Member of Financial Accounting Standards Foundation

Summary of Consolidated Financial Statements for the First Quarter, FY2015
February 5, 2015
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President &Representative Director

Contact:

Ryu Muramatsu

Executive Vice President

Tel: +81-3-3464-0182

Scheduled date of submission ofquarterly reportFebruary 12, 2015

Scheduled date ofcommencement ofdividend payment-

Supplemental materials preparedfor financial results

Yes

Information meeting arranged
related to financial resultsYes (for institutional investors andanalysts)

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

1.

Consolidated Financial Statements for the First Quarter, FY2015(From October 1, 2014 to December 31, 2014)(1) Consolidated Financial Statements (Percentages denote the increase or decrease from the previous period)
Net sales
Operating income
Ordinary income
Net income
1Q FY2015
1Q FY2014

Million yen
1,958
1,645

%
19.1
25.5

Million yen
725
577

%
25.7
20.5

(Note) Comprehensive income: 1Q FY2015: 515 million yen (39.6%)

1Q FY2015
1Q FY2014

Net income per share
Yen
13.78
10.31

Million yen
758
601

%
26.0
25.2

Million yen
476
355

%
33.9
25.1

1Q FY2014: 368 million yen (28.8%)

Diluted net income per share
Yen
13.78
10.29

(Note)
1) In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 are calculated on thesame base.
2) In order to appropriately display the net income per share, in regard to the stock attributed to the directors’
remuneration board incentive plan trust, it has the right to a claim of dividend, and is therefore, not included intreasury stock.
(2) Consolidated Financial Position

1Q FY2015
FY2014

Total assets
Million yen
29,754
24,613

Net assets
Million yen
6,811
6,815

Equity ratio
%
22.9
27.7

Net assets per share
Yen
197.06
197.15

Reference: Equity: 1Q FY2015: 6,805 million yen FY2014: 6,808 million yen(Note)In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 are calculated on the same
base.
2.

Dividends
1Q

FY 2014
FY 2015
FY 2015 (forecast)

2Q
Yen
—
—

Yen
0.00
0.00

Yearly dividends
3Q
Fiscal Year end
Yen
Yen
—
30.00
—

18.00

Total
Yen
30.00
18.00

(Note) Revision of the most recently released dividend forecast: No
In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2015(forecast) are calculated on
the same base.

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2015
(From October 1, 2014 to September 30, 2015)(For the full year, percentages denote an increase or decrease as compared with the previous period. For the first six months ofthe period under review, they denote an increase or decrease as compared with the second quarter of the previous year.)2Q of FY 2015
(cumulative)
Full year

Net sales
Million yen%

Operating income
Million yen
%

4,033
8,656

15.6
20.1

1,471
2,974

18.7
20.1

Ordinary income
Million yen
%
1,476
2,985

18.5
18.1

Net income
Million yen
%
887
1,797

Net income per
share
Yen

23.3
18.6

25.68
52.03

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

Notices:
(1)

(2)
(3)

(4)

Changes of important subsidiaries during the period (change of specific subsidiaries that lead to a change
in the scope of consolidation): No
Number of new subsidiaries: - (Name:), number of excluded subsidiaries: - (Name:)
Application of special accounting procedures for the execution of the financial statements: No
Changes in the accounting policy / changes in the accounting estimation / restatement of corrections[1] Changes associated with the revision of accounting policy, etc.: No[2] Changes other than [1]: No[3] Changes in accounting estimations: No[4] Restatement of corrections: No
Number of shares issued (common stock)[1] Number of shares issued at the end of
the term (including treasury stock)[2] Number of treasury stocks at the end of
the term[3] Average number of shares

1Q FY2015: 34,538,400

FY 2014: 34,538,400

1Q FY2015: 2,500

FY 2014: 2,278

1Q FY2015: 34,535,921

1Q FY2014: 34,480,091

1) In October 1, 2014, our company executed a 2-1 stock split. The number of end of the period shares issued,
the number of end of the period treasury stock shares, and the average number of shares during the period are
calculated on the assumption that the said stock split was implemented at the beginning of the previous fiscal year.
2) In order to appropriately display the number of treasury stocks at the end of the term and average number ofshares, in regard to the stock attributed to the directors’ remuneration board incentive plan trust, it has the right to aclaim of dividend, and is therefore, not included in treasury stock.

