© 2021 Ubiquitous AI Corporation. All rights reserved.
This presentation is for informational purposes only. Ubiquitous AI Corporation
makes no warranties, express or implied, in this summary.
Materials for Financial Performance Reporting
First Quarter for FY Ending March 2022
Satoshi Hasegawa, President
August 13, 2021
Ubiquitous AI Corporation (UAC)
© 2021 Ubiquitous AI Corporation 2
Index
◼Summary of Financial Performance for Q1 FY2022
◼Business Trend and Actions by Segment and Product Area
◼Topics
Summary of Financial Performance for FY 2022 Q1
© 2021 Ubiquitous AI Corporation 4
SoftwareProductBusiness
SalesOperating Income
14111
In the fast device boot-up business, a royalty income from in-vehicle products recovered. In the Database business, sales increased on a year-on-year basis thanks to an increasing royalty income from customers in the industrial area.
SoftwareDistribution Business
SalesOperatingLoss
19382
Sales increased on a year-on-year basis supported by an increasing royalty income from existing customers.
SoftwareServiceBusiness
SalesOperatingLoss
674
Sales from content licensing related to in-vehicle equipment increased. Commissioned development also made steady progress, recording an increase of sales on a year-on-year basis.
Summary by Segment
Financial Performance
Summary of Financial Performance for Q1 of FY 2022 (accumulated)
• Both sales and operating profit in Q1 increased on a year-on-year basis but are still lower than the performance achieved for Q1 of FY ended March 2020 due to the COVID-19 pandemic.‒ Consolidated sales: 402 million yen (+27.9% Y/Y, -20.5% against FY 2020)‒ Consolidated operating loss: 75 million yen (-158 million yen for Q1 FY 2021, -31 million
yen for Q1 FY 2020)
(Million yen)
© 2021 Ubiquitous AI Corporation 5
◼ Changes were made on a method of calculating the segment profits for two business segments of Ubiquitous AI Corporation
– Background
• Since the merger of former AI Corporation (in July 2018), we made efforts to unify common business areas in
both companies.
– Allocation of indirect departmental costs
• Indirect departmental costs: personnel costs in sales, marketing & communication, and administration
departments and departmental costs of these departments
• Allocation ratio: Adjusted to 1:1 given sales and gross margin in the initial budget for the FY ending March 2022
◼ Affected amount due to the changes in method of calculating segment profits
Changes in Method of Calculating Segment Profits
(Unit: Million yen)
FY2022 1Q FY2021 1Q Change FY2020 1Q Change
Before Adj. After Before Adj. After Before After Before Adj. After Before After
Adj. Adj. Adj. Adj. Adj. Adj. Adj. Adj. Adj. Adj.
Sales 141 141 95 95 46 46 150 150 -8 -8
Segment Profit -2 13 11 -42 15 -27 40 38 14 17 32 -17 -21
Sales 193 193 164 164 28 28 270 270 -76 -76
Segment Profit -68 -13 -82 -59 -15 -74 -9 -7 -9 -17 -27 -59 -54
Sales 67 67 54 54 13 13 86 86 -18 -18
Segment Profit -4 -4 -3 -3 -1 -1 15 15 -19 -19 (Note) The segment profits for the FY 2021 and FY 2020 are before the amortization of goodwill for easy comparison, and the allocation ratio is set as the same rate as that in FY 2022.
