Summary of Consolidated Financial Statements for the Second Quarter, FY2019 (IFRS)May 9, 2019
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
reportMay 10, 2019

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

1.

Consolidated Financial Statements for the Second Quarter, FY2019(From October 1, 2018 to March 31, 2019)(1) Consolidated Financial Statements (Cumulative)(Percentages represent year-on-year % change)

Q2 FY2019

Millionyen %16,015 27.5

Millionyen %4,258 30.2

Millionyen %4,134 30.0

Total
Profit attributable
comprehensive
to owners of parent
incomeMillionMillionMillion
%
%
yen %
yen
yen
2,549 31.0
2,578
31.4
2,244
△1.0

Q2 FY201812,558 25.2

3,269 51.8

3,180 60.8

1,946 41.4

Revenue

Operating profit

Basic earnings per share

Profit before
income taxes

Profit after tax

1,962

44.5

2,267

20.3

Diluted earnings per share

Q2 FY2019

Yen
35.05

Yen
34.32

Q2 FY2018

26.64

26.64

(Note) On October 1, 2018, our company executed a 2-1 stock split. The values for FY2018 are calculated on the same base.

(2) Consolidated Financial Position

Q2 FY2019
FY20182.

Total assets
Million yen
122,907
116,858

Total equity
Million yen
25,29426,020Total equity attributableto owners of parent
Million yen
24,084
24,796

Total equity attributable toowners of parent to total
assets
%19.6
21.2

Dividends

FY 2018
FY 2019
FY 2019 (forecast)End of Q1
Yen
0.00
0.00

Full-year dividend
End of Q2
End of Q3
Year-end
Yen
Yen
Yen
0.00
0.00
58.00
0.00
0.00
35.00

Total
Yen
58.00
35.00

(Note 1) Revision to the most recently released dividend forecast: No(Note 2) On October 1, 2018, our company executed a 2-1 stock split. The values for FY2018 are calculated on the same base.

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2019
(From October 1, 2018 to September 30, 2019)(Full year % represents comparison with previous term)

Full year

Profit before
Revenue
Operating profit income taxes
MillionMillionMillion
yen
%
yen
%
yen
%
31,850 20.6
8,300 26.7
8,108 21.0

(Note) Revision of the most recently released financial forecast: No―1―

Profit attributable to Basic earnings
owners of parent
per share
MillionMillion
yen
%
yen
%
Yen
5,206 22.6
5,106
20.0
69.32
Profit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)
Q2 FY2019: 74,301,000
FY 2018: 74,301,000[1] Number of shares issued at the end of the term(including treasury stock)
FY 2018: 5,000[2] Number of treasury shares at the end of the term Q2 FY2019: 5,076[3] Average number of shares during the term
Q2 FY2019: 73,562,665
Q2 FY2018: 73,670,440(quarterly average)(Note 1) Number of treasury shares at the end of the term includes the shares attributed to the directors’
remuneration board incentive plan (BIP) trust and J-ESOP: 639,400 shares for FY2018 and 734,205 sharesfor Q2 FY2019.)(Note 2) On October 1, 2018, our company executed a 2-1 stock split. The shares issued at start of the previous
term are calculated by assuming the post-split number of shares.
* 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 6 of the attachment.
2. Results Presentation Meeting for Institutional Investors and Analysts to be held on May 10, 2019. Supporting
materials and a video of the 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 Quarter……………………………… 4(1) Consolidated operating results…………………………………………………………………………………… 4(2) Status of consolidated financial position………………………………………………………………………… 8(3) Review of consolidated earnings forecasts and other forecasts……………………………………………... 9
2. Condensed consolidated Financial Statements and Major Notes…………………………………………….10(1) Condensed consolidated balance sheet………………………………………………………………………..10(2) Condensed consolidated income statement and comprehensive income………………………………….12(3) Condensed consolidated statement of changes in equity……………………………………………………14(4) Condensed consolidated statement of cash flows……………………………………………………………15(5) Notes regarding the going concern assumptions…………………………………………………….……….17(6) Notes regarding condensed consolidated financial statements……………………………………………..18―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.
① Consolidated operating results
The Group announces its earnings results for the cumulative second quarter of the consolidated fiscal year
(October 1, 2018 to March 31, 2019) as follows.
(Unit: Thousand yen)First six months of theprevious consolidated
fiscal year
(From October 1, 2017
to March 31, 2018)

