financial results for q3 fy2020 results_v1.pdf · other half is flow-type sales consisting of...

Financial results for the third quarter

of the fiscal year ending June 2020

BrainPad Inc.（Securities Code 3655）

May 14, 2020

Analytics Innovation Company ©BrainPad Inc. 1

Introduction

Our Mission

“Create a sustainable futureby advanced data utilization”

Our Vision

“Analytics Innovation Company”Bringing benefits of analytics / AI

to enterprises


Corporate Overview

Group Structure

Certifications

Consolidated subsidiaries

Unconsolidated subsidiaries

BrainPad Inc.

Mynd, Inc. BrainPad US Inc.

100% ownership

100% ownership

Trading name BrainPad Inc.

AddressShirokanedai Bldg.3-2-10 Shirokanedai Minato-ku,Tokyo 108-0071, Japan

Phone +81-3-6721-7001

Established 3/18/2004

Listed Section First section of the Tokyo Stock Exchange (Code: 3655)

Capital ¥ 575M（as of 03/31/’20)

Employees 326 （as of 03/31/’20, Consolidated）

ManagementTeam

Seinosuke Sato Chairman /Representative Director /Co-Founder

Takafumi Kusano CEO / Co-FounderMakoto Yasuda DirectorKo Ishikawa Director/CFOYoichiro Shiozawa Director Tomohiro Sekiguchi DirectorTetsuya Sano Outside DirectorMakiko Ushijima Outside DirectorHaruo Suzuki Statutory AuditorKatsuyuki Yamaguchi Outside AuditorKazutaka Okubo Outside Auditor

JIS Q 15001Auth.No: 10822646

PrivacyMark for enterprise is approved as

taking appropriate measuresto protect personal information.

Certification・SystemISO(JIS Q) 27001

Web recommendation・advertisement distribution technology・SaaS service used data analysis technology are certificated and registered to Japan Quality assurance organization


Analytics Business

Solusion Business

Our business fields to create valuable data

Data Consulting Business

AnalyticsD

igital Marketing

Digital Marketing Business

Products Business


- Receive orders and tackle projects according to the business challenges of each customer

- Project periods varies from several months to multiple years, team structures varies from a few people to around 10 people

- Totals are calculated as flow-type sales, but many customers re-contracting us every few months whomwe support over long terms

Analytics BusinessSupport enterprises to improve their business performance by Data analytics. Analytics consultant and specialized data scientists provide high value to their business. BrainPad holds 100+ data scientists which is biggest in domestically in Japan.

Characteristics/strengthsProfit structure of previous fiscal year (Consolidated results of fiscal year ended June 2019)

Primary services

- Personnel expenses accounts for most part of the cost of sales

- Other costs include server expenses and software expenses

Segment profitability: 42.6%

- Organization boasting the largest number of data scientists in the industry

- Experience in supporting broad range of businesses, without specializing in specific field

- Knowhow that allows us to apply cutting-edge technologies such as AI, statistical sciences and mathematical engineering to actual businesses

- Organizational strength that allows us to start hiring new graduates quicker than other companies in the industry, and to continue training around 10 to 20 new graduates each year

Reorganize and innovate businesses processesthrough the use of AI and machine learning

Training data utilization personnel / structuring organizations and systems

Improve marketing and CRM based on real time data

Apprehension of customer business structure through analysis;Establishment of customer growth strategies;Optimal distribution of resources (time, costs);Construction of marketing systems;Measurement of effects of policies ...and more.

Optimization of supply chains(Distribution, dispatch, staffing, demand prediction, etc.);Optimization of production processes (Fault detection, yield improvements, etc.);Detection of unauthorized transactions;Logic development utilizing AI;Image analysis by using deep learning ...and more.

Structuring and start-up support of organizations and systems for data utilization;Training data utilization personnel and providing customized programs incorporating data scientist training methods...and more.

Cost ofSales

Net Sales ¥1.4billion¥2.4billion

Profit¥1billion


- Approximately half is stock-type sales consisting of monthly usage fees and maintenance fees, and the other half is flow-type sales consisting of batched license sales, development sales, and human support sales

- Flow-type sales instantly increase where there are large license sales or orders for development or human support projects

Solution BusinessBusiness of developing data analytics platform and licensing of foreign-produced machine learning based packages and integrate them into enterprises’ systems. Licensing business domain is marketing automation/CRM, including social listening systems.

