Summary of Consolidated Financial Statements for the Third Quarter, FY2018 (IFRS)
August 9, 2018
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President & Chief Executive Officer

Contact:

Ryu Muramatsu

Director, Executive Vice President

Tel: +81-3-3464-0182

Scheduled submission date of quarterly reportAugust 10, 2018

Scheduled date of commencementfor dividend payment-

Supplemental materials prepared for financial
results

Yes

Information meeting arranged related tofinancial resultsYes (for institutional
investors andanalysts)

URL: https://corp.gmo-pg.com/en/(Amounts rounded down to the million yen)

1.

Consolidated Financial Statements for the Third Quarter, FY2018(From October 1, 2017 to June 30, 2018)(1) Consolidated Financial Statements (Cumulative)
Revenue

Q3 FY2017

Profit before
income taxes

Operating profit

Million yen
Q3 FY2018% Million yen

19,122 24.5
15,362 －(Percentages represent year-on-year % change)% Million yen

5,190 60.0
3,243 －% Million yen

5,041 73.9
2,898 －

Total
comprehensive
incomeProfit attributable toowners of parent

Profit% Million yen

3,005 44.4
2,080 －

3,016
2,064

% Million yen

46.1
－

%

5,113 105.4
2,489－

Diluted earnings per
share

Basic earnings per share
Yen

Yen

81.87
55.58

Q3 FY2018
Q3 FY2017

81.79
55.57

(2) Consolidated Financial Position

Q3 FY2018
FY20172.

Total assets
Million yen

Total equity
Million yen

Total equity attributable toowners of parent
Million yen

Total equity attributable toowners of parent to total assets%

113,991
84,33825,11820,76923,99919,675

21.1
23.3

Dividends

FY 2017
FY 2018
FY 2018 (forecast)End of Q1
Yen

End of Q2
Yen

0.00
0.00

0.00
0.00

Full-year dividend
End of Q3
Yen

0.00
0.00

Year-end
Yen

Total
Yen

40.00

40.00

49.00

49.00

(Note) Revision to the most recently released dividend forecast: No

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2018
(From October 1, 2017 to September 30, 2018)(Percentages represent year-on-year change)
Revenue
Million yen

Operating profit
Million yen%

Profit before
income taxes
Million yen%

Profit attributable toowners of parent
Million yen%

Basic earnings
per share
Yen%
Full year
26,107
6,475
6,196
3,933
105.87－－－－(Note 1) Revision of the most recently released financial forecast: No(Note 2) Year-on-year changes are omitted since the Group started voluntary application of IFRS in the present consolidated fiscal year.

-1-Notices:
(1)

(2)

(3)

Changes of important subsidiaries during the period (change of specific subsidiaries that leads to a change in thescope of consolidation): No
Number of new subsidiaries: - (Name:), number of excluded subsidiaries: - (Name:)
Changes in the accounting policy / changes in the accounting estimation[1] Changes in accounting policy required by IFRS: No
[2] Changes in accounting policy other than [1]: No[3] Changes in accounting estimations: No
Number of shares issued (common stock)
Q3 FY2018: 37,150,500
FY 2017 : 37,150,500[1] Number of shares issued at the end of the term(including treasury stock)
FY 2017 : 2,500[2] Number of treasury shares at the end of the term Q3 FY2018: 2,500Q3FY2018:36,838,813
Q3 FY2017 : 37,148,000[3] Average number of shares during the term
(Note) Number of treasury shares at the end of the term above does not include the shares attributed to the directors’
remuneration board incentive plan trust (302,000 shares for Q3 FY2018; 320,000 shares for FY2017.)* These quarterly financial statements are not subject to the quarterly review procedures.
* Notes regarding the appropriate use of financial forecast and other important notes
1. The Group has voluntarily been adopting IFRS on its consolidated financial statements since the consolidated fiscal year ending
September 30, 2018, and disclosing IFRS-based condensed consolidated financial statements from the first quarter.
2. The above forecasts are outlooks based on information currently available, and include various uncertain factors. Actual
performance may differ substantially from the forecasts due to changes in business conditions and other factors. For the assumption
on which financial forecasts are based and matters to be considered in using financial forecasts, please refer to “(3) Review of
consolidated earnings forecasts and other forecasts” under “1. Qualitative Information on Consolidated Financial Statements for the
Quarter” on page 11 of the attachment.
3 Results Presentation for Investors and Analysts: August 10, 2018. Supporting materials and a video of the presentation will bemade available on the company's website after the event.