Software Service
Business
Software Product
Business
Software Distribution
Business
FY2022 FY2021 FY2020
Segment Product Area 1Q 1Q Change 1Q Change
(Conso- (Conso- (Conso-
lidated) lidated) lidated)
Connectivity & Security 12 11 5.9% 31 -61.7%
Quick Boot 98 66 47.3% 95 3.0%
Database 31 17 79.9% 23 34.4%
Sub-Total 141 95 48.3% 150 -5.7%
193 164 17.4% 270 -28.4%
Software Service Business 67 54 24.2% 86 -21.5%
Total 402 314 27.9% 506 -20.5%
Software
Product
Business
Software Distribution Business
Comparison to FY 2021 Q1Sales by Segment and by Product Area
© 2021 Ubiquitous AI Corporation 6
(Unit: Million yen)
FY2022 FY2021 FY2020
1Q 1Q Change 1Q Change
(Consolidated) (Consolidated) (Consolidated)
Sales 141 95 46 150 -8
Segment Profit(Loss) 11 -27 38 32 -21
Sales 193 164 28 270 -76
Segment Profit(Loss) -82 *1 -101 19 *1 -53 -28
Sales 67 54 13 86 -18
Segment Profit(Loss) -4 *2 -29 24 *2 -11 -45
Sales 402 314 87 506 -103
Segment Profit(Loss) -75 *3 -158 82 *3 -31 -43
Software Product
Business
Software Distribution
Business
Software Service
Business
Total
Comparison to FY 2021 Q1Sales and Profit by Segment
© 2021 Ubiquitous AI Corporation 7
*1 Including amortization of goodwill of 26 million yen as a result of acquiring shares of former A.I. Corporation. *2 Including amortization of goodwill of 25 million yen as a result of acquiring shares of AIM Corporation.*3 Including the amortization of goodwill of 52 million yen/
(Unit: Million yen)
FY2022 FY2021 FY2020
1Q 1Q Change 1Q Change
(Consolidated) (Consolidated) (Consolidated)
Sales 141 95 46 150 -8
Segment Profit(Loss) 11 -27 38 32 -21
Sales 193 164 28 270 -76
Segment Profit(Loss) -82 *1 -74 -7 *1 -27 -54
Sales 67 54 13 86 -18
Segment Profit(Loss) -4 *2 -3 -1 *2 15 -19
Sales 402 314 87 506 -103
Segment Profit(Loss) -75 *3 -105 29 *3 20 -96 Total
Software Product
Business
Software Distribution
Business
Software Service
Business
Comparison to FY 2021 Q1:Sales and Profit before Amortization of Goodwill by Segment
© 2021 Ubiquitous AI Corporation 8
(Unit: Million yen)
Note: for easy comparison to the FY 2022, we do not include,*1 Including amortization of goodwill of 26 million yen as a result of acquiring shares of former A.I. Corporation. *2 Including amortization of goodwill of 25 million yen as a result of acquiring shares of AIM Corporation.*3 Including the amortization of goodwill of 52 million yen.
© 2021 Ubiquitous AI Corporation 9
Comparison to FY 2021 Q1: Sales
◼ Sales: Increased on a Y/Y basis against FY 2021, but still lower than the pre-COVID FY 2020 level– SP Business: Recorded a YoY increase of royalty income from fast boot-up products mainly for in-vehicle customers and database
products for industrial customers, although we failed to completely absorb the decrease caused by the transition of commissioneddevelopment projects in the Connectivity & Security business to the SS business.
– SD Business: While a royalty income increased on a YoY basis mainly in wireless products and notebook PC-relate products, it has not reached the level recorded for the FY ended March 2020.
– SS Business: While sales from contents licensing for in-vehicle customers and commissioned development increased on a YoY basis, it has not reached the level recorded for the FY ended March 2020.
SP -8
314
506
+13
314
506
+2
402
+46
+28+1
+17 +67 402
Comparison to FY 2020 1Q
402
SD -76
SS -18
Reference
402Other
-13
Royalty -48
Commissioneddevelopment
-28
One-timecontractfees -13
By Business Segment By Type of Business
(Unit: Million yen)
(Note)SP=Software Product BusinessSD=Software Distribution BusinessSS=Software Service Business
Increase of Sales in SP
Increase of Sales in SD
Increase of Sales in SS
ActualFY 20211Q
Comparison to FY 2020 1Q
ActualFY 20211Q
Increase of sales from one-time
contract fees
Sales fromcommissioneddevelopment
Sales froma royalty income
Sales fromOther
businesses
Reference
© 2021 Ubiquitous AI Corporation 10
Comparison to FY 2021 Q1: Operating Profit
By Expense Item
-158
-75
+50
-6-14
-8
-158
-75
+38
-7
-1
+10
◼ Although operating profit increased on YoY basis, it has not reached the level recorded for the FY ended March 2020.
– Although the operating profit increased on a YoY basis supported by the increase of royalty income in the SP business and the completion of amortization of goodwill, it has not recovered to the FY 2020 level due to the decrease of sales of other products.
