Summary of Consolidated Financial Statements for the First Quarter, FY2019 (IFRS)
February 12, 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
reportFebruary 14, 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 First Quarter, FY2019(From October 1, 2018 to December 31, 2018)(1) Consolidated Financial Statements (Cumulative)
Revenue
Millionyen(Percentages represent year-on-year % change)

Operating profit

Profit before
income taxes

Millionyen

Millionyen%%

Profit%Millionyen

Total
Profit attributable
comprehensive
to owners of parent
incomeMillionMillion
%
%
%
yen
yen

Q1 FY2019

8,246 35.2

2,076 30.2

1,934 22.0

1,050 22.9

1,079

25.4

213

△79.7

Q1 FY2018

6,098 26.4

1,594 28.7

1,585 35.3

854 36.3

860

41.1

1,051

△4.7

Basic earnings per share

Diluted earnings per share
Yen

Yen

Q1 FY2019

14.67

14.39

Q1 FY2018

11.58

11.58

(Note) In October 1, 2018, our company executed a 2-1 stock split. The values for the FY2017 are calculated on the same base.

(2) Consolidated Financial Position

Q1 FY2019
FY20182.

Total assets
Million yen
132,387
116,858

Total equity
Million yen
23,22626,020Total equity attributable toowners of parent to total
assets
%
16.6
21.2

Total equity attributableto owners of parent
Million yen
22,024
24,796

Dividends

FY 2017
FY 2018
FY 2018 (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

Total
Yen
58.00

35.00

35.00

(Note 1) Revision to the most recently released dividend forecast: No(Note 2) In October 1, 2018, our company executed a 2-1 stock split. The values for the FY2017 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 previous term comparison; Interim % represents year-on-year change)

2Q of FY 2019
(cumulative)
Full year

Profit before
Revenue
Operating profit income taxes
MillionMillionMillion
yen
%
yen
%
yen
%

Millionyen

15,202 21.1

4,150 26.9

4,052 27.4

2,469 26.9

2,424

23.5

32.91

31,850 20.6

8,300 26.7

8,108 21.0

5,206 22.6

5,106

20.0

69.32

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

ProfitProfit attributable to Basic earnings
owners of parent
per share
Million
%
yen
%
Yen

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.: No[2] Changes in accounting policy other than [1]: No[3] Changes in accounting estimations: No(3) Number of shares issued (common stock)
Q1 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 Q1 FY2019: 5,076
Q1 FY2019: 73,563,591
Q1 FY2018: 74,296,000[3] Average number of shares during the term
(Note 1) Number of treasury shares at the end of the term above does not include the shares attributed to thedirectors’ remuneration board incentive plan trust and J-ESOP (639,400 shares for FY2018; 734,205 shares for
1Q FY2019.)(Note 2) In order to appropriately disclose the number of treasury shares at the end of the term and average
number of shares during the term (cumulative), 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 in treasury stock
for a more accurate disclosure of basic earnings per share.
* 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 9 of the attachment.
2 Results Presentation for Investors and Analysts: February 14, 2019. Supporting materials and a video of thepresentation 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……………………………………...10
2. Condensed consolidated Financial Statements and Major Notes….………………………………….11(1) Condensed consolidated balance sheet…………………………………………………………………11(2) Status of consolidated financial position ………………...………………………………………………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………..………………………………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
under review.
① Consolidated operating results
The Group announces its earnings results for the cumulative first quarter of the cumulative consolidated fiscal
year (October 1, 2018 to December 31, 2018) as follows.
(Unit: Thousand yen)First three months of theprevious consolidated
fiscal year
(From October 1, 2017
to December 31, 2017)

First three months of thecurrent consolidated
fiscal year
(From October 1, 2018
to December 31, 2018)

Rate of change (%)