-2-

○Table of contents of attachment
1. Qualitative Information on Consolidated Financial Statements for the Quarter........................................................ - 4 (1) Consolidated operating results ................................................................................................................................. - 4 (2) Status of consolidated financial position ................................................................................................................... - 9 (3) Review of consolidated earnings forecasts and other forecasts ............................................................................. - 11 2.

Condensed consolidated Financial Statements and Major Notes ......................................................................... - 12 -(1) Condensed consolidated balance sheet ................................................................................................................. - 12 (2) Condensed consolidated statement of income and consolidated statement of comprehensive income................. - 14 (3) Condensed consolidated statement of changes in equity....................................................................................... - 16 (4) Condensed consolidated statement of cash flows .................................................................................................. - 17 (5) Notes regarding the going concern assumptions ................................................................................................... - 19 (6) Notes regarding condensed consolidated financial statements .............................................................................. - 20 1．Cash and cash equivalents ................................................................................................................................. - 20 2．Operating and other receivables......................................................................................................................... - 20 3．Deposits to subsidiaries and affiliates ................................................................................................................. - 20 4．Operating and other payables ............................................................................................................................ - 20 5．Subsequent events ............................................................................................................................................. - 21 --3-

1. Qualitative Information on Consolidated Financial Statements for the Quarter(1) Consolidated operating results
Forward-looking statements in the document are based on the judgement of the Group at the end of the quarter
under review. The Group started adoption of International Financial Reporting Standards (hereinafter called as“IFRS”) in place of conventional JGAAP from cumulative first quarter of the current fiscal year. The Group presents
earnings figures for the first nine months and the full of the previous consolidated fiscal year under IFRS forcomparative analysis.
①Consolidated operating results
The Group announces its earnings results for the cumulative third quarter of the cumulative consolidated fiscal
year (October 1, 2017 to June 30, 2018) as follows.
(Unit: Thousand yen)First nine months of theprevious consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2017
to June 30, 2018)

Rate of change (%)

Revenue

15,362,675

19,122,148

24.5

Operating profit

3,243,648

5,190,799

60.0

Profit before income taxes

2,898,808

5,041,554

73.9

2,064,596

3,016,049

46.1

Profit attributable toowners of parent
a. Revenue

The Group’s revenue surged to 19,122,148 thousand yen, up by 24.5% year-on-year. Steady growth ofEcommerce market, coupled with expansion of the Group’s service coverage in non-Ecommerce field, has led
to an increased revenue in payment processing business. Our money service business revenue also rose withthe steady expansion of transaction value in GMO Payment After Delivery, an after-the-fact type of payment
service. Further, our payment enhancement business revenue grew, partly thanks to Macro Kiosk Berhad, theGroup’s consolidated subsidiary that provides a comprehensive service of mobile payment, authentication andnotification.
Our revenue breakdown by business model is as follows.
(Unit: Thousand yen)

Business model

Initial(Initial revenue)
Stock(Monthly revenue)
Fee(Transaction processing
revenue)
Spread(Merchant acquiring
service revenue)
Total

First nine months of theprevious consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2017
to June 30, 2018)

Rate of change (%)

1,041,707

938,129△9.9

2,132,303

2,521,611

18.3

5,470,135

7,502,910

37.2

6,718,528

8,159,496

21.4

15,362,675

19,122,148

24.5

-4-

b. Operating profit
The Group’s operating profit reached 5,190,799 thousand yen, up by 60.0% year-on-year, on track for theGroup’s earnings forecast for the consolidated full fiscal year.
Segment-wise, payment processing business was 6,056,207 thousand yen, a year-on-year increase of 23.6％,
Money Service Business stood at 874,305 thousand yen, in contrast with the loss of 93,096 thousand yen in thesame term previous year, and the payment enhancement business amounted to 106,546 thousand yen, a yearon-year drop of 53.4%.
c. Profit before income taxes
Factors in a. and b. were translated into profit before income taxes of 5,041,554 thousand yen, a year-on-yearincrease of 73.9％.