Characteristics/strengthsProfit structure of previous fiscal year (Consolidated results of fiscal year ended June 2019)

Primary products handled

- License purchase, subcontract expenses for contracted development, etc., accounts for most part of the cost of sales

- Subcontracting is used mostly for development work to control profitability

- Percentage of purchase and subcontracting expense is highest among our three lines of business

Segment profitability: 27.1％

- From standpoint that is not dependent on vendors, customers can choose from flexible systems that suit their needs

- Find and select unique foreign tools. Numerous tools are available in Japan only through us

- Based on abundance of experience, we are able to provide optimal analysis environments and tools for data utilization

Cost ofSales

Net Sales ¥1.3billion¥1.8billion

Profit¥0.5billion

exQuickWithout using SQL, marketer, business person can obtain necessary data intuitively.

Intuitivedata extraction

BrandwatchDiscover the underlying perceptions of consumers with social media data insights using AI. Share your new insights easily with informative graphics. Enable your team to from long term strategies, and act on real time tactics.

WPS AnalyticsAn Integrated Modular System perform statistical and graphing functionality, and makes it possible to run many applications written in the SAS language.

SAS-compatiblesystem

SAP® Data InteligenceAn all-in-one platform that has the functions of gathering and managing data, processing data necessary for machine learning, and creating, managing, and operating machine learning models.

Microsoft AzureProvide necessary functions for utilization of Big Data on Cloud Platform.

Cloud platform

BrainRoboRPA (Robot Process Automation) software.Improve efficiency of enterprises’ business process.

Robotics process automation

ProbanceMarketing automation for B2C market. Web visitors preference prediction by machine learning, get highest ROI.

MarketingAutomation

VizTactSupport business decisions with visual analytics enhanced by Machine Learning and Natural Language Processing.

Augmented Analytics

BrainPad is the exclusive reseller in Japan In-house product The others

Machine learningDigital Consumer Intelligence


- Products developed by our company are used on a monthly subscription basis (Majority of sales are related to “Rtoaster”)

- A stock-type business model in which sales increase as long as customers do not cancel their subscriptions

- Some flow-type sales from customized development and deployment consulting expenses

Digital Marketing BusinessSupport to enhance enterprises’ digital marketing businesses. Our home grown Rtoaster, provides DMP and recommendation services to enterprises. Rtoaster and Ad products are integrated by natural language processing developed by our wholly owned subsidiary Mynd, and our own analytics technologies.

Characteristics/strengthsProfit structure of previous fiscal year(Consolidated results of fiscal year ended June 2019)

Primary products handled (all developed in-house)

A majority of the costs of sales is for server expenses for operating products developed by our company and personnel expenses for developing products

Segment profitability: 22.4%

- Develop and provide “Rtoaster” which is the top-class share in the DMP market (3.0 billion cases of tracking, and 200 million items)

- Productization of sophisticated algorithms developed in-house, characteristic of an analysis company

- Can be incorporated with products of other companies, regardless of the vendor, and can perform digital marketing by employing “Rtoaster,” a private DMP, at the center

AdNoteOperation supporting tool for Ads. The two features are auto reporting (20 report types) and a simulation for advertising budget allocation.

Ads operation Support

ConomiAn algorithm find the most effective combination of an individual and a product from various combinations by utilizing collected and accumulated data source.

Recommend engine

FUSE LIGHTAutomate internet Ads by utilizing AI. Without using human operation, internet Ads is delivered to customer.

Ads operationAutomation

RtoasterVarious marketing tactics are applied using DMP. Top-class product in the private DMP domain.

Private DMPrecommendation

Mynd plusNatural language processing engine.

Analyze context, abridge, etc.

Natural LanguageProcessing

AdPencilSubmission supporting tool for web advertising. An easy operation and automation by AI.


Cost ofNet Sales Sales¥1.5billion ¥1.1billion

Profit¥0.3billion


Our Clients & PortfoliosThese listed clients have conducted business with us and permitted the use and publication of their name, or have already hadtheir name published alongside our own in press releases or other publications. published in the media.

(as of May 14, 2020; titles omitted; in no particular order)

Information technology and communications

Google Cloud Japan G.K., Yahoo Japan Corporation, NIFTY Corporation、GMO Research, Inc., OTSUKA CORPORATION, CCC Marketing Co.,Ltd., istyle Inc., Interspace Co.,Ltd., Aerosense Inc, ATLED CORP. , OM Network Co., Ltd., CrowdWorks Inc., JR East Net Station Co.,Ltd., STAR FESTIVAL INC., DAIWABO INFORMATION SYSTEM CO., LTD., Trend Micro Incorporated

Electronics Mitsubishi Electric Corporation

Chemical （include consumer product） Lion Corporation, KOSÉ PROVISION CO., LTD., FANCL CORPORATION, FUJIFILM Healthcare Laboratory Co., Ltd.

