FY2022/5 Financial Results

Gunosy Inc.
TSE Prime (6047)
July 15, 2022
July 15, 2022

INDEX

1. Executive Summary

P3

2. Financial Results for FY2022/5

P 10

3. Business Overview by Division

P 16

4.

P 25

Progress of Medium-Term Management Plan and FY2023/5 Outlook

5. Management Structure
6.

P 37

Reference Materials: Overview of Gunosy Inc.

P 41

（C） Gunosy Inc. All Rights Reserved.

2

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

3

FY2022/5 Full-Year Summary

Summary

Both net sales and operating profit exceeded the forecast.
Net sales

8,998

Operating profit

412

million yen

Compared to
the forecast

102.3 %

million yen

Compared to
the forecast

206.2 %

Significantly
higher

Factors•

Gunosy Ads results were higher than expected, due in part to increased
advertising demand in March.

•

Operating profit was significantly above the forecast, as advertising expenses were
controlled more than planned considering the status of sales achievement.
（C） Gunosy Inc. All Rights Reserved.

4

Background of Better-Than-Expected Results
Net sales exceeded the forecast due to KPI improvement and success in capturing the needs of March,when advertising demand increases. In light of increasing uncertainty in the macro-environment andother factors, we placed priority on securing profits and curbed advertising expenses by 160 million
yen compared to the plan.
Net sales exceeded forecast
due to a combination ofmultiple factors

1

2

3

Continuous
improvement ofGunosy KPI

Capturing ad demandin March

Game8 results
exceeding expectations

Advertising expenses

Given the better-than-Curbedexpected sales progress,
advertising expenses
curbed by approx. 160
million yen

318
153

153

152

Q1

Q2

Q3

FY2021Result

Q4

375

371

Curbed by approx.

¥160 million

389

QonQ
227

Q1

Q2

Q3

Q4

FY2022

Consolidated operating profit higher than forecast by approx. 210 million yen（C） Gunosy Inc. All Rights Reserved.

5

Factors behind the Upside: Improved Profitability per User
Profitability per user showed improvement throughout the period. DAUs declined slightly as
advertising expenses were curbed considering the growing uncertainty of the macro-environment andother factors, and the achievement of the sales plan.

Financial
Data

Net sales of Gunosy

Profitability per user
(Index: Sales/DAU)
Profitability shows continued growth

KPI

Number of users(Index: DAU)

Improving

DAUs declined slightly due torestrained investment in advertising

Growth rate

2021

2022

2021

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

+3%

2022

（C） Gunosy Inc. All Rights Reserved.

6

Factors behind the Upside: Significant Improvement in Retention
Rate in Gunosy
The percentage of new users reached approx. 33% of the total users as of May 2022. The retention rateof new users showed steady improvement throughout the year 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. 33% of the total.
100%

New users

Existing users

80%% of newusers

33%
FY2022 Q4

60%

40%

20%

e
Activ nttme
inves

Investment
controlled

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

Y
Retention
rate(vs. Feb 2021)

1.5 times(As of May 2022)

0%

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 5⽉

2021

2022

（C） Gunosy Inc. All Rights Reserved.

7

"slice": Progress on KPIs
Overwhelming growth has continued. AUM showed significant growth of 700% YonY, while
maintaining low default rates.

Approx.

AUM growth+70%

AUM (outstanding
loan balance)

Number of registered users

12 million+
users

AUM growth(7 million+ at the time of the previous
announcement)+700%

Number of cards issued per month

Approx.

（YonY）

Significant growth underway from previous
announcement due to rapid expansion of
new users

Rapidly
growing

200k
2020

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

Se
p
O
ct
N
ov
D
ec
Ja
n
Fe
b
M
ar
Ap
r
M
ay
Ju
n

/month2021

2022(Announced in
2022/1)

Present（C） Gunosy Inc. All Rights Reserved.

8

“slice” Topics
Despite the difficult financing environment due to changes in the market, a large-scale fundraising of$50 million was completed. Following the dispatch of directors, slice became an equity-method
affiliate of Gunosy.

