Summary of Consolidated Financial Statements for the Third Quarter of FY2020 (IFRS)
August 11, 2020
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 12, 2020

Scheduled date of commencementfor dividend payment-

Supplemental materials prepared forfinancial results

Yes

Information meeting arranged related tofinancial resultsYes (for institutional
investors and analysts)

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

1.

Consolidated Financial Statements for the Third Quarter, FY2020(From October 1, 2019 to June 30, 2020)(1) Consolidated Financial Statements (Cumulative)
Revenue
Mil. Yen

Q3 FY2020
Q3 FY201924,118
20,108(Percentages represent year-on-year % change)

Profit before
income taxes

Operating profit% Mil. Yen

19.9
-

7,778
6,932

Basic earnings per
share

%

Mil. Yen

12.2
-

8,413
6,749

% Mil. Yen

24.7
-

%

Mil. Yen

5,810 37.9
4,214 40.2

5,750
4,252

% Mil. Yen

35.2
41.0

%

6,157 71.6
3,587 △29.8

Diluted earnings per
share

Yen
78.16
57.81

Q3 FY2020
Q3 FY2019

Profit attributableTotal
to owners ofcomprehensive
parentincomeProfit

Yen
76.28
56.55

(Note)
Macro Kiosk Berhad has been deconsolidated from Q3 of Fiscal Year Ending September 2020 and has been reclassified as
discontinued operations. As a result, revenue, operating profit and profit before income taxes exclude discontinued operations andpresent the amounts for continuing operations only. The corresponding figures in the previous year of Q3 FY2019 have been similarly
restated, and the year-on-year percentage figures for Q3 FY2019 are not shown for this reason.
For details, please refer to page 19, “⑤ Discontinued operations” found in “(6) Notes regarding condensed consolidated financial
statements,” under “2. Condensed consolidated financial statements and major notes”.

(2) Consolidated Financial Position
Total assets

Q3 FY2020
FY20192.

Total equity attributable toTotal equity attributableowners of parent to total
to owners of parent
assetsTotal equity

Mil. Yen

Mil. Yen

Mil. Yen%

192,661
139,990

30,952
27,53929,70326,49415.4
18.9

Dividends
Annual dividend
End of Q1
FY2019FY2020
FY2020 (forecast)(Note)

3.

End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

0.00
0.00

0.00
0.00

0.00
0.00

36.00

36.00

42.00

42.00

Revision to the most recently released dividend forecast:

No

Consolidated Financial Forecast for the Fiscal Year Ending September 2020
(From October 1, 2019 to September 30, 2020)(% represents year-on-year change)

Profit before
Operating profit
income taxes

Revenue

Profit attributable Basic earnings
to owners of parent per share

ProfitMil. Yen%

Mil. Yen%

Mil. Yen

31,418

16.7

10,376

8.5

9,867

6.1

(Note 1)

Revision of the most recently released financial forecast:

No(Note 2)The corresponding previous term’s figures have been restated to present continuing operations only, and the year-onyear percentages are computed on this basis. The year-on-year change in operating profit of ¥10,376 mil. would be
25.0% YoY if compared against the previous term’s operating profit of ¥8,301 mil. including discontinued operations.

Full year―1―% Mil. Yen%

Mil. Yen%

Yen

6,216 23.0

6,110

16.0

83.06

Notices:(1) 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:)(2)

Changes in the accounting policy / changes in the accounting estimation[1] Changes in accounting policy required by IFRS.: Yes[2] Changes in accounting policy other than [1]: No[3] Changes in accounting estimations: No(3)

Number of shares issued (common stock)[1] Number of shares issued at the end of the term(including treasury stock)[2] Number of treasury shares at the end of the term
[3] Average number of shares during the term

Q3 FY2020: 74,301,000

FY 2019: 74,301,000

Q3 FY2020: 714,781
Q3 FY2020: 73,577,545

FY 2019: 739,281
Q3 FY2019: 73,562,350(Note) Number of treasury shares at the end of the term above include the shares attributed to the directors’
remuneration board incentive plan trust and J-ESOP (734,205 shares for FY2019; 709,705 sharesfor Q3 FY2020.)* 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 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 10 of the attachment.
2. Results Presentation for Investors and Analysts to be held on August 13, 2020. Supporting materials and a video ofthe presentation will be made available on the company's website after the event.

