(350A) Stock Price

Digital Grid operates its core business around "DGP," a trading platform that directly connects power generators and electricity consumers. The company handles transmission operations—including contract management, supply-demand management, and billing—on the DGP platform, enabling customers to trade electricity freely without requiring specialized expertise or large upfront investments.

The company serves diverse customers including corporate electricity consumers, renewable energy and fossil fuel generators, traditional power companies, and trading houses. Revenue is primarily generated through platform fees based on transaction volume, allowing the company to earn fees without directly bearing market risk. Additional revenue comes from individual services such as supply-demand management and certificate procurement on behalf of clients.

The business is divided into three segments: "Power Platform Business," "Renewable Energy Platform Business," and "Other." The Power Platform Business focuses on non-renewable energy procurement and differentiates itself through low-cost fees, flexible contracts, and cost transparency. The Renewable Energy Platform Business matches certificates and PPAs (Power Purchase Agreements) and manages supply-demand through services including RE Bridge, Eco no Hashi, and GPA. The Other segment operates grid-scale battery storage and aggregation services, as well as decarbonization educational content, to develop future revenue streams.

The company aims to become a mega-platform by expanding the market where customers can choose their own power supply portfolio, centered on its "DGP" platform. In fiscal year ending July 2025, the company achieved net sales of approximately 6.15 billion yen, operating profit of approximately 2.74 billion yen, and an operating margin of 44%, demonstrating strong profitability. Handled electricity volume reached approximately 2.4 billion kWh annually as of 2025, with a stable monthly average churn rate of approximately 2.9%. Building on this foundation, the company aims to further increase customer numbers and transaction volumes. Long-term strategy focuses on expanding long-term transactions such as PPAs (Power Purchase Agreements) to increase recurring revenue and build a customer base capable of absorbing price volatility risks.

Priority investment areas are deepening platform functionality and expanding sales channels. The company plans to leverage AI to automate contract management and demand-supply adjustment, previously handled manually, while enhancing cost competitiveness through automated wholesale trading and diversified procurement sources. To strengthen its distributor network, the company is standardizing sales tools, implementing onboarding standardization, and introducing distributor scoring systems to efficiently acquire new contracts. Currently, over 70% of contract capacity relies on 100% market procurement; the company is implementing measures to increase retention rates by expanding hedging products and fixed procurement options.

In new market development and business expansion, the company is accelerating renewable energy initiatives. It has established a system to guide customers progressively from non-fossil certificate proxy procurement services ("Eco no Hashi") through PPA matching ("RE Bridge") to demand-supply management on DGP. As of July 2025, renewable energy handled capacity reached approximately 281MW, with handled electricity volume of approximately 250 million kWh. Additionally, the company is advancing wholesale renewable energy trading for former general electric utilities, short-term PPAs, and project development addressing environmental value fixation needs, while expanding performance in adjustment services including battery storage.

Regarding technological innovation, the company prioritizes improving generation and demand forecasting accuracy. Since imbalance costs—arising from differences between planned and actual values—represent business risk, the company is making continuous investments in AI-based forecast model improvements, advanced data analytics, and algorithm refinement to mitigate risk. Furthermore, the company plans to strengthen collaboration with battery storage manufacturers and accumulate aggregation results to enhance grid adjustment capacity, while establishing service development systems capable of responding promptly to regulatory changes such as simultaneous markets.