Topics 1

Topics 2

Fundraised in an additional round

Gunosy$50 million

Dispatcheddirectors

New major fundraising (approx. $50 million)
in June 2022 in a Series C round led by Tiger
GlobalStrengthened collaboration between
Gunosy and slice.
slice became an equity-method affiliateof the Gunosy Group.

（C） Gunosy Inc. All Rights Reserved.

9

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

10

FY2022/5 Consolidated Results for Q4
In Q4, sales and profit marked QonQ growth. Advertising expenses were curbed in line with higher
sales, partly reflecting higher sales in March, when advertising demand increases. Although full-yearsales increased YonY, profit declined due to an increase of advertising expenses by approx. 600 million
yen from the previous year.
(Million yen)

QonQ comparison

FY2022/5 Q4YonY comparison

FY2022/5
Full-year

FY2021/5
Full-year

FY2022/5 Q3

QonQ

2,399

2,215

108.3%

8,998

8,910

101.0%

Operating profit

223

27

809.2%

412

717

57.5%

Operatingmargin

9.3%

1.2%

-

4.6%

8.0%

-

Ordinary profit

222

92,269.0%

191

642

29.9%

Profit attributableto owners of parent

144

13

1,098.3%

130

383

33.9%

Net sales

YonY（C） Gunosy Inc. All Rights Reserved.

11

Total Number of Active Users *(MAU)
Gunosy's MAUs declined slightly in QonQ due to curbed advertising expenses.
MAUs of NewsPass and au Service Today remained stable.

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 MAUs (monthly active users) of “Gunosy”, “NewsPass”, “au Service Today” and “LUCRA".

Q1

Q2

Q3

Q4

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

12

Breakdown of Net Sales*1

Gunosy Ads posted a significant sales increase QonQ, partly backed by advertising demand in March.
Game8 also posted record-high sales.

Others
Game8
ADNW
*2
Gunosy Ads(Million yen)

4,500

136

206

254

232

3,000

280

256

334

234

1,236
1,422 1,459
1,143

178

223

19

240

128

317

1,357 1,480
1,298

251

320
530

1,500

221
203

366
371

1,935 1,894 1,960 2,030 2,119 1,964 1,960

1,594

246

275

375
262

435

441
267

260

168

451
254

153

390
227

194

420
247

192

457
257

1,267 1,198 1,189

1,526 1,403 1,334 1,352 1,492

Q1

Q4

0
Q1

Q2

Q3

FY2019/5

Q4

Q1

Q2

Q3

FY2020/5

Q4

Q2

Q3

Q1

FY2021/5

Q2

Q3

Q4

FY2022/5*1: Sales of “Gunosy Ads”, “ADNW” and “Game8” are presented on a nonconsolidated basis. Internal trade adjustments areincluded 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 decreased by 160 million yen QonQ. We are continuing to hire personnel tosolidify our organization to achieve medium- to long-term growth. Other costs continue to be strictly
controlled.

3,646
3,307

3,000

3,388

3,362

3,109

(Million yen)

1025

2,908

846

3,781

1,111
983

1,096 1,176

950

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

371
39

535

513

518

515

413

128
278

121
182

111
187

115
195

Q4

Q1

Q2

Q3

Q4

193
86

977 1,091 1,027 125

Q2

1,090

810

540

920

560

Q1

1,974

2,135 2,085 2,187 2,176

779

0
Q1

2,304

153
94
583

FY2021/5

537
348

580

Others
Revenue sharing *419

Advertising expenses

389
39

227
39

Rent expenses on land

538

575

607

109
186

118
168

114
181

114
186

Q1

Q2

Q3

Q4

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 Q4, both domestic and overseas business remained strong, partly due to the release of major
game titles, and sales reached a record high.
On the other hand, in FY2023/3 Q1, sales and profits are expected to decline due to a drop in demandfor browsing walkthroughs for existing game titles. We will continue to invest to capture medium- andlong-term growth drivers.

Recordhigh(Million yen)

Net sales

500

457

451
435 441

Operating profit

390

366 375420

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

Q2

Q3

129

0
Q1

Q2

Q3

FY2019/3

FY2020/3

Q3

Q4

FY2021/3* Nonconsolidated results (before consolidated adjustment). Results of Smarprise, our subsidiary is not included.
FY2022 Q4 results are for the period from January to March 2022 due to a gap with the parent company's
consolidated accounting period.