Medical・Pharmaceutical Bayer Yakuhin, Ltd., Medical Data Vision Co.,Ltd.

Retail・DistributionLawson,Inc., Takashimaya Company,Limited, TSUTAYA Co., Ltd, GEO CORPORATION,I-ne CO.,LTD, ASKUL Corporation, ENOTECA CO.,LTD., OAK LAWN MARKETING, INC., AUTOBACS SEVEN CO.,LTD., kai industries co., ltd., KONAKA CO.,LTD., ANA TRADING CO., LTD., Sogo & Seibu Co., Ltd., DIESEL JAPAN CO.,LTD, Dinos Cecile Co., Ltd., DORAMA INC., NISHIKAWA Co., Ltd.,Baroque Japan Limited., PEACH JOHN CO.,LTD, K.K.B4F, FELISSIMO CORPORATION, Wacoal Corp.

Food provisions・Foodservice

SKYLARK HOLDINGS CO.,LTD., MORINAGA MILK INDUSTRY CO.,LTD., Kirin Company, Limited, Kewpie Corporation, COCA-COLA(JAPAN)COMPANY,LIMITED, Meiji Co., Ltd., ASAHI BREWERIES, LTD., UCC HOLDINGS CO.,LTD,KIKKOMAN CORPORATION, SHiDAX CORPORATION, JAPAN TOBACCO INC.

Banking・Securities・CardSMBC Nikko Securities Inc., Mizuho Securities Co., Ltd., The Bank of Yokohama,Ltd., Yamaguchi Financial Group, Inc., JCB Co., Ltd., Daiwa Securities Co. Ltd.,MATSUI SECURITIES CO.,LTD., MUFG Bank, Ltd., Shinsei Bank,Limited, Sumitomo Mitsui Trust Bank, Limited,The Iyo Bank,Ltd., Orient Corporation,POCKET CARD CO., LTD.

Education・Human resource・Consulting service

Benesse Corporation, Persol Career Co., Ltd., Mynavi Corporation, Recruit Staffing Co.,Ltd., en-japan inc., BizReach, Inc.,Matching Service Japan Co., Ltd., TechnoPro Holdings,Inc., BeNEXT Technologies Inc., DISCO CORPORATION, Nikkei HR,Inc., Kawaijuku Educational Institution, Z-kai Inc., Pasona Tech, Inc., EXPERT STAFF INC.

Air transportation ・Travel・Hotel

Japan Airlines Co.,Ltd., ALL NIPPON AIRWAYS CO., LTD., Kyushu Railway Company, Nippon Travel Agency Co.,Ltd.,YAMATO TRANSPORT CO., LTD, Yuko Yuko Holdings Inc., Hilton WorldWide, PRINCE HOTELS, INC.

Construction・Housing Yachiyo Engineering Co., Ltd., MISAWA HOMES CO.,LTD., DAITO TRUST CONSTRUCTION CO.,LTD., Sekisui House,Ltd.,Nomura Real Estate Urban Net Co., Ltd., Mitsui Fudosan Residential Lease Co.,Ltd.

Media・Advertisement・Entertainment

NIKKEI STYLE, WOWOW INC., PIA Corporation, The Asahi Shimbun Company, SEGA Holdings Co., Ltd., SEGA Games Co., Ltd.,Fuji Television Network, Inc., THE YOMIURI SHIMBUN(Tokyo head office), JTB Publishing,Inc., HAKUHODO PRODUCT‘S INC., Starts Publishing Corporation, Delphys inc., Beacon Communications K.K., J-WAVE i.INC.

The others Satofull Co., Ltd., ANISPI HOLDINGS Co., Itamiarts.Inc.