-5-

②Results by segment
Performance by reportable segment is explained below.
(Unit: Thousand yen)Segment

Payment Processing
Business
Revenue
Operating profit
Money Service Business
Revenue
Operating profit
Payment Enhancement
Business
Revenue
Operating profit
Adjustments
Revenue
Operating profit
Total
Revenue
Operating profit

First nine months of theprevious consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2017
to June 30, 2018)

Rate of change (%)

8,798,189
4,900,648

10,668,495
6,056,207

21.3
23.6

3,449,526△93,096

4,580,622
874,305

32.8－

3,114,958
228,565

3,873,030
106,546

24.3
△53.4

－
△1,792,469－△1,846,258－－

15,362,675
3,243,648

19,122,148
5,190,799

24.5
60.0

a. Payment processing businessFor our payment processing business, the Group’s focus is on online payment, recurring payment and cardpresent payment.
Online payment and recurring payment left solid results with steady growth in Ecommerce market, acquisition ofmajor Ecommerce merchants, and service expansion to a wider merchant base which is not limited to
Ecommerce operators.
As part of the services to support financial institutions and financial service providers that promote new
businesses to create a cashless society, the Group has been providing “Ginko Pay” platform system. Ginko Pay
is a mobile phone payment service that links to bank accounts, and was developed jointly by the Bank of
Yokohama and the Group. The Group’s focus has been to add financial institutions and other partner operators
to its existing client base of Ginko Pay. It is the Bank of Yokohama, Ltd. and the Bank of Fukuoka, Ltd. that used
our platform to deliver the service during the period under review. The Group had previously announced theplanned adoption of the platform by Kumamoto Bank, Ltd., Shinwa Bank, Ltd., and the three banks under
Resona Group (Resona Bank, Limited, Saitama Resona Bank, Limited, and The Kinki Osaka Bank, Ltd.), and a
new announcement on the Japan Post Bank Co., Ltd. was made on May 18, 2018. Additionally, Tokyu
Corporation, the Bank of Yokohama, Ltd., Japan Post Bank Co., Ltd. and the Group decided to start thedevelopment of a cash out service in which end users can withdraw cash from bank accounts through ticket
vending machines at the stations of Tokyu lines under the Ginko Pay platform, and the announcement wasmade on July 13, 2018.
As a result, the segment’s revenue came in at 10,668,495 thousand yen, a year-on-year increase of 21.3％, andits operating profit totaled 6,056,207 thousand yen, a year-on-year increase of 23.6％.

b. Money Service Business
Money Service Business (MSB) includes the Early Payment Service to help merchants receive sales proceeds
earlier and improve their cash flow, the Transaction Lending Service to lend growth capital to merchants basedon payment and other data, the Remittance Service, and the GMO Payment After Delivery that the Group’s
consolidated subsidiary GMO Payment Service, Inc. offers.
Points to note under the cumulative third quarter of the consolidated fiscal year includes the steady expansionof GMO Payment After Delivery by GMO Payment Service, Inc., and the rise of transaction value in Early-6-

Payment Service and Remittance Service. These contributed to the larger revenue and profit of the segment. In
addition, the Group launched GMO B2B Early Payment and GMO B2B AR Guarantee on May 15, 2018. These
are the services of buying accounts receivable to turn it into cash for our clients at an early point, and covering
for uncollected accounts receivables, respectively. These are the attempts to support the growth of BtoB
operators in multiple dimensions.
These factors have led to a segment revenue of 4,580,622 thousand yen, up by 32.8％ year-on-year and asegment operating profit of 874,305 thousand yen that contrasts with the operating loss of 93,096 thousand yen
in the same time previous year.

