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2026 Fiscal Year Execution Results

• Order Expansion Strategy: Successfully completed the Yaskawa Electric DX project in Business Solutions, secured large manufacturing logistics orders in IoT Solutions, and secured the first order for the new AQUA DataFusion service. Key remaining challenges: accelerate order acquisition for the new COREVIO business DX service, shorten lead times for logistics orders, and scale volume in livestock, education, and smart city verticals.
• Quality & Customer Trust: A new direct-report quality assurance headquarters implemented on-site proactive quality checks, successfully suppressed unprofitable rework after last fiscal year's major quality issue, and reduced rework volume from upstream processes. Key challenge: further refine quality assurance processes and expand generative AI tool adoption for quality work.
• Generative AI for Productivity: Generative AI cut programming and testing man-hours by 50% in the Business Solutions segment, delivering over 0.2 billion yen in profit benefit. Key challenge: expand generative AI adoption company-wide and extend use to higher-level processes like requirement definition and basic design.
• Management Infrastructure Reform: Advanced segment-by-segment profitability analysis to enable real-time visibility of investment recovery and unprofitable projects, and completed preparation for core system migration scheduled for April 2026. Key challenge: implement stable operation after migration.

Key Product & Operational Milestones

• MMLogiStation, the company's warehouse execution system, held the No.1 market share position in the Japanese WES market for 3 consecutive years through 2024, recognized for its flexible interoperability and all-in-one warehouse workflow offering.
• Milfee, the company's livestock feed tank level management service, entered a partnership with NTT Docomo Business to accelerate adoption across the Japanese livestock industry, leveraging Docomo Business's nationwide sales coverage.
• Smart bus stop solutions are currently deployed by 80 operators across 28 prefectures, including high-profile locations at Naha Airport, Nagano Station East Exit, and urban redevelopment projects.
• COREVIO GRID, a new data integration platform service for enterprise data, launched in February 2026, commercializing know-how gained from manufacturing client system development projects.

2027 Fiscal Year Strategic Priorities

• Cross-functional customer value proposal to expand orders: Leverage the company's full portfolio of products and services to deliver total solutions to clients regardless of initial contact point, driving larger order volumes.
• Accelerate launch of new services for early monetization: Push full commercialization of AQUA DataFusion and COREVIO to build high-margin new businesses quickly.
• Company-wide expansion of generative AI to drive profit: After successful deployment in Business Solutions, reallocate dedicated AI support resources to help other business units adopt generative AI and capture additional productivity gains.
• Maximize human capital value to strengthen organizational capability: Prioritize improved recruiting competitiveness, optimized personnel rotation, higher employee engagement, and reskilling, supported by data-driven talent management tools.

• YE DIGITAL forecasts continued solid demand for digital-related investment (driven by generative AI adoption, DX promotion, and labor shortage solutions) despite modest economic growth and uncertain geopolitical conditions, and is guiding full year 2027 February fiscal year consolidated revenue of 22.0 billion yen, representing an 8.6% increase year-over-year. This includes 15.5 billion yen in revenue for the Business Solutions segment (to be maintained at roughly prior year levels) and 6.5 billion yen in revenue for the IoT Solutions segment, driven by accelerated Logistics DX growth.
• The company guides full year 2027 operating profit of 2.2 billion yen, a 35.1% increase year-over-year; ordinary profit of 2.3 billion yen, a 26.9% increase year-over-year; and net profit attributable to parent company shareholders of 1.6 billion yen, a 24.8% increase year-over-year.
• The company updated its shareholder return policy to add a DOE (dividend on equity) target alongside the existing payout ratio target, setting targets of 30% payout ratio and 5.0%+ DOE. For 2027 fiscal year, the company guides a full year dividend of 30 yen per share (15 yen interim, 15 yen final), a 10 yen per share increase from the prior year, with a projected DOE of 6.3% and payout ratio of 33.4%. The company will also flexibly implement share buybacks as needed to improve capital efficiency and shareholder returns, aligned with the medium-term target of 25% ROE by the 2028 February fiscal year.

