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COVER_Presentation for New Investors

Avatar for COVER Corporation COVER Corporation
July 02, 2025
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COVER_Presentation for New Investors

Avatar for COVER Corporation

COVER Corporation

July 02, 2025
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  1. 3 Together, Let's Create Culture Loved by All. We are

    continuing to build a platform to bring together unique and diverse content creators. With the latest technology, users are exposed to new, exciting, high-quality experiences every single day. We bring about the best 2D entertainment loved by all, regardless of age, gender, and nationality. To bring all this to fruition, we continue to challenge the norm. Mission
  2. Company Overview Name COVER Corporation Capital 1,093 million yen Establishment

    June 13, 2016 CEO Motoaki Tanigo BoD Ikko Fukuda, Shuhei Ueda, Kimiyuki Suda, Yoichi Wada, Isao Miyajima, Chikako Ogura, Kenichiro Arai Employees 679 Business VTuber Production Business (Streaming/Content, Concerts/Events, Merchandising, Licensing/Collaborations) 4 ▪Earnings Structure (FY2025/3) Streaming/Content 22% Concerts/Events 18% Merchandising 47% Licensing/Collaborations 13% A virtual entertainment company that builds a unique revenue model by developing multi-faceted businesses, starting with VTubers
  3. What is VTuber? 5 Performer Avatar A real-life creator performs

    using a virtual avatar, either on online platforms such as streaming services or in offline environments such as live venues VTubers are creators for the new era who combine the real and virtual worlds and communicate with fans interactively
  4. 6 Commerce Activities via IP Building up Our VTuber IP

    and Fan Community Channel Membership*2, Super Chat *3 47.4% (YoY +65.1%) 13.2% (YoY +29.4%) 17.9% (YoY +39.1%) 21.5% (YoY +22.0%) A passionate fan community is expanding through daily streaming and live concerts of VTubers. Multifaceted commerce initiatives is going forward, utilizing the characteristics of virtual avatars From VTuber Agency to an Expanding IP Business Streaming / Content Merchandising Licensing / Collaborations Concerts / Events Major Rev. Sources Major Cost Items Services Revenue Mix *1 (vs Prev. Year) Livestreaming through streaming platforms Live events offline / online Real / digital merchandise IP license-out and Promotional support like tie-up ads. Tickets sales, Product sales In-house/External EC sales Royalties collected from licensees, Promotional fees from advertisers Platform Fees, Rev. share w/ VTubers Event production costs, Rev. share w/ VTubers Sales Commission, Raw Materials, Rev. share w/ VTubers Production Costs, Rev. share w/ VTubers *1 : Breakdown of FY2025/3 Revenue *2 : A system on YouTube whereby members pay a monthly fee to become channel members and receive badges, emotes, limited video distribution and other similar privileges *3 : A system that allows viewers to pay a fee to make their chat messages stand out when livestreaming is published using YouTube's live chat
  5. 7 VTuber Direct Market 105 billion yen *1 Global Anime

    Market 3.3 trillion yen *2 Global Content Market 123.6 trillion yen *3 N/A (#) *1: Refer to the VTuber market size forecast for 2025 from Yano Research Institute’s “Survey on the VTuber market” *2: Refer to the 2023 anime industry market (broadly defined anime market) from The Association of Japanese Animations “Anime Industry Report 2024” *3: Refer to the global market size of the content industry in 2019 described in "Basic Materials of the No. 23 New Capitalism Realization Conference" of the Cabinet Secretariat *4: From "Anime Industry Report 2024" by the Association of Japanese Animations. Using “TV animation production time,” and calculated on the assumption that each episode is 30 minutes long ▪ Expanded image of TAM in the VTuber market ▪ Annual supply of COVER-related YouTube content vs. annual supply of new titles in the Japanese anime market 0 5,000 10,000 15,000 20,000 25,000 30,000 FY2019/3 FY2020/3 FY2021/3 FY2022/3 FY2023/3 FY2024/3 FY2025/3 Annual supply of COVER-related YouTube content Annual supply of new titles in the Japanese anime market*4 The VTuber market has a structure similar to that of the anime market, but with its overwhelming content supply and interactivity, it maintains a passionate fan base and is expanding rapidly Rapid Growth of VTuber Market
  6. Structural Growth of hololive production 8 Reference: YouTube (as of

    March 31, 2025) hololive production Conventional influencer business models Number of affiliated VTubers 89 Total number of channel subscribers 97.15 million Number of VTubers with 1M+ subscribers 44 Average number of unique users (UU) 27.92 million Percentage of overseas viewers 30.1% ▪ hololive production ▪ Differences from conventional influencer business models Accumulation of production capabilities Revenue model Hit replicability • Economies of scale achieved through large- scale investments such as 3D motion capture studios • Continued development related to expressive technologies Production capabilities depend on individuals, and know-how is difficult to accumulate Multifaceted, including streaming, live, MD, licensing, TCG, and games Primarily driven by advertising and collaboration revenue Creates replicable hits backed by the production brand and loyal fan pool Dependent on a single channel such as individuals or groups The accumulation of production capabilities and diversification of revenue sources support sustainable growth
  7. High Recognition and Brand Awareness as Production 9 Source :