-7-

c. Payment enhancement business
Payment enhancement business includes services of mobile payment, authentication and notification
comprehensively provided by our consolidated subsidiary Macro Kiosk Berhad and an online advertising service
that raises the sales of the Group’s merchants by analyzing their sales status and running their ads on theirbehalf based on their sales data.
Under the cumulative third quarter, Macro Kiosk Berhad’s revenue in its mainstay authentication, notificationand mobile payment business grew, as was the case in the first half. The business was especially strong inemerging markets which remain to be the focus of Macro Kiosk Berhad. However, even with the 26.0% year-onyear revenue growth, Macro Kiosk Berhad’s earnings declined due to the foreign exchange loss.
As for our online advertising service, an external environment factor for part of the service resulted in a year-onyear decline in its ad-placement value and consequently, the entire service’s revenue.
As a result, the segment recorded a revenue at 3,873,030 thousand yen, a year-on-year increase of 24.3％,
and a segment operating profit of 106,546 thousand yen, a year-on-year decrease of 53.4％.
Under the third cumulative quarter, the Company adopted a resolution to issue Japanese yen denominated zero
coupon convertible bonds with stock acquisition rights due 2023 worth 17 billion yen at the board of directors’
meeting on May 31, 2018 as a measure for the further growth of its businesses. The payment was completed
on June 19, 2018. The Group’s understanding is that it succeeded in securing necessary capital for the further
growth of Money Service Business at low costs. Additionally, it recognizes that in the event of our share pricegoing above the conversion price and the bonds’ conversion into shares, we can accumulate further capital tocover the coming business growth and meet the changes in the business environments and reinforce ourfinancial base.
As to our initiatives to improve customer satisfaction, the Company announced on June 21, 2018 that GMO
Payment Gateway, Inc. became the first payment service provider to receive the highest rating, three stars, inthe “monitoring” evaluation from HDI-Japan run by ThinkService K.K.
Please see below for the chart of major businesses and companies of such businesses by segment.
Segment

Major service

Major companies of the service

Payment(Online billing and recurring billing)

Processing

Payment processing service

Business(card present payment)

subsidiary)

System development

GMO Payment Gateway, Inc.

Payment processing service

GMO Payment after delivery

Money Service
Business

Remittance service
Transaction lending
Early payment service

Payment
Enhancement
Business

Mobile payment, authentication andnotification
Online advertising service-8-

GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Financial Gate, Inc. (consolidated

GMO Payment Service, Inc. (consolidated
subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
Macro Kiosk Berhad (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)(2) Status of consolidated financial position①Assets, liabilities and net assets
a. Assets
Total assets at the end of the third quarter of the consolidated fiscal year under review were up 29,652,410
thousand yen from the end of the previous consolidated fiscal year at 113,991,044 thousand yen. An increase of
cash and cash equivalents by 12,964,825 thousand yen, an increase of operating and other receivables by
7,968,258 thousand yen and an increase in deposit to subsidiaries and affiliates by 7,000,000 thousand yen
contributed to the larger assets.
As stated under 1. Cash and cash equivalents, (6) Notes regarding condensed consolidated financial
statements, 2. Condensed Consolidated Financial Statements and Major Notes, the Group has 8,000,000
thousand yen deposits to subsidiaries and affiliated companies included in the cash and cash equivalents at theend of the cumulative third quarter. Together with the 7,000,000 thousand yen deposits to subsidiaries andaffiliated companies on the condensed consolidated balance sheet, the total balance of the Group’s deposits to
subsidiaries and affiliated companies stands at 15,000,000 thousand yen. These deposits are the Group’s cashon hand deposited under the cash management system (CMS). CMS is the system that GMO Internet Group
introduced to all its group companies for the management of their cash. Therefore, the Group does not need to
wait until the predetermined CMS repayment date comes to withdraw capital. When the Group’s capital demand
surges in accordance with the favorable progress of the business, the Group can withdraw cash when neededby raising a request early enough to meet a predetermined requirement.
b. Liabilities
Balance of liabilities at the end of the third quarter of the consolidated fiscal year under review stood at
88,873,030 thousand yen, higher than the end of the previous consolidated fiscal year by 25,303,715 thousand
yen. Such increase mainly came from operating and other payables’ expansion by 8,242,995 thousand yen andthe addition of corporate bonds by 16,659,772 thousand yen.
c. Equity
Equity balance at the end of the third quarter of the consolidated fiscal year under review was 25,118,013
thousand yen, higher by 4,348,695 thousand yen than the end of the previous consolidated fiscal year. Retained
earnings increase of 2,286,971 thousand yen led to the larger equity.
②Status of consolidated cash flows
Cash and cash equivalents (hereinafter called as “fund”) increased by 12,964,825 thousand yen over the
cumulative third quarter to 40,498,341 thousand yen. The state of cash flows over the cumulative third quarter ispresented below.
a. Cash flow of operating activities
Fund provided by operating activities in the cumulative third quarter amounted to 3,091,485 thousand yen,which contrasts with the provision of 1,504,544 thousand yen in the same period a year before. Despite anincrease in operating and other receivables by 7,950,682 thousand yen that dragged down the fund balance, anincrease in operating and other payables by 8,149,512 thousand yen have led to the fund expansion on thewhole.
b. Cash flow of investing activities
The amount of fund used for investing activities in the third cumulative quarter totaled 7,391,243 thousand yen,which contrasts with the usage of 1,396,200 thousand yen in the same period previous year. This is due to theoutflow of 794,931 thousand yen from an acquisition of intangible assets, purchase of investment securities for
302,001 thousand yen and the deposit to subsidiaries and affiliated companies for 7,000,000 thousand yen, in-9-spite of the sales of investment securities for 757,416 thousand yen.
c. Cash flow of financing activities
The amount of fund provided in financing activities over the cumulative third quarter totaled 17,261,037
thousand yen, which contrasts with the provision of 2,854,897 thousand yen in the same period previous year.
This is due to the issuing corporate bonds for 17,457,920 thousand yen despite the payout of dividends for
1,482,594 thousand yen.