Q1

Q4

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

15

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

16

Media Business

Gunosy“2022 Election of the House of Councilors” was featured as a topic in the "Good to Know" section of
the Gunosy app. A new corporate section was established to better understand KPI trends and user
behavior to quickly and efficiently implement quality measures.
Special project implemented

Strengthen organizational structure2022 Election of the House of Councilors
featured as a topic in the "Good to Know" section

Reinforcement of organizational structure
to improve quality and speed of the process
covering issue discovery, solution definition,
implementation, and value delivery

Gunosy Business Dep.
New

Product Management Group

Mission of Product Management Gr.
•

Promote understanding of users from both quantitativeand qualitative aspects.

•

Develop plans through high-resolution understanding of
users

•

Realize smooth flow from planning to development（C） Gunosy Inc. All Rights Reserved.

17

Media Businessau Service Today

The recommendation tab was redesigned to improve convenience for au users. Continuous
improvements in UI, UX, and algorithms resulted in steady profitability per user throughout the year.

Recommendation tab was redesigned

Status of profitability

Profitability per user remained strong
Growth＋15%(vs. June 2021)

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

2021

2022

（C） Gunosy Inc. All Rights Reserved.

18

Ad Network (ADNW)Media Business

The imps marked a high level due to successful media development efforts through organizational
reinforcement that were carried out up to the previous quarter.

Number of Impressions and CPM(Million imp)

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

imp\31.33\29.0645,000\27.7030,00050,98838,872 40,900 38,390 41,138

43,325CPM\20\15.14\12.5946,71834,54315,00029,432\11.48 \11.91 \11.87 \11.14 \11.22 \11.86\10.8722,489 21,892 22,763 23,165 20,493 21,037 23,941

0

\0

Q1

Q2

Q3

FY2019/5

Q4

Q1

Q2

Q3

Q4

Q1

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

Q2

Q3

FY2021/5

Q4

Q1

Q2

Q3

Q4

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

19

Game8 GroupGame8

We are expanding our support for game publishers by providing them solutions. At the same time,
we are enhancing our organizational structure and are considering global expansion of our business.

Solutions we offer
Support to solve various challenges in the game lifecycle from game development to pre- and post-release andoverseas expansion
Development - CBT

Before release

Pre- and post-release

After release

Overseas expansion

CBT for writers

Prior registration

Homepage
TakeoverGame walkthroughwiki

Overseas
wiki@Game8.co

Development
supportAttract
customers

Long-term
continuation

Overseas
SupportNews articles

PR through influencers

Increase
visibility（C） Gunosy Inc. All Rights Reserved.

20

New Business

YOU IN

Multiple sales channels were developed for both online and offline shopping. We will continue to meet thedemand for casual gifts, while catering to formal gifts at hotels, wedding halls, and other venues. We
also want to support the purchase of products for personal use by those who want to promote
wellbeing.

Offline shopping

＠all day place shibuya

Monthly sales(Starting April 27, 2022)

Steadily growing by capturing demand forcasual gifts during seasonal events suchas White Day and Mother's Day

Growth

Dec
2021

Jan

Feb

Mar

Apr

May

2022
（C） Gunosy Inc. All Rights Reserved.

21

Investment“slice” Product Update

The UPI (Unified Payments interface) payments feature, a key infrastructure in India for small valuetransactions, was launched. User engagement is expected to improve.

UPI feature launched
Infrastructure for small-value transactions that makes it easy to make payments and transfer funds
from smartphones. Led by the Government of India and the Reserve Bank of India, and operated
by the National Payment Corporation of India (NPCI), in which major banks have equity shares.

（C） Gunosy Inc. All Rights Reserved.

22

Investment

Investment*1

The overall cumulative investment remains in the range of approximately 5 billion yen. *1 Despite thechallenging financial environment for growth companies, the overall portfolio continues to maintain ahigh degree of soundness.
* Investments made since October 2018, when the investment project was launched, are included in the following:

Investment
ratio

Main investee companies

Early

FintechRaisedapprox.

Education

India

$50mn

Approx.