    User Local (as of March 31, 2025) Company A Company B *1 N/A 98.4 83.2 13.3 44 7 1 89 185 170 43,401 40,700 N/A *1: Comparison with the same period based on each company’s disclosed results or forecasts. N/A indicates that the figures have not been disclosed # of VTubers w/ 1M+ ch. Subs. Total # of ch. Subs. (MM) # of VTubers Yearly Revenue *1 (MM JPY) Recognition, popularity, and revenue are best-in-class within VTuber Industry (forecast)
  8. 0 5 10 15 20 25 30 35 ▪ Top

    10 female streamers by hours watched (2024 / World ranking / including non-VTuber) Reference: Stream Charts “Most Watched Female Streamers on 2024” # Name Hours watched 1 Usada Pekora 34,658,391 2 Sakura Miko 29,712,171 3 ironmouse 26,559,879 4 Hakui koyori 23,036,587 5 Ozora Subaru 21,601,988 6 mira 19,481,598 7 Emiru 16,683,595 8 amouranth 14,631,769 9 Jinnytty 14,384,329 10 Kyedae 14,189,824 (Million hours) 10 High performance in global streamer rankings Four of the top five female streamers in the world, including non-VTuber, are VTuber affiliated with our company
  9. Revenue Drivers and Profit Contribution by Service 11 Service Revenue

    (million yen) Revenue Drivers (YoY Growth Rate) Cost/ Investment Ratio Profit Contribution FY2024/3 FY2025/3 KPI FY2024/3 FY2025/3 YoY Streaming/Content 7,647 9,323 Average number of monthly UU (10 thousand) 2,043 2,792 +36.7% Large Small Total number of videos 91,779 118,953 +29.6% Concerts/Events 5,601 7,793 Number of visitors*1 340,000 520,000 +52.9% Medium- Large Small- Medium Number of concerts*1 10 15 +50.0% Merchandising 12,477 20,539 Total number of shipments (10 thousand) *2 270 400 +48.1% Medium Medium- Large Licensing/ Collaborations 4,440 5,744 Number of companies Approx. 280 Approx. 370 +32.1% Medium Large *1: Tallying of live performances hosted by the company during each period *2: Total number of shipments other than digital goods for each period In past fiscal years, attraction-related-KPIs grew significantly. In the commerce domain, which contributes significantly to profits, various KPIs grew steadily against the backdrop of progress in business development
  10. Extended reinvestment in content to reach even more potential fans

    and continue to expand our brand and the creator economy zone 12 Expansion of Creator Economic Zone through Extended Reinvestment >> Extended reinvestment while ensuring reproducibility >> << Improve engagement << Expand awareness among fans who enjoy entertainment content Development of mass- targeted content such as anime and games Participation in the VTuber community Deployment of IP content such as MD VTuber streaming for fans Forming a passionate fandom Provide content globally to diverse entertainment fan base Give back to creators and reinvest in content development Light fandom Middle fandom Core fandom
  11. 13 13 General content consumption VTuber creator economy Primary content

    Fans Provision Support/Consumption Primary content created by talents Derivative content created by fans Fans Provision Support/Consumption Fans support and consume provided content Talents and fans collaborate to co-create content Competitive Advantage that is Difficult to Replicate, Driven by the Expansion of the Creator Community The presence of a passionate creator community drives the brand’s expansion
  12. Brand Expansion Based on Creator Support and Co-creation 14 ※:

    Trends in the number of channel subscribers for affiliated VTuber channels, including official channels, at the end of each fiscal year, and the average monthly unique users for each fiscal year (Million) (Million) The success of top creators is helping to expand awareness among the mass audience ▪ Trends in number of YouTube channel subscriptions and average number of monthly unique users (UU)* ▪ Multifaceted activities of creators Streaming/Video • Usada Pekora is nominated for The Game Award • Short-form videos by multiple VTubers go viral (Houshou Marine, Juufuutei Raden, etc.) Music • Hoshimachi Suisei’s BIBBIDIBA recorded over 100 million views on YouTube • Live performances growing in scale (Hollywood Palladium, Nippon Budokan, Ariake Arena, K-Arena Yokohama,etc.) Games • Winner of eSports Awards due to contribution of “Shishiro Cup,” a game tournament project by Shishiro Botan • Hosting of projects by VTubers such as hololive GTA Events • Mori Calliope appears at Osaka Expo 2025 Opening • Number of visitors at 6th Fes/EXPO2025: 260 thousand people TCG • The company has continuously held national conventions as well as store conventions and social events, attracting a total of 150,000 people to date • Captures Tier 2 player population and popularity Collaboration • Increase in number of collaboration projects in various industries such as Expansion of tie-up projects in various fields such as Los Angeles Dodgers, McDonald's, Sony PlayStation 30th anniversary commercial, Capcom Monster Hunter, etc. 0 5 10 15 20 25 30 0 20 40 60 80 100 120 FY2022/3 FY2023/3 FY2024/3 FY2025/3 Camulative total number of channel subscribers (left axis) Average monthy unique users (right axis)
  13. 4,569 7,474 10,059 FY2023/3 FY2024/3 FY2025/3 15 ▪ Growth in