Revenue

6,098,938

8,246,908

35.2

Operating profit

1,594,464

2,076,207

30.2

Profit before income taxes

1,585,482

1,934,930

22.0

860,460

1,079,216

25.4

Profit attributable toowners of parent

a. Revenue
The Group’s revenue surged to ¥8,246 mil., up by 35.2 % year-on-year. The payment processing businessrevenue continued to grow thanks to the steady growth of Ecommerce market, coupled with expansion of theGroup’s service coverage in non-Ecommerce field. Our money service business (MSB) revenue also rose fromthe steady expansion of transaction value in “GMO payment after delivery,” an after-the-fact type of payment
service. The payment enhancement business revenue grew driven by Macro Kiosk’s strong revenue growth, theGroup’s consolidated subsidiary that provides a comprehensive service of mobile payment, authentication andnotification.
Our revenue breakdown by business model is as follows.
Effective from this Frist Quarter of the cumulative consolidated fiscal year 2019, we have reclassified thesoftware development revenue from Initial to Stock. Additionally, with the adoption of IFRS 15, 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. The amount reclassified from Initial to Stock is¥180 mil. for the First Quarter of the cumulative consolidated fiscal year (October to December 2018). There is
no retroactive reclassification for the First Quarter of the previous cumulative consolidated fiscal year 2018 as
the adjustment of the cumulative effect from initial application of IFRS 15 is made against Retained Earningsbalance at the start of the First Quarter of this cumulative consolidated fiscal year 2019.

―4―

(Unit: Thousand yen)

Business modelFirst three months of theprevious consolidated
fiscal year
(From October 1, 2017
to December 31, 2017)

Initial(Initial revenue)

First three months of thecurrent consolidated
fiscal year
(From October 1, 2018
to December 31, 2018)

Rate of change (%)

251,041

393,654

56.8

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

795,869

1,184,653

48.9

2,360,807

3,072,803

30.2

2,691,219

3,595,796

33.6

Total

6,098,938

8,246,908

35.2

b. Operating profit
The Group’s operating profit reached ¥2,076 mil., up by 30.2% year-on-year, on track to achieve the Group’s
consolidated fiscal year forecast.
By segment, payment processing business operating profit was ¥2,428 mil., an increase of 44.8% YoY; Money
Service Business stood at ¥645 mil., an increase of 66.7% YoY; and, payment enhancement business recordeda loss of ¥77 mil. (the previous First Quarter amount is a profit of ¥47mil.).
c. Profit before income taxes
Pre-tax profit was ¥1,934 mil. an increase of 22.0% year-on-year, from the reasons stated above in a. and b., aswell as currency losses incurred the First Quarter, compared to the currency gains recorded in the previous First
Quarter.

―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 three months of theprevious consolidated
fiscal year
(From October 1, 2017
to December 31, 2017)

First three months of thecurrent consolidated
fiscal year
(From October 1, 2018
to December 31, 2018)

Rate of change (%)

3,311,505
1,677,270

4,737,738
2,428,285

43.1
44.8

1,525,907
387,5032,014,326
645,908

32.0
66.7

1,261,524
47,734

1,494,843△77,92418.5－－△518,043－△920,062－－

6,098,938
1,594,464

8,246,908
2,076,207

35.2
30.2

a. Payment processing business
For the payment processing business, the main focus areas consist of online payment, recurring payment and,card-present payment.
Both the transaction volume and value has expanded significantly, thanks to the secular growth in online
payment and recurring payment of the Ecommerce market coupled with the Installment Sales Act amendmentthat enabled the acquisition of large scale merchants since last year. Segment revenues benefited from the
expanded service usage by non-Ecommerce customers, steady growth of existing Ecommerce merchants, aswell as the efforts made to acquire large-scale and high-growth new merchants.
As part of the services to support financial institutions and financial service providers in their businesses areas
to create a cashless society, the Group has been providing “Ginko Pay” platform system, mobile phone
payment app service linked to the bank account, which was co-developed by the Bank of Yokohama and theGroup. The Group’s focus is to expand the adoption of Ginko Pay to other financial institutions and otherservice providers. The Bank of Yokohama Ltd. and the Bank of Fukuoka Ltd. (which includes The Bank ofFukuoka the Kumamoto Bank Ltd. and, Shinwa Bank Ltd.) have launched services that utilize the Ginko Pay
platform, and rollout of Ginko Pay-linked services are anticipated at Resona Group (the Group banks ofResona Bank Limited, Saitama Resona Bank Limited, The Kinki Osaka Bank Ltd) and Japan Post Bank Co. Ltd.
Furthermore, The Bank of Okinawa and Hokuhoku Financial Group (which includes The Hokkaido Bank andthe Hokuriku Bank). As a result, segment revenues reached ¥4,737 mil. an increase of 43.1% and segment
segment operating profit was ¥2,428 mil. an increase of 44.8%.