Mid-to-late

75%

Early

Commerce

MaaS

Real estate
tech

FintechFintechAudio
deliveryCommerce

Japan

Exit
executed

Mid-to-late

Approx.

25%

Organic EL

HR techInvestment asa limitedpartner*1: Investment balance including investments as an LP.

（C） Gunosy Inc. All Rights Reserved.

23

Investment Portfolio

Investment

May 2019

May 2020

May 2021

May 2022

0.98

0.99

1.11

5.36

Investment
ratio(Million yen)

25,741*1

Accumulated investment*2

Estimated value + Sale price“Accumulated
investment” and“Estimated value + Sale
price”

5.4
times

253

249

813

808

1,867

2,068

4,805

Japan

30

259

770

880

(accumulated
)

India

223

553

1,097

3,924

Market
value

Japan

30

259

776

1,037

(accumul
ated)

India

218

547

1,291

24,703

Investment*1. Accumulated investment: Calculated in yen at the exchange rate at the time of investment. Includes investments in issues already sold.
*2. Estimated value: Value that we estimated as the price at which shares, etc. would be transferred in an arm's-length transaction, based on the following method. Note that such estimatedvalue is generally not based on the results of a valuation report by an external third party or an audit by an accounting auditor, but is calculated by us at our own discretion.
(1)
(2)
(3)

Issues that raised funds in a recent funding round: The estimated valuation is the valuation at the time of the relevant round, with a 20.7% illiquidity discount applied.
Issues for which an external third-party valuation was previously obtained: The estimated valuation is based on such valuation.
Other issues: Valued at book value at the time of investment. For those acquired in foreign currency, the value is converted at the most recent exchange rate.

The estimated value of GaragePreneurs Internet Pvt. Ltd. (slice) is based on the valuation in the most recent funding round in June 2022 (with an illiquidity discount of 20.7% applied).

（C） Gunosy Inc. All Rights Reserved.

24

Progress of Medium-Term Management
Plan and FY2023/5 Outlook（C） Gunosy Inc. All Rights Reserved.

25

Mid-term Target (Announced in July 2021)
The target indicator in the Mid-term Management Plan announced in 2021 is maintained. We aim toachieve a market capitalization of 100 billion yen over the mid- to long-term through achieving growthacross the Gunosy Group as a whole.

development of new business opportunities

Aim for group-wide growth with the achievement of

Investment

Enhance corporate value through growth of existing businesses and100 billion yen in market capitalization as the midGame

to long-term target indicator.

8

Media
business

Present（C） Gunosy Inc. All Rights Reserved.

26

Business Environment
In determining the short- and medium-term management policy, we updated our assessment of thebusiness environment from the time the Mid-term Management Plan targets were developed as ofJanuary 2022, mainly with respect to the following issues.

Assessment of the business environment

Economic trend

Some speculate that the economy isentering a recession, due tocontinued interest rate hikes inmany countries.

Financial markets

Stock price of listed and unlisted
growth companies continued toundergo an adjustment phase as aresult of the interest rate hike.

Impact on the Gunosy GroupOur policyllAdvertising sales may be negatively
affected if entering such a phase.

lFinancing for existing portfolio
companies becomes more difficult
On the other hand, opportunities forexternal investment in minority
investments and M&A are increasing.

ll

Covid-19

COVID-19 epidemic now recurring.

Game8High dependence on some titles
Weakness of existing smartphonegame titles
Lack of major titles in 1Hll

Strict application of investment
criteria in advertising.
Maintain strict cost control and asound financial basis for thecompany as a whole.
Promote asset management ofexisting investments considering thecurrent environment
Actively search for external
investment opportunities while
continuing to maintain strict
investment criteria.

l

To date, COVID-19 has impacted ourearnings both positively andnegatively.

l

Establish a system to closely monitor
user trends, and quickly detect andrespond to changes in the market
situation.

l

Decline in PV may damage sales
In FY2023/5, we forecast that sales
to be more centered on 2H than 1H.

lRecognize certain performance risks
and continue to exercise strict cost
control, including the level ofinvestment in new businesses.

l（C） Gunosy Inc. All Rights Reserved.

27

Near-term Investment Policy in Light of Changes in theBusiness