Consolidated financial highlights

for the third quarter



1,6002,397

1,1571,672 2,054

1,407

1,826

966

1,2811,559

1,325

1,454

987

1,088

1,2264,332

5,677

3,110

4,042

4,839

0

1,000

2,000

3,000

4,000

5,000

6,000

2018年

6月期

2019年

6月期

2018年

6月期3Q

2019年

6月期3Q

2020年

6月期3Q

百万円セグメント別売上高

ﾏｰｹﾃｨﾝｸﾞﾌﾟﾗｯﾄﾌｫｰﾑ事業ｿﾘｭｰｼｮﾝ事業ｱﾅﾘﾃｨｸｽ事業

923 1,168 1,5511,048

1,3421,6391,138

1,533

1,6491,222

1,6354,332

5,677

4,839

0

1,000

2,000

3,000

4,000

5,000

6,000

2018年

6月期

2019年

6月期

2020年

6月期3Q

百万円四半期別売上高

4Q

3Q

2Q

1Q

Consolidated net sales

■Digital Marketing ■Solution ■Analytics

Net salesMillion JPY

Million JPY

FY2018

FY2019

FY2020

FY2018

FY2019

FY20193Q

＋19.7%

FY20203Q

FY20183Q

Net sales by Segment


560

1,021

748 800957

301

495364 427 440

322 326292 387

456

-598 -657 -512-722

-973

-1,000

-750

-500

-250

0

250

500

750

1,000

1,250百万円セグメント別営業利益

ｱﾅﾘﾃｨｸｽ事業ｿﾘｭｰｼｮﾝ事業ﾏｰｹﾃｨﾝｸﾞﾌﾟﾗｯﾄﾌｫｰﾑ事業本社費

51208 314160

278312

207

406 255

166

293

585

1,185

880

0

200

400

600

800

1,000

1,200

1,400

2018年

6月期

2019年

6月期

2020年

6月期3Q

百万円四半期別営業利益4Q3Q2Q1Q

Consolidated operating income

FY2018

FY2019

FY2020

FY2018

Operating income Operating incomeby SegmentMillion

JPYMillion JPY

■Digital Marketing■Solution■Analytics■Head office costs

FY2019

FY20193Q

FY20193Q

Retroactive Adjustment

（※）

FY20203Q

（※）Due to change of the organization in July,results of fiscal years ended June 2019 ispresented after retroactive adjustments.