―2―

○ Table of contents of attachment

1. Qualitative Information on Consolidated Financial Statements for the Quarter4(1) Consolidated operating results

4(2) Status of consolidated financial position

8(3) Review of consolidated earnings forecasts and other forecasts

10

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

1111(2) Condensed consolidated statement of income and consolidated statement comprehensive income 13(3) Condensed consolidated statement of changes in equity

15(4) Condensed consolidated statement of cash flows

16(5) Notes regarding the going concern assumptions

18(6) Notes regarding condensed consolidated financial statements

19② Cash and cash equivalents

19③ Operating and other receivables

19④ Deposits to subsidiaries and affiliates

19⑤ Discontinued operations

19

―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 underreview.
Macro Kiosk Berhad has been deconsolidated from Third Quarter of Fiscal Year Ending September 2020 and has
been reclassified as discontinued operation in the condensed quarterly financial statements. As a result, revenue,
operating profit and profit before income taxes exclude the discontinued operation and present the amounts forcontinuing operations only. The corresponding figures for Third Quarter of Fiscal Year Ending September 2019 are
also restated and presented on a similar basis.
① Consolidated operating results
The Group announces its earnings results for the cumulative third quarter of the consolidated fiscal year 2020
(October 1, 2019 to June 30, 2020) as follows.
(Unit: Thousand yen)
Q3 FY2019(From October 1, 2018
to June 30, 2019)

Q3 FY2020(From October 1, 2019
to June 30, 2020)

Rate of change (%)

Revenue

20,108,691

24,118,665

19.9

Operating profit

6,932,045

7,778,478

12.2

Profit before income taxes

6,749,720

8,413,985

24.7

4,252,580

5,750,915

35.2

Profit attributable to ownersof parent

a. Revenue
The Group’s revenue reached to ¥24,118 mil., up by 19.9% YoY. Overall transactions trended favorably due tonesting demand, despite the decline in transactions at some merchants that were adversely affected by
COVID-19. The Payment Processing Business revenue grew, led by steady growth of E-Commerce (EC)market for online and recurring payments coupled with the expansion of the Group’s services to the offline
domain. The Money Service Business (MSB) revenue grew from the strong trends seen in GMO Payment After
Delivery transactions, a type of deferred payment service. Payment Processing Business revenue was ¥16,809
mil. (up 21.2% YoY), Money Service Business (MSB) revenue was ¥6,868 mil. (up 19.6% YoY) and Payment
Enhancement Business revenue was ¥448 mil. (down 9.8% YoY). For details, please refer to page 6 of “②Results by segment” found under “(1) Consolidated operating results” of “1. Qualitative Information on
Consolidated Financial Statements for the Quarter”.

―4―Revenue breakdown by business model is as follows.
(Unit: Thousand Yen)
Business model

Q3 FY2019(From October 1, 2018
to June 30, 2019)

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

Q3 FY2020(From October 1, 2019
to June 30, 2020)

Rate of change(%)

1,029,560

1,874,154

82.0

3,637,816

4,231,674

16.3

5,566,380

6,403,742

15.0

9,874,933

11,609,093

17.6

20,108,691

24,118,665

19.9

b. Operating profit
Operating profit reached ¥7,778 mil., up by 12.2% YoY. Operating profit grew by 12.2% YoY compared to therevenue growth of 19.9% YoY due to unfavorable comparison with the previous Q3 that benefited from a one-off
decline in expenses related to lower credit risks resulting from various corporate efforts and the efforts to control
expenses after this one-off expense reduction.
By segment, Payment Processing Business segment profit (operating profit) was ¥8,647 mil., up 17.6% YoY;
Money Service Business segment profit (operating profit) stood at ¥1,337 mil., down 9.5% YoY; and, Payment
Enhancement Business segment profit (operating operating) of ¥79 mil., down 33.4% YoY.
For details please refer to page 6 of“② Results by segment” of the “(1) Consolidated operating results”.

c. Profit before income taxes
Pre-tax profit reached ¥8,413 mil., up 24.7% YoY. The reason the pre-tax profit growth rate of 24.7% YoY ishigher than the operating profit growth rate of 12.2% YoY, is due to gains on investment partnerships of¥261mil. that increased the financial income to ¥289mil. (versus ¥33mil. in the previous Q3) and equity method
investment gains of ¥528mil. (versus an equity method loss of ¥9mil. in the previous Q3).
Additionally, due to reclassifying Macro Kiosk Berhad as a discontinued operation, the quarterly loss fromdiscontinued operations of ¥179 mil. is recorded in the Q3 results.
Details are presented on page 19, “⑤ Discontinued operations” found in “(6) Notes regarding condensed
consolidated financial statements,” under “2. Condensed consolidated financial statements and major notes”.