b. Money Service Business
Money Service Business (MSB) includes the Early Payment Service to help merchants receive sales proceeds
earlier to improve their cash flow, the Transaction Lending Service to lend growth capital to merchants based on
payment and other data, the Remittance Service, and the GMO Payment After Delivery that the Group’s
consolidated subsidiary GMO Payment Service, Inc. offers.
For the period under review, GMO Payment After Delivery, Early Payment Service and the Remittance Service―6―all showed steady increase, and the overseas lending service which was launched in the previous year, also
contributed to increase the segment revenue.
As a result of the above, segment revenue reached to ¥2,014 mil. an increase of 32.0% year-on-year, andoperating profit reached ¥645 mil. an increase of 66.7% year-on-year, boosted both by revenue growth as wellaslowered credit costs and corporate-wide efforts to reduce expenses.

c. Payment enhancement business
Payment enhancement business includes mobile payment services, authentication and notification
comprehensively provided by our consolidated subsidiary Macro Kiosk Berhad, and an online advertising
service to expand sales of the Group’s merchants by analyzing their sales status and running timely ads ontheir behalf based on their sales data.
Under the first quarter in review, Macro Kiosk Berhad’s revenue grew 20.5% year-on-year, with its mainstay
EMS business growing 22.2% year-on-year that’s to expanding the service coverage to emerging economies ofVietnam in addition to the existing focus market of Malaysia. The MPS business grew a sluggish 8.5% year-onyear due to headwinds from external factors. Despite the continued growth in segment revenue, the segment
operating profit recorded a loss from strategic upfront investment to establish out business foundations andforeign currency loss from increased amount of transactions between subsidiary.
Online advertising service revenue increased 9.0% year-on-year despite the slowdown of ad placements insome of the services that were adversely affected by external factors.
As a result of the above, segment revenue was ¥1,494 mil. and increase of 18.5% year-on-year, and segment
loss was ¥77 mil. (previous First Quarter was a profit of ¥47mil.)Please see below for the chart of major businesses and companies of such businesses by segment.
Segment