+52expenses+6(Recruitment)Advertising +1
(Note) Changes of segment profit in the SD business and SS businessare before the amortization of goodwill for easy comparison.
-31
SP-21
SD-54
SS-19
-75
-31
+52
-75
+52
Out-Sour-cingcost +9
+52
Other sales-57
labor cost-20
Other costs
-6
By Business SegmentBreak-Even Point
Break-Even Point
(Unit: Million yen)
Increase of Profit in SP
Decrease of Profit in SD
Decrease of Profit in SS
Decrease of Amortization of Goodwill
Amortizationof Goodwill
Amortizationof Goodwill
Comparison to FY 2020 1Q
ActualFY 20211Q
Comparison to FY 2020 1Q
ActualFY 20211Q
Causedby sales decreaseFroma royalty income
Caused by other sales decrease
Decreaseof out-sourcingcost
Increase of labor
cost
Increase of other costs
Decreaseof Amor-tization of Goodwill
Royalty -20
© 2021 Ubiquitous AI Corporation 11
FY2022 FY2021 Change FY2020 ChangeQ1 Q1 Q1
Sales 402 314 87 506 -103
Cost of Sales 247 209 38 281 -33
Gross Margin 155 105 49 225 -70
SG&A 230 263 -32 257 -26
Operating Income(Loss) -75 -158 82 -31 -43
Non-Operating Profit 6 2 3 1 4
Ordinary Income(Loss) -69 -155 86 -30 -38
Extraordinary Income(Loss) - - - - -
Income Taxes 11 23 -12 5 6
Net Income(Loss)* -80 -179 98 -35 -45
Consolidated Profit and Loss Statement
*Profit(Loss) attributable to owners of the parent
(Unit: Million yen)
© 2021 Ubiquitous AI Corporation 12
End of June End of March Change
2021 2021
Cash and deposits 877 828 48Notes and accounts receivable-
trade- 676 -676
Notes and accounts receivable-
trade & Contract assets402 - 402
Securities 900 800 100
Inventories 7 5 1
Prepaid expenses 49 46 2
Other 32 56 -24
Current assets 2,269 2,414 -145
Noncurrent assets 385 393 -7
Assets 2,654 2,807 -153
Consolidated Balance Sheet (Asset Section) (Unit: Million yen)
© 2021 Ubiquitous AI Corporation 13
End of June End of March Change
2021 2020
Accounts payable-trade 76 131 -55
Accounts payable-other 16 47 -30
Advances received - 73 -73
Contract liabilities 74 - 74
Other 63 46 17
Current liabilities 231 298 -67
Noncurrent liabilities 80 80 -
Capital stock 1,483 1,483 -
Capital surplus 1,453 1,453 -
Retained earnings -667 -586 -80
Other 73 78 -4
Net assets 2,343 2,429 -85
Liabilities and net assets 2,654 2,807 -153
Consolidated Balance Sheet (Liabilities and Net Assets Section)(Unit: Million yen)
© 2021 Ubiquitous AI Corporation 14
Achievement to Full FY Forecast (Consolidated)
Sales
Operating
Income(Loss)
Ordinary
Income(Loss)
Net
Income(Loss)
Full FY
Forecast
2,196
80
80
57
Q1 Actual
402
-75
-69
-68
Achievement
Ratio (%)
18.3
-
-
-
(Unit: Million yen)
Business Trend and Actions by Segment and Product Area
© 2021 Ubiquitous AI Corporation 16
Software Product Business
Connectivity & Security◼ Summary of FY 2022 Q1
• Recorded sales from an R&D project related to security implementation for IoT device.
• Recorded a royalty income from an existing customer in the digital imaging area.
• Recorded sales of a new product development project from an existing customer related to HEMS.
• Acquired a patent for our security technology related to the life cycle management of IoT devices that is used for “Edge Trust.
(Note) The graph shows sales and profit in the entire Software Product Business and sales only related to the Connectivity and Security area.
◼ Business Direction• Enhancing collaboration with partners in the various fields
from semiconductor devices to cloud services, with focusing on “Edge Trust” for accelerating the business development in the IoT security area.
• Expanding the business for digital contents transmission using “HDPC/DTCP” and “Securus” as well as the protection technology for in-vehicle IVI.