▲1.3％


35 147 217111192

291144

283177

117

259

407

881

684

0

200

400

600

800

1,000

1,200

1,400

2018年

6月期

2019年

6月期

2020年

6月期3Q

百万円四半期別当期純利益

4Q3Q2Q1Q

53215 320162

281318

209

409 261

172

309

596

1,214

899

0

200

400

600

800

1,000

1,200

1,400

2018年

6月期

2019年

6月期

2020年

6月期3Q

百万円四半期別経常利益4Q

3Q

2Q

1Q

Consolidated ordinary income ／ profit

FY2018

FY2019

FY2020

FY2018

FY2019

FY2020

Ordinary income ProfitMillion JPY

Million JPY

+10.1%▲0.7％

Unconsolidated financial highlights

for the third quarter



62 80116 138 124 127 14329

4248

5548 48

53

4462

7386

69 7381

42

33

2424

63 74

363

91

177217

261303 304

322363 368

0

100

200

300

400

2016年

6月期末

2017年

6月期末

2018年

6月期末

2019年

6月期末

2020年

6月期2Q

2020年

6月期3Q

2020年

5月14日時点

2020年

6月期目標

ｾｸﾞﾒﾝﾄ修正済

名従業員数の内訳（単体）

その他

ﾏｰｹﾃｨﾝｸﾞﾌﾟﾗｯﾄﾌｫｰﾑ事業

ｿﾘｭｰｼｮﾝ事業

ｱﾅﾘﾃｨｸｽ事業

The number of employees

＋22.6％

＋20.3％＋16.1％

FY2018

FY2019

FY20202Q

FY2016

FY2017

FY2020Plan

The number of employees

■Digital Marketing■Solution■Analytics■Others

As of05/14/’20

FY20203Q


93 167 182315125

243 262

346

197

338 356

296

145

273

560

1,021

800

957

35.0% 42.6%

47.8%46.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

200

400

600

800

1,000

1,200

2018年

6月期

2019年

6月期

2019年

6月期3Q修正

2020年

6月期3Q

百万円四半期別セグメント利益

4Q

3Q

2Q

1Q

利益率

338 445 633360

545719459

682

701443

7241,600

2,3972,054

0

500

1,000

1,500

2,000

2,500

3,000

2018年

6月期

2019年

6月期

2020年

6月期3Q


4Q3Q2Q1Q

Analytics Business（1）

Net sales Operation IncomeMillion JPY

Million JPY

FY2018

FY2019

FY2020

FY2018

FY2019

FY2019


OperatingIncometo salesratio

+22.8％+19.6％

FY2020


198 205 204177 161

220280

204267 249

305 306338 360

459 443 445

545

682724

633

719 701

38

5558 60

37

4953 53

4149 51

4842

5255

46

36

46

55

45

35 37

45

0

10

20

30

40

50

60

70

80

0

100

200

300

400

500

600

700

800

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

顧客数百万円

売上高顧客数

Analytics Business（2）

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

■Net sales■The number of customersMillion

JPYCustomers


3492 114 16797

135155

13769

136157 137

101

131

301

495427 440

21.4%27.1%

33.3% 28.3%

0.0%

20.0%

40.0%

60.0%

0

200

400

600

2018年

6月期

2019年

6月期

2019年

6月期3Q修正

2020年

6月期3Q

百万円四半期別セグメント利益4Q

3Q

2Q

1Q

利益率

282 385 529357

438510327

458520441

5441,407

1,8261,559

0

500

1,000

1,500

2,000

2,500

2018年

6月期

2019年

6月期

2020年

6月期3Q

百万円四半期別売上高4Q3Q2Q1Q

Solution Business（1）

FY2018

FY2019

FY2020

FY2018

FY2019

FY2019


FY2020

+21.7%


+3.3%

Net sales Operation IncomeMillion JPY

Million JPY


108 109 117 123 109 110 110 114 119 125151 148 146 146 149 166 164 169 183

208 227 228 232

65

145104

145

77 89

140 150 141 120

182224

136

211178

276

222

269 275

336 302 282 288

0

6574

90 91101 108

124 127 127142 146 153 158

172183 188

175186

195 198 192 195 198

0

50

100

150

200

0

100

200

300

400

500

600


顧客数百万円

ストック型売上：月額サービス利用料、保守売上などフロー型売上：開発売上、人的支援売上など顧客数

Solution Business（2）

■Flow-type-sales■Stock-type-sales■The number of customers CustomersMillion

JPY

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020


65 85 120 14388

96126 123100

113

143176

6636

319 330389

442

24.2%

22.8%

35.9%36.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

0

100

200

300

400

500

2018年

6月期

2019年

6月期

2019年

6月期3Q修正

2020年

6月期3Q

百万円四半期別セグメント利益

4Q

3Q

2Q

1Q

利益率

301 336 388

331 358 409351 391

426333

3651,316

1,4501,224

0

500

1,000

1,500

2,000

2018年

6月期

2019年

6月期

2020年

6月期3Q


4Q3Q2Q1Q

Digital Marketing Business（1）

FY2018

FY2019

FY2020

FY2018

FY2019

FY2019


FY2020


Net sale Operation IncomeMillion JPY

Million JPY

＋12.7%＋13.4%


230 230 221 215 216 227 223 218 231 239 250 251 260283 292 286 290 287 294 291 300 300

318

20 11 13 41 58 62 64 61 44 53 53 59 4148 59 47 46 70

97 74 88 109109

125 126 124 127 123 130 138 136 130 136153 162 164 171 180 180 178 181

217 219 225 220 217

0

50

100

150

200

250

0

100

200

300

400

500


顧客数百万円

ストック型売上：月額サービス利用料、保守売上などフロー型売上：開発売上、人的支援売上など顧客数

Digital Marketing Business（2）

CustomersMillion JPY

■Flow-type-sales■Stock-type-sales■The number of customers

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

The Medium-term

Management Plan（FY2020～FY2023）


BrainPad’s Mission and Medium-term Corporate Vision

MISSION Unwavering mission since our foundation

Create a sustainable future by advancing data utilization

Corporate Vision Vision for the next medium-term management plan

Analytics Innovation CompanyContinue to produce advanced and practical data utilization results in business, customer experience, and operations to become the leading company of the data capital society which has an impact on the world


Basic Policies of the Next Medium-term Management Plan

Business environment assumptions in the next medium-term management plan

Basic policies of the next medium-term management plan

We recognize that the market surrounding the data utilization related business (AI, data analytics, digital marketing, etc.) will continue to grow by more than 20% per year while enveloping peripheral areas. (*1)

Due to the anticipated market expansion and the expected entry from start-up companies and adjacent industries, the demand for talent and personal services to support data utilization will continue to increase going forward.

(*1) Reference documents: March 2019 Fuji Chimera Research Institute, Inc. “2019 Overall Survey of AI Business”; December 2018 MIC Research Institute Ltd. “Business Analytics Market Outlook 2019 Edition”; February 2019 “ITR Market View: E-mail/Web Marketing Market 2019,” “ITR Market View: SFA/Integrated Marketing Support Market 2019”

Expand the organizational scale including the hiring and training of diverse personnel to meet the demand to provide the personal services and solutions which are essential to data utilization*The diverse talent required by our company will be described later

1

Strengthen cooperation with domestic and foreign technology firms through business alliances and investment in addition to our own R&D to accelerate data utilization using advanced technology

2

Enhance the systems for providing and demonstrating the comprehensive strengths required for data utilization in order to increase the advanced and practical data utilization results which have an impact on business