First six months of thecurrent consolidated
fiscal year
(From October 1, 2018
to March 31, 2019)

Rate of change (%)

Revenue

12,558,478

16,015,927

27.5

Operating profit

3,269,904

4,258,091

30.2

Profit before income taxes

3,180,037

4,134,331

30.0

1,962,370

2,578,390

31.4

Profit attributable toowners of parent

a. Revenue
The Group’s revenue surged to ¥16,015 mil., up by 27.5% year-on-year. The Payment Processing Businessrevenue continued to grow thanks to the steady growth of the Ecommerce market, coupled with expansion of
the Group’s services to non-Ecommerce operators. Our Money Service Business (MSB) revenue also rose fromthe steady expansion of transaction value of “GMO Payment after delivery,” a type of payment service after thecollection/delivery of goods, and the Remittance service. The Payment Enhancement Business revenue grew,
driven by robust revenue growth at Macro Kiosk, the Group’s consolidated subsidiary that provides acomprehensive service of mobile payment, authentication and notification.
Our revenue breakdown by business model is as follows.
With the adoption of IFRS 15 effective from the start of this consolidated fiscal year 2019, the softwaredevelopment revenue for the payment processing service is recognized as prorated over the life of the service
provision period, compared to the previous lump sum method booked at point of delivery inspection. As such,the software development revenue has been reclassified from Initial to Stock. The amount reclassified from
Initial to Stock is ¥355 mil. in the Second quarter of the cumulative consolidated fiscal year (October 2018 toMarch 2019). There is no retroactive reclassification applied as the adjustment of the cumulative effect from theinitial application of IFRS 15 is made against Retained Earnings balance at the start of this consolidated fiscal
year 2019.

―4―

(Unit: Thousand JPY)

Business model

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

First six months of theprevious consolidated
fiscal year
(From October 1, 2017
to March 31, 2018)

First six months of thecurrent consolidated
fiscal year
(From October 1, 2018
to March 31, 2019)

Rate of change (%)

639,903

713,42611.5

1,628,013

2,411,444

48.1

4,797,608

6,044,719

26.0

5,492,951

6,846,335

24.6

12,558,478

16,015,927

27.5

b. Operating profit
The Group’s operating profit reached ¥4,258 mil., up by 30.2% YoY, on track to achieve the Group’s
consolidated fiscal year forecast. Note that the YoY growth of 30.2% in this Second Quarter is significantly lower
than the 51.8% recorded in previous Second Quarter, but this is due to inclusion of expenses related tochanges in the fair value of Provisions for Director’s remuneration BIP Trust in the previous period (i.e. October
1, 2016 to March 31, 2017).
By segment, Payment Processing Business operating profit was ¥4,724 mil., up by 22.5% YoY; Money Service
Business stood at ¥987 mil., up by 69.3% YoY; and, Payment Enhancement Business recorded an operating
loss of ¥31 mil. (the previous Second Quarter amount was an operating profit of ¥22mil.).
c. Profit before income taxes
Pre-tax profit was ¥4,134 mil. up by 30.0% YoY, from the reasons stated above in a. and b.

―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 six months of theprevious consolidated
fiscal year
(From October 1, 2017
to March 31, 2018)

First six months of thecurrent consolidated
fiscal year
(From October 1, 2018
to March 31, 2019)

Rate of change (%)

