Financial Results for 3Q FY2023
Members Co., Ltd. (TSE 2130)
December 31, 2022

Company Profile

Representative Director and President Tadashi Kenmochi
Members is the internet business partner that aims to create a spiritually rich society through “MEMBERSHIP” by
supporting digital business with digital creators.
Corporate nameMembers Co., Ltd.

Date of establishment June 26, 1995
MissionCreate a spiritually rich society through “MEMBERSHIP”

Locations

Headquarters (Tokyo), Web Garden Sendai, Web Garden Kitakyushu, Web Garden Kobe, Sapporo Office(VISION2030)

Capital1,016 million yen (as of December 31, 2022)

Sales revenue

14,938 million yen (fiscal year ended March 31, 2022)〔IFRS〕

Securities code

2130; Prime Section of Tokyo Stock Exchange

No. of employees(consolidated)

2,281 (as of December 31, 2022)

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Management Policy and Service Features
Members is a platform on which digital creators (DCs), who play aleading role in value creation in the rapidly expanding digital
economy, can grow and play an active role.
We develop and provide optimal digital business operation services
that meet social needs in order to realize a prosperous society.

Supporting thedevelopment of digitalproducts and services

Pursuing happiness of digital creators

Technology-specific DC
human resources provision

PGT business(PGT: Product Growth Team)A group of creators who embody the corevalues of "contribution, challenge,sincerity, and teamwork" and continue toimprove their skills to maximize theresults of client companies.

Tech venture companies

An initiative to achieve
10,000 digital creators

Support tocreate social
problem-solving
business

Dedicated team for digital business
operation support(EMC: Engagement Marketing Center)

EMCbusiness

Promoting CSV (*)
management and corporate
value marketing

Major
companies

Marketingtransformation

DC human resources
provision
comprehensive
service

Data
Scientists

UX DesignDX

Digital business support for mid-sized local companies

Digital business / Product development supportEngineering

Creating social value

SaaS

DevOpsAdvancedtechnology
domainOptimizing the services provided* CSV (Creating Shared Value: A management method that simultaneously realizes economic and social value)3

3Q FY 2023 Overview
Consolidated sales revenue increased by 19.1%, and added-value sales(*1) increased by 21.0%,
marking a record high for the cumulative 3rd quarter. On the other hand, it was not enough to cover
upfront investment, and operating profit dropped year on year. Sales revenue of the PGT business,
centered on specialized companies, maintained a high growth rate of +35.9% year-on-year, and thesales ratio of non-web operations increased by 7.1 points from the previous fiscal year.

Consolidated results
Sales revenue

12,610

millionyen

Added-value sales

Operating profit+19.1%
y/y607

millionyen+48.7%(38.8%)y/yy/y12,063

millionyen+21.0
28.0%%
y/yBusiness situation
EMC business
Sales revenue

8,046
Operation rateduring 23/3Q

80.7 ％

PGT business
Sales revenue
millionyen+8.3%

Down 4.3 points
y/y

y/y

5,000

millionyen

Ratio of sales ofservices other thanwebsite operation
during 23/3Q

35.7 ％+35.9%y/y

No. of companies
we offer theresult-based
team model(*2)

103+28 from
the end ofthe previous
FY

2,020

+397, +24.5%
from the endof theprevious FY

Up 7.1 points
compared to theend of theprevious FY

No. ofconsolidated
digital creators(DCs)*1 Added value sales = Sales revenue ー Outsourcing and procurement costs ＝ Sales from in-house resources*2 No. of companies we offer the result-based team model is counted if the customer was provided services by EMC and PGT as a dedicated team of 3 or more DCs.

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Income Statement Summary
Customer acquisition was delayed compared to the number of DCs that were steadily secured,then, the operation rate declined. This made the gross profit margin also declined by 2.4
points year-on-year. SGA expenses increased significantly due to aggressive sales investmentaiming for 25% growth and expansion of investment in mid-career recruitment, and theoperating profit margin decreased by 4.6 points year-on-year.
Result in 3Q[Unit：million yen]

FY3/2022

FY3/2023

Full year in FY3/2023
y/yRevised Forecast

Progress rate
toward the revised
forecast

10,592

12,610+19.1%

17,30072.9%

Added value sales

9,966

12,063+21.0%――

Gross profit

3,178

3,479

+9.5%

―

―

(Gross profit margin)

30.0%

27.6%

―

――

SGA

2,202

2,876

+30.6%

―

―

992

607

(38.8%)

1,20050.6%

9.4%

4.8%

―――

Pretax profit989

558(43.6%)