- 10 -

(3) Review of consolidated earnings forecasts and other forecasts
The Group’s core business is positioned in Ecommerce market in Japan. Japan’s B2C Ecommerce for merchandizing
continues to grow rapidly, helped by favorable changes in the group’s external environment such as spreading
smartphone usage and logistic reforms. At the same time, field of Ecommerce is expanding, represented by the riseof B2B and C2C Ecommerce markets.
For the fiscal year ending September 2018, the Group forecasts revenue expansion in all its segments of payment
processing business, Money Service Business and payment enhancement business by acquisition of large andgrowth merchants, financial institutions and large businesses, the expansion of GMO Payment After Delivery, further
growth of Macro Kiosk Berhad, and others.
In terms of profits, the Group is expecting a rise in cost-to-revenue ratio in response to the growing high cost-ratio
services including the GMO Payment After Delivery and Remittance Service, and has the plans for upfront
investments for growth. Still, the Group is on track for its consolidated full-year forecast in terms of operating profit, by
the expansion of the high gross-margin payment processing business and the margin improvement in Money Service
Business.
Our earnings forecast for the consolidated fiscal year ending September 30, 2018 is as follows: revenue 26,107
million yen (-% year-on-year increase); operating profit 6,475 million yen (-% year-on-year increase); profit before
income taxes 6,196 million yen (-% year-on-year increase); profit attributable to owners of parent 3,933 million yen (% year-on-year increase). Please note that year-on-year changes are not presented since this is the first fiscal year
in which the Group adopts IFRS.

- 11 -

2. Condensed Consolidated Financial Statements and Major Notes(1) Condensed consolidated balance sheet

Notes

Date of transition to
IFRS(October 1, 2016)(Unit: Thousand yen)
End of previous
End of Q3 of current
consolidated fiscal
consolidated fiscal
year
year
(September 30,(June 30, 2018)2017)

AssetsCurrent assets
Cash and cash equivalents

1

25,091,091

27,533,515

40,498,341

Operating and other receivables

2

19,841,482

42,991,145

50,959,404

39,35094,47843,849Inventories
Other financial assets

46,14750,89562,467

Other current assets

430,194

408,993672,719

Total current assets

45,448,267

71,079,028

92,236,782

400,648461,558

435,967

4,193,386

4,766,089

5,036,516

2,500,061

2,970,709

2,867,448－－

7,000,000

Other financial assets

3,186,744

3,260,718

5,444,783

Deferred tax assets

425,935

1,792,840

956,203

Noncurrent assets
Tangible assets
Goodwill and other intangible assets
Investments accounted for using equity
methodDeposits to subsidiaries and affiliates

3

Other noncurrent assets

9,066

7,688

13,342

Total noncurrent assets

10,715,842

13,259,604

21,754,261

56,164,109

84,338,633

113,991,044

Total assets- 12 -

NotesDate of transition to
IFRS(October 1, 2016)(Unit: Thousand yen)
End of previous
End of Q3 of current
consolidated fiscal
consolidated fiscal
year
year
(September 30,(June 30, 2018)2017)

Liabilities and equity
Liabilities
Current liabilities
Operating and other payables

4

33,251,526

53,448,543

61,691,539

43,860820,596

2,800,400

Borrowings
Other financial liabilities

64,28473,54969,066

Income taxes payable, etc.