*

Indication of the implementation status of quarterly review procedures
These quarterly financial statements are not subject to the quarterly review procedures of the Financial
Instruments and Exchange Act. At the time of disclosure of these quarterly financial statements, the quarterly
financial statement review procedures of the Financial Instruments and Exchange Act had not been completed.

*

Explanation of the proper use of financial forecasts and other important notes
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 inusing 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 4 of theattachment.

Table of contents of attachment
1. Qualitative Information on Consolidated Financial Statements for the Quarter(1) Qualitative information on consolidated operating results(2) Qualitative information on the consolidated financial condition(3) Review of consolidated earnings forecasts and other forecasts
2. Items concerning summary information (Notes)(1) Changes of important subsidiaries(2) Application of special accounting procedures for the execution of
the financial statements(3) Changes in the accounting policy/ changes in the accounting
estimation / restatement of corrections
3. Consolidated quarterly financial statements(1) Consolidated quarterly balance sheet

2
2
3
4
4
4
4
4
5
5

(2) Consolidated quarterly statements of income and consolidated quarterly
statement of comprehensive income

7(3) Consolidated statements of cash flows

9(4) Notes to consolidated quarterly financial statement

10(Notes regarding the premise for continuance)(Note when there is a significant fluctuation in the amount of shareholders’ equity)

－

1 －

10
10

1. Qualitative Information on Consolidated Financial Statements for the
Quarter(1)

Qualitative information on consolidated operating results
Regarding the economic environment in Japan during the period under review, the Japanese economy was on a
gradual recovery track as the reaction to the demand rush after the consumption tax hike was diminishing; however,consumer spending still remained somewhat weak.
In regard to our core business, the BtoC EC market continues to grow thanks to a favorable external environment suchas broader use of smartphones and tablets as well as reforms in logistics, and e-commerce is also spreading in themarket of sales of non-goods items such as services, as seen in new areas such as omni-channel, O2O and CtoC EC.
In regard to the credit card field, credit card shopping is steadily growing, and people tend to make more purchases via
the Internet. Also, the non-face-to-face use of credit cards in the field of payment for everyday living expenses
continues to expand, such as payments for rent and medical costs, as well as utility charges and public funds. It is acertainty that opportunities to use credit cards will continue to increase.
Under such circumstances, the group has pressed on with its businesses in order to expand the scale of operations
described below
Our company and our subsidiary GMO Epsilon, Inc. provides companies that sell products on a non-face-to-face basiswith a payment processing service and, related to the payment-processing business, the means through which
payment processing by credit cards and other methods can be efficiently made.
The Group offers a broad range of services such as online payment and recurring payment services that respond to ourcustomers’ business category, size and payment type.
The number of merchants during the first quarter of the current consolidated fiscal year increased by 4,744 to 54,469
compared to the end of the previous consolidated fiscal year. The number and amount of processed payments steadily
increased.
Changes in number of operating stores
End of September