3


Target Value of the Next Medium-term Management Plan

FY2019（Result）

FY2023（Target） Growth rate

Net sales

Ordinary income

Ordinary incometo sales ratio

ROE

Employees

5,676

1,213

21.4％4years average

（FY2016-FY2019）21.2％

306

11,500

2,000

17.4％4years average

（FY2020-FY2023）About 20％

580～650

CAGR 19.3％

CAGR 13.3％

ー

ー

ー

Million JPY


Current AnalyticsBusiness

Current SolutionBusiness

Business Strategy: Cultivate the Comprehensive Data Utilization Strengths Which Create an Impact

Consulting and human support

Anal

ytic

sD

igita

l*

Current Digital MarketingBusiness

Expand support for practical data and AI utilization associated with

systemization/structuralization through continuous organization expansion and

capability improvements

Lengthen and enlarge projects by enhancing our abilities to respond and

make proposals targeting company management

Enhance consulting services in the digital area

Identify and introduce highly unique overseas analytics tools to the Japanese market

Create solutions (or products) from previous analytics results

Provide integrated solutions in the digital area which capture the needs of customer companies

Deepen major products and take on the

challenge of launching new products

Product provisionBased on the shortage of data utilization talent in Japan, the demand will only increase. The trend to demand human support when introducing tools is growing even stronger. As the number of companies entering the market increases, we will consistently provide services which focus on quality.

As good products continue to be created one after another by global vendors and open source, we will take the stance of selecting and skillfully applying those products which are most suitable to the needs of our customer companies. (We will develop solutions which do not exist in the market)Ap

proa

ch

*Digital: Area centered on the reform and support of digital marketing, which used to be called web marketing, within the area called digital transformation (DX)


Current Analytics Services

Current System Integration

Talent Strategy: Expand the Diverse Professional Talent Which Supports Our Comprehensive Data Utilization Strengths

Consulting and human support

Anal

ytic

sD

igita

l

Current Digital Marketing Services

Data Scientists / Data Analysts /AI and Machine Learning Engineers /

Data Engineers /Analysis Training Specialists, etc.

Marketers/Sales Personnel /AI Business Producers /

IT Business Consultants /System Architects / SEs /

Cloud Engineers /Infrastructure Engineers, etc.

Digital Marketing Consultants /Customer Success, etc.

Product Researchers /Product Marketers /

Product Sales Personnel /Product Introduction Consultants /

Technical Support, etc.

Analysis Service Development Engineers /

Technology Researchers /R&D, etc.

Product Planning /Software Development

Engineers /UI Designers, etc.

Product provision

Appr

oach

Cor

pora

te S

taff

Based on the shortage of data utilization talent in Japan, the demand will only increase. The trend to demand human support when introducing tools is growing even stronger. As the number of companies entering the market increases, we will consistently provide services which focus on quality.

As good products continue to be created one after another by global vendors and open source, we will take the stance of selecting and skillfully applying those products which are most suitable to the needs of our customer companies. (We will develop solutions which do not exist in the market)


Capital Policy: Investment (Including M&A) and the Direction of Shareholder Returns

1 Investment approach (including M&A) Consider M&A for the purpose of acquiring talent that can accelerate the organic growth

of existing businesses Consider investment and M&A for the purpose of investigating and implementing

advanced technologies as contributions to medium- to long-term growth*In addition to external investments, also consider and carry out new product development and the practical application of advanced technologies internally within reasonable limits

Initially focus on research and examination with an eye toward establishing expert personnel to promote investment and M&A

2 Direction of shareholder returns We recognize that the effective utilization of capital for business growth, including the

investments described above, is the highest priority issue for improving the enterprise value as expected by all shareholders

However, in the event that the effective utilization of capital makes no progress, consider share buybacks, dividends, and other shareholder returns from the perspective of avoiding imprudent decreases in ROE


Earnings Forecast for the Next Term (First Fiscal Year of the Next Medium-term Management Plan)

The earnings forecast figures for the next term (fiscal year ending June 2020, the first fiscal year of the next medium-term management plan) are scheduled to be released together with the announcement of financial statements in August of this year.However, while sales growth is being maintained, profit growth is forecast to be limited for the following reasons.（While we are aiming for sales growth of over 10%, because there are possibilities that growth may not reach 20% and the

amount of profit may be at roughly the same level as the current term, we are currently investigating）

【Factors behind the slowing sales growth and the limited profit growth】

1Increase in resource allocation to recruiting and training

2 Reevaluation of the pay system and restructuring

3 Investment in the office environment

Due to the intensifying competition to acquire talent in the data utilization field, our company is behind in some areas in securing the necessary personnel during the current medium-term plan period.To make up for this delay, we are drafting a plan to increase the allocation of human and financial resources to recruiting and training.

The employee turnover rate is decreasing, but the pay system including the incentive plan needs to be reevaluated in terms of both retaining existing employees and improving hiring efficiency.Moreover, we will also start restructuring to better demonstrate our comprehensive strengths.