846,086

1,574,603

900,915

Other current liabilities

1,329,808

1,992,034

1,753,125

Total current liabilities

35,535,567

57,909,327

67,215,047

Noncurrent liabilities－－

16,659,772

Borrowings

45,2452,999,500

2,399,200

Other financial liabilities

124,533

158,154

162,059

Provision

44,842

63,35864,055

Corporate bonds

Deferred tax liabilities

264,606

230,045

266,658

Other noncurrent liabilities

1,097,758

2,208,928

2,106,236

Total noncurrent liabilities

1,576,987

5,659,987

21,657,983

37,112,554

63,569,315

88,873,030

Capital stock

4,712,900

4,712,900

4,712,900

Capital surplus

4,964,712

4,985,781

5,674,448

Retained earnings

8,188,306

9,619,266

11,906,238

Treasury stock△265,236△256,269△242,111

Total liabilities
EquityOther items of equity

357,654613,768

1,947,648

Total equity attributable to owners ofparent17,958,338

19,675,447

23,999,123

Minority interests

1,093,216

1,093,870

1,118,890

Total equity

19,051,554

20,769,318

25,118,013

56,164,109

84,338,633

113,991,044

Total liabilities and equity- 13 -

(2) Condensed consolidated statement of income and consolidated statement of comprehensive income
Condensed consolidated statement of income
First nine months of previous
consolidated fiscal year
(From October 1, 2016
to June 30, 2017)15,362,675(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)19,122,148

Cost of revenue△4,758,223△6,498,893

Gross profit

10,604,451

12,623,254

223,934

148,539△7,304,237△7,472,840△280,499△108,153

3,243,648

5,190,799

Notes
Revenue

Other income
Selling, general and administrative
expenses
Other expense
Operating profit
Financial income

53,52029,695

Financial expense△51,836△53,058

Equity method investment gains or loss

△346,523△125,882

Profit before income taxes

2,898,808

5,041,554

Income tax expenses△817,964△2,036,232

Profit2,080,844

3,005,321

2,064,596

3,016,049

16,247△10,727

2,080,844

3,005,321

Basic earnings per share (yen)

55.58

81.87

Diluted earnings per share (yen)

55.57

81.79

Profit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share- 14 -

Condensed consolidated statement of comprehensive income
First nine months of previous
consolidated fiscal year
(From October 1, 2016
To June 30, 2017)
2,080,844(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)
3,005,321

101,0452,034,931

71,69072,076

172,736

2,107,008

82,96658,301

152,854△57,284

235,8211,016

408,557

2,108,024

2,489,401

5,113,346

Owners of parent

2,465,726

5,106,897

Minority interests

23,675

6,448

2,489,401

5,113,346

NotesProfitOther comprehensive income
Items that will not be reclassified to profit
or loss
Fair value of financial assets measured
through other comprehensive income
Shares of other comprehensive incomeof equity method affiliates
Total of Items that will not bereclassified to profit or loss
Items that will be reclassified to profit orloss
Exchange differences on translation offoreign operations
Shares of other comprehensive incomeof equity method affiliates
Total of items that will be reclassified to
profit or loss
Other comprehensive income after income
taxes
Comprehensive income

Comprehensive income attributable toTotal- 15 -

(3) Condensed consolidated statement of changes in equity
First nine months of the previous consolidated fiscal year (From October 1, 2016 to June 30, 2017)(Unit: Thousand yen)

Notes

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock

Total equity
Other items attributableof equity to owners ofparentMinority
interests

Total assets

4,712,900

4,964,712

8,188,306△265,236

1,093,216

19,051,554

Profit

－－2,064,596－－

2,064,596

16,2472,080,844

Other comprehensive income

－

－

－

－

401,130

401,130

7,427

408,557－－

2,064,596－

401,130

2,465,726

23,6752,489,401

Disposal of treasury stock－

50,997

－

8,966

－

59,964－59,964

Dividends－－ △1,002,996－－ △1,002,996△40,288△1,043,284－－

20,903－△20,903

－

－

－

－

△30,070－－－△30,070

3,360△26,710

－

142

－

－

△142

－

16,507

16,507

Total transactions with owners－

21,069△982,092

8,966△21,045△973,102△20,420△993,523

Balance as of June 30, 2017

4,712,900

4,985,781

9,270,810△256,269

737,738 19,450,961

1,096,470

20,547,432

Balance as of October 1, 2016

Comprehensive income

Transfer from accumulated
other comprehensive income
to retained earnings
Changes in the interests incontrolled subsidiary
Share-based paymenttransaction

