Tobila : Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending October 31, 2021

Non-consolidated Financial Results for the Third Quarter of the Fiscal Year Ending October 31, 2021

(Nine Months Ended July 31, 2021)

		[Japanese GAAP]
		September 10, 2021
Company name: Tobila Systems Inc.	Listing: Tokyo Stock Exchange, First Section
Securities code:	4441	URL: https://tobila.com
Representative:	Atsushi Akita, Representative Director and President
Contact:	Toshihito Goto, Managing Director and CFO
	Tel: [phone]

Scheduled date of filing of Quarterly Report:								September 10, 2021
Scheduled date of payment of dividend:					-
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:								Yes (Video distribution is planned)
							(All amounts are rounded down to the nearest million yen)
1. Non-consolidated Financial Results for the Third Quarter (November 1, 2020 - July 31, 2021) of the
Fiscal Year Ending October 31, 2021
(1) Results of operations												(Percentages represent year-on-year changes)
	Net sales				Operating profit	Ordinary profit			Profit
	Million yen	%			Million yen	%	Million yen	%		Million yen	%
Nine months ended Jul. 31, 2021	1,057		17.2			450	19.7	449	28.6			310	28.2
Nine months ended Jul. 31, 2020	902		24.9			376		18.1	349	14.5			241	16.1
	Net income per share	Diluted net income per share
				Yen						Yen
Nine months ended Jul. 31, 2021				29.94								29.29
Nine months ended Jul. 31, 2020				23.56								22.67
(2) Financial position
	Total assets	Net assets	Equity ratio
		Million yen	Million yen					%
As of Jul. 31, 2021				1,730				1,403					81.1
As of Oct. 31, 2020				1,647				1,347					81.7
Reference: Shareholders' equity (million yen) As of Jul. 31, 2021:	1,403		As of Oct. 31, 2020:	1,347
2. Dividends
									Dividend per share
		1Q-end	2Q-end					3Q-end	Year-end		Total
				Yen	Yen		Yen			Yen			Yen
Fiscal year ended Oct. 31, 2020				-		0.00			-			10.80			10.80
Fiscal year ending Oct. 31, 2021				-		0.00			-
Fiscal year ending Oct. 31, 2021																11.70			11.70
(forecasts)
Note: Revision to the most recently announced dividend forecast: None

3. Earnings Forecast for the Fiscal Year Ending October 31, 2021 (November 1, 2020 - October 31, 2021)

(Percentages represent year-on-year changes)

			Net sales			Operating profit		Ordinary profit		Profit				Net income per share
			Million yen	%		Million yen	%		Million yen	%		Million yen	%		Yen
	Full year		1,410		14.2		517		3.7		515		9.3		352		9.2		33.84

Note: Revision to the most recently announced earnings forecast: None

* Notes

1. Application of special accounting methods for presenting quarterly non-consolidated financial statements: None
2. Changes in accounting policies and accounting-based estimates, and restatements
3. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
4. Number of outstanding shares (common shares)
5. 1. Number of shares outstanding at the end of the period (including treasury shares)

As of Jul. 31, 2021:	10,477,500 shares	As of Oct. 31, 2020:	10,385,400 shares
2) Number of treasury shares at the end of the period
As of Jul. 31, 2021:	95,950 shares	As of Oct. 31, 2020:	50 shares
3) Average number of shares outstanding during the period
Nine months ended Jul. 31, 2021:	10,358,183 shares	Nine months ended Jul. 31, 2020:	10,270,951 shares

• The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts, and other special items

Cautionary statement with respect to forward-looking statements

Forecasts of future performance in these materials are based on assumptions judged to be valid and information available to Tobila Systems' management at the time these materials were prepared, but are not promises by Tobila Systems regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons.

	Tobila Systems Inc. (4441) Financial Results for the Third Quarter of FY10/21
Contents of Attachments
1. Qualitative Information on Quarterly Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Earnings Forecast and Other Forward-looking Statements	3
2. Quarterly Non-consolidated Financial Statements and Notes	4
(1)	Quarterly Non-consolidated Balance Sheet	4
(2)	Quarterly Non-consolidated Statement of Income	5
(3)	Notes to Quarterly Non-consolidated Financial Statements	6
	Going Concern Assumption	6
	Significant Changes in Shareholders' Equity	6
	Segment and Other Information	6
	Subsequent Events	7

1

Tobila Systems Inc. (4441) Financial Results for the Third Quarter of FY10/21

1. Qualitative Information on Quarterly Financial Performance

(1) Explanation of Results of Operations

The economic outlook remains uncertain as the spread of the COVID-19 infections continues, and a state of emergency and priority measures to prevent the spread of the disease have been reimposed. With vaccinations in full swing, vaccination-related fraud and spam activities through phone calls have increased significantly across the country. The perpetrators, through phone calls, promise to make priority appointments for vaccine shots on behalf of people for a fee.

