Securities Report - 77th Fiscal Period (2025/04/01 - 2026/03/31)

Zett Corporation Securities Report - 77th Fiscal Period (2025/04/01 - 2026/03/31)

The company has submitted its Securities Report for the 77th fiscal period (from April 1, 2025 to March 31, 2026) to the Director of the Kanto Local Finance Bureau, in accordance with the Financial Instruments and Exchange Act. This report serves as a critical document to accurately and timely communicate the company's management status and financial condition to investors and other stakeholders.

Overview of Management Policy and Performance

For the current fiscal period, the company's management policy is centered on the fundamental principles of "achieving sustainable growth" and "maximizing shareholder value." In response to changing domestic and international market conditions, the company will advance focused R&D investments, expand into new business areas, and enhance group-wide efficiency to strengthen its medium- to long-term revenue base.

Sales revenue for the period is expected to increase slightly compared to the previous year, primarily driven by growing demand for cloud services and AI-related solutions. The company aims to maintain an operating profit margin above the previous year's level through optimization of its cost structure.

Financial Condition Analysis

The company's assets are primarily composed of current assets, which account for approximately 65% of total assets. Within current assets, cash and deposits represent about 40%, while notes and accounts receivable make up around 20%. Fixed assets show an increasing trend in intangible fixed assets—mainly software and licenses—reflecting the accumulation of technological capabilities.

On the liabilities side, current liabilities constitute approximately 70% of total liabilities, primarily consisting of notes and accounts payable and short-term borrowings. The equity ratio has increased by 0.8 percentage points compared to the previous fiscal year, indicating continued strengthening of the company's financial foundation.

Consolidated Earnings Forecast

The consolidated earnings forecast for the 77th fiscal period is as follows:

- Net Sales: 128 billion yen (up 3.2% year-on-year) - Operating Income: 15.8 billion yen (up 4.0%) - Ordinary Income: 16.2 billion yen (up 3.8%) - Net Income: 11.5 billion yen (up 2.7%)

These figures have been formulated with consideration of global economic trends and foreign exchange rate fluctuations.

Risk Factors

Key risk factors facing the company include:

- Supply chain risks due to global semiconductor shortages - Potential economic downturns in major markets - Cybersecurity incident risks - Revenue volatility due to foreign exchange fluctuations

To address these risks, the company is implementing appropriate risk management measures, including supply chain diversification, strengthening cybersecurity systems, and reviewing foreign exchange hedging strategies.

Future Outlook

The company will continue investing in cloud computing, artificial intelligence, and IoT fields, driven by the acceleration of digital transformation (DX). Additionally, through advancing ESG management, the company aims to contribute to building a sustainable society and enhancing long-term corporate value.

For further details of this report, please visit the "Investor Relations" section of the company's official website.