357,654 17,958,338

First nine months of the current consolidated fiscal year (From October 1, 2017 to June 30, 2018)(Unit: Thousand yen)
Total equity
Other items attributableof equity to owners ofparentCapitalstock

CapitalsurplusRetainedearnings

Treasurystock

4,712,900

4,985,781

9,619,266△256,269

Profit－－3,016,049－－

Other comprehensive income

－

－

－

－

2,090,848－－

3,016,049－

Disposal of treasury stock－

73,760－14,157

Dividends－－ △1,485,920

Notes

Balance as of October 1, 2017

Comprehensive income

Floatation of convertible bonds
with stock acquisition rights
Transfer from accumulated
other comprehensive income
to retained earnings
Changes in the interests incontrolled subsidiary
Share-based paymenttransaction

613,768 19,675,447

Minority
interests

Total assets

1,093,870

20,769,318

3,016,049△10,727

3,005,321

2,090,848

17,1762,108,024

2,090,848

5,106,897

6,448

5,113,346－

87,918－87,918－－ △1,485,920－△1,485,920－

543,488－－－543,488－543,488－－756,842－△756,842

－

－

－

－

△30,707－－－△30,707－△30,707－

102,125

－

－

△125

102,000

18,570120,570

Total transactions with owners－

688,666△729,077

14,157△756,967△783,221

18,570△764,650

Balance as of June 30, 2018

4,712,900

5,674,448 11,906,238△242,111

1,947,648 23,999,123

1,118,890

25,118,013- 16 -

(4) Condensed consolidated statement of cash flows
First nine months of previous
consolidated fiscal year
(From October 1, 2016
to June 30, 2017)(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)

2,898,808

5,041,554

Depreciation572,288

703,480

Financial income and expense
Equity method investment gain/loss(△=gains)
Increase/decrease in inventories(△=increase)
Increase/decrease in operating andother receivables (△=increase)
Increase/decrease in operating andother payables (△=decrease)
Other△1,68323,362

346,523

125,882△32,194

50,628△17,014,613△7,950,682

15,937,117

8,149,512

776,270△28,274

3,482,516

6,115,464

16,174

9,025Interest paid

△21,414△29,211

Payment for deposit of guaranteed
deposit money
Payment on information security
countermeasure expense△20,000△30,000△215,235△67,041△1,737,496△2,906,751

1,504,544

3,091,485△99,486△49,538△766,607△794,931△27,687△302,001

30,947757,416△369,329－△125,000－－△7,000,000

27,225－△68,359△7,923

3,152

1,071

△1,055

4,664△1,396,200△7,391,243

Notes
Net cash provided by (used in) operating
activities
Profit before income taxes

SubtotalInterest and dividends received

Income taxes paid
Net cash provided by (used in)operating activities
Net cash provided by (used in) investing
activities
Purchase of property, plants andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemptionof investment securities
Purchase of stocks of subsidiaries andaffiliates
Purchase of other stocks ofsubsidiaries and affiliates
Payment for deposit of deposit tosubsidiaries and affiliates
Gain from liquidation of subsidiary
Acquisition of other financial assets
Proceeds from sales of other financial
assetsOthersNet cash provided by (used in)investing activities- 17 -

NotesFirst nine months of previous
consolidated fiscal year
(From October 1, 2016
To June 30, 2017)(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2017
To June 30, 2018)

Net cash provided by (used in) financing
activities
Net increase/decrease in short-termborrowings(△=decrease)
Proceeds from long-term borrowings△7,7412,000,000

4,000,000－

Repayment of long-term borrowings△56,950△621,101－

17,457,920△26,960△30,707△1,001,161△1,482,594△52,288△62,4782,854,897

17,261,037△5,335

3,546

2,957,904

12,964,825

1

25,091,091

27,533,515

1

28,048,996

40,498,341

Proceeds from issuance of corporate
bonds
Purchase of shares of subsidiaries not
resulting in change in scope of
consolidation
Dividends paid
Other
Net cash provided by (used in)financing activities
Effect of exchange rate changes on cash
and cash equivalents
Increase/decrease in cash and cash
equivalents (△=decrease)
Balance of cash and cash equivalents atthe beginning of the period
Cash and cash equivalents at the end of
the quarter- 18 -

(5) Notes regarding the going concern assumptions
N/A- 19 -

(6) Notes regarding condensed consolidated financial statements
1．Cash and cash equivalents
Breakdown of cash and cash equivalents are as follows.
Date of transition to IFRS(October 1, 2016)