―5―

② Results 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

Q3 FY2019(From October 1, 2018
to June 30, 2019)

Q3 FY2020(From October 1, 2019
to June 30, 2020)

Rate of change(%)

13,866,435
7,352,230

16,809,246
8,647,828

21.2
17.6

5,744,779
1,477,868

6,868,145
1,337,233

19.6
△9.5

497,476
120,011448,569
79,967

△9.8
△33.4

－
△2,018,064△7,296△2,286,550－－

20,108,691
6,932,045

24,118,665
7,778,478

19.9
12.2

a. Payment Processing Business
The main focus areas of the Payment Processing Business are online payment, recurring payment services,offline payment processing service and, support services to financial institutions and financial service providers.
In the online payment and recurring payment domain, we focused our efforts to acquire large merchants andexpand our services to non-EC operators given the backdrop of a steadily expanding EC market.
The spread of COVID-19 continued to affect financial performance of the current quarter since Q2 FY2020. In
particular, the declaration of a State of Emergency by the Japanese government (from April 7, 2020 to May 25,2020) suppressed consumption in the offline market while favorably affecting online payments due to thenesting demand. That said, offline consumption is in a gradual recovery trend since the lifting of the State ofEmergency on May 25, 2020.
Specifically, the impact from COVID-19 on earnings was seen in transaction value growth of 22.7% YoY due tothe adverse impact to some merchants in the travel and ticket sales sector where per-transaction-value isrelatively high. On the other hand, transaction volume growth of 41.5% YoY exceeded the transaction value
growth due to the increase in micropayment transactions on the back of expanding EC market and rising
penetration of cashless payment, coupled with the revenue contribution from the increase in online transactionsof household items, digital content and public dues and taxes.
In the offline domain, the adverse impact from COVID-19 continued from Q2 into the current quarter due todepressed offline consumption. Despite this, sales of payment terminals trended favorably from the Installment
Sales Act amendment leading to replacement demand for IC-chip enabled terminals, and steady order wins for
projects related to the Unattended Market (UM) such as ticket machines and fare adjustment machines, which
is one of the target markets.
As a result, segment revenues reached ¥16,809 mil., up 21.2% YoY and segment profit (operating profit) was¥8,647 mil. up 17.6% YoY.
b. Money Service Business
Money Service Business (MSB) consists of Early Payment Service to help merchants improve their cash flow byreceiving sales proceeds earlier according to the merchant’s cash cycle needs; Transaction Lending Service tolend growth capital to merchants based on their payment and other related data; Lending service to overseas
operators; Remittance Service; and GMO Payment After Delivery offered by the consolidated subsidiary GMO
Payment Service, Inc.

―6―

In this third quarter under review, GMO Payment After Delivery, a type of deferred payment service, showed asteady trend supported by growing nesting demand despite some merchants that were adversely affected by
COVID-19. In addition, lending service to overseas operators, GMO B2B Early Payment and GMO B2B AR
Guarantee services also grew. Remittance service grew on the back of the increased demand for refunds due
to COVID-19, and Early Payment service revenues also increased YoY during the third quarter under review.
As a result, segment revenue reached ¥6,868 mil., up 19.6% YoY and segment profit (operating profit) reached¥1,337 mil., a decline of 9.5% YoY due to the slowdown of few services and unfavorable comps against theprevious third quarter which benefited from a one-off decline in expenses related to lower credit risks resulting
from various corporate efforts and efforts to control expense levels after this one-off expense reduction.

c. Payment Enhancement Business
Payment Enhancement Business comprises of online advertising service which provides analytics andadvertisement management service based on transactional trends to support our merchants’ growth, and“Medical Kakumei byGMO,” a reservation management system to enable operational efficiency offeredexclusively to medical institutions by our consolidated subsidiary GMO Medical Reservations Technology Co.
Ltd.
While online advertising service revenues declined YoY due to business restructuring, it exceeded internal plansfrom the increased online advertising demand from expanding EC market due to COVID-19.
As a result of the above, segment revenue was ¥448 mil., down 9.8% YoY and segment profit (operating profit)
was ¥79 mil., down 33.4% YoY.
With the transfer of all the share of Macro Kiosk on May 18, 2020, its business has been classified as
discontinued operation in the consolidated financial statements. Therefore, the segment revenue and profit(operating profit) presents only the continuing operations, and year-on-year percentages are computed bysimilarly restating the previous term’s figures.
Details are presented on page 19, “⑤ Discontinued operations” found in “(6) Notes regarding condensed consolidated
financial statements,” under “2. Condensed consolidated financial statements and major notes”.