6,960,907
3,855,529

9,272,379
4,724,611

33.2
22.5

3,106,201
583,400

3,833,603
987,97823.4
69.3

2,491,368
22,0652,909,943△31,280

16.8－－△1,191,090－△1,423,217－－

12,558,478
3,269,904

16,015,927
4,258,091

27.5
30.2

a. Payment Processing Business
The payment processing business primarily comprises of payment processing services for online payment,
recurring payment and, card-present payment.
Secular growth of the Ecommerce market in online payment and recurring payment areas, coupled with theInstallment Sales Act amendment that enabled the acquisition of large scale merchants since last year,
continues to drive the growth in transaction volume and value, growing at 29.6% YoY and 24.9% YoYrespectively, albeit at a slightly muted growth rate compared to the First Quarter.
We focused on expanding the participants and enrolling more financial institutions onto the Ginko Pay payment
platform, the bank-account linked smart payment service co-developed by The Bank of Yokohama Ltd. and theGroup, to enhance our support services aimed towards financial institutions and financial service providers thatare promoting new businesses that enable a cashless society.
As a result, segment revenues reached ¥9,272 mil. up by 33.2% and segment profit (operating profit) was¥4,724 mil. up by 22.5% YoY.
On May 8th 2019, Japan Post Bank Co. Ltd. launched its service using the Ginko Pay platform, the newest
addition to the 4 other financial institutions that have already launched their respective services. Moreover, the
4 adopters of Ginko Pay (namely, Tokyu Corporation, The Bank of Yokohama Ltd., Japan Post Bank Co. Ltd.
and the Group) have launched the first-ever Cash-out service than enables withdrawing cash from the ticket
vending machine using the Ginko Pay platform, available at all Tokyu Line train stations from May 8, 2019.

b. Money Service Business
Money Service Business (hereafter, MSB) consists of the Early Payment Service to help merchants improvetheir cash flow by receive sales proceeds earlier according to the merchant’s cash cycle needs, the Transaction
Lending Service to lend growth capital to merchants based on their payment and other data, the Remittance
Service, and the GMO Payment After Delivery offered by the Group’s consolidated subsidiary GMO Payment
Service, Inc..
For the cumulative Second quarter period of consolidated FY2019, GMO Payment after delivery and theRemittance Service showed a steady increase, and the lending service to overseas business operators, which
was launched in the previous year, also contributed to increase the segment revenues.

―6―As a result of the above, segment revenue reached to ¥3,833 mil. up by 23.4% YoY, and operating profit
reached ¥987 mil. up by 69.3% YoY, boosted by the revenue growth as well as concerted effort to lower credit
costs.
As part of our multifaceted offerings to support the growth of BtoB EC operators, we will commence the newservice “Electronic Invoice Early Payment” in January 2020 (press statement released on April 25, 2019)
together with Infomart Corporation (hereafter, ‘Infomart’). The Electronic Invoice Early Payment service allows
business operators (viz. issuers of invoices) to monetize their invoices with a single click, and will be available
to users of Infomart’s BtoB Platform Invoicing.

c. Payment Enhancement Business
Payment Enhancement Business comprises of mobile payment services (the “MPS business” andauthentication and notification services via SMS (the “the EMS business”), provided by our consolidated
subsidiary Macro Kiosk Berhad, and an online advertising service to expand sales of the Group’s merchants byanalyzing their sales status and running timely ads on their behalf based on their sales data.
In the cumulative Second quarter period, Macro Kiosk Berhad’s revenue grew 19.5% YoY, with its mainstay
EMS business continuing its strong growth from the previous quarter by growing 22.4% YoY, thanks toexpanding the service coverage to emerging economies including Vietnam in addition to the main market of
Malaysia. However, the MPS business revenue declined 1.9% YoY due to headwinds from external factors.
Segment operating profit recorded a loss from strategic upfront investments to establish the business’
foundations and from foreign currency loss arising from transactions between subsidiaries.
Online advertising service revenue increased 7.4% YoY to reach ¥161 mil. despite the slowdown of adplacements in some of the services that were adversely affected by external factors.
As a result of the above, segment revenue was ¥2,909 mil. an increase of 16.8% YoY, and segment loss was¥31 mil. (the previous Second Quarter was a profit of ¥22mil.).
(*) Note that the “customer support services” has been renamed “online advertising service.”
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 Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)

Payment processing service(card present payment)
System development
GMO Payment after delivery

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

Remittance service
Money Service
Business

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

Transaction lending

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

Early payment service

Mobile payment, authentication
Payment

and notification

GMO Epsilon, Inc. (consolidated subsidiary)