1,180

47.3%

Net profit

687

379(44.8%)

850

44.6%

Sales revenue

Operating profit(Operating profit margin)

5Consolidated Earnings and Dividend Forecasts for the Term Ending March 2023
Based on trends in the consolidated cumulative period by the 3rd quarter of Fiscal Year ending March 31,2023, we have revised the full-year consolidated earnings forecast (Analysis on profit decrease on nextpage). We will continue to invest in anticipation of growth from the next fiscal year onwards. Dividendforecast has not been revised in light of the financial situation and future growth prospects. In addition, wewill implement share buybacks as a flexible capital policy.
Forecast for FY2023 (IFRS)

Full-year results for
FY 2022 (IFRS)
Full yeary/y increase/decrease rate

18,20021.8%

17,30015.8%

Operating profit (million yen)

1,876

48.7%

2,200

17.3%

1,200(36.0%)

Pretax profit (million yen)

1,896

52.0%

2,185

15.2%

1,180(37.8%)

Net profit (million yen)

1,404

56.7%

1,573

12.0%

850(39.5%)

Profit attributable toowners of parent (million yen)

1,404

56.7%

1,573

12.0%

850(39.5%)

DOE(*)
6.7%
6.2%

6.0%
5.0%

4.0%

4.3%

4.6% 4.8%

3.9%

3.0%

30.0
25.0

14.0

2.0
13/03

1.9%

3.0
2.5
14/03 15/03*DOE = Dividend on equity ratio

7.5

9.5

1011.5

16/03 17/03

018/03 19/03

40.0%
25.1%
30.0% 23.6%
24.5%
23.5%
23.2%
20.8%
19.9%19.1%
26.4%
20.0%
20.1%
10.0%

20/03 21/03 22/03 23/03

Forecast
予想

Payout Ratio(Japanese Standard)
配当性向（⽇本基準）

54.5

46.0%

50.0%

2515

17.5

2.2%

3520

4.2%

2.0%

Payout Ratio
30

5.2%

4.0%

0.0%

y/y increase/decrease rate

Full year

23.6%

DOE（IFRS)
DOE (IFRS)

1.7%

y/y increase/decrease rate

14,938

DOE(⽇本基準)
DOE (Japanese Standard)

1.0%

Full year

Sales revenue (million yen)

Dividend
配当

7.0%

After revision

Before revision

Payout Ratio(IFRS)
配当性向（IFRS）

0.0%
13/03 14/03 15/03 16/03 17/03 18/03 19/03 20/03 21/03 22/03 23/03
予想Forecast6Factors in Decline in Profit in 3Q FY 2023
Against the background of the expansion of the digital economy and the shortage of IT humanresources, the growth rate target for our Vision2030 is 25%. The number of DCs is growing relatively
smoothly against the target. In the past, the number of DCs was basically the key to growth, and wewere able to secure high operating rate of DCs.
(1)Acquiring new customers,
expanding team models
In the mainstay EMC business, the increase of
new customers is sluggish. We are shifting fromthe existing customers-dependent marketingsystem to a system in which the production
division and the marketing division function
separately.

[unit: employees](2)Expanding non-web
operation fields(3) Improving the humanresources portfolio

The promising non-web operation domain
for large clients in the EMC business isbeing cultivated.

Since FY 3/2021, we have not recruited aplanned number of mid-career workers. As aresult, the ratio of new graduates, whose initialtraining period is long, increased, thereby
decreasing the ratio of employees in service andthe capacity of offering services.

Consolidated Number of DCs

Consolidated Sales Revenue[unit: million yen]

2,500

25,000
2,020

2,000

20,00017,3001,623
14,938
1,500

1,306

+24.5%

15,000+24.3%

12,087
10,6071,000

10,000

500

5,000

00
21/03

22/03
New
新卒DC数
graduates

DCs
except New graduates
DC数（新卒除く）*CAGR = compound average growth rate

22/12

20/03

21/03

22/03

23/03
21% Revised Forecast 23%

18%

修正後計画

EMC

PGT

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Policies/measures for achieving the annual plan for FY 3/2023
Growth points in the cumulative 3rd quarter
Strong sales growth in thePGT Business
Achieved the target operation rateof DCs, including new graduates.