Please see below for the table of the major businesses and companies providing these businesses by segment.
Segment

Major service

Major companies of the service

Payment processing service
Payment
Processing
Business(Online billing and recurring billing)

GMO Epsilon, Inc. (consolidated subsidiary)

Payment processing service
GMO Financial Gate, Inc. (consolidated subsidiary)(Offline payment)
GMO Payment After Delivery
Money Service
Business

GMO Payment Gateway, Inc.

GMO Payment Service, Inc. (consolidated
subsidiary)
GMO Payment Gateway, Inc.

Remittance service

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

Transaction lending

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

Early Payment service

GMO Epsilon, Inc. (consolidated subsidiary)

Payment
Enhancement

Online Advertising

GMO Payment Gateway, Inc.

Business―7―

(2) Status of consolidated financial position
Assets, liabilities and net assets
a. Assets
Total assets at the end of the consolidated third quarter under review increased by ¥52,670 mil. from the end of
the previous fiscal year end to reach ¥192,661 mil. This is mainly due to an increase in cash and cash
equivalents of ¥40,025 mil., an increase in advance payment of ¥3,121 mil., an increase in accrued revenuesof ¥3,618 mil. and the increase of tangible fixed assets of ¥3,316 mil.
The Group has ¥1,350 mil. deposits to subsidiaries and affiliated companies included in the balance of cash
and cash equivalents at the end of the consolidated third quarter under review, as stated in ② Cash and cash
equivalents” of (6) Notes regarding condensed consolidated financial statements. Together with the ¥5,000 mil.
of deposits to subsidiaries and affiliated companies stated in the condensed consolidated balance sheet, thetotal balance of the Group’s deposits to subsidiaries and affiliated companies stands at ¥6,350 mil. These
deposits are GMO Internet’s Group-wide cash on hand that is deposited under the cash management system(CMS) implemented and managed by GMO Internet. This allows the Group to withdraw necessary funds
without the need to wait until the preset CMS repayment date, by registering a request by taking into accountthe number of days required for application.
b. Liabilities
Balance of liabilities at the end of the consolidated third quarter under review stood at ¥161,709 mil., anincrease of ¥49,257 mil. from the end of the previous consolidated fiscal year, mainly due to an increase inaccrued expenses of ¥5,645 mil., an increase in deposits received of ¥38,034 mil., an increase in borrowings of¥2,932 mil. and the increase in other financial liabilities of ¥3,125 mil.
c. Equity
Equity balance at the end of the consolidated third quarter under review was ¥30,952 mil., an increase of¥3,413 mil. from the end of the previous consolidated fiscal year. This was mainly due recording the quarterly
net profit of ¥5,810 mil. and other comprehensive profit of ¥347 mil., which was partially offset by the decline inretained earnings of ¥2,648 mil. from dividend payouts.
② Status of consolidated cash flows
Cash and cash equivalents (“funds”) at the end of the consolidated third quarter under review increased by¥40,025 mil. versus the balance at the start of the term, to reach ¥92,039 mil. The state of cash flows over thethird quarter under review is discussed below.
a. Cash flow from operating activities
Net funds provided by operating activities during the consolidated third quarter under review amounted to¥43,889 mil., which compares to ¥1,886 mil. in net funds used in the same period of the previous year. This
resulted from cash outflows from (i) an increase in advances paid of ¥3,121 mil., (ii) an increase in accrued
revenues of ¥3,619 mil. (iii) corporate and income tax payment of ¥3,018 mil. which was partially offset by cash
inflows of (i) profit before tax of ¥8,413 mil., (ii) increase in accrued expenses of ¥5,789 mil., and (iii) increase indeposits received of ¥38,035 mil.
b. Cash flow from investing activities
Net funds used by investing activities during the consolidated third quarter under review totaled ¥3,827 mil.,which compares to a net funds used of ¥533 mil. in the same period of the previous year. This is due to cash
outflows from (i) acquisition of intangible assets of ¥1,176 mil., (ii) payment for acquisition of investment
securities of ¥892 mil., (iii) payment for acquisition of other financial assets of ¥803 mil. and (iv) payment due tosale of subsidiary shares resulting in a change in the scope of consolidation of △¥968 mil.