    overseas revenue ▪ Progress of overseas business-related KPIs FY2024/3 FY2025/3 Content supply quantity by overseas VTubers 8,517 9,295 Number of video views by overseas VTubers 750 million 930 million Number of overseas live performances*1 5 9 Number of merchandise shipments*2 540 thousand 740 thousand Number of companies of Licensing/Collaboration transactions Approx. 50 Approx. 70 (MM JPY) *1: Tallying of live performances including concert hosted by other companies during each period *2: Total number of shipments other than digital goods for each period Potential for Expansion Through Overseas Development The foundation for overseas business is expanding with the launch of new performers and progress in business development
  14. Types of and Outlook for Our Game/Metaverse Related Business 16

    Summary Revenue model holo Indie IP Licensing out to game developers Holoearth Development cost • Brand for derivative work games using our IP • Indie game creators, etc. can publish games using our IP under the relevant brand • Total number of released titles expanded to 22 Borne by creators, in principle The operating costs are borne by the Company Amortize assets recorded on the B/S at time of profit and loss (PL) Large part of cost is borne by developer companies Revenue share Revenue share • Development of original games through licensing out our IP to game development and management companies • Under development of multiple titles with external developers • The Company supervise original games and handle a part of promotion • Metaverse platform that provides fans with new experiences • In-house development from the viewpoint of development flexibility with a view to collaborating with our other services The Company’s revenue In gaming-related businesses, financial risks are managed in a decentralized manner by type. Several profitable titles have already been released under license-out to other companies
  15. 17 ▪ Update summary ⚫ A new service called “HoloEarth

    Marketplace” has been launched, allowing users to create and sell fashion items and stamps within Holoearth ⚫ Other items are added and fashion functions expanded Holoearth Ver1.0.0 was published in April 2025 and marketplace was officially released ▪ Future development plans ⚫ Strengthen cooperation with production to allow hololive VTubers to play in their usual appearance. Also plan to install virtual live performance and meet-and-greet functions. ⚫ A tracking mode is being developed that will allow users to manipulate their avatar's facial expressions and movements using a commercially available webcam connected to their PC. ▪ Immediate financial impact ⚫ Starting from the FY2025/3, operating expenses and amortization of software assets will be recorded on P&L statement ➢ Amortization began around October 2024 (amortization period: 5 years) ➢ Overall cost impact on P&L for FY2025/3 was approximately 500 million yen ➢ Impact for FY2026/3 envisaged to be 1,000 million yen (including 800 million yen of amortization cost) ⚫ Additional assets will be recorded for development costs in the phase after the start of amortization around October 2024 according to engineering and other operational work-hours, and those assets will be amortized as needed in line with releases. *Image shows contents under development
  16. Step 2 Focusing on the expansion of VTuber culture and

    diversified business development, advancing toward the growth stage necessary to achieve our mid-to-long term mission 19 Create a new content culture and global economic zone originating from Japan Step 3 Step 1 Milestones towards Mission Accomplishment Establish the VTuber business Evolution to VTuber business Expansion of creator economic zone ✓ Modeling the planning, production, and hit process of VTuber using video media, SNS, etc. ✓ Recognition and brand establishment of hololive Production ✓ Fostering a passionate fan community ✓ Media Mix such as MD and licensing out ✓ Promote cross-selling by marketing through diverse channels for product sales ✓ Widespread penetration among generations and regions familiar with anime culture and the culture of Oshikatsu (supporting your favorite things in various ways, such as admiring and supporting idols and characters) ✓ Expand to adjacent content areas such as anime and games ✓ Expand revenue opportunities for creators by diversifying products and services ✓ Reach even the mass population with low awareness of VTubers Focus areas Medium-term goal Establish reproducibility Details are described in p.7-10 Details are described in p.11 Details are described in p.12-17
  17. 708 1,107 2,152 1,756 2,423 2,422 4,423 4,394 3,601 4,190

    5,010 7,648 5,142 7,133 6,949 10,941 6,416 10,688 11,758 14,538 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 13,663 1,855 20,451 3,417 30,166 5,536 43,401 8,001 20 FY2022/3 FY2023/3 FY2024/3 FY2025/3 CAGR 47.0% ▪ Revenue and operating profit by fiscal year ▪ Quarterly Revenue by services FY2021/3 FY2022/3 FY2023/3 FY2024/3 FY2025/3 (MM JPY) Revenue Operating profit Ongoing Progress in Business Expansion Maintained high growth while expanding the fan base by enhancing functions through expanded reinvestment (MM JPY) Streaming/Content Revenue Licensing/Collaborations Revenue Concerts/Events Revenue Merchandising Revenue
  18. 21 MM JPY Financial Results for FY2025/3 Earnings Forecasts for