Unit price increased by ateam-based operation in
PGT businessTransition from single personnel
to a teamGrowth of specializedinternal companies
Expansion into new technicalfieldsStrong hiring of new
graduates
Securing the number of DCs

Measures for achieving the full-year plan

・Production and sales separation
・High operation rate due toeffective sales by dispatching ateam of DCs

・The number of client companies
to which we offer the PGT model*1
increased by 29 from the end of theprevious term.
・Average monthly unit price: up
5% year on year

Improvement policy (1)Strengthen sales structure by separatingproduction and sales

Specialized companies*2
・Accounting for 20% of sales
・Growth rate: 95.5%
・Added value sales per DC:+38,000 yen compared with major
companies*3

Improvement policy (2)Further expansion of specialized companies in
non-website operation fields

・484 new graduates joined in April
2022.
・600 new graduates to be joined inApril 2023.
・In recent years, we have recruited
200 mid-career workers per year.

Improvement policy (3)Improving the human resources portfolio byexpanding investment in mid-career
recruitment and fundamentally strengthening
training*1 PGT model is a team-based operation rather than a single creator.
*2 Specialized companies: Internal companies mainly in the PGT business, specializing in data, UX, EC, SaaS, DX, AI, XR, DevOps, etc. There are a total of 12 specialized companies as of December 31, 2022.
*3 Major companies: 3 internal companies that are EMC company (EMC business), Members Career company and Members Edge Company (PGT business)

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Summary of Improvement Policies and Goals from Next FY
We will continue upfront investment for recruitment in the next fiscal year
expecting temporary decline in profit margin. However,
we will increase human capital with the mid/long-term perspective.
To increase quarterly added value sales by 25% by the end of FY 3/2024 andrealize a 25% growth and an operating income margin of 10% from FY 3/2025

Improvement
policy123

Strengthen our sales
capabilities by separating
sales from production

Further expansion of
specialized companies in thenon-website operation fields

Improvement of the humanresources portfolio

To establish 4 or more
specialized companies everyterm

New graduates: In the nextterm, 600 new graduates will
join our company. For
several years from the FY
3/2025, we will decrease theno. of new graduates toemploy.

To increase the no. of digitalcreators of specializedcompanies by 65% or over tobecome 700 creators.

Mid-career workers: In thenext term, we will recruit 248
mid-career workers, so thatthe no. of mid-career
workers will be equal to theno. of new graduates severalyears later.

In the Q4 of FY 3/2024:
・the no. of digital creators
in service increased 250, and・added value sales grew
25% Q on Q.

Mid/longterm goals
From FY 3/2025:
To increase added value
sales by 25% or overannually

9Balance Sheet Summary[unit: thousand yen]Previous consolidated
accounting year
（Mar. 31, 2022）

3rd quarter of the current
consolidated accounting year
（Dec. 31, 2022）

AssetsCurrent assets
Cash and cash equivalents

5,226,706

3,882,944

Trade receivables and other receivables

3,075,859

3,155,597

Inventory assets

48,63296,014

Other current assets

224,303441,6908,575,502

7,576,247

Tangible fixed assets

237,803

344,070

Rights to use as assets

713,578

608,557

Goodwill

116,115

116,115

Intangible assets

12,425

10,488Other financial assets

373,657

1,309,153

Deferred tax assets

375,346

209,566

Total non-current assets

1,828,927

2,597,951

Total assets

10,404,429

10,174,198

Total current assets

Non-current assets

10Balance Sheet Summary[unit: thousand yen]
Liabilities and shareholdersʼ equity
Liabilities
Current liabilities
Lease liabilities
Trade payables and other payables
Income taxes payable
Contract liabilities
Other current liabilities
Total current liabilities

Previous consolidated
accounting year
（Mar. 31, 2022）

3rd quarter of the current
consolidated accounting year
（Dec. 31, 2022）

400,434
1,068,471
370,219
30,2002,326,547
4,195,872

284,083
1,117,498
3,810
12,6502,387,223
3,805,266

Non-current liabilities
Lease liabilities
Allowance
Total non-current liabilities
Total liabilities

197,817
115,362
313,180
4,509,052

127,566
194,924
322,491
4,127,757

Shareholdersʼ equity
Capital stockCapital surplus
Treasury shares
Other components of equity
Retained earnings
Total equity attributable to owners of the parent
Total shareholdersʼ equity
Total liabilities and equity

963,358
281,704(8,477)52,1904,606,602
5,895,377
5,895,377
10,404,429

1,016,922
339,256(7,750)40,477
4,657,535
6,046,440
6,046,440
10,174,198

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Cautionary Statement

This document has been translated from a part of the Japanese original forreference purposes only. In the event of any discrepancy between this translated
document and the Japanese original, the original shall prevail.

For IR inquiries
Members Co., Ltd.
Corporate Planning Office IR Team
ir@members.co.jp

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