△50
-
50
100
150
+46
141
95
-27
C&S11
C&S12
+0 11
+38
■Sales■Segment
Profit(Loss)
-50
(Million yen)
FY2021 Q1 FY2022 Q1
-50
-
50
100
150
© 2021 Ubiquitous AI Corporation 17
Software Product Business
Fast Device Boot-up
◼ Business Direction• Enhancing sales and marketing for the overseas market.
• Expanding sales of in-vehicle products other than in-vehicle information terminals
• Promoting high value-added solutions and cross-sell by combining various functions such as a file system that can work at the time of power discontinuity, virtualization technology, and secure boot.
• Continuing the development of next generation technologies.
◼ Summary of FY 2022 Q1• Recorded a steady royalty income from existing domestic
and overseas customers in the in-vehicle equipment area, and overseas customers in the consumer products area
• Continue large and middle-sized development projects with several customers in the in-vehicle terminal area such as a car navigation system.
• The accumulated number of shipped licenses of “Ubiquitous QuickBoot”, a fast device boot-up solution for Linux/Android exceeded 50 million unites globally as of the end of May 2021.
+46141
95
-27
+31
11
+38
QB66
QB98
FY2021 Q1 FY2022 Q1
■Sales■Segment
Profit(Loss)
(Million yen)
(Note) The graph shows sales and profit in the entire Software Product Business and sales only related to the Connectivity and Security area.
-50
-
50
100
150
© 2021 Ubiquitous AI Corporation 18
◼ Summary of FY 2022 Q1• Recorded a royalty income from existing customers in
the area of industrial machines
◼ Business Direction• Ensuring a stable profit by support services to
existing customers• Increasing sales of products for in-vehicle
equipment, OA equipment, testing equipment, and industrial machines
Software Product Business
Database
(Note) The graph shows sales and profit in the entire Software Product Business and sales only related to the Connectivity and Security area.
(Million yen)
FY2021 Q1 FY2022 Q1
+46
141
95
-27
+13
11
+38
DB17
DB31
■Sales■Segment
Profit(Loss)
© 2021 Ubiquitous AI Corporation 19
Software Distribution Business
◼ Summary of FY 2022 Q1• BIOS products: Recorded a royalty income of “Insyde H2O *1” from an
existing customer that provides notebook PCs.
• Quality improvement supporting tools: Recorded a licensing fee of
“CodeSonar*2” from existing customers in the areas of in-vehicle
equipment and industrial machines.
• Wireless products: Recorded a royalty income of “Blue SDK *3” from
an existing customer in the area of in-vehicle equipment.
• AI Solution Products: Recorded a royalty income of “CoDriver *4” from
an existing customer in the area of in-vehicle equipment.
• Others: Recorded a royalty income from new and existing customers
for various products we are offering.
◼ Business Direction• Exploring products and technologies that can meet the changes
triggered by the COVID-19 pandemic.
• Acquiring overseas vendors that have excellent marketability.
• Enhancing sales of new products that have been developed/acquired in the previous FY.
• Focusing on sales of tool products such as software quality improvement supporting tools that can highly contribute to a stable income stream under the annual licensing agreements.
(Note) Changes of segment profits are before the amortization of goodwill for easy comparison.
△100
-
100
200
+28
193
164
-74 -82-7
FY2021 Q1 FY2022 Q1
■Sales■Segment
Profit(Loss)
(Million yen)
-100
*1 Insyde H2O: BIOS based on C-driver that implements the ‘EFI/UEFI’ specifications
*2 CodeSonar:Tool that can statically analyze operational malfunction and vulnerability of software at the time of compiling a source code and detect bugs.
*3 BlueSDK: Bluetooth protocol stack*4 CoDriver: Driver monitoring system
© 2021 Ubiquitous AI Corporation 20
Software Service Business
◼ Summary of FY 2022 Q1• Recorded various commissioned development sales from
existing customers
• Recorded a licensing fee for “YOMI Data” content for in-vehicle equipment
◼ Business Direction• Maintaining existing profit backed by close collaboration
with Gracenote in the U.S. as well as developing new business through a proposal of business cooperation
• In addition to projects with existing customers and partners, realizing a sales synergy effect throughout the group based on engineering service projects for our group products and customers
△1△20
-
20
40
60
8067
54
-3 -4
+13
FY2021 Q1 FY2022 Q1
■Sales■Segment
Profit(Loss)
(Million yen)
-20
Examples of using “YOMI Data”(artist & sort)
(Note) Changes of segment profits are before the amortization of goodwill for easy comparison.