Macro Kiosk Berhad (consolidated subsidiary)

Enhancement
Business

GMO Payment Gateway, Inc.
Online advertising service―7―

GMO Epsilon, Inc. (consolidated subsidiary)(2) Status of consolidated financial position①Assets, liabilities and net assets
a. Assets
Total assets at the end of the Second quarter of the consolidated fiscal year under review was up ¥6,048 mil.
from the end of the previous consolidated fiscal year at ¥122,907 mil. The increase in total assets is mainly due
to an increase in advance payment of ¥4,143 mil. and an increase in accrued income of ¥2,856 mil.
The Group has ¥3,000 mil. deposits to subsidiaries and affiliated companies included in the balance of cash andcash equivalents at the end of the Second quarter of this consolidated fiscal year, as stated in “② Cash andcash equivalents” of (6) Notes regarding condensed consolidated financial statements. Together with the ¥7,000
mil. of deposits to subsidiaries and affiliated companies on the condensed consolidated balance sheet, the totalbalance of the Group’s deposits to subsidiaries and affiliated companies stands at ¥10,000 mil. These deposits
are the Group’s cash on hand that is deposited under the cash management system (CMS) implemented andmanaged by GMO Internet. As a result, this allows the Group to withdraw necessary funds without having to
wait until the predetermined CMS repayment date is reached, by registering a request taking into account thedesignated number of days prior to when cash is needed.
b. Liabilities
Balance of liabilities at the end of the Second quarter of the consolidated fiscal year under review stood at¥97,613 mil., an increase of ¥6,774 mil. from the end of the previous consolidated fiscal year, mainly due to anincrease in deposits received of ¥6,969 mil.
c. Equity
Equity balance at the end of the Second quarter of the consolidated fiscal year under review was ¥25,294 mil.,lower by ¥726 mil. from the end of the previous consolidated fiscal year. Dividend paid out of retained earningsof ¥2,136 mil., and share buybacks of ¥689 reduced the Equity balance despite the increase in profits
attributable to owners of parent company of ¥2,578 mil.
② Status of consolidated cash flows
Cash and cash equivalents (hereinafter called “funds”) increased by ¥1,169 mil. from the balance at the start of
the term, to ¥43,202 mil. The cash flows by activity over the cumulative six months under review is discussed
below.
a. Cash flow from operating activities
Net funds provided by operating activities in the cumulative Second quarter of the consolidated fiscal year underreview amounted to ¥3,839 mil., which compares to ¥3,816 mil. in the same period of the previous year. This
resulted from cash outflows of (i) increase in advances paid of ¥4,143 mil., (ii) increase in accrued revenues of¥2,856 mil., (iii) decrease in accrued expenses of ¥1,085 mil.

and (iv) income tax payment and tax refunds of¥1,490 mil., that were netted out against cash inflows of (i) profit before tax of ¥4,134 mil., (ii) decrease in tradereceivables ¥1,447 mil., and (iii) increase in deposits received of ¥6,969 mil.
b. Cash flow from investing activities
Net funds provided by investing activities over the cumulative Second quarter of the consolidated fiscal year
under review totaled ¥61 mil., which compares to a net fund usage of ¥788 mil. in the same period of theprevious year. This is due to cash inflow from repayments for time deposits of ¥689 mil., which was netted
against cash outflow from the acquisition of intangible assets ¥568 mil., and acquisition on investment securities¥101 mil.

―8―

c. Cash flow from financing activities
Net funds used by financing activities over the cumulative Second quarter of the consolidated fiscal year underreview was a ¥2,574 mil., which compares to the provision of ¥1,228 mil. in the same period of the previous
year. This is due to cash outflow from share buybacks of ¥689 mil., and dividend payout of ¥2,133 mil.