―8―

c. Cash flow from financing activities
Net funds provided by financing activities over the consolidated third quarter under review was a ¥28 mil., which
compares to net funds used of ¥103 mil. in the same period of the previous year. This is due to cash outflows
from repayments of long-term borrowings of ¥1,067 mil., dividend payouts of ¥2,647 mil., which was partially
offset by net inflows from the increase in short term borrowings of ¥4,000 mil.

―9―

(3) Review of consolidated earnings forecasts and other forecasts
The Group’s core business is positioned within the EC market in Japan, and Japan’s B2C EC market formerchandizing continues to grow very rapidly, helped by favorable externalities such as increased penetration ofsmartphones and logistic/distribution industry reforms. At the same time, the broader EC market, which is ouraddressable market, is expanding from the widening scope of EC market driven by the online migration of B2B andC2C transactions. We are committed to achieving over 25% operating profit growth in the medium to long term byfocusing on FinTech in the Money Service Business (MSB) segment, cashless domain where Japan is expected tocatch up to overseas levels, IoT in the offline market and, on global expansion as well.
As announced in the press release dated May 19, 2020 titled “Updated Notice Concerning Waiver of Claims toa Consolidated Subsidiary and Transfer of Shares due to the Transfer of the Same Consolidated Subsidiary”,
Macro Kiosk has been deconsolidated on May 2020 and reclassified as a discontinued operation. Details areprovided in on page 19, “⑤ Discontinued operations” found in “(6) Notes regarding condensed consolidated financial
statements,” under “2. Condensed financial statements and major notes”.

As a result, we have revised the earnings forecast for Fiscal Year ending September 30, 2020 due to restating
the revenue, operating profit and, profit before income taxes to exclude the discontinued operations and only
present continuing operations.
As a result of this revision, revenue has been revised downwards, but there are no changes to the profit figurescompared to the previous forecast, as the impact from this revision is minimal. Also note that current operating
profit forecast (B) of ¥10,376 mil. is an 8.5% YoY increase compared to previous year’s reference operating
profit of ¥9,562 mil. However, the growth rate would be a 25.0% YoY increase when compared to previous year’s
operating profit of ¥8,301 mil. including discontinued operations.
ProfitProfit before

Basic

Operating
Revenue

attributable toincomeProfitprofitearnings perowners of

taxes

share
parentYen Mil.

Yen Mil.

Yen Mil.

Yen Mil.

Yen Mil.

Yen

Previous Forecast (A)36,618

10,376

9,867

6,216

6,110

83.06

Current Forecast (B)31,418

10,376

9,867

6,216

6,110

83.06

In/Decrease (B-A)△5,200

-

-

-

-

-

In/Decrease (%)

△14.2

-

-

-

-

-

26,922

9,562

9,297

5,052

5,267

71.61

(Reference)Previous Term (FY2019)(Reference) Previous Term: The figures for fiscal year ending September 2019 are restated to exclude
discontinued operations and present only continuing operations.
Regarding our response to the COVID-19 contagion, business activities have basically switched to remote working
from January 27, 2020, and we do not detect any noticeable decline in productivity and efficiency although there has
been some delays in system development for some of the projects. Additionally, while there is the possibility of being
affected from the overall weakness in private consumption, we currently assess the impact from COVID-19 to ourearnings as minimal given the widely dispersed merchant sectors for the online business making our business lesssusceptible to a crisis in any one sector, and the increasing online shift of offline businesses.

―10―

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

Notes

End of previous consolidated
fiscal year
(September 30, 2019)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2020)

AssetsCurrent assets
Cash and cash equivalents②

52,013,447

92,039,082

Operating and other receivables③

13,663,112

11,123,448

Advances paid

32,496,862

35,617,962

Accrued revenue

21,566,393

25,184,995

207,280

485,405－5,000,000

165,584875,058

Inventories
Deposits to subsidiaries and affiliates④

Other financial assets
Other current assets

956,398

572,992

Total current assets

121,069,081

170,898,944

517,509

3,833,753

4,359,129

4,784,711

3,001,692

3,752,145

Non-current assets
Tangible assets①

Goodwill and other intangible assets
Investments accounted for using equity
methodOperating and other payables③－

1,975,100

Deposits to subsidiaries and affiliates④

5,000,000－

Other financial assets

4,803,089

6,267,976

Deferred Tax Assets

1,124,014

1,022,065

Other non-current assets

116,082

126,711

Total non-current assets

18,921,518

21,762,464

139,990,599

192,661,409

Total assets―11―NotesEnd of previous consolidated
fiscal year
(September 30, 2019)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2020)