Topics
© 2021 Ubiquitous AI Corporation 22
Fast device boot-up solution for Linux®/Android™
Accumulated number of shipped licenses of “UbiquitousQuickBoot” exceeded 50 million units (June 14)
◼Accumulated number of licenses shipped◼Product Profile
• Our proprietary fast device boot-up solution developed in-house
• Easily speeding up the boot-up time of devices, contributing to the energy saving and supporting better user experience
<Introduction effects and examples of applications>
Acquired the basic patent in May 2012
7,000
11,000
13,000
15,000
18,000
21,500
32,000
50,200
-
10,000
20,000
30,000
40,000
50,000
2016 / 01
2017 / 01
2017 / 08
2017 / 12
2018 / 04
2019 / 12
2018 / 12
2021 / 05
(Thousand unit)
May 2018: Compatible with Intel ®Cyclone® V SoC
Apr. 2018: Compatible with x86 Architecture Apollo Lake
Oct. 2017: Launch “Ubiquitous QuickBoot R2.0” Product line up of Lite / Pro / AutomotiveCompatible with x86 Architecture Intel Atom®
Aug. 2017: Start marketing of “Ubiquitous QuickBoot SafeG Pack”
Dec. 2016: Compatible with 64-bit, SecureBoot, Renesas R-Car H3/M3
Jan. 2019: Business collaboration with Tuxera
More adoption in the overseas market, leading to a sharp increase of shipment in the last one year that led to more than 12 million units shipped
Introduction effects Example of applications
Quickly start various processing tasks such as saving and monitoring
Mitigate stress of users who are waiting for the boot-up
Can operate with zero standby current thanks to quick boot-up
Improve productivity by reducing the testing time per unit at the time of product inspection
Monitoringcamera
Digital camera
Drive recorder
Car navigation system
TV PC/Various console
Mobile rooter
Digital book
multifunction printer/printer
Testing equipment
Production of products
© 2021 Ubiquitous AI Corporation 23
Acquired patent evaluation for the basic technology of “Edge Trust” (June 15)
◼Details of the patent
• It is a (deactivation) technology by which a “Device use certificate” issued for securely using a cloud service on an IoT device is automatically deleted by the IoT device itself when the cloud service is terminated or the IoT device is disposed.
◼Summary of Patent Evaluation
• Patent Application No.P2019-108731
• Name of InventionInformation processing device and its control program
• Patent applicantsUbiquitous AI Corporation, Toppan Inc.
Life Cycle Management of IoT devices by Edge Trust
Acquired the patent for technology that can realize the security of IoT device throughout the life cycle
Life cycle of IoT device
EOL
IoT Service A
Update Disposal
IoT Service B
DLCM Service
Activate
DLCM Agent
Planning Development Manufacturing Start of Use Maintenance
• Device management depending on the usecondition of IoT device:- User management and connection control
using a unique ID and certificates;- Update/deletion of certificates in response
to the service connection conditions;- Secure update of firmware
• Authentication processing and device registration that are necessary for connecting the IoT device to a cloud service
<Problems that can be solved by Edge Trust>
Termination of Use Reuse/Disposal
• Secure implementation accounting for the security best practice and related standards
• Root of Trust construction that enables to collaborate with systems
• Privacy information management using secured hardware.
• Writing of devicespecific information
• Production andshipment control using a unique ID
Appendix
© 2021 Ubiquitous AI Corporation 25
Disclosures in FY 2022 Q1
Announcement Date Press Release
Q1
June 14
◼ Ubiquitous AI announced that the accumulated number of shipped licenses of “Ubiquitous QuickBoot”, a fast device boot-up solution for Linux/Android™, exceeded 50 million unites globally.-- Introduction by the in-vehicle information devices stably increased; expanded shipment for overseas market --
June 15◼ Ubiquitous AI and Toppan Inc. acquired the patent evaluation for the basic technology of “Edge Trust”.
- Acquired the patent for technology that can realize security throughout the life cycle of IoT device