    FY2026/3 Full-year First-half Second-half Full-year First-half Second-half Revenue 43,401 17,104 26,296 52,500 22,750 29,750 Reference: Marginal profit* 18,711 7,832 10,879 21,714 9,021 12,692 Margin 43.1% 45.8% 41.4% 41.4% 39.7% 42.7% Operating profit 8,001 3,372 4,629 8,200 2,420 5,780 Margin 18.4% 19.7% 17.6% 15.6% 10.6% 19.4% Ordinary profit 7,962 3,301 4,660 8,200 2,420 6,150 Margin 18.3% 19.3% 17.7% 15.6% 10.6% 19.4% Net profit 5,559 2,120 3,438 5,700 1,679 4,021 Margin 12.8% 12.4% 13.1% 10.9% 7.3% 13.5% *: Marginal profit is calculated as “Revenue – Cost of sales(variable) – SG&A(variable)” FY2026/3 Performance Forecast While assuming continued revenue growth, due to the impact of upfront investment, operating profit is only a slight increase as of the beginning of the fiscal year Earnings Forecast for the first half of FY2026/3 • Profits for the first half are expected to fall below the same period of the previous fiscal year due to the seasonal nature of sales, which are concentrated in the second half and a short- term increase in fixed costs associated with business investments aimed at future growth • Under the new management structure, we will promote structural reforms such as personnel reassignments, business process reviews and optimization of SG&A costs, and strengthen our earnings base Upside Catalysts • Expansion of earnings in Japan and overseas for the TCG business, which is scheduled to launch in English version • SCM rationalization after the second half of the year by the transfer of logistics warehouses in the middle of the year • Expansion of business with large collaborating companies and licensees overseas • Expansion of related businesses by increasing brand awareness in music and games areas Downside Catalysts • Slowdown in overseas consumer demand related to changes in tariffs, cost of living and exchange rates Lower profits due to upfront expenditures (see below) • R&D in expressive technologies • Enhancement of systems to increase content supply • Enhancement of systems to improve SCM efficiency • Development of overseas business (operation of overseas bases, marketing, etc.) • Development of digital content business such as games/Holoearth • Enhancement of systems in administrative departments to strengthen management foundations
  19. 52500 -26436 26063 -17863 8200 3092 11292 22 ▪ Breakdown

    of FY2026/3 Forecasts Impact of Upfront Investment Expenditure on Operating Profit Forecast In FY2026/3, expansion of the Company's structure for sustainable growth and R&D expenses will caus e a temporary drop in profits. On the other hand, profitability over medium to long term is expected to be improved through disciplined investment and improved management efficiency Breakdown of main costs • Performer's fees • Manufacturing cost of goods • Event costs • Studio-related expenses Breakdown of main SG&A expenses • Personnel expenses/Outsourcing expenses/Subcontracting expenses • Expansion of production capacity • R&D expenses • Enhancement of systems to improve SCM efficiency • Overseas business development expenses (including overseas base expenses as outsourcing expenses) • Strengthening of management foundation • Warehouse SG&A expenses • Office and studio equipment costs • Software amortization Operating profit (Operating margin) • Forecast: 820 million yen (15%) • Reference value with upfront investment expenditure reversed: 1,120 million yen (21%) (MM JPY)
  20. 23 43,462 8,064 100,000~ 25,000~ FY2025/3 FY2030/3 43,401 8,001 (MM

    JPY) ▪ Business Growth Image Revenue and Gross Profit • Increase business scale while improving profitability over the medium term through multifaceted product offerings and changes to sales mix, while ensuring revenue distribution to VTubers Operating Profit • Emphasize investment in a wide range of growth areas, including expansion of production capacity, overseas business development, and digital content-related business development, as well as sustainable growth, and target a realistic profit level that aims to create maximum value over the medium to long term • As the sales mix is expected to fluctuate in the process of promoting growth investment and diversifying profit opportunities, focus on the level of operating profit as a medium-term target • Under the new management structure, structural reforms will be promoted such as personnel reassignment, business process review, and optimization of SG&A expenses, while at the same time strengthening the earnings structure • Once the expansion phase of our business foundation is completed, expect room for further improvement in profitability through cost optimization and economies of scale • The medium-term target is assumed to be achievable through organic growth, but strategic alliances and the utilization of external resources are not ruled out as growth options Medium-term Targets (From FY2026/3 to FY2030/3) By building on specific goals from the “medium- to long-term revenue targets” announced previously, our medium-term management targets are reset to achieve net sales of 100 billion yen and operating profit of 25 billion yen or more in FY2030/3
  21. 24 Drivers of Business Expansion for Achievement of Targets We