The Tokyo Olympics began in July 2021, but without spectators in attendance. As a result, many people watched the games on TV or via internet streaming. Simultaneously, phishing scams emerged aiming to trick people into entering their credit card details under the guise of being a live Olympic broadcast. In this manner, specialized fraud schemes are becoming ever more sophisticated as the world continues to change.

There is thus a growing need to protect not only oneself, but also one's family and friends from these special frauds. In response, we have been focusing on the deployment of our spam filter service to provide an effective countermeasure in deterring crime. For further growth of our business, we have taken actions to enlarge service alliances, strengthen cooperation and deepened our cooperative relationships with them, and also increased the number of monthly active users Note. At the same time, we have diversified our marketing activities for our cloud- based IP phone service, "TobilaPhone Cloud," to increase sales and won the 'Leader' awards in the both the PBX and IVR (Interactive Voice Response) categories of the "ITreview Grid Award 2021 Summer."

As a result, net sales increased 17.2% year-on-year to 1,057,966 thousand yen in the first nine months of the fiscal year ending October 31, 2021. Operating profit increased 19.7% to 450,446 thousand yen, ordinary profit increased 28.6% to 449,510 thousand yen and profit was up 28.2% to 310,124 thousand yen.

Note: Monthly active users (MAU) are the number of users of our products and services who access our server at least once a month to update a blocked phone number list automatically or to activate our app or other services. If a person uses multiple devices and each device has a separate agreement, the person is counted as different users.

MAU is an important KPI for determining the contribution of our products and services to eliminating problems caused by fraud and spam activities. Our revenue is, however, not always directly affected by an increase or decrease in MAU because contracts with business clients such as telecommunications companies have different terms.

Business segment performance was as follows:

Fraud and spam prevention services

There are three service categories in this segment. A filtering service that blocks fraudulent and other malicious calls on mobile phones is the core business. The other categories are a filtering service for landline phones and TobilaPhone Cloud, a filtering service for phones used by businesses. We continued to focus on building an even larger and more powerful foundation for the provision of filtering services.

As a result, sales in the first nine months were 997,118 thousand yen, up 20.2% from one year earlier, and segment profit increased 19.1% to 673,523 thousand yen.

Others

Other services include a website design and operation support service, development projects outsourced by other companies and other activities. We do not intend to increase the scale of operations in this segment. Sales in the first nine months decreased 16.8% from one year earlier to 60,847 thousand yen, and the segment profit was 36,743 thousand yen, down 9.5%.

Total operating profit is the sum of the profit of the two segments minus corporate expenses, which are not allocated to the reportable segment. Corporate expenses mainly consist of selling, general and administrative expenses that are not attributable to the reportable segment. In the first nine months, corporate expenses increased 13.0% from

2

Tobila Systems Inc. (4441) Financial Results for the Third Quarter of FY10/21

one year earlier to 259,820 thousand yen mainly because of higher administrative expenses because of the larger scale of operations.

1. Explanation of Financial Position Total assets

Total assets increased 82,795 thousand yen from the end of the previous fiscal year to 1,730,760 thousand yen at the end of the third quarter of the current fiscal year. This was attributable mainly to a decrease of 38,783 thousand yen in cash and deposits, which was partially offset by increases of 20,295 thousand yen in notes and accounts receivable-trade, 40,029 thousand yen in investment securities, 15,368 thousand yen in long-term prepaid expenses and 39,079 thousand yen in intangible assets.

Liabilities

Total liabilities increased 26,649 thousand yen from the end of the previous fiscal year to 327,504 thousand yen. The main factors include decreases of 33,542 thousand yen in accounts payable-other and 22,724 thousand yen in income taxes payable, which were partially offset by a 78,307 thousand yen increase in advances received.

Net assets

Total net assets increased 56,145 thousand yen from the end of the previous fiscal year to 1,403,255 thousand yen. The main factors include the booking of profit of 310,124 thousand yen, a decrease of 112,161 thousand yen in retained earnings due to dividends paid and purchase of treasury shares of 154,563 thousand yen.

(3) Explanation of Earnings Forecast and Other Forward-looking Statements

We currently maintain the earnings forecast for the fiscal year ending October 31, 2021 that was announced on December 10, 2020.

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