(3) Review of consolidated earnings forecasts and other forecasts
The Group’s core business is positioned within the Ecommerce market in Japan, and Japan’s BtoC Ecommerce formerchandizing continues to grow very rapidly, helped by favorable externalities such as increased penetration ofsmartphone and logistic/distribution industry reforms. At the same time, scope of Ecommerce market itself is
expanding from the Ecommerce migration of BtoB and CtoC fields.
For the fiscal year ending September 2019, the Group forecasts across-the-board growth in all segments of Payment
Processing Business, Money Service Business and Payment Enhancement Business, through acquisition of large
and high-growth merchants and financial institutions and, expansion of GMO Payment after delivery.
The earnings forecast for consolidated fiscal year ending September 30, 2019 are as follows: revenue of ¥31,850 mil.
(up 20.6% YoY), operating profit ¥8,300 mil. (up 26.7% YoY), profit before tax ¥8,108 mil. (up 21.0% YoY), profit¥5,206 mil. (up 22.6% YoY), and profit attributable to owners of parent company ¥5,106 mil. (up 20.0% YoY).

―9―

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

Notes

End of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand Yen)
End of Q2 of current
consolidated fiscal year
(March 31, 2019)

AssetsCurrent assets
Cash and cash equivalents②

42,033,124

43,202,369

Operating and other receivables③,⑤

13,236,930

11,778,263

Advances paid

22,267,745

26,411,148

Accrued revenue

15,717,965

18,574,747

64,53754,8257,000,000

7,000,000

706,745

42,430Inventories
Deposits to subsidiaries and affiliates④

Other financial assets
Other current assets

1,205,270

1,010,714

Total current assets

102,232,318

108,074,499

450,918

575,575

4,934,688

5,066,113

2,938,426

2,830,641

Noncurrent assets
Tangible assets
Goodwill and other intangible assets
Investments accounted using equity
methodOther financial assets

5,444,421

5,184,895

Deferred tax assets

833,886

1,088,990

Other noncurrent assets

24,29786,321

Total noncurrent assets

14,626,639

14,832,539

116,858,957

122,907,039

Total assets―10―NotesEnd of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand Yen)
End of Q2 of current
consolidated fiscal year
(March 31, 2019)

Liabilities and equity
Liabilities
Current liabilities
Operating and other payables

4,663,264

4,760,761

Accrued expenses⑤

15,740,072

14,646,675

Deposits received⑤

41,228,933

48,198,355

4,101,400

4,800,400

98,852

119,993

1,530,203

1,460,566

7,388

363,608

Borrowings
Other financial liabilities
Income taxes payable, etc.
Provisions
Other current liabilities

2,030,282

2,110,863

69,400,397

76,461,224

Corporate bonds

16,676,929

16,711,241

Borrowings

2,199,100

1,798,900

Other financial liabilities

185,223

266,159

Provision

64,05564,055

Deferred tax liabilities

205,749

178,417

Other noncurrent liabilities

2,107,484

2,133,029

Total noncurrent liabilities

21,438,542

21,151,803

90,838,939

97,613,027

Capital stock

4,712,900

4,712,900

Capital surplus

5,758,448

5,793,266

Retained earnings

12,875,446

13,122,711

Treasury stock△491,893△1,181,846

Other items of equity
Total equity attributable to owners ofparentMinority interests

1,941,305

1,636,980

24,796,206

24,084,012

1,223,811

1,209,999

Total equity

26,020,018

25,294,011

116,858,957

122,907,039

Total current liabilities
Noncurrent liabilities

Total liabilities
EquityTotal liabilities and equity―11―(2) Condensed consolidated statement of income and consolidated statement of comprehensive income
Condensed consolidated statement of income

Notes
Revenue⑥

First six months of previous
consolidated fiscal year
(From October 1, 2017
to March 31, 2018)12,558,478(Unit: Thousand yen)First six months of current
consolidated fiscal year
(From October 1, 2018
to March 31, 2019)
16,015,927△4,178,763△5,811,604

8,379,715

10,204,322

120,498

73,939△5,090,210△5,890,733△140,098△129,436

3,269,904

4,258,091

Cost of revenue
Gross profit
Other income
Selling, general and administrative
expenses
Other expense
Operating profit
Financial income

35,00425,851

Financial expense△30,522△96,775

Equity method investment gains or loss

△94,349△52,835

Profit before income taxes

3,180,037

4,134,331△1,233,894△1,585,183

1,946,143

2,549,148

Owners of parent

1,962,370

2,578,390

Noncontrolling interests△16,227△29,242

Profit

1,946,143

2,549,148

Basic earnings per share (yen)