Number of operating
storesEnd of September End of September

End of September

End of December

2011

2012

2013

2014

2014

32,062

38,94944,32849,72554,469Note: Number of operating stores means the number of IDs assigned to each store to use the service. It shows thenumber of stores (merchants) which have an agreement with the Group, are connected to the system, and areable to process payments at any time in principle.
For online payment field, payment-processing service grew steadily and the business of GMO Epsilon, Inc. which
provides “Multi-Payment Service” to the merchants grew steadily, too.
For recurring payment field, we have continued to attempt to develop this field to enable using credit card for paying
utility charges, public funds and other monthly services closely connected with everyday life
We provide payment methods to public institutions, such as the Japan Pension Service, and local governments, suchas the Tokyo Prefectural government.
Our subsidiary GMO Payment Service Inc. provides a “GMO Payment Later” service that allows the user to pay after
receiving the goods. The “GMO Payment Later” service has been adopted by an increasing number of merchants as apayment service with high level of consumers’ needs and has continued to perform favorably since its introduction in
May 2013.
As a value-added service making the best of the Group’s merchant base, we have made steady efforts to expand
services in areas related to the payment-processing business, such as the Online Advertising Service, providing SSL
server certifications, shipping services and early payment services.
During the period under review, we have introduced a new loan service to provide growth funds to our merchants.
Going forward, we will continue with our efforts to launch new products that will contribute to solving our merchants’problems.
With regard to overseas business, we established five oversea entity to provide GMO-PG Global Payment solutions toJapanese non-face-to-face businesses with a local presence and targeting local markets in South East Asia.
We have continued to promote funding activities through the “GMO Global Payment Fund” to form capital alliances with－2 －prospective payment-related businesses; in addition, the financial results of local payment processing companies inwhich we invest our fund have performed steadily. With a view to incorporating the huge growth potential of Southeast
Asia, which is the center of global growth, into our Group’s mid-to-long-term business growth, we will continue tointroduce new measures while creating a synergistic effect between “GMO-PG Global Payment” and “GMO Global
Payment Fund.”Concerning operating expenses, while the solid performance of “GMO Payment Later” service saw a hike in cost of
sales, we were able to take advantage of the scale merit of the revenue growth and reduce our burden of parallel
operation by completing the transfer of our data center to strengthen our payment processing capacity, which has beenongoing since September 2014. As a result, cost of sales amounted to 382,006,000 yen (a 20.3% increase on a
year-on-year basis). Selling, general and administrative expenses came to 851,039,000 (a 13.4% increase on a
year-on-year basis), as the deconsolidation of our former consolidated subsidiary Social Appli Payment Service, Inc.
resulted in a reduction in the said expenses, and our ongoing cost reduction efforts took effect.
Consequently, the Group’s operating results for the cumulative first quarter of the current consolidated fiscal year wereas follows: Net sales amounted to 1,958,642,000 yen (an increase of 19.1% on a year-on-year basis); operating
income grew 25.7% on a year-on-year basis to 725,596,000 yen; ordinary income amounted to 758,080,000 yen (anincrease of 26.0% on a year-on-year basis); and net income reached 476,041,000 yen (increase of 33.9% on a
year-on-year basis).
Ratio of ordinary income to net sales grew 38.7% from 36.6%.

(2)

Qualitative information regarding the consolidated financial condition[1]

AssetsThe balance of total assets at the end of the first quarter of the current consolidated fiscal year was
29,754,985,000 yen, up 5,141,926,000 yen as compared with the end of the previous consolidated fiscal year.
This increase was mainly due to an increase of cash and deposits (+3,463,289,000 yen) and an increase ofadvance payments-trade (+478,853,000yen) and an increase of accounts receivable-other (+383,792,000yen).
The increase of cash and deposits was mainly caused by the increase of deposits of merchants, in accordancewith the merchant acquiring service agreement.
The deposits of merchants will mostly be paid out on the tenth of the next month, therefore the deposit balance
will decrease with receipt of deposits.

[2]

Liabilities
The balance of liabilities at the end of the first quarter of the current consolidated fiscal year was 22,943,095,000
yen, up 5,145,416,000 yen as compared with the end of the previous consolidated fiscal year. This increase wasmainly caused by an increase in deposits received of 5,232,248,000 yen, which was an effect of the increase indeposits received from merchants in accordance with the merchant acquiring service agreement.

[3]

Net assets
The balance of net assets at the end of the first quarter of the current consolidated fiscal year was 6,811,890,000
yen, down 3,489,000 yen as compared with the end of the previous consolidated fiscal year. The decrease wasmainly attributable to net income of 476,041,000 yen, with a decrease of 518,041,000 yen as a result of a
distribution of surplus.

[4]

Cash FlowsAt the end of the first quarter of the current consolidated fiscal year, cash and cash equivalents (the “Funds”) was
23,807,627,000 yen, up 3,458,318,000 yen as compared with the balance at the beginning of the period. Cashflows at the end of the cumulative first quarter of the current consolidated fiscal year are as follows.
Net cash provided by (used in) operating activities
Cash provided by operating activities during the cumulative first quarter of the current consolidated fiscal year
amounted to 4,498,525,000 yen (provided 3,164,190,000 yen for the corresponding period of the previous fiscal
year). This was mainly due to income before income taxes of 762,962,000 yen and an increase in deposits
received of 5,169,011,000 yen, after a payment of income taxes of 634,610,000 yen.
Net cash provided by (used in) investing activities
Cash used in investment activities totaled 553,712,000 yen (223,103,000 yen was used in the corresponding
period of the previous fiscal year.) This was mainly due to the acquisition of securities (319,578,000 yen) andsecurities of subsidiaries and affiliates (125,000,000 yen).
Net cash provided by (used in) financing activities
Cash used in financing activities totaled 509,452,000 yen (397,983,000 yen was used in the corresponding periodof the previous fiscal year). This was primarily attributable to the dividend payment of 499,804,000 yen.