    will promote business development in each service in stages, and expect "establishment of a global earnings base" and "expansion of earnings in new business areas" to make full-scale contributions to earnings from the second or third year of the medium-term target period Key measures Details of key investments Strengthening of content supply through co-creation • Produce top talents in diverse fields of expression, including live streaming, music, games and art • Improve sophistication and efficiency of content production systems • Expand awareness through collaboration with other companies' large-scale content/media • Establishment of frameworks for the creation of top talents • R&D and capital investments related to expressive technologies used in streaming and live concerts, etc. • Joint productions with other companies with large-scale content that has long production timeframes, such as anime Establishment of a global earnings base • Establish merchandise production and distribution in major overseas consumption areas, mainly in North America and Asia • Expand global licensing transactions • Operation of overseas bases • Enhancement of data infrastructure for SCM, etc. • Overseas marketing • Consideration of capital and business alliances and M&As as necessary Expansion of earnings in new business areas • Roll out TCG globally • Increase earnings from digital content, such as games • Joint development of games with external developers • In-house development of Holoearth Advanced utilization of human capital • Maximize performance through optimal allocation and development of human resources • Strengthen management foundations for sustainable growth • Establishment of administrative department structure
  22. 25 Cash at end of period Cumulative operating cash flow

    For growth investment or M&As: 50 billion yen Cash-on-hand/ Shareholder returns • Flexibly maintain a buffer of cash-on-hand against business risks and fluctuations in the market environment • Possibility of transitioning to a stage where we consider shareholder returns from a capital efficiency perspective, depending on our financial soundness and cash generation capabilities • Make growth investments aimed at contributing to medium-term business performance, focusing on areas such as overseas business development, strengthening of production and producing functions, optimization of production and logistics, diversification of earnings, and strengthening of management foundations • Also consider strategic M&As as necessary Carefully scrutinize the effects of investment when implementing projects. Drivers of Business Expansion for Achievement of Targets For the 5 years until FY2030/3, we expect to make a cumulative total of approximately 50 billion yen in growth investment or M&As. We will consider returning surplus cash to shareholders while maintaining flexible internal reserves
  23. 26 Name Position Domain of Supervision Career Motoaki Tanigo President

    and CEO Senior Vice President - He worked at Imagineer Co., Ltd. producing games in partnership with Sanrio Company, Ltd., and then oversaw a business operating official mobile sites in partnership with TV stations and publishing companies. After launching an e-commerce business at istyle Inc., operator of the cosmetics review site @cosme, and participating in the founding of the mobile advertising company Interspire Inc. (now UNITED, Inc.), he founded 30min. Inc. and developed an O2O business centered on 30min., Japan’s first GPS- enabled smartphone application, which was sold to IID, Inc. Ikko Fukuda Director and CTO Senior Vice President Metaverse Area and Technology Division He started his career at Sony Corporation in 2005, where he was in charge of designing systems for broadcasters. From 2008, he served as CTO at Agile Media Network Inc., where he was in charge of advertising systems for social media, campaign systems, etc. Since 2016, he has been in charge of developing VTuber streaming apps at COVER Corporation. Shuhei Ueda Director Senior Vice President Media Mix and Licensing/Collaboration He joined Imaginner Co., Ltd. as a new graduate. Founded Gamepot Inc. in 2001. Shuhei Ueda was a pioneer of FreeToPlay and led the dawn of online games. The Company went public in 2005. Then he served as representative director of Japanese subsidiary of AfreecaTV Co., Ltd., a major live streaming service in South Korea, as well as several other companies. He is co-chairman of Japan Online Game Association. Yosuke Kaneko CFO Senior Vice President Supervisor of Corporate Shared Function, Corporate Planning Department, Overseas Business Development Department He worked in Capital Markets Limited at SMBC Nikko Securities Inc., where he engaged in structuring equity financing transactions. In 2018, he was in charge of executing global equity offerings, including global IPOs, at the company's branch in London. He joined COVER Corporation in 2021, serving as the General Manager of the Corporate Planning Office. In 2023, he was appointed Executive Officer and CFO. Takashi Kato Senior Vice President Administration, General Affairs, Legal Affairs and Intellectual Property, Crisis Management Certified public accountant. After working at an auditing firm, he was in charge of the administrative department of a start-up company before joining COVER Corporation in 2020. He was involved in starting up and expanding the corporate department. He currently serves as the general manager and managing executive of the Administration Department, which includes legal affairs and crisis management, as well as the Human Resource Department. Daisuke Maeda Senior Vice President Product Planning and Commerce He was involved in launching several internet businesses at Sumitomo Corporation. Thereafter, he served as president of Soukai Drug Malaysia and MonotaRO Indonesia consecutively. After returning to Japan, he joined RAKSUL and was appointed Executive Officer for the sales division for printing and customer attraction. In 2024, he became an Executive Officer in charge of managing Merchandising, E-commerce, and Logistics at COVER Corporation. Shigeki Hayashi Senior Vice President VTuber Production He was involved in game development and operations, and has held management positions such as Art Director and General Producer at Konami Digital Entertainment Co., Ltd. and COLOPL, Inc., while working on a number of major game titles. He joined COVER Corporation in 2022 as the head of the Creative Production Department and was appointed as an executive officer in 2025, overseeing VTuber production. Business Operation Structure for FY2026/3 and thereafter From April 2025, the management structure was changed with working to achieve management targets
  24. 28 Major Risks Measures Proba- bility Impact Time Span Dependence