Major service

Major companies of the service

Payment 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 first quarter of the consolidated fiscal year under review was up ¥15,528 mil. fromthe end of the previous consolidated fiscal year at ¥132,387 mil. The increase in total assets is mainly due tocash and cash equivalents increasing by ¥7,523 mil., increase in advance payment of ¥2,009 mil. and increasein accrued income of ¥6,847 mil.
The Group has ¥5,000 mil., deposits to subsidiaries and affiliated companies included in the cash and cash
equivalents at the end of the current consolidated fiscal year. Together with the ¥7,000 mil., deposits to
subsidiaries and affiliated companies on the condensed consolidated balance sheet, the total balance of theGroup’s deposits to subsidiaries and affiliated companies stands at ¥12,000 mil., These deposits are theGroup’s cash on hand deposited under the cash management system (CMS). CMS is the system that GMO
Internet Group introduced to all its group companies for the management of their cash. Therefore, the Group
does not need to wait until the predetermined CMS repayment date comes to withdraw capital. When theGroup’s capital demand surges in accordance with the favorable progress of the business, the Group can
withdraw cash when needed by raising a request early enough to meet a predetermined requirement.
b. Liabilities
Balance of liabilities at the end of the first quarter of the consolidated fiscal year under review stood at ¥109,161
mil., higher than the end of the previous consolidated fiscal year by ¥18,322 mil. This increase is mainly due toincrease in accrued expenses of ¥6,197 mil., and increase in deposits received of ¥12,100mil.
c. Equity
Equity balance at the end of the first quarter of the consolidated fiscal year under review was ¥23,226 mil.,lower by ¥2,793 mil. from the end of the previous consolidated fiscal year. Dividend paid out of retained
earnings amounted to ¥2,136 mil.
② Status of consolidated cash flows
Cash and cash equivalents (hereinafter called “fund”) increased by ¥7,523 mil. versus the balance at the start of
the term, to ¥49,556 mil. The state of cash flows over the three months under review is discussed below.
a. Cash flow from operating activities
Net funds provided by operating activities in the first quarter amounted to ¥9,997 mil., which compares to¥9,537 mil. in the same period a year before. This resulted from the net effect of cash outflows of (i) increase inadvances paid ¥2,009 mil., (ii) increase in accrued revenues ¥6,847 mil. (iii) corporate and income tax paymentof ¥1,541 mil., and cash inflows of (i) profit before tax of ¥1,934 mil., (ii) increase in accrued expenses ¥6,255
mil., and (iii) increase in deposits received of ¥11,948 mil.
b. Cash flow from investing activities
Net funds provided by investing activities over the consolidated first quarter under review totaled ¥316 mil.,which compares to a net fund usage of ¥381 mil. in the same period previous year. This is due to the net impactof the cash outflow of ¥330 mil. from the acquisition of intangible assets and cash inflow from repayments forcompulsory deposits of ¥689 mil.
c. Cash flow from financing activities
Net funds used by financing activities over the consolidated first quarter under review was a ¥2,733 mil., which
compares to ¥1,705 mil. in the same period of the previous year. This is due to cash outflow from share―8―

buybacks of ¥689 mil. and dividend payout of ¥2,118 mil..

―9―

(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 B2C 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 online migration of B2B and C2C Ecommerce.
For the fiscal year ending September 2019, the Group forecasts across the board growth in all its segments of
payment processing business, Money Service Business and payment enhancement business, through acquisition oflarge and high-growth merchants and financial institutions, expansion of GMO payment after delivery.
The earnings forecast for consolidated fiscal year ending September 30, 2019 are: revenue of ¥31,850 mil. (anincrease 20.6% year-on-year), operating profit ¥8,300 mil. (an increase of 26.7% year-on-year), profit before tax¥8,108 mil. (an increase of 21.0% year-on-year) and profit attributable to owners of parent company ¥5,106 mil. (anincrease of 20.0% YoY).

―10―

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 Q1 of current
consolidated fiscal year
(December 31, 2018)

AssetsCurrent assets
Cash and cash equivalents②

42,033,124

49,556,828

Operating and other receivables③,⑤

13,236,930

13,757,221

Advances paid

22,267,745

24,277,714

Accrued revenue

15,717,965

22,565,740

64,537

79,4697,000,000

7,000,000

706,745

60,132Inventories
Deposits to subsidiaries and affiliates④

Other financial assets
Other current assets

1,205,270

1,074,545

Total current assets

102,232,318

118,371,652

450,918

527,539

4,934,688

4,970,680

2,938,426

2,859,881

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

5,444,421

4,278,859

Deferred tax assets

833,886

1,291,043

Other noncurrent assets

24,29787,750Total noncurrent assets

14,626,639

14,015,754

116,858,957

132,387,407

Total assets―11―NotesEnd of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand yen)
End of Q1 of current
consolidated fiscal year
(December 31, 2018)

Liabilities and equity
Liabilities
Current liabilities
Operating and other payables