－

3 －

(3)

Review of consolidated earnings forecasts and other forecasts
In regard to our core business, the BtoC EC market continues to grow thanks to a favorable external environment
such as broader use of smartphones and tablets as well as reforms in logistics, and EC (e-commerce) is also
spreading in the market of sales of non-goods items such as services, as seen in new areas such as omni-channel,
O2O and CtoC EC.
For the term ending September 2015, we expect initial revenue, running revenue and merchant acquiring service
revenue to increase steadily. We believe this will be achieved by accelerating the acquisition pace of new merchants,
strengthening the development of large-scale merchants through the provision of higher quality services, andincreasing revenue per merchant through providing services that increase added value associated with themerchants' use of the Group.
In regard to costs, we keep forecast for increase in sales cost ratio due to the sales growth of “Online AdvertisingService", which has a high sales-cost ratio. We also forecast investment cost on the subsidiary companies, overseas
businesses, and other investment on new businesses. We expect 18.1% growth in ordinary income and 34.5%
ordinary income ratio.

2. Items concerning summary information (Notes)(1)

Changes of important subsidiaries
N/A

(2)

Application of special accounting procedures for the execution of the financial
statements
N/A

(3)

Changes in the accounting policy/ changes in the accounting estimation/
restatement of corrections
N/A

－

4 －

3. Consolidated quarterly financial statements(1)

Consolidated quarterly balance sheet(Unit: Thousand yen)

Summary of balance sheet at
End of the first quarter of thethe end of the previous
current consolidated fiscal year
consolidated fiscal year
(December 31, 2014)(September 30, 2014)
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Merchandise
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Tangible assets
Buildings, net
Tools, furniture and fixtures, net
Other
Total tangible assets
Intangible assets
Goodwill
Right of trademark
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and affiliates
Bonds of subsidiaries and affiliates
Investments in other securities ofsubsidiaries and affiliates
Long-term loans receivable from directors
and employees
Claims provable in bankruptcy, claims
provable in rehabilitation and other
Long-term prepaid expenses
Lease and guarantee deposits
Deferred tax assets
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets－

5 －20,386,175
792,588
2,165
531
585,395
58,823150,097504,077
52,343△56,177
22,476,019

23,849,464
884,4631,441
673
969,188
64,40780,414
982,931
346,304△86,978
27,092,310

57,29861,075
113,573
231,947

55,151
55,825
104,799
215,777

30,694272
661,723
71,778764,469

28,012
234
669,650
88,025785,922650,7392,507
11,0001,010,005
8,021
11,000264,442391,227

1,910

1,794

12,434

12,568

7,722
149,210
51,384△10,729
1,140,621
2,137,039
24,613,058

6,291
188,50342,425△10,862
1,660,974
2,662,674
29,754,985

(Unit: Thousand yen)
Summary of balance sheet at
End of the first quarter of thethe end of the previous
current consolidated fiscal year
consolidated fiscal year
(December 31, 2014)(September 30, 2014)
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Provision for bonuses
Other provisions
Other
Total current liabilities
Noncurrent liabilities
Provision for directors’ remuneration Board
Incentive Plan Trust
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Accumulated other comprehensive
incomeSubscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

229,278
692,310644,375
171,628
7,850
15,589,857
206,137
34,84048,061
17,624,339－

6 －

310,136
1,189,958
161,144
112,410
25,777
20,822,105
88,37565,34822,775,257
75,00070,000103,339
173,339
17,797,678

92,837
167,837
22,943,095

708,118
968,040
5,315,707△264,723
6,727,143

708,118
968,040
5,273,706△265,236
6,684,629

64,821

89,613

16,68531,366

81,506

120,980

3,774
2,956
6,815,379
24,613,058

3,774
2,506
6,811,890
29,754,985

(2) Consolidated quarterly statements of income and consolidated quarterly
statement of comprehensive income(Consolidated quarterly statements of income)(Cumulative third quarter of the consolidated fiscal year)(Unit: Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Equity income of affiliates
Earnings on investment in silent partnership
Earnings on investment in partnership
Earnings on reversal of dividends payable
Rent income
Commissions received
Exchange earnings
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Loss on investment in silent partnership
Loss on investment in partnership
Rent expenses
Other
Total non-operating expense
Ordinary income
Extraordinary income
Income from securities soldTotal extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Total extraordinary loss
Income before income taxes
Corporate, inhabitant and enterprise taxes
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interest in loss(△)
Net income－