In anticipation of a headcount increase during the next medium-term plan, facility related costs including office floor space expansion are expected to increase.

APPENDIX


Our values: The best way to create valuable data

A variety of IT related vocabulary has nowadays become popular and commonplace.

“It is however necessary to utilize this vocabulary in order to obtain efficiency and innovation.”

• BrainPad is a leading company of data utilization. We have been engaged with Business Creation&

Management Improvement since our establishment in 2004.

• Business Creation& Management Improvement are driven by the use of data derived from Analytics

and Engineering.

Big DataMachine Learning

IoT/IoEInternet of ThingsInternet of Everything

AIArtificial Intelligence

Prediction・Optimization

Data Scientist Deep LearningData Analytics

Data Utilization FinTech

MA （MarketingAutomation）


3 competences BrainPad can add unique value

Since its founding in 2004, BrainPad have supported utilizing data

for more than 1,000 companies. By utilizing an abundance of accumulated

knowledge, we can solve management issues for a wide range of industries.

BrainPad employs more data scientists than the any other company in Japan -

100 in-house specialists in total. Our Data scientists specialize in various

disciplines, and technical expertise across all industries, with a wealth of

analytical experience. We organize teams according to our customer's needs at

the highest analytical level.

Through technical experience and cutting-edge technology, BrainPad boasts the

ability to effectively ”shape" systems and software. The high level of technology

and expertise has been effectively proven with the creation of our No. 1 product

"Rtoaster" in the digital marketing domain

Data utilization for more than 1,000+ companies

100+ Data scientists

No.1 product in DMP Area


Our USP & Cutting Edge Capabilities

Verification of

feasibility & ROI

by Trial Analysis

Development of

Platform & algorithm analysis

to solve business challenge

Application to

actual business operations

&

Monitor and support

operation improvements

for

lasting business success

Visualization of business challenges

Assessment & Concept design

Our services can be applied to whole stages where big data analysis is necessary for solving business challenges.

The stages include concept design through to actual operations.

Our services

Strategic consulting firm Related product vendors specialize indigital marketing and analysis

Major systems integrated company（Current condition: lack of Analysis specialists ）

Major consulting firm （Strategy, organization. technology Outsourcing )（Current condition: pool of specialists analysis is small, and still accumulating knowledge of IT ）

The other company’s

Business domain


Build the entire infrastructure

for data utilization

・Plan data utilization

・Build analysis infrastructure

・Operations support

Our Service①：Big Data Utilization Service

BrainPad provides services that solve the following problems

by utilizing the knowledge of many professionals who specialize in managing big data.

Improve overall of PDCA

(in terms of marketing)

・Understand customer behavior

・Lead nurturing

・Measure effectiveness

・Optimization

Improve marketing and CRM based on

real time data

Optimize business processes

using analytics

・Sales

・Manufacturing

・Supply chain management

・New business

Develop human resource,

Build specialized structure

・A roadmap for autonomous data utilization

・Train human resources to be able to utilize data

・Develop specialized organization and structure

Reorganize and innovate businesses processes

through the use of AI and machine learning

Build platform for big data analysis

・Develop human resources to manage and utilize data professionally and accurately・Built Organization/ structure

Marketing Analytics

Specialists

（Consultant/advisor

・Data Scientist）

Machine Learning

/Deep Learning,

IoT, AI Specialist

（Data Scientist･ Engineer）

Analysis Environment & Software Production Specialist

(Product consultant・System engineer）

Corporate Training & HR

Development Specialist

（Consultant/advisor

・Instructor）

Specialists provide these services


Our Service②：Digital Marketing Service

High Value Products & Services

BrainPad provides expert digital marketing services.

These service includes; data analysis, system builds and implementation, and expert consultancy,

with the option of our Top-class digital marketing product:"Rtoaster" .

＋ Analysis ＋ System building ＋Consulting for implementation

Understand and develop customer requirements through analysis made conducted by our expert team (Data Scientists)

Build, modify and Repair systems to integrate with existing data, creating a more efficient system.

Implementation & operational support provided by our expert DM specialists.

AdNoteOperation supporting tool for Ads. The two features are auto reporting (20 report types) and a simulation for advertising budget allocation.



MarketingAutomation


Recommend engine

BrandwatchDiscover the underlying perceptions of consumers with social media data insights using AI.

Digital Consumer Intelligence





Mynd plusNatural language processing engine.Analyze context, abridge, etc.





Our Product：Specialist of utilizing dataMarketing



Mynd plusNatural language processing engine.Analyze context, abridge, etc.