    on video distribution platforms operated by other companies We provide livestreaming content to viewers through video distribution platforms such as YouTube. If it becomes difficult for us to continue providing livestreaming content due to changes in the business strategies of these video distribution platforms or in our relationship with them, or if there are significant changes in economic conditions, our revenue from viewers via these platforms may decrease, which may affect our business and earnings. We do not solely rely on livestreaming. We have been able to advance the diversification of our revenue stream opportunities to include merchandising, events, and licensing of intellectual property. Our content creators are also active on multiple video streaming platforms other than YouTube. Furthermore, we are planning for our content creators to eventually stream on our own platform, which is currently under development. Therefore, we do not solely depend on a single platform. Med. Med. Long- Term Risks related to the popularity, frequency of activities, and continuity of activities of our VTubers Our business performance depends to a certain degree on the popularity of the VTubers that are affiliated with our company and the frequency of content being produced. We have responded to scandals, incidents of social turmoil and defamation and other similar matters concerning our tubers from the beginning. We are taking measures such as expanding our technical and organizational systems to support VTubers so they can carry out their activities comfortably. However, the nature and frequency of VTuber activities depend on the activities of the content creators who use anime-like avatars. Therefore, there is a possibility that our reputation, business performance and financial situation may be affected due to a decline in the added value of our intellectual property, content, merchandise and the like that may occur in cases, such as: (i) when our content creators are unable to continue receiving support from viewers due to the streaming of inappropriate content, scandals, incitement of social controversy, defamation, or other similar reasons related to maintaining a healthy environment for streaming activities; (ii) when the frequency of our content creator’s activities declines significantly; or (iii) when it becomes difficult for our content creators to continue their activities. In looking at individual content creators, these risks may not emerge at a high frequency. However, we are taking countermeasures such as: (I) promoting the streaming of content in a healthy environment; (ii) responding to scandals, incitement of social controversy, defamation and the like; (iii) expanding technical and organizational systems to support VTubers so they can carry out their activities comfortably; (iv) collaborating with other related organizations within our industry; and (v) stabilizing the provision of content by providing content via our productions, as a whole, by a variety of popular VTubers. Med. Med. Mid- Term Changes in Consumer Demand Trends Due to External Factors Our main revenues are from livestreaming by VTubers on video distribution platforms and sales of related merchandise and content. If the growth of related markets slows Due to changes in prices, exchange rates, various regulations including legal and tax systems, economic trends, individual preferences, etc., and if our business model cannot be sustained over the long term due to the number of viewers of our content declining accordingly, or if we cannot sufficiently develop a new business model to respond to these changes, our business, performance, and financial position may be affected through such factors as a slowdown in net sales growth against a backdrop of a decrease in the number of customers. We intend to mitigate this risk by diversifying the areas in which we conduct business and by diversifying the geographic regions in which we operate. Med. Med. Mid- Term * For risks other than the above, please refer to "Business Risks" in the Securities Registration Statement, etc. Major Risks and Countermeasures
  25. 15,882 22,693 33,342 4,569 7,474 10,059 20,451 30,166 43,401 FY2023/3

    FY2024/3 FY2025/3 29 *1:The revenue ratio (left axis) is the ratio of the revenue of the top 20 VTubers to the total revenue of all VTubers belonging to our Company. The cumulative revenue ratio (right axis) is the cumulative value from the top of the revenue ratio *2: Aggregate revenue of items for which overseas revenue can be reasonably estimated and aggregated by each service, as opposed to overseas revenue by location. Revenue for which overseas transactions cannot be estimated is aggregated as domestic sales. 0% 10% 20% 30% 40% 50% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 The high contribution of top VTubers is largely due to individual measures such as solo live performances ▪ Sales Trend (Domestic/Overseas) *2 Domestic Sales (MM JPY) Overseas Sales (MM JPY) ▪ Revenue Ratio by VTuber (Top 20) *1 Revenue Ratio (%) Cumulative Profit Ratio (%) Built up a structure that provides revenue diversification of all VTubers and groups, achieving stability Revenue Diversification of COVER’s VTubers and Overseas Sales
  26. Conceptual Image of Expanding the VTuber Economic Zone 123,600 billion