For the 2026 February fiscal year, YE DIGITAL reported total consolidated net sales of 20.263 billion yen, a 1.6% increase year-over-year, marking the 4th consecutive year of revenue growth and a new all-time high. 1. Business Solutions Segment: Revenue was 15.901 billion yen, a 0.4% increase year-over-year, accounting for 78.5% of total company revenue. Within this segment, ERP and Business DX revenue grew 6.4% year-over-year driven by strong DX demand and new customer acquisition, while the 'Other' sub-segment (mobile, automotive, and health insurer system development) saw an 11.3% year-over-year revenue decline to 4.786 billion yen, primarily due to the completion of a large health insurer system project; excluding this impact, the sub-segment performed solidly. 2. IoT Solutions Segment: Revenue was 4.361 billion yen, a 6.2% increase year-over-year, accounting for 21.5% of total company revenue. Within this segment: the high-priority Logistics DX sub-segment grew 21.1% year-over-year to 1.69 billion yen, driven by strong inquiry volume, continued order growth, and new expansion into intra-facility logistics for manufacturing clients.文教 internet and security-related products were flat year-over-year at 0.835 billion yen, as demand shifted to terminal devices in fiscal 2026 and expected demand from the 'Second GIGA' program was pushed to fiscal 2027. All other sub-segments (livestock DX, smart city solutions, IoT products) were roughly flat year-over-year. Total operating profit for the full year was 1.628 billion yen, a 15.6% increase year-over-year, also a new all-time high, with the Business Solutions segment contributing a 0.036 billion yen profit increase from sales growth, the IoT segment contributing a 0.143 billion yen profit increase from sales growth, and overall profitability improvements adding 0.438 billion yen, partially offset by 0.393 billion yen in negative impact from expanded human capital investments.

• Geopolitical uncertainty (such as the current Iran situation) creates macroeconomic downside risk that could impact customer IT investment budgets.
• Strong inbound inquiry for logistics projects creates lead time lengthening risk that could result in delayed order conversion and missed revenue targets.
• Newly launched services (COREVIO, AQUA DataFusion) have not yet achieved meaningful order scale, creating revenue and monetization risk if customer adoption is slower than planned.
• Generative AI adoption is currently limited to programming and testing processes in a single business segment; full company-wide deployment faces implementation and productivity capture risk.
• The company's core system migration is scheduled to go live in April 2026, creating operational disruption risk if post-migration stability is not achieved quickly.

Q: What results has YE DIGITAL achieved from its generative AI initiatives, and what are the plans for expansion next fiscal year? / A: In the 2026 fiscal year, generative AI was deployed to programming and testing processes in the Business Solutions segment, cutting work hours by 50% and delivering over 0.2 billion yen in net profit benefit. The Business Solutions segment has now reached self-sufficient operation of generative AI tools, so dedicated AI support resources will be reallocated to help other business units implement AI across their workflows. The company also plans to expand AI usage to upstream processes like requirement definition and basic design to capture additional productivity gains.

Q: What is the current market position of MMLogiStation, and what are your growth expectations for the product? / A: MMLogiStation has held the No.1 share position in Japan's WES market for three consecutive years, per third-party research, recognized for its flexible integration with third-party automation and WMS products, real-time optimization, and all-in-one warehouse functionality. The company expects continued strong demand for warehouse digital transformation, and is expanding into new verticals like intra-factory logistics for manufacturing clients to drive further growth.

Q: What is YE DIGITAL's approach to talent retention and improving employee motivation? / A: YE DIGITAL is a service-focused business with no manufacturing facilities, so its primary asset is its people. The company is implementing data-driven human capital management focused on four key areas: strengthening recruiting competitiveness to hire top talent, implementing optimally aligned placement and rotation to match workers to roles, improving employee engagement by supporting individual growth and purpose, and delivering reskilling programs through formal succession planning to build internal capability. The company has also expanded salary investment in recent years to improve compensation competitiveness.