BrandwatchDiscover the underlying perceptions of consumers with social media data insights using AI.

Digital Consumer Intelligence


MarketingAutomation

AdNoteOperation supporting tool for Ads. The two features are auto reporting (20 report types) and a simulation for advertising budget allocation..






Visualization & Business Intelligence ・ Augmented Analytics

BrainPad is the exclusive reseller in Japan The others In-house developed product

exQuickWithout using SQL, marketer, business person can obtain necessary data intuitively.

Intuitivedata extraction

TableauInteractive data visualizations.

Visualization

VizTactSupport business decisions with visual analytics enhanced by Machine Learning and Natural Language Processing.

Augmented Analytics

Analytical InfrastructureCloud

platform

SnowflkeData warehouse and data sharing solutions having completely new cloud-native architectures that are completely different from the existing data warehouses

CloudData Ware House

Microsoft AzureProvide necessary functions for utilization of Big Data on Cloud Platform.

Data mining & Machine learning


Recommend engine

SAP® Data InteligenceAn all-in-one platform that has the functions of gathering and managing data, processing data necessary for machine learning, and creating, managing, and operating machine learning models.

Machinelearning

WPS AnalyticsAn Integrated Modular System perform statistical and graphing functionality, and makes it possible to run many applications written in the SAS language.

SAS-compatiblesystem

UltiPadOptimization tool, satisfying large number of constraints working with predictive scores.

Optimizationengine

BrainRoboRPA (Robot Process Automation) software.Improve efficiency of enterprises’ business process.

Robot processautomation

Optimization RPA applications

In-house product


420 625 800 1,078 1,295 1,327 1,588 1,740 1,887 1,6049271,320 1,282

1,436 1,386 1,5651,928

2,5913,786

3,232

1,347 1,946 2,0822,514 2,680 2,893

3,516

4,332

5,673

4,837

33.2%

0%

20%

40%

60%

80%

100%

0

1,000

2,000

3,000

4,000

5,000

6,000

2011年

6月期

2012年

6月期

2013年

6月期

2014年

6月期

2015年

6月期

2016年

6月期

2017年

6月期

2018年

6月期

2019年

6月期

2020年

6月期3Q

百万円単体売上高（ストック/フロー別）およびストック型売上高の比率

フロー型売上：開発売上、一括計上型のライセンス売上などストック型売上：月額サービス利用料、保守売上など売上高に占めるストック型売上高の比率

Stock-type ／ Flow-type-sales

FY2017

FY2018

FY2019

FY2015

FY2016

FY2013

FY2014

FY2011

FY2012

Stock-type ／ Flow-type salesMillion JPY

■Flow-type-sales■Stock-type-sales■Stock-type-sales rate of net sales

FY20203Q


458 660 734 723 818 818 865 1,1271,600

2,397

290317

633 730 885 915 8991,209

1,407

1,826

158370

580 629838 980 1,135

1,192

1,325

1,454

72 130368 420

646906

1,347

1,946 2,0822,541 2,713 2,899

3,528

4,332

5,677

0

200

400

600

800

1,000

1,200

1,400

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2005年

6月期

2006年

6月期

2007年

6月期

2008年

6月期

2009年

6月期

2010年

6月期

2011年

6月期

2012年

6月期

2013年

6月期

2014年

6月期

2015年

6月期

2016年

6月期

2017年

6月期

2018年

6月期

2019年

6月期

経常利益（百万円）売上高（百万円）

連結売上高、連結経常利益の推移

ﾏｰｹﾃｨﾝｸﾞﾌﾟﾗｯﾄﾌｫｰﾑ事業売上高

ｿﾘｭｰｼｮﾝ事業売上高

ｱﾅﾘﾃｨｸｽ事業売上高

経常利益

History of Net Sales／Ordinary income

FY2017

FY2018

FY2019

FY2015

FY2016

FY2013

FY2014

FY2011

FY2012

Consolidated net sales ／ Ordinary income

Net Sales（Million JPY）

FY2010

FY2009

FY2008

FY2007

FY2006

FY2005

■Digital Marketing

■Solution

■Analytics

●Ordinary income

Ordinary income（Million JPY）


This material is unpublished document protected by Copyright Law of Japan and each country.This material contains confidential information.The contents of this material all information here in may not be disclosed to any third party.Except for evaluation purposes, copying or publishing any or part of information herein is strictly prohibited.Using or disclosing any or part of information from Brainpad inc. without prior written authorization is strictly prohibited.

BrainPad Inc.Shirokanedai Bldg.3-2-10 Shirokanedai Minato-ku,Tokyo 108-0071, Japan+81-3-6721-7001www.brainpad.co.jp [email protected]

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