4,663,264

5,136,819

Accrued expenses⑤

15,740,072

21,937,117

Deposits received⑤

41,228,933

53,329,460

4,101,400

4,400,400

98,852

104,419

1,530,203

578,951

7,388

7,773

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

2,030,282

2,354,348

69,400,397

87,849,291

Corporate bonds

16,676,929

16,694,085

Borrowings

2,199,100

1,999,000

Other financial liabilities

185,223

235,654

Provision

64,05564,055

Deferred tax liabilities

205,749

187,764

Other noncurrent liabilities

2,107,484

2,131,168

Total noncurrent liabilities

21,438,542

21,311,728

90,838,939

109,161,019

Capital stock

4,712,900

4,712,900

Capital surplus

5,758,448

5,762,065

Retained earnings

12,875,446

11,623,537

Treasury stock△491,893△1,181,846

Other items of equity
Total equity attributable to owners ofparentMinority interests

1,941,305

1,108,276

24,796,206

22,024,933

1,223,811

1,201,454

Total equity

26,020,018

23,226,387

116,858,957

132,387,407

Total current liabilities
Noncurrent liabilities

Total liabilities
EquityTotal liabilities and equity―12―(2) Condensed consolidated statement of income and consolidated statement of comprehensive income
Condensed consolidated statement of income

RevenueFirst three months of previous
consolidated fiscal year
Notes
(From October 1, 2017
to December 31, 2017)
6,098,938(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2018
to December 31, 2018)
8,246,908△2,035,754△3,004,380

4,063,183

5,242,528

102,51739,902△2,494,932△3,098,993△76,303△107,230

1,594,464

2,076,207

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

59,401

12,792Financial expense△11,107△111,034

Equity method investment gains or loss

△57,276△43,034

Profit before income taxes

1,585,482

1,934,930

Income tax expenses△730,875△884,655

854,607

1,050,275

Owners of parent

860,460

1,079,216

Non-controlling interests△5,853△28,941

Profit854,607

1,050,275

Basic earnings per share (yen)

11.58

14.67

Diluted earnings per share (yen)

11.58

14.39

ProfitProfit attributable toEarnings per share―13―

Condensed consolidated statement of comprehensive income

ProfitFirst three months of previous
consolidated fiscal year
Notes
(From October 1, 2017
to December 31, 2017)854,607(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2018
to December 31, 2018)
1,050,275

85,553△808,994

39,006△53,448

124,560△862,442

87,022△41,142△14,500

66,544

72,522

25,401

197,082△837,041

1,051,689

213,234

1,043,381

246,1888,307△32,953

1,051,689

213,234

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

Comprehensive income attributable to
Owners of parent
Minority interests
Total

―14―

(3) Condensed consolidated statement of changes in equity
First three months of the previous consolidated fiscal year (From October 1, 2017 to December 31, 2017)(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,
4,712,90
19,675,44
20,769,31
4,985,781 9,619,266 △256,269 613,768
1,093,870
2017
0
7
8
Profit－－ 860,460－－ 860,460 △5,853 854,607
Other comprehensive
14,161 197,082－－－－ 182,921 182,921
incomeComprehensive income
8,307 1,051,689－－ 860,460－ 182,921 1,043,381△1,485,9△1,485,9△1,485,9
Dividends
－
－
－
－
－
20
20
20
Transfer fromaccumulated other
42,974－－－ △42,974－－－
comprehensive income
to retained earnings
Changes in the interests－ △4,121－－－ △4,121－ △4,121in controlled subsidiary
Share-based payment
17
6,190
6,190
－
－
－
△17
－
transaction
Total transactions with
△1,442,9△1,490,0△1,483,8
6,190－ △4,104－ △42,991
owners45
41
51
Balance as of December
4,712,90
19,228,78
20,337,15
4,981,677 9,036,781 △256,269 753,697
1,108,368
31, 20170
7
6First three months of the current consolidated fiscal year (From October 1, 2018 to December 31, 2018)(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,
4,712,90
12,875,44
24,796,20
26,020,01
5,758,448
1,223,811△491,893 1,941,305
2018
0
6
6
8
Profit－－ △195,085－－ △195,085－ △195,085
Other comprehensive
4,712,90
12,680,36
24,601,12
25,824,93
5,758,448
1,223,811△491,893 1,941,305
income0113Comprehensive income－－ 1,079,216－－ 1,079,216 △28,941 1,050,275
Dividends
Transfer fromaccumulated othercomprehensive income
to retained earnings
Changes in the interests
in controlled subsidiary
Share-based paymenttransaction
Total transactions withownersBalance as of December
31, 2017
Balance as of October 1,
2018