Liabilities and equity
Liabilities
Current liabilities
Operating and other payables

4,688,856

4,380,075

Accrued expenses

16,118,112

21,763,585

Deposits received

50,834,374

88,869,310

15,800,400

19,800,400

108,534

344,188

1,569,616

1,219,774

396,631367,762

Borrowings
Other financial liabilities①

Income taxes payable, etc.
Provisions
Other current liabilities

2,229,923

2,398,352

Total current liabilities

91,746,449

139,143,450

Corporate bonds

16,745,648

16,797,352

Borrowings

1,398,700

331,500

Non-current liabilities

Other financial liabilities①

223,363

3,113,262

Provision

35,848

129,761

Deferred tax liabilities

85,60454,758Other non-current liabilities

2,215,686

2,139,003

Total non-current liabilities

20,704,851

22,565,638

Total liabilities

112,451,301

161,709,089

Capital stock

4,712,900

4,712,900

Capital surplus

5,847,480

5,672,056

EquityRetained earnings①

Treasury stock
Other items of equity
Total equity attributable to owners ofparentMinority interests①

Total equity
Total liabilities and equity―12―

15,884,444

18,915,683△1,181,846△1,149,341

1,231,655

1,551,888

26,494,633

29,703,186

1,044,664

1,249,133

27,539,297

30,952,320

139,990,599

192,661,409

(2) Condensed consolidated statement of income and consolidated statement of comprehensive income
Condensed consolidated statement of income

Notes

Q3 FY2019(From October 1, 2018
to June 30, 2019)(Unit: Thousand yen)
Q3 FY2020(From October 1, 2019
to June 30, 2020)

Continuing Operations
Revenue

20,108,691

24,118,665

Cost of revenue△5,686,197△6,711,606

Gross profit

14,422,494

17,407,058

100,818

114,692△7,516,551△9,610,624△74,716△132,647

Operating profit

6,932,045

7,778,478

Financial income

33,328289,491

Financial expense△206,386△182,779△9,266

528,794

6,749,720

8,413,985△2,364,763△2,424,742

4,384,957

5,989,243△170,406△179,198

4,214,550

5,810,044

Owners of parent

4,252,580

5,750,915

Non-controlling interests△38,030

59,129Profit4,214,550

5,810,044

Continuing operations

59.35

80.48

Discontinuing operations

△1.54

△2.32

Total

57.81

78.16

Other income
Selling, general and administrative
expenses
Other expense

Equity method investment gains or loss
Profit before income taxes
Income tax expenses
Profit from continuing operations

Discontinued Operations
Profit/Loss from discontinued operations(△=loss)
Quarterly profit

Profit attributable toEarnings per share
Basic earnings per share (yen) (△=loss)

Diluted earnings per share (yen) (△=loss)
Continuing operations

58.04

78.54

Discontinuing operations

△1.49

△2.25

Total

56.55

76.28

―13―

Condensed consolidated statement of comprehensive income

Notes

Q3 FY2019(From October 1, 2018
to June 30, 2019)

Profit(Unit: Thousand yen)
Q3 FY2020(From October 1, 2019
to June 30, 2020)

4,214,550

5,810,044△476,673

298,935

Shares of other comprehensive incomeof equity method affiliates△49,001

256,255

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△525,675

555,190△34,598△222,658△66,589

15,005

Total of items that will be reclassified to
profit or loss

△101,187△207,653△626,862

347,537

3,587,687

6,157,582

Owners of parent

3,621,452

6,097,274

Non-controlling interests△33,764

60,307

Total

3,587,687

6,157,582

Other comprehensive income
Items that will not be reclassified to profit
or loss
Fair value of financial assets measured
through other comprehensive income

Other comprehensive income after
income taxes
Comprehensive income

Comprehensive income attributable to―14―

(3) Condensed consolidated statement of changes in equity
First nine months of the previous consolidated fiscal year (From October 1, 2018 to June 30, 2019) (Unit: Thousand yen)

Notes
Balance as of October 1,
2018
Cumulative effects ofaccounting changes
Restated Balance
ProfitOther comprehensive
incomeQuarterly comprehensive
incomePurchase of treasury
stock
Dividends
Transfer from accumulated other comprehensive income to retained
earnings
Share-based paymenttransaction
Total transactions withownersBalance as of June 30,
2019

Capitalstock

Capitalsurplus4,712,900

5,758,448 12,875,446－
4,712,900

Retained Treasury
earnings
stock

Total equity
Other
attributable Minority
items ofto owners interests
equityof parent