26.64

35.05

Diluted earnings per share (yen)

26.64

34.32

Income tax expenses
ProfitProfit attributable toEarnings per share―12―Condensed consolidated statement of comprehensive income

Notes
ProfitFirst six months of previous
consolidated fiscal year
(From October 1, 2017
to March 31, 2018)
1,946,143(Unit: Thousand yen)First six months of current
consolidated fiscal year
(From October 1, 2018
to March 31, 2019)
2,549,148

108,040△287,897

51,925△42,986

159,966△330,883

91,670△11,396

69,80537,894

161,475

26,497

321,442△304,386

2,267,585

2,244,762

2,258,454

2,274,065

Other comprehensive income
Items that will not be reclassified to profit
or loss
Fair value of financial assets measured
through other comprehensive income
Share 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
Share 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 to
Owners of parent
Noncontrolling interests
Total

―13―

9,131

△29,3032,267,585

2,244,762

(3) Condensed consolidated statement of changes in equity
Cumulative six months of the previous consolidated fiscal year (From October 1, 2017 to March 31, 2018)(Unit: Thousand yen)TotalequityOther
CapitalCapital Retained Treasury
attributabl Minority
Total
Notes
items ofstock
surplus earnings
stock
e to
interests
assetsequityowners ofparentBalance as of October 1,
4,712,900 4,985,781 9,619,266
613,768 19,675,447 1,093,870 20,769,318△256,269
2017－－ 1,962,370－－ 1,962,370△16,227 1,946,143
ProfitOther comprehensive
296,083
296,083
25,358321,442－－－－
income296,083 2,258,454
9,131 2,267,585－－ 1,962,370－
Comprehensive income
Sale of treasury stock－－

14,157

Dividend
Transfer fromaccumulated othercomprehensive income
to retained earnings
Changes in the interests
in controlled subsidiary
Share-based paymenttransaction
Total transactions withownersBalance as of March 31,
2018－－ △1,485,920

－

－

－

45,648－△45,648

－

－

－

－

△30,707－－－△30,707－△30,707－

68,125－－△125

68,00012,38080,380－111,178 △1,440,271

14,157△45,774 △1,360,709

12,380 △1,348,329

4,712,900

5,096,959 10,141,365△242,111

864,077 20,573,192

1,115,382 21,688,574

73,760－87,918－ △1,485,920－

87,918－ △1,485,920

Cumulative six months of the current consolidated fiscal year (From October 1, 2018 to March 31, 2019)(Unit: Thousand yen)TotalequityOther
CapitalCapital Retained Treasury
attributabl Minority
Notes
items of
Total assets
stock
surplus earnings
stock
e to
interests
equityowners ofparentBalance as of October 1,
4,712,900 5,758,448 12,875,446 △491,893 1,941,305 24,796,206
1,223,811
26,020,018
2018
Cumulative effects of－－△195,085－－△195,085－△195,085
changes in accountingchanges
4,712,900 5,758,448 12,680,361
1,223,811
25,824,933△491,893 1,941,305 24,601,121
Restated Balance
ProfitOther Comprehensive
incomeComprehensive income
Purchase of treasury
stock
Dividends
Share-based paymenttransaction
Total transactions withownersBalance as of March 31,
2019

－

－

2,578,390－－

2,578,390△29,2422,549,148

－

－

－

－

△304,324△304,324△61△304,386－－

2,578,390－△304,324

2,274,065△29,3032,244,762－－－△689,952－△689,952－△689,952－－ △2,136,041－－ △2,136,041－△2,136,041－

34,81815,49150,310－34,818－－－34,818 △2,136,041△689,952－ △2,791,175

15,491△2,775,683

5,793,266 13,122,711 △1,181,846

1,636,980 24,084,012

1,209,999

25,294,011

4,712,900―14―

(4) Condensed consolidated statement of cash flows
First six months of previous
consolidated fiscal year
(From October 1, 2017
to December 31, 2018)(Unit: Thousand yen)First six months of current
consolidated fiscal year
(From October 1, 2018
to December 31, 2019)

