FY2022/5 Financial Results for Q3

Gunosy Inc.
TSE Prime (6047)
April 14, 2022

INDEX

1.

Executive SummaryP3

2.

Financial Results for FY2022/5 Q3

P 10

3.

FY2022/5 Outlook

P 16

4.

Business Overview by Division

P 19

5.

Reference Materials: Overview of Gunosy Inc.

P 27

（C） Gunosy Inc. All Rights Reserved.

2

Executive Summary（C） Gunosy Inc. All Rights Reserved.

3

FY2022/5 Q3 Summary
Overview

In the consolidated results for Q3 (June 2021 - Feb. 2022), both net sales andprofits remained strong.
Full-year forecasts were revised upwards.

Media
Business•

Profitability of Gunosy and au Service Today showed continued improvement.

•

Initial sales forecasts are expected to be achieved despite reduced
investment in advertising, mainly due to an improved retention rate in Gunosy(1.7 times higher compared to users acquired in the same month last year).

Game8 Group

Investment•

Achieved 108% sales growth and 112% profit growth QonQ.

•

Overseas business, a growth driver, is growing steadily.

•"slice", our investment in India continues to show rapid growth, with
AUM up by more than 480% YonY, partly due to enhanced marketingmeasures.
（C） Gunosy Inc. All Rights Reserved.

4

Upward Revision of Consolidated Full-year Forecasts
Revised consolidated full-year forecasts

KPIs for Gunosy showed improvement as a result of improved media quality. Fullyear sales made steady growth despite curbs on advertising investment. In
response, we revised our operating profit upwards from 0 to 0.2 billion yen.
(Million yen)

Before revision

After revision

FY2022/5 full-year FY2022/5 full-year
forecast
forecast

vs. initial
forecast

Net sales

8,790

8,800

100.1%

Operatingprofit0200-

Operatingmargin-2.3%-

Not disclosed in
FY2022/5 Q2

-28

-

-13

-

Ordinary profit
Profitattributable toowners ofparent-due to the financial
impact of ”slice” which
could not bereasonably calculated.

-

Supplementary
information• The efficiency of advertising
investment improved supported by
improvements in per-user profitability
and retention rates, etc. in Gunosy.
• Considering the progress status of fullyear consolidated sales, we expect tocurb advertising investment in both Q3
and Q4 to a greater extent than planned.
• As the financial impact of "slice" in thecurrent year can now be reasonably
calculated, the forecast for ordinary profit
and profit for the current year has been
disclosed.
• (See p18 for more details. Incorporationof financial data of “slice” into thestatement of income is planned for Q1of the next financial year.)（C） Gunosy Inc. All Rights Reserved.

5

(1/2) Background to Upward Revision: Improved Profitability
per User
While DAUs remained stable, per-user profitability improved.

Financialdata

Net sales of Gunosy(Index: Sales/DAU)

Number of users(Index: DAU)

Profitability shows continued growth

DAUs remain stable

Profitability per user

KPI

Improving

Growth rate

2021

2022

M
ay
Ju
n
Ju
l
Au
g
Se
p
O
ct
N
ov
D
ec
Ja
n
Fe
b

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

+14%

2021

2022

（C） Gunosy Inc. All Rights Reserved.

6

(2/2) Background to Upward Revision: Significant Improvementin Retention Rate in Gunosy
The percentage of new users reached approx. 30% of the total users as of February 2022. The retention
rate of new users has shown a significant improvement since the resumption of advertising
investment.
New users as % of DAU

Improvement of retention rate

The percentage of new users with higher
profitability increased to approx. 30% of
the total

The retention rate of new users has
shown a significant improvement since
the resumption of advertising investment.

Y

100%
N ew users

80%

60%

Retention rate

1.7 times(vs. Feb 2021)(As of Feb 2022)

Existing u se rs

As of FY2022 Q4

35%-40%40%(Forecast)

Changes to the forecast of the percentage of new users asof the end of May 2022

20%

0%

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

2021

2022

• As advertising investment will be more curbed than
Ythan the estimate disclosed
planned, the figure is lower
in Q2 (40%-50%).
• However, as per-user profitability and retention rates
are higher than expected, sales are expected to meetthe full-year forecast disclosed in Q2.