Total
assets△491,893

1,941,305

24,796,206△195,085－－△195,085

5,758,448 12,680,361△491,893

1,941,305

24,601,121

1,223,811 25,824,933－－

4,252,580△38,030

4,214,550－

1,223,811 26,020,018－△195,085－－

4,252,580－－－－ △631,128△631,128

4,266△626,862－－

4,252,580－ △631,128

3,621,452△33,764

3,587,687－－－△689,952△689,952－△689,952－－ △2,136,041

－

－

－

1,006

－

△1,006－－－－

66,019－－－66,01920,386

86,406－

66,019 △2,135,034△689,952

4,712,900

5,824,467 14,797,908 △1,181,846－－ △2,136,041△1,006 △2,759,974
1,309,169

25,462,599－ △2,136,041

20,386 △2,739,587
1,210,434 26,673,033

First nine months of the current consolidated fiscal year (From October 1, 2019 to June 30, 2020) (Unit: Thousand yen)
Total
Other
equityCapitalCapital Retained Treasury
Minority
Total
Notes
items of attributablestock
surplus earnings
stock
interests
assetsequityto ownersof parent
Balance as of October 1,
4,712,900 5,847,480 15,884,444 △1,181,846 1,231,655 26,494,633 1,044,664 27,539,297
2019
Cumulative effects of①－－△97,243－－△97,243△38,971 △136,214
accounting changes
4,712,900 5,847,480 15,787,200 △1,181,846 1,231,655 26,397,389 1,005,692 27,403,082
Restated Balance
ProfitOther comprehensive
incomeQuarterly comprehensive
incomeDisposal of treasury
sharesDividends
Transfer from accumulated other comprehensive income to retained
earnings
Share-based paymenttransaction
Changes in the interest incontrolled subsidiary
Changes from sale ofshares in consolidated
subsidiary
Other increase/decrease
Total transactions withownersBalance as of June 30,
2020

－

－

5,750,915－－

5,750,915

59,1295,810,044

－

－

－

－

346,358

346,358

1,178

347,537－－

5,750,915－

346,358

6,097,274

60,307

6,157,582－

33,085－32,504－65,590－65,590－－ △2,648,221

－

－

－

25,788－△25,788

－

－

－

－

109,953－－△22

109,931

14,610124,541－△9,528－－－△9,528－△9,528－△308,934－－－△308,934

168,522△140,412

－

－

－

－

△313

△313

－

△313

△175,423 △2,622,433

32,504－
4,712,900

5,672,056 18,915,683 △1,149,341―15―－ △2,648,221△26,125 △2,791,477
1,551,888

29,703,186－ △2,648,221

183,132 △2,608,345
1,249,133 30,952,320

(4) Condensed consolidated statement of cash flows

Notes(Unit: Thousand yen)
Q3 FY2020(From October 1, 2019
to June 30, 2020)

Q3 FY2019(From October 1, 2018
to June 30, 2019)

Net cash provided by (used in) operating
activities
Profit before income taxes
Profit before income taxes fromdiscontinued operations (△=loss)
Depreciation & Amortization

6,749,720

8,413,985△167,613△158,338

810,018

1,117,664

Impairment Loss－

115,793

Gain/Loss from sale of subsidiary－

172,466

168,665△85,335

9,266△528,794△81,753△278,124

1,046,826△742,104△6,549,797△3,121,099△4,845,962△3,619,114

48,651

1,463,044

528,574

5,789,690

6,481,777

38,035,197

355,680△28,869△585,475

455,3033,968,578

47,001,365

38,05230,973Financial income and expense
Equity method investment gain/loss(△=increase)
Increase/decrease in inventories(△=increase)
Increase/decrease in operating andother receivables (△=increase)
In/Decrease in advances paid(△=increase)
Accrued revenues (△=increase)
In/Decrease in operating payables(△=decrease)
In/Decrease in accrued expenses(△=decrease)
In/Decrease in deposits received(△=decrease)
In/Decrease in provisions(△=decrease)
Other
SubtotalInterest and dividends received△38,360△124,444△3,119,940－

Income taxes paid/refunded
Net cash provided by (used in)operating activities
Net cash provided by (used in) investing
activities
Payment from time deposits
Purchase of property, plants andequipment
Purchase of intangible assets△2,735,313△3,018,886△1,886,982