3,180,037

4,134,331

Depreciation & Amortization

457,650

525,842

Financial income and expense△4,30970,924Equity method investment loss
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)
Other

94,34952,835

13,9999,711

473,781

1,447,643△3,095,981△4,143,402△1,581,937△2,856,782

630,811

112,446

1,473,957△1,085,264

4,012,264

6,969,499△19,344

148,348

5,635,279

5,386,134

6,010

25,851△18,260△22,441－△59,940

Information security expenses paid

△67,041－

Income taxes paid/refunded
Net cash provided by (used in)operating activities
Net cash provided by (used in) investing
activities
Proceeds from withdrawal of time
deposits
Purchase of property, plants andequipment
Purchase of intangible assets△1,739,473△1,490,051

3,816,514

3,839,552－

689,374△35,392△72,668△538,256△568,789

Purchase of investment securities
Proceeds from sales of investment
securities
Proceeds from Investment Partnership△264,918△101,562

58,245－9,550

110,805

Acquisition of other financial assets
Proceeds from sales of other financial
assetsOthersNet cash provided by (used in)investing activities△1,863△89,401

796

7,262

△16,363△36,677△788,201△61,656

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

SubtotalInterest and dividends received
Interest paid
Security Deposits paid

―15―

First six months of previous
consolidated fiscal year
(From October 1, 2017
to December 31, 2018)(Unit: Thousand yen)First six months of current
consolidated fiscal year
(From October 1, 2018
to December 31, 2019)

3,200,000

699,000△415,662△400,200－△689,952△1,482,368△2,133,237△73,095△50,376

1,228,873△2,574,766△31,967△33,884

4,225,219

1,169,245②

27,533,515

42,033,124②

31,758,735

43,202,369

Notes
Net cash provided by (used in) financing
activities
Increase and decrease of short-termborrowings
Repayment of long-term borrowings
Purchase of treasury stock
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―16―

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

―17―

(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, 2018)(Unit: Thousand yen)
End of Q2 of current
consolidated fiscal year
(March 31, 2019)

Cash and cash equivalents

37,033,124

40,202,369

Deposits to subsidiaries
and affiliates

5,000,000

3,000,000

42,033,124

43,202,369

Total
③

Operating and other receivables
Breakdown of operating and other receivables are as follows.
End of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand yen)
End of Q2 of current
consolidated fiscal year
(March 31, 2019)

Accounts receivable-trade7,262,587

5,563,591

Operating loans

6,063,545

6,054,794

14,613249,914△103,815△90,037

13,236,930

11,778,263

Other
Allowanceaccounts

fordoubtful

Total④

Deposits to subsidiaries and affiliates
Our deposits to subsidiaries and affiliates are the deposits under the CMS of the GMO Internet Group

―18―

⑤

Treatment of Financial Assets and Liabilities
The Group has the legally enforceable right over some of its financial assets and liabilities to recognize the value ofthe assets and liabilities as a net amount, or to offset the financial assets and liabilities when the transaction ofrealization of the asset and settlement of liabilities is structured and intended to occur simultaneously. For thesereasons, the net amount of the financial assets and liabilities is recognized in the condensed financial statements.
The following table shows the amount used to deduct (offset) the financial assets and liabilities for the same trade
partner.
As of the second quarter of consolidated fiscal year (March 31, 2019)
Amount deducted (netted)
in the Condensed Financial
Statement

Gross Amount of
Financial Assets(Unit: Thousand yen)
Net amount shown inCondensed Financial
Statement

Financial Asset
OperatingReceivables

and

Total

Other

4,447,594△2,555,617

1,891,976

4,447,594△2,555,617

1,891,976

Amount deducted (netted)
in the Condensed Financial
Statement

Gross Amount of
Financial Liabilities(Unit: Thousand yen)
Net amount shown inCondensed Financial
Statement

Financial Asset
Accrued Expenses

14,336,652△585,609

13,751,043

Deposits Received

45,688,590△1,970,008

43,718,581

60,025,242△2,555,617

57,469,624

Total

―19―