04% 617.83%

Net Profit Margin 18.56% 5.91% 20.17% 2.45% 9.97% 6.83% 7.89% 7.38% 2.10% 12.74%

Extraordinary Income/Loss NA NA NA 0 -1 5

Profit Before Income Taxis NA NA NA 159 711 540 818 765

Income Taxes NA NA NA 60 1,097 -132 180 180

Net Income 728 219 1,110 98 -385 672 637 585 235 1,508

(YoY) NA -69.92% 406.85% -91.17% -492.86% -274.55% -5.21% - -63.11% 541.70%

Note: Since the consolidated financial statements are prepared from the third quarter of FY3/2024, comparative analysis
with the previous fiscal year is not provided.
Source: Company Data.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 10Balance Sheet (¥ mn)
FY 3/18 3/19 3/20 3/21 3/22 3/23 3/24

Cash And Deposits 1,907 1,583 2,533 2,168 3,419 2,861 13,173

Accounts Receivable 1,110 1,034 1,044 1,345

Inventory 264 549 504 621

Others 507 221 205 1,043

Current Assets 4,049 5,223 4,614 16,182

Construction In Progress 269 14 85 445

Others 699 778 558 1,420

Property, Plant and Equipment 968 792 643 1,865

Goodwill 0 0 0 537

Intangible Assets 2,346 2,457 3,170 4,113 4,001 4,070 6,699

Deferred Tax Asset 129 0 147 120

Investment Securities 0 0 0 286

Investments And Other Assets 511 355 482 784

Total Non-Current Assets 2,808 3,991 4,524 5,592 5,148 5,194 9,348

Total Assets 7,167 7,246 9,322 9,641 10,372 9,808 25,530

Accounts Payable - Trade 53 149 68 206

Accounts Payable - Other 700 390 779 0

Short – Term Debt 1,014 507 5 167

Advances Received 0 2,528 2,009 1,764

Deposits Received 661 1,684 8,735

Others 425 262 189 1,690

Current Liabilities 2,192 4,497 4,734 12,562

Long-Term Debt 15 8 3 1,560

Accrued Pension Cost /Salary Allowance 88 101 115 178

Others 40 0 1 401

Non-Current Liabilities 143 109 119 2,139

Total Liabilities 1,295 1,154 2,119 2,335 4,606 4,852 14,700

Capital 9,812 9,812 9,812 3,053 3,553 3,553 6,151

Capital Surplus 3,100 3,100 2,581 3,053 3,553 708 3,306

Retained Earnings 18,288 19,973 21,021 1,195 -1,345 673 1,258

Shareholders' Equity 25,326 27,070 29,629 7,302 5,761 4,934 10,714

Stock Acquisition Rights 2,254 1,646 one two 5 5 22 40

Valuation Difference on Other Securities 0

three 0 0 76 76

Total Net Assets 5,872 6,092 7,203 7,306 5,766 4,956 10,830

Note: Consolidated financial statements will be prepared from the third quarter of the fiscal year ending March 2024.
Source: Company Data.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 11Operating Cash Flow Chart (¥ mn)
FY 3/21 3/22 3/23 3/24

Depreciation 1,206 1,464 1,601 1,615

Loss (Gain) on Valuation of Investment 1 0 0 0

Interest and Dividends Received 0 0 0 0

Interest Payments -2 -4 0 0

Increase (Decrease) in Deposits Received 298 1,023 1,177

Other Operating Cash Flows -165 352 180 -2,259

Cash Flows from Operating Activities 1,040 2,110 2,804 533

Purchase of Property, Plant and Equipment -451 -167 -101 -476

Purchase of Intangible Assets -1,860 -1,177 -1,277 -2,455

Purchase of Investment Securities 0 0 0 -200

Purchase of Shares of Subsidiaries Resulting in

7,710
Change in Scope of Consolidation

Cash Flows from Investing Activities -2,311 -1,344 -1,377 4,589

Proceeds from Short-Term Borrowings 970 0 0 0

Repayment of Short-Term Debt 0 -500 -500 0

Issuance of Shares 0 1,000 0 5,195

Redemption and Cancellation of Shares 0 0 -1,500 0

Other Financing Cash Flows -64 -14 15 -5

Cash Flows from Financing Activities 906 486 -1,985 5,190

Free Cash Flow -1,271 766 1,427 5,122

Source: Company Data.

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Transaction Media Networks | 5258 (TSE Growth)
Figure 12. Stock Indicators, ROE & KPI’s
3/25 3/26
FY 3/19 3/20 3/21 3/22 3/23 3/24
Forecast Target

EPS (¥) 3,493 17,632 3.13 -12.23 21.19 15.85 6.38 40.83

BPS (¥) 96,731 114,362 232 179 160 292 293 NA

Dividend Per Share (¥) NA NA 0 0 0 0 0 NA

Dividend Payout Ratio NA NA 0.00% 0.00% 0.00% 0.00% 0.00% NA

Closing Price (¥) NA NA NA NA NA 628 440 440

PER (times) NA NA NA NA NA 39.6 69.0 10.8

PBR (times) NA NA NA NA NA 2.1 1.5 NA

Shares Issued & O/standing (TN) 63.0 63.0 NA NA NA 36,937 36,992 NA

Number Of Treasury Stock NA NA NA NA NA 0 0 NA

Number Of Shares of Treasury

NA NA NA NA NA 36,937 36,992 NA
Stock Excluded (‘000 Shares)

Market Capitalization (\ mn) NA NA NA NA NA 23,196 16,276 NA

Shareholders' Equity Ratio 84.1% 77.3% 75.73% 55.54% 50.30% 41.97% 41.50% NA

Interest-Bearing Debt NA NA 1,029 515 8 1,728 1,678 NA

D/E Ratio NA NA 0.14 0.09 0.00 0.16 0.16 NA

EV (Enterprise Value) NA NA NA NA NA 11,751 5,421 NA

EBITDA (¥ mn) 1,079 2,667 1,367 2,180 2,137 2,441 2,526 2,526

EV/EBITDA Ratio NA NA NA NA NA 4.81 2.15 NA

ROE 3.7% 16.7% 1.35% -6.69% 13.58% 5.40%

ROIC (Capital Invested) NA NA 1.14% -6.14% 13.94% 4.75%

ROIC (Business Assets) NA NA 1.45% -9.93% 15.85% 6.97%

Number of Employees 217 236 275 249 254 362

Number of Connected
30 50 59 70 83 96
Terminals (10,000)

Annual Settlement Processing

1.1 1.7 2.6 3.1 3.7 4.6
Transaction Value (GMV) (¥ TN)

Annual Number of Settlements

9 12 15 17 20 24
Processed (Billions of Times)

Note: Stock price indexes for FY3/25 (company forecast) and FY2/26 (company target) are based on the closing price on
December 12th. Balance sheet items are based on the end of September 2024.

Source: Company Data.

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Transaction Media Networks | 5258 (TSE Growth)

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