43,889,007

689,374－△119,838△380,580△913,122△1,176,244

Purchase of investment securities
Proceeds from sale of investment
securities
Proceeds
fromredemptionofinvestments partnerships
Purchase of other financial assets
Proceeds from sales of other financial
assetsPayment for sale of subsidiary shares
resulting in change in the scope of
consolidation
OthersNet cash provided by (used in)investing activities△204,318△892,432

41,040－110,805

340,691△92,167△803,706

8,077

116,887－△968,256△52,859△63,398△533,010△3,827,038

Interest paid
Increase in Deposits―16―NotesQ3 FY2019(From October 1, 2018
to June 30, 2019)

Net cash provided by (used in) financing
activities
In/Decrease in short-term borrowings(△=decrease)
Repayment of long-term borrowings

3,399,000

4,000,000△600,300△1,067,200△689,952－△2,133,724△2,647,811△78,135△256,856△103,111

28,131△106,362△64,465△2,629,467

40,025,634②

42,033,124

52,013,447②

39,403,656

92,039,082

Payment for stock buyback
Dividends paid
Other
Net cash provided by (used in)financing activities
Effect of exchange rate changes on cash
and cash equivalents
Increase and 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
period(Unit: Thousand yen)
Q3 FY2020(From October 1, 2019
to June 30, 2020)―17―

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

―18―

(6) Notes regarding condensed consolidated financial statements② Cash and cash equivalents
Breakdown of cash and cash equivalents are as follows.
End of previous consolidated
fiscal year
(September 30, 2019)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2020)

Cash and cash equivalents

49,213,447

90,689,082

Deposits to subsidiaries
and affiliates

2,800,000

1,350,000

52,013,447

92,039,082

Total③ Operating and other receivables
Breakdown of operating and other receivables are as follows.
End of previous consolidated
fiscal year
(September 30, 2019)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2020)

Accounts receivable - trade

5,663,939

5,276,843

Operating loans

7,514,754

6,812,078

590,916

1,105,776△106,498△96,149

13,663,112

13,098,548

Other
Allowanceaccounts

fordoubtful

Total④ Deposits to subsidiaries and affiliates

Our deposits to subsidiaries and affiliates are the deposits under the CMS (cash management system) of
GMO Internet Group.
⑤ Discontinued operations
Third Quarter of Fiscal Year Ending in September 2020 (from October 1, 2019 to June 30, 2020)a.

Overview of discontinued operations
GMO Payment Gateway resolved at the Board of Directors meeting held of April 30, 2020 to sell all the sharesof Macro Kiosk Berhad held through a subsidiary (the “Sale”) and signed the Share Transfer Agreement on thesame date. As a result of the Sale, Macro Kiosk Berhad has been deconsolidated and is reclassified as
discontinued operation in the condensed consolidated financial statements. The Sale was completed on May
18, 2020.

b.

Profit/Loss from discontinued operation
Q3 FY2019(From October 1, 2018
to June 30, 2019)

Income(Unit: Thousand yen)
Q3 FY2020(From October 1, 2019
to June 30, 2020)

3,858,897

3,858,555

Expenses (see Note)
Quarterly Profit/Loss before income taxes fromdiscontinued operation
Corporate tax expense (see Note)△4,026,511△4,016,892△167,613△158,338△2,793△20,859

Quarterly profit/loss from discontinued operation△170,406△179,198(Note) The figure for Q3 FY2020 includes ¥172 mil. in losses from sale of subsidiary shares of Macro Kiosk Berhad.
There is no material impact on the corporate tax expense.

―19―

c.

Cash flow from discontinued operation
Q3 FY2019(From October 1, 2018
to June 30, 2019)(Unit: Thousand yen)
Q3 FY2020(From October 1, 2019
to June 30, 2020)

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities (seeNote)
Net cash provided by (used in) financing activities△181,100

431,502△89,821△33,783△9,234△62,431

Total△280,155

335,287(Note) Due to the loss of controlling interest in Macro Kiosk Berhad, the net payment for the transfer of shares, net ofthe cash and cash equivalents held by the company, amounted to △¥968 mil. and is presented in “Payment
for sale of subsidiary shares resulting in change in the scope of consolidation” found under “Net cash providedby (used in) financing activities” of the Condensed consolidated statement of cash flows.
d.

Assets and liabilities from loss of controlling interest.
Assets and liabilities from the loss of controlling interest is as shown below.
(Unit: Thousand yen)
As of the date of completion ofshare transfer (May 18, 2020)
968,256

Cash and cash equivalents

1,266,351

Receivables

341,565

Assets other than the above△1,699,085

Payables△391,285

Liabilities other than the above
Total

485,801―20―