－

－

－

－ △833,028 △833,028－－ 1,079,216

－

－

－

－

△2,136,041－－△2,136,041－△2,136,0
41

－

3,617

－

－

－

3,617

10,596

14,213－ △833,028－ △689,952△4,012 △837,041

246,188 △32,953－ △689,952

213,234－ △689,952△2,136,0△2,822,3△2,811,7
10,596△689,952－
41
76
80
4,712,90
11,623,53 △1,181,8
22,024,93
23,226,38
5,762,065
1,108,276
1,201,454
0
7
46
3
7
－

3,617

―15―

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

1,585,482

1,934,930

Depreciation & Amortization

224,410258,253

Financial income and expense△48,293

98,63457,27643,034△31,388△14,932△181,430△560,481

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

Equity 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 payables(△=decrease)
In/Decrease in accrued expenses(△=decrease)
In/Decrease in deposits received(△=decrease)
Other△738,034△2,009,969△3,134,935△6,847,775

753,845524,075

4,081,996

6,255,031

8,986,412

11,948,748△417,401△62,693

Subtotal

11,137,938

11,566,857

3,388

12,792

Interest and dividends received△3,169△11,296－△29,940

Income taxes paid
Net cash provided by (used in)operating activities
Net cash provided by (used in) investing
activities
Payment for deposit of time deposits
Purchase of property, plants andequipment
Purchase of intangible assets△1,600,643△1,541,289

9,537,512

9,997,123－

689,374△16,708△43,347△258,664△330,541

Purchase of investment securities
Proceeds from sales and redemptionof investment securities
Acquisition of other financial assets
Proceeds from sales of other financial
assetsOthersNet cash provided by (used in)investing activities△148,934△1,58058,245－△1,686△12,85696

933△13,968

14,044△381,621

316,026

Interest paid
Security Deposits paid

―16―

First three months of previous
consolidated fiscal year
Notes
(From October 1, 2017
to December 31, 2017)
Net cash provided by (used in) financing
activities
Proceeds from short-term borrowings－

299,000△207,688△200,100－△689,952△1,472,199△2,118,666△26,053△24,226△1,705,941△2,733,945

23,365△55,499

7,473,314

7,523,704②

27,533,515

42,033,124②

35,006,830

49,556,828

Repayment of long-term borrowings
Payment for stock buyback
Dividends paid
Other
Net cash provided by (used in)financing activities
Increase and decrease in cash and cash
equivalents (△=decrease)
Balance of cash and cash equivalents atthe beginning of the period
Effect of exchange rate changes on cash
and cash equivalents
Cash and cash equivalents at the end of
period(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2018
to December 31, 2018)―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, 2018)(Unit: Thousand yen)
End of Q1 of current
consolidated fiscal year
(December 31, 2018)

Cash and cash equivalents

37,033,124

44,556,828

Deposits to subsidiaries
and affiliates

5,000,000

5,000,000

42,033,124

49,556,828

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 Q1 of current
consolidated fiscal year
(December 31, 2018)

Accounts receivable-trade7,262,587

5,753,548

Operating loans

6,063,545

8,015,682

14,613

83,174△103,815△95,184

13,236,930

13,757,221

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

―19―

⑤

Treatment of Financial Assets and Liabilities
The Group has the legally enforceable right over some of its financial assets and liabilities to set off the recognizedvalue of the assets and liabilities as a net amount, or the Group can offset the financial assets and liabilities when thetransaction of realization of the asset and settlement of liabilities is structured 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 first quarter of consolidated fiscal year (December 31, 2018)
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

4,986,183△2,971,471

2,014,711

4,986,183△2,971,471

2,014,711

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

21,844,863△897,694

20,947,169

Deposits received

50,583,189△2,073,777

48,509,412

Total

72,428,053△2,971,471

69,456,581―20―