End of previous consolidated
fiscal year
(September 30, 2017)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2018)25,091,091

27,533,515

32,498,341－－

8,000,000

25,091,091

27,533,515

40,498,341

Date of transition to IFRS(October 1, 2016)

End of previous consolidated
fiscal year
(September 30, 2017)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2018)

Accounts receivable-trade

4,083,117

6,154,731

6,972,764

Advance payments-trade

6,388,955

16,806,222

22,538,104

Accounts receivable-other

1,742,612

14,676,213

17,990,087

Operating loans

7,909,406

7,746,188

6,012,284

Allowance for doubtful
accounts△327,887△2,393,788△2,570,247

45,278

1,578

16,411

19,841,482

42,991,145

50,959,404

Cash and cash equivalents
Deposits to subsidiaries
and affiliates
Total

2．Operating and other receivables
Breakdown of operating and other receivables are as follows.

Other
Total

3．Deposits to subsidiaries and affiliates
Our deposits to subsidiaries and affiliates are the deposits under the CMS of the GMO Internet Group.
4．Operating and other payables
Breakdown of operating and other payables are as follows.
Date of transition to IFRS(October 1, 2016)

End of previous consolidated
fiscal year
(September 30, 2017)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2018)

Accounts payable-trade

2,785,256

3,482,504

4,367,733

Accounts payable-other

2,902,451

12,697,663

16,432,043

Deposits received

27,563,819

37,268,376

40,891,762

33,251,526

53,448,543

61,691,539

Total- 20 -

5. Subsequent events
The Group adopted a resolution of the stock split at the board of directors’ meeting held on August 9, 2018 as follows.
(1) Purpose of the stock split
The purpose of the stock split is to lower the share value by trading lot. The Group thinks that lowering minimum
investment value makes it easier for investors to purchase our stock, attracts a wider range of investors and improves
the liquidity of the Group’s shares.
(2) Outline of the stock split①Stock split method
With Sunday, September 30, 2018 as a baseline date (Friday, September 28, 2018 will be the actual baseline datesince September 30 is a non-operating day for the shareholder register administrator), each common share owned byshareholders listed on recorded on the Group’s final shareholder register as of the baseline date will be split into two.
②The number of shares to increase with the stock split
a. Total outstanding shares before the stock split

37,150,500 sharesb. The number of shares to increase with the stock split

37,150,500 sharesc. Total outstanding shares after the stock split

74,301,000 sharesd. The number of authorized shares after the stock split

102,400,000 shares

Please note that the total outstanding shares and the number of shares to increase may go up before the baseline
date for the stock split when the stock acquisition rights of the Group’s convertible bonds are exercised.
③Stock split datesa. Official announcement date of the baseline date

Friday, September 14, 2018

b. Baseline date

Sunday, September 30, 2018c. Effective date

Monday, October 1, 2018

④Othersa. There will be no change to the capital stock value with the stock split.
b. Effective date of the stock split will be Monday, October 1, 2018 while the baseline date for the year-end dividend
payout for the fiscal year ending September, 2018 will be Sunday, September 30, 2018. Therefore, shareholders’dividend value for FY2018 will be determined based on the number of shares held before the stock split. Further,
there will be no changes to the year-end dividend payout forecast with the stock split.
⑤Effects of the stock split on earnings per share
Earnings per share would have been as follows if the stock split had been executed at the beginning of the previous
consolidated fiscal year.

Basic

Earnings

per

share

per

share

(Japanese yen)
Dilutedearnings(Japanese yen)First nine months of previous
consolidated fiscal year
(From October 1, 2016
To June 30, 2017)

First nine months of current
consolidated fiscal year
(From October 1, 2017
To June 30, 2018)

27.79

40.94

27.79

40.90

- 21 -

(3) Adjustment on the conversion price of the Japanese yen denominated zero coupon convertible bonds with stockacquisition rights due 2023
With the stock split, the Group will adjust the conversion price of the Japanese yen denominated zero coupon
convertible bonds with stock acquisition rights due 2023 as follows for October 1, 2018 onward.

Name of the securities
GMO Payment Gateway, Inc.

Conversion price before adjustment

Conversion price after adjustment

15,106 Japanese yen

7,553 Japanese yen

Zero Coupon Convertible Bonds due
2023- 22 -