■ Overview of Triple Eyes <5026>

1. Segment Information

The company consists of itself and four consolidated subsidiaries (Simple Plan Inc., Shoshi Ichimon Shogi Center, Zero Field, BEX), totaling five companies. The segments are the AI Solutions business and the GPU Server business. The AI Solutions business includes AI integration, engineering, AI products, and others. The GPU Server business was established by consolidating Zero Field as a subsidiary in September 2023. Furthermore, the company has changed its classification method for business segments and has revised the reporting segments from the previous "AI Solutions business" and "Training business" to "AI Solutions business" and "GPU Server business".

(1) AI Solutions Business

(a) AI Integration

AI integration is centered around the development of core systems and payment systems based on LAMP※1 technology and OSS※2 development technology, boasting achievements across various industries such as finance, distribution, real estate, services, and healthcare. Major projects involve primary contracts from large SIers and direct transactions from end-users for system development.

※1 LAMP refers to an acronym for the initial letters of four technologies: "Linux", "Apache", "MySQL", and "Perl, PHP, Python", which refer to website construction technology.

※2 OSS (Open Source Software) refers to free source code or software that allows for modification and redistribution of the source code.

The company focuses on training full-stack engineers who are well-versed in various fields of development, from system development to network construction. It has gathered skilled professionals who can handle all stages, providing a one-stop service that includes system design, system development, infrastructure construction for system operation, and operation and maintenance. By flexibly responding to customer needs and providing high-quality services with excellent cost performance, it builds a competitive advantage over other companies.

A full-stack engineer refers to a technician who can manage all processes from design to environment construction, development, and operation in engineering tasks such as system development and Software Development, as opposed to a technician specializing in specific technologies like system engineers or network engineers.

In addition, a characteristic of the company is that it collaborates with partner SIers to propose cutting-edge technology solutions based on research and development results from AI, Blockchain Technology, and IoT. As a system development company capable of uniquely designing and constructing AI engines, it differentiates itself by providing comprehensive AI systems tailored to customer needs.

Blockchain Technology refers to the technology that allows data to be distributed and stored across geographically separate Servers, linking blocks of data with specific formats or contents in a way that is difficult to tamper with, in chronological order.

An engine refers to a consolidated piece of Software or system designed to execute specific information processing.

(b) AI Products

In AI Products, the company offers services powered by its uniquely developed AI engine. The company's AI engine particularly enhances services centered around image recognition, especially in the area of Facial Recognition. Moreover, the AI engine is utilized not only for image recognition but also for language processing, demand forecasting, and route exploration. These AI engines can be integrated into devices from other companies and the number of applications is increasing.

The company's focused image recognition platform, AIZE, provides solutions for Facial Recognition and image recognition services across various industries and business types, primarily in retail. Particularly for Facial Recognition, it boasts a high accuracy rate of over 99% for frontal still images, detecting a 512-dimensional feature vector from the face images. It can also authenticate from side or diagonal face images, in walk-through environments, and while wearing a Mask, preventing impersonation through photographs. The AI engine that can estimate age, gender, and emotions contributes to fields such as marketing, hospitality, and safety management.

Features are numerical representations of what characteristics are included in the data that the Computer learns from.

AIZE has a rich service layer as an image recognition platform, highly scalable, and not limited to a lineup of services tailored to individual corporate needs, but also allows customization to fit existing systems.

AIZE is agnostic to the devices used for image acquisition. Whether it's security cameras, Smart Phones, PC cameras, thermal devices, or robots, as long as there are cameras and a communication environment, the AI engine in the cloud analyzes the images. The Facial Recognition system, which can be installed in a short time and started at low cost, is ideal for a small start in AI adoption. Since AIZE has no limit on the number of recorded images, it can process large amounts of data and facilitate the promotion of corporate DX through AI.

The company's products offered by AIZE are as follows.

・Marketing Services using Facial Recognition of face images in stores (AIZE Research)

・Facial Recognition attendance service for employee attendance management, membership management, and entrance/exit management (AIZE Biz)

・Service (AIZE Breath) that adds an alcohol check feature to the Facial Recognition attendance service, in response to amendments to the Road Traffic Act.

・Intrusion detection AI system for preventing theft of Copper wire cables at Photovoltaic Power Stations.

(c) Engineering.

The company acquired BEX in July 2024 and made it a 100% subsidiary. BEX is engaged in mechanical design and development in the automotive field, research and implementation in advanced technology areas (AI research, EV design), and IT system design and development, with major clients including Aisin <7259>, Kojima Press Industry Co., Ltd., Sumitomo Electric Industries, Ltd., Denso <6902>, Toyota Motor <7203>, and Toyota Body Co., Ltd., among other large auto manufacturers and Tier 1 firms. For the fiscal year ending March 2023, the business scale showed revenue of 1,551 million yen and an operating profit of 86 million yen, making the acquisition price of approximately 650 million yen appear attractive. The background for the company grouping BEX is that, due to the nature of the automotive industry, the regulatory check of CAD drawings in automotive design business has become complicated. It is anticipated that collaboration between the two companies will enable early AI implementation. If these goals are realized, it is seen that there will be significant benefits, such as expanding existing client relationships and improving the business efficiency of BEX itself, leading to enhanced profitability.

(Written by: FISCO guest Analyst Hiroki Nagaoka)