（C） Gunosy Inc. All Rights Reserved.

7

Gunosy's Advertising Investment

PolicyAdvertising investment with a viewto achieving a consolidated
operating surplus on a full-yearbasis• Aim for solid sales growth through improved Sales/DAU by
expanding the number of new users and a solid build-up ofusers by controlled advertising investment.
• We will step up investment in the event of a significant
improvement in KPIs or the launch of attractive new
businesses, allowing flexibility for temporary losses.

External factors• Continue to take a cautious stance inorder to achieve consolidated operating
profit in view of increasing uncertainty
in the financial markets and other areas.

Internal factors• The improvement in Gunosy's KPIs
has helped to secure a stable userbase with a more comfortable return on
investment (IRR) than in the past.
• While maintaining our IRR benchmark,we will also make upfront investments
in multiple marketing initiatives tomaintain our growth cycle.

（C） Gunosy Inc. All Rights Reserved.

8

"slice": Progress on KPIs
Overwhelming growth has continued. Low default rates have been maintained, while AUM, number ofusers and number of cards issued has grown significantly.
Approx.

+100%

AUM growth
AUM (outstanding
loan balance)

Number of registered users

7 million +users

AUM growth+480%（YonY）(5 million+ at the time of the previous
announcement)

Number of cards issued permonth
Significant growth underway from previously
published figures due to rapid expansion of
new users

200k /
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020

2021

Rapidly
growingmonth(At the time ofpreviousannouncement)

Present（C） Gunosy Inc. All Rights Reserved.

9

FY2022/5 Financial Results for Q3（C） Gunosy Inc. All Rights Reserved.

10

FY2022/5 Consolidated Results for Q3 (vs. results)
QonQ sales and profits growth and YonY sales growth (June 2021 - Feb. 2022) were achieved. Thiswas due to improved profitability as a result of the acquisition of new users of Gunosy and a recovery insales of Game8, which had recorded a temporary sales decline in the previous quarter. Operating profit
for nine months from June 2021 – Feb 2022 declined as advertising costs increased by 670 million yen
over the same term last year.
(Million yen)

Q3
FY2022/5
Q3
Net sales
Operating profit
Operating margin
Ordinary profit
Profit attributableto owners of parent

Total Q1-Q3

FY2022/5
Q2

QonQ

2,215

2,105

105.2%

27

19

1.2%

FY2022/5
Q1-Q3

FY2021/5
Q1-Q3

YonY

6,598

6,453

102.3%

140.0%

189

563

33.6%

0.9%

-

2.9%

8.7%

-

9

-79

-

-31

546

-

13

-61

-

-14

314

-

（C） Gunosy Inc. All Rights Reserved.

11

Total Number of Active Users *(MAU)
Gunosy's MAUs increased slightly QonQ due to an increase in the retention rate of newly acquired
users.

LUCRA
NewsPass + au Service Today
GunosyQ1Q2Q3

FY2019/5

Q4

Q1

Q2

Q3

FY2020/5

Q4

Q1

Q2

Q3

Q4

FY2021/5* Average for each quarter of MAU (monthly active users) of “Gunosy”, “NewsPass”, “au Service Today” and “LUCRA”

Q1

Q2

Q3

FY2022/5（C） Gunosy Inc. All Rights Reserved.

12

Breakdown of Net Sales*1

All businesses recorded sales increases QonQ, including Gunosy Ads, G8 and ADNW.

OthersADNW

Game8Gunosy Ads*2

136
206

254
232

178
223

240

128
317

1,422

1,459

1,357

1,480

1,298

(Million yen)

4,500

3,000

280
256
1,143

334
234
1,236

19

251
320
530

1,500

246
375
262

275

221
441

435

267

1,267

1,198

1,189

Q1

Q2

Q3

203
366
371

1,935

1,894

1,960

2,030

2,119

1,964

1,960

1,594

168
451
254

153
390
227

194
420
247

1,526

1,403

1,334

1,352

Q4

Q1

Q2

Q3

260

0
Q1

Q2

Q3

FY2019/5

Q4

Q1

Q2

Q3

Q4

FY2020/5

FY2021/5

FY2022/5*1: Sales of “Gunosy Ads”, “ADNW” and “Game8” are presented on a nonconsolidated basis. Internal trade adjustments are included in “Others”.
*2: Sales of Gunosy Ads are the total of “Gunosy”, “NewsPass”, “au Service Today” and “LUCRA”.