    yen Global Content Market 3.3 trillion yen Global Anime Market 105 billion yen VTuber market The VTuber business in Japan will be established as a collection of various pieces of content VTuber business will expand into anime market, mainly in countries with high affinity for anime and IP content VTuber content will transcend regions and generations, creating a unique economic zone and penetrating each market Toy Hobby Music Game Anime LIVE streaming Events such as live activities Goods ...... ...... Anime market Game market Publishing market Manga market Music market Character market North America East Asia Southeast Asia Europe ...... Make VTubers elevate to the culture of the youth generation, especially in countries with an anime culture, and penetrate the global content market that transcends countries and generations 30
  27. Professional Generated Content (Content created by professionals) Content created by

    professional creators and specialists who have special knowledge and skills #TVShows #MusicVideos #ArtistMusic PGC User Generated Content (Content created by users) Content created and shared by ordinary users and consumers #E-CommerceSiteReviewsComments #VideoClips UGC 31 What is UGC? In recent years, UGC as well as PGC has been attracting much attention
  28. Marketing Leverage between PGC and UGC (2) UGC PGC Fan

    community of hololive COVER On TikTok Total number of views 300 MM Total number of clips used this music is 50 Thousands On YouTube, 4 thousands movies and clips are released Leveraging the content power by UGC enhances the possibility of spreading to unviewed audiences Leading to increase of new fans YouTube official MV Total number of views 37.35 MM Houshou Marine “Bishoujo Muzai♡Pirates” as of the end of February 2024 Figures as of the time when the data could be collected 32
  29. Create an Environment that Promotes UGC Although derivative works are

    usually limited to that for non-profit purposes, the monetization function provided by the video-sharing site can be used for clipped videos, and derivative work games can be distributed for a fee by posting them on Steam using the game brand “holo Indie” for derivative work games. Build a reward ecosystem that allows creators to monetize under certain conditions and increases their desire to create We have established Derivative Works Guidelines with the aim of ensuring that more fans can enjoy the content provided by the Company in a variety of ways 33
  30. Holo Parade Holo Run hololive Treasure Mountain Idol Showdown holo8

    34 MYRIAD DEATH “holo Indie” Project In November 2023, we launched “holo Indie,” a new game brand for derivative work games, to co-create with fans and creators around the world. The Game Creator Support Program* is provided as a reward ecosystem to support the continued activities of derivative work game creators. As a result, in the market of derivative work games, which are normally produced for free, distribution of games for a fee is permitted, and creative activities of derivative work games are supported. * A system that consolidates the publishing of derivative work games and returns rewards to creators by posting, reviewing, managing, and doing other necessary management tasks on websites such as Steam accounts though our subsidiary CCMC Corp. (head office: Minato-ku, Tokyo) ◼ Track record of holo Indie
  31. 35 ▪ Activities involving defamation *As of March 31, 2025

    ◼ About the company’s streaming moderator system Stream moderation services are in Japanese, English and Indonesian, 24 hours a day by approximately 77 moderators. ◼ Organizations and activities Joined as an industry association involved in game distribution and metaverse development. Participate in the development of guidelines and study groups. Japan Online Game Association (JOGA) Creator Economy Association (CEA) Joined as an industry group addressing issues surrounding creators such as defamation and social tipping. Cooperate in exchanging opinions and conducting surveys regarding creators. Music Publishers Association of Japan (MPA) Joined as an industry organization involved in the processing and distribution of rights around music. Safer Internet Association (SIA) Joined as an industry organization addressing Internet issues such as defamation and underage protection. Cooperate in exchanging opinions and conducting research on various issues related to our services. Activities during the one-year period from January 2024 to December 2024 Number of cases in which actions were taken against defamatory acts toward affiliated talents: 252 • Legal Action Against Infringements of Rights on Online Forums and Social Media • Legal Action Against Harassment Directed at Overseas Talents • Legal Action Against Aggregator Websites In June 2023, we released an additional joint statement announcing the formation of a “Anti-Defamation Study Group” with the cooperation of Google LLC, note inc., UUUM Co., Ltd., ANYCOLOR, Inc., and related experts. To support the activities of our content creators, we are working with various industry associations to improve their working environment and implement various anti-defamation measures, etc. ESG-related Activities
  32. 36 Organizational Structure ▪ Company Structure *1 (as of March

    31, 2025) IP Planning, Content Creation, Infrastructure Development 34% Sales & Marketing 26% Production Management 17% Metaverse 9% Back Office 14% Corporate Planning Administrators Management Metaverse Development Media Mix Expansion Talent Management Production Management VTuber Branding Planning and Developing New Vtubers Streaming Application and Software Development Studio Content Creation Advertisement・PR Event Planning Sales & MD *1 : Organizational structure in full-time employees Live Event Management COVER boasts an industry-leading and diverse workforce with a large number of specialized employees
  33. 2 2 2 2 2 2 2 3 3 4

    9 13 22 36 48 51 75 93 110 132 170 215 262 300 373 376 392 409 455 480 492 509 570 602 652 679 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Historical Trends in Employees 37
  34. Objective Indicators to Judge the Achievement of Management Goals 38