First three months of theprevious consolidated
fiscal year
(From October 1, 2013
to December 31, 2013)
1,645,144
317,675
1,327,468
750,260
577,208

First three months of thecurrent consolidated
fiscal year
(From October 1, 2014
to December 31, 2014)
1,958,642
382,006
1,576,636
851,039
725,596

1,940
4,143
－
6,575
409
770
3,450
7,862
7,805
2,643
35,600

1,917
5,091
1,979
－
－
1,050
3,482
4,993
20,170609
39,294

355
7,367
－
－
3,379
5
11,107
601,701

537
－
1,467
1,391
3,412
1
6,809
758,080

－
－

4,882
4,882

2,808
2,808
598,892
195,83147,503
243,334
355,557－
355,557－－

7 －

762,962
220,228
67,350287,578475,383△657
476,041

(Consolidated quarterly statements of comprehensive income)(Cumulative first quarter of the consolidated fiscal year)(Unit: Thousand yen)

Income before minority interests
Other comprehensive income
Other valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income ofassociates accounted for using equity method
Total other comprehensive income
Comprehensive income(Details)
Parent company shareholders’ comprehensive
incomeMinority’s comprehensive income－

First three months of theprevious consolidated
fiscal year
(From October 1, 2013
to December 31, 2013)
355,557First three months of thecurrent consolidated
fiscal year
(From October 1, 2014
to December 31, 2014)
475,383

6,280

20,4246,460

14,889624

4,368

13,364368,922

39,681
515,065

368,922515,515

－

△449

8 －

(3)

Consolidated statements of cash flows(Unit: Thousand yen)First three months of theprevious consolidated
fiscal year
(From October 1, 2013
to December 31, 2013)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Increase and decrease in provision (△decrease)
Interest and dividends income
Interest expenses
Foreign exchange gains and losses (△gains)
Equity in gains and losses of affiliates (△gains)
Gains and losses on investments in silent partnership(△gains)
Gains and losses on investment in partnership (△gains)
Loss on retirement of noncurrent assets
Gains and losses on valuation of investment securities(△gains)
Increase and decrease in accounts receivable (△Increase)
Increase and decrease in inventories (△increase)
Increase and decrease in advance payments-trade(△increase)
Increase and decrease in accounts receivable-other(△increase)
Increase and decrease in purchase debts (△decrease)
Increase and decrease in accounts
payable-other(△increase)
Increase and decrease in deposits received (△decrease)
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plants and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of other securities of subsidiaries and affiliates
Payment on leasehold deposits
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Proceeds from issuance of common stock
Purchase of treasury stock
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Translation differences of cash and cash equivalents
Increase and decrease in cash and cash
equivalents(△decrease)
Balance of cash and cash equivalents at the beginning of
the period
Cash and cash equivalents at the end of period－

9 －First three months of thecurrent consolidated
fiscal year
(From October 1, 2014
to December 31, 2014)

598,892
61,5692,682△79,502△6,084355△7,805
7,367

762,962
68,3702,682△116,668△7,008537△20,070△1,979△6,575

1,467

△409
2,808

1,391
－

－

△4,882△61,259△411△91,899691△14,090△383,792△154,743△478,751

37,59680,663

94,562496,301

3,185,928△28,934

5,169,011△347,574

3,631,946
1,755
△355
△469,155
3,164,190

5,131,452
1,950
△537
△634,340
4,498,525△1,387△84,978△9,217－△125,000－△2,520△223,103－△73,117△319,578
4,983△125,000△31,186△9,813△553,712

6,736－△394,351△10,368△397,983
7,707

－
△513
△499,804△9,134△509,452
22,9572,550,810

3,458,318

18,358,343

20,349,309

20,909,154

23,807,627

(4)Notes to the consolidated quarterly financial statement(Notes regarding the premise for continuance)
N/A(Note when there is a significant fluctuation in the amount of shareholders’ equity)
N/A

－

10 －