（C） Gunosy Inc. All Rights Reserved.

13

Cost Structure
Advertising investment in Gunosy remained at the same level as in Q2. Personnel costs increased due tothe resumption of investment in recruitment, which was carried out as part of an organizationalbuild-up for medium- and long-term growth. Other costs remained tightly controlled.

3,646
3,307

3,000

3,388

3,362

3,109

(Million yen)

1025

2,908

846

3,781

1,111
950

983

1,096 1,176

2,337
917
822

493

1,500

539

777

55

54

420

414

55

103

102

456
109

988 1,047

814

637
51
507
131
884

51
526
157

2,048

583
72

90

526

541

146

134

1,866
957

Q2

Q3

FY2019/5

Q4Q3

FY2020/5

515

370

334

153
93

152
88

318
64

375
36

535

513

518

413

128
278

121
182

111
187

Q4

Q1

Q2

Q3

193
86

977 1,091 1,027 125

Q2

1,090

810

540

920

560

Q1

1,974

2,135 2,085 2,187

779

0
Q1

2,304

153
94
583

FY2021/5

537

Others
Revenue sharing *348

Advertising expenses

371
39

389
39

Rent expenses on land

515

538

575

115
195

109
186

118
168

114
181

Q4

Q1

Q2

Q3

and building
Personnel expenses
Server expenses
Ad network costs

FY2022/5*”Revenue sharing” included in “Others” in FY2021/5 and earlier, but separated from “Others” from FY2022/5 Q1.
“Live video production expenses” is included in “Others” from FY2022/5 Q1（C） Gunosy Inc. All Rights Reserved.

14

Game8
In Q3, the growth of overseas business and the stability of domestic business resulted in sales
growth QonQ. Investment in new businesses will continue to be made in the future in order to acquire
medium- and long-term growth drivers.
(Million yen)

500

451
435 441

Net sales390

366 375

Operating profit

420

317 320

250

206

232

256

234 223 240
151

95

111

116
57

54

50

Q4

Q1

Q2

113

113

108

111

Q3

Q4

Q1

Q2

127

136
97

109

0
Q1

Q2

Q3

FY2019/3

FY2020/3

Q3

FY2021/3* Nonconsolidated results (before consolidated adjustment). Results of Smarprise, our subsidiary is not included.
FY2022 Q3 results are for the period from October to December 2021 due to a gap with the parent company's
consolidated accounting period.

Q4

Q1

Q2

Q3

FY2022/3（C） Gunosy Inc. All Rights Reserved.

15

FY2022/5 Outlook（C） Gunosy Inc. All Rights Reserved.

16

FY2022/5 Results Forecast (Consolidated)
Up until Q3, both sales and operating profit made steady progress compared to the full-year
forecast.
Operating profit is expected to be 200 million yen higher than the forecast disclosed in Q2 as a result of
curbing advertising investment to the extent that full-year sales target is achieved.
(Million yen)

Before revision

After revision

Progression
Progression
FY2022/5 Q1FY2022/5 FullFY2022/5 Fullrate
rate
Q3
year forecast
year forecast
Net sales

6,598

8,790

75.1%

8,800

75.0%

Operatingprofit

189

0

-

200

94.6%

Operatingmargin

2.9%

-

-

2.3%

-

Ordinary profit

-31

-

-

-28

-

Profit attributableto owners ofparent

-14

-

-

-13

-

（C） Gunosy Inc. All Rights Reserved.

17

*

Impact of "slice" on the Statement of Income (Under J-GAAP)
Points1.

Our voting interest in “slice” is in the range of 15%-20% as defined in "Accounting Standard
for Equity Method of Accounting for Investments". We intend to start applying the equity
method at the timing of certain events (such as the completion of the dispatch of executives) thatare deemed to have a material impact on the financial, operating or business policy decisions ofslice. Our director and CFO, Yuki Maniwa, is due to be appointed as a board member at the endof April/beginning of May.

2.

The equity method of accounting is expected to be applied during the fiscal year ending May 31,
2022. Incorporation of financial data into the statement of income is planned to be started
for Q1 of the next financial year.