    FY2021/3 FY2022/3 FY2023/3 FY2024/3 FY2025/3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue (MM JPY) 708 1,107 2,152 1,756 2,423 2,422 4,423 4,394 3,601 4,190 5,010 7,648 5,142 7,133 6,949 10,941 6,416 10,688 11,758 14,538 Streaming / Content 420 571 797 844 1,220 1,200 1,416 1,412 1,450 1,572 1,575 1,744 1,651 1,799 2,038 2,157 2,034 2,184 2,504 2,599 Concerts / Events 0 58 515 240 293 287 563 1,059 193 581 466 2,187 376 1,285 954 2,985 349 1,144 2,328 3,971 Merchandising 262 424 656 503 756 713 1,904 1,457 1,574 1,597 2,090 2,740 2,091 3,269 2,701 4,414 2,931 5,879 5,448 6,280 Licensing / Collaborations 24 52 182 168 152 220 540 464 382 439 878 976 1,023 778 1,254 1,383 1,100 1,480 1,476 1,687 Operating Profit (MM JPY) 179 353 785 379 624 326 757 145 361 516 856 1,682 895 1,408 1,186 2,045 834 2,537 2,171 2,457 Total # of YouTube ch. Subs. (MM) 1,003 1,808 2,884 3,733 4,418 5,081 5,799 5,986 6,525 7,002 7,238 7,558 7,782 8,319 8,625 8,841 9,225 9,362 9,599 9,715 # of VTuvers* 42 42 50 52 52 57 62 68 68 71 71 75 75 82 86 85 89 87 91 89 <Reference> *: Fuwawa Abyssgard and Mococo Abyssgard, who shared a channel, were counted as one person The Company have positioned the levels of “revenue” and “operating profit” set forth in our medium- term management targets as key objective indicators for enhancing corporate value. Revenue is indicators that demonstrate the results of our diverse business activities, while operating profit is considered to reflect the recovery of growth investments and improvements in management efficiency
  35. MM JPY FY2021/3 FY2022/3 FY2023/3 FY2024/3 FY2025/3 Total Revenue 5,724

    13,663 20,451 30,166 43,401 YoY Growth +287% +138% +49% +48% +44% Gross Profit 2,777 5,274 9,396 13,988 21,805 Margin 48% 38% 45% 46% 50% Operating Profit 1,698 1,855 3,417 5,536 8,001 Margin 29% 13% 16% 18% 18% Net Income 1,220 1,244 2,508 4,137 5,559 Margin 21% 9% 12% 14% 13% PL Summary 39
  36. BS Summary 40 MM JPY FY2021/3 FY2022/3 FY2023/3 FY2024/3 FY2025/3

    Total Current Assets 3,048 7,168 11,740 14,798 22,872 Cash and Cash Equivalents 1,899 4,644 7,793 8,666 11,498 Total Fixed Assets 467 1,069 4,146 7,914 10,187 Total Asset 3,516 8,238 15,887 22,713 33,060 Total Liabilities 1,303 4,780 8,880 11,569 16,112 Total Equity 2,212 3,457 7,006 11,143 16,947
  37. CF Summary 41 MM JPY FY2021/3 FY2022/3 FY2023/3 FY2024/3 FY2025/3

    Cash flows from operating activities 1,419 3,537 4,866 4,765 5,285 Cash flows from investing activities (402) (793) (2,759) (3,893) (2,696) Cash flows from financing activities 526 - 1,040 (0) 244 Net increase in cash and cash equivalents 1,543 2,745 3,148 873 2,831 Cash and cash equivalents at beginning of period 356 1,899 4,644 7,793 8,666 Cash and cash equivalents at end of period 1,899 4,644 7,793 8,666 11,498
  38. 42 This material has been prepared by COVER Corporation (the

    “Company”) solely for information purpose only, and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in the United States, Japan or any other jurisdictions. Any information contained in this material other than facts in the past and at present is referred to as such forward-looking statements. Forward-looking statements include but are not limited to expressions such as “believe”, “strive to", “anticipate”, “predict", “expect", “confirm", “continue", “try", “estimate“, “forecast“ “to take measures to", “hope”, “intend", “attempt", “it is possible…", “plan“, “strategy”, “potential", “probability", “project", “risk", “pursue", “should be…", “working to…", “have the goal of…“ and “planning to" as well as other similar expressions to explain future business activities, achievements, events and circumstances. Forward-looking statements are predictions about the future that reflect management's judgment based on currently-available information. As such, these forward-looking statements are subject to various risks and uncertainties. It is possible that the actual business content, results and the like in the future may significantly differ from those expressed in or suggested by the forward-looking statements. Therefore, please do not rely on forward-looking statements. For the business plan for FY2026/3, please refer to the “Presentation Materials for FY2025.3". The next disclosure of “Materials for Growth Opportunities and Strategies” is scheduled to be made at the time of the announcement of full-year financial results for FY2026/3. Handling of these Materials