3.

Significant items affecting the profit and loss to be incorporated in the statement of income for the
next fiscal year and beyond that remain undetermined are as follows:4.

•

Deemed acquisition date, which is the start date of application of the equity method (Since the company's fiscal year ends at the end of March,
the results of operations are expected to be incorporated with a time lag, as is the case with other subsidiaries.)•

Determination of the amount of goodwill, etc. through PPA (Purchase Price Allocation) procedure and its amortization period•

Performance of "slice" in the period in which the profit or loss is incorporated.

As "slice" is growing rapidly, marketing measures will continue to be strengthened to ensure
further growth in the future. Accordingly, it is assumed that losses may be recorded in relation to
the application of the equity method in the short to medium term.

*This is the status as of April 14, 2022. If any important issues regarding the status arise in the future that should be disclosed, we will promptly disclose them.
（C） Gunosy Inc. All Rights Reserved.

18

Business Overview by Division（C） Gunosy Inc. All Rights Reserved.

19

Media Business

Gunosy Became an Official Partner of the Urawa Reds

We signed an official partnership agreement with the Urawa Reds for the 2022 season. The new
Urawa Reds channel was launched on the Gunosy and NewsPass apps. The Gunosy app logo is now
displayed on the ad-board at “Saitama Stadium 2○○2".
Launched "Urawa Reds Channel"

Sponsorshipagreement

As an official partner, we launched the "Urawa Reds
Channel" in the Gunosy app, which is exclusively
dedicated to news related to the Urawa Reds. In addition
to match information for the 2022 season, the Urawa
Reds Channel offers player-related information such as
player transfers, original video content only available
on Gunosy and other Urawa Reds-related information all
in one place.
（C） Gunosy Inc. All Rights Reserved.

20

Media Business

Progress in au Service Today

We worked continuously to improve the UX, including the release of the search functions, as wellincreasing profitability through header videos. Profitability per user is continuing to improve.

Updated features

Release of search function and header video

Status of profitability

Profitability per user
(Sales/DAU) is improving
Growth＋35%

May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Search function

Header video

2021

2022
（C） Gunosy Inc. All Rights Reserved.

21

Media Business

Ad Network (ADNW)Both CPMs and imps were on a recovery path, supported by media development achieved by thestrengthening of the organization, which resulted in a QonQ sales growth. We intend to drive businessgrowth by continuing to pursue customer development.
Number of Impressions
and CPM(Million imp)

60,000\36.84\40\35.75\29.71 \29.98\31.33

imp\29.0645,000\27.7030,00050,98843,32538,872 40,900 38,390 41,138

CPM

\20

\15.14\12.5946,71834,54315,00029,432\11.48 \11.91 \11.87\11.14 \11.22\11.8622,489 21,892 22,763 23,165 20,493 21,037

0

\0

Q1

Q2

Q3

FY2019/5

Q4

Q1

Q2

Q3

Q4

FY2020/5* CPM (cost per mille): Price per 1,000 impressions of advertisement

Q1

Q2

Q3

FY2021/5

Q4

Q1

Q2

Q3

FY2022/5（C） Gunosy Inc. All Rights Reserved.

22

Game8 Group

Progress in Overseas Business

The number of PVs of game walkthrough content for the North American region is steadily
increasing contributing to sales growth even more than before. We will continue to focus on ouroverseas operations.

Overseas Business

The number of PVs of the overseas business in gamewalkthrough wiki guides is growing steadily.

Growth

Sep-Nov
2020

Dec-Feb

Mar-May

Jun-Aug
2021

Sep-Nov

Dec-Feb
2022（C） Gunosy Inc. All Rights Reserved.

23

Investment

slice

A three-year, top-ranked partnership agreement was signed with the Mumbai Indians, one of themost popular teams in India's national sport, cricket, with the purpose of increasing brand awareness ofthe services offered by “slice”.

One of the most popular teams in the
Indian Premier League (IPL)
Twitter *1
Approx.

7.5

Instagram *1
Approx.

9.9

millionmillionEstablished

Number of IPL wins

2008

5

followers

followers

Highest in IPL

Sponsor type

PRINCIPAL PARTNERS(Highest-ranked)（C） Gunosy
All asRightsReserved.
*1: Inc.
Statusof April
2022.

24

Investment

Investment

Our equity in “slice”, which was over 17% as of the end of Q2, increased to about 3 billion dollars in Q3
with a follow-on investment *1of about 10 million dollars. The total investment in our investment
business is approximately 5 billion dollars.
Investments made since October 2018, when the investment project was launched, are included in the following:

Investment
ratio

Main investee companies
Approx.

$10mn

Early

India

Fintechof follow-on
investment
executed

Education

Approx.
Mid-to-late

75%

Early

Commerce

FintechMaaSReal estatee
tecFintechAudio
deliveryCommerce

Japan

Exit
executed

Mid-to-late

Approx.

25%

Organic EL

HR techInvestment asa limitedpartner*1: Includes the balance of investments committed, such as investments as an LP.

（C） Gunosy Inc. All Rights Reserved.

25

New Business

YOU INWe are focusing on personalized gifting. e-commerce platforms such as giftee and Anny started
handling 'YOU IN'. We also continue with our project for an offline base, such as Hankyu Department
Store Osaka Umeda Main Store, where the first offline store was set up in the Kansai region.

Off-line store@ Hankyu Department Store
Osaka Umeda Main Store(March 16-29, 2022)

Expansion of sales
channels

Sales channels developed,
such as 'giftee'（C） Gunosy Inc. All Rights Reserved.

26

Reference Materials: Overview of Gunosy Inc.

（C） Gunosy Inc. All Rights Reserved.

27

Overview of Gunosy Inc.

Basic Information
Officers:

Representative Director and Chairman, Group
Chief Executive Officer (CEO), Shinji KimuraCompany name:Gunosy Inc.

Representative:

Shinji Kimura

Representative Director and President, Yuya
Taketani

Yuya Taketani

Director and CFO, Hiroki Maniwa

Established:

November 14, 2012

Director, Kentaro Nishio

Fiscal year end:May

Director, Takuya Sawada

Capital:Director (Outside), Suguru Tomizuka

Stock Code:4,099 million yen (as of the end of
February 2022)
6047 (TSE Prime)

Audit corporation:

Ernst & Young ShinNihon LLC

Director (Outside), Hirokazu Mashita

Number of
employees:249(as of the end of February 2022, on aconsolidated basis)2-24-12 Shibuya, Shibuya-ku, Tokyo

Director (Outside), Lei-Isabelle Nakao

Head office:Business:

Development and operation of information
curation service and other media

Director (Outside), Junichi Shiroshita

Corporate Auditor, Masakazu Ishibashi
Corporate Auditor (Outside), Kenji Shimizu
Corporate Auditor (Outside), Noboru Kashiwagi（C） Gunosy Inc. All Rights Reserved.

28

From “Gunosy Way” to “Gunosy Pride”
The concept of "Gunosy Way", which had been defined as a milestone for Gunosy to follow, was redesigned
as "Gunosy Pride“, which inherits the original thoughts and concepts.

1“Triple win” philosophy
Benefit the customer, the user, and the world. Benefit yourself, others, andyour fellow employees. We will continue to create a cycle of goodness not
only outside the company and society, but within our company as well.

2

Creating opportunities with science
We will use data and technology to accelerate innovation with facts. We will
also use science to solve social issues.

3

Centennial quality
We do not stop working until we feel that this is the best we can do, rather
than thinking that this is good enough. We will face the work in front of us
with sincerity and honesty, seeking quality that will endure for a hundredyears.

4

Respond to adversity in a positive way
There are as many adversities as there are challenges. However, we
believe that it is the adversity that brings us the opportunity for growth. We
will not run away from the obstacles in front of us, but rather we will
aggressively pursue our business in adversity.

（C） Gunosy Inc. All Rights Reserved.

29

Disclaimer

Forward-looking statements contained in these materials are prepared from judgments andassumptions based on information available at the time of preparing the materials, and do notguarantee their accuracy. These materials contain financial data that have not been audited byan independent certified public accountant or an auditing firm. Please note that actual results
may differ materially from the forecasts due to various uncertainties included in these judgments
and assumptions and changes in risk factors and the economic environment.

（C） Gunosy Inc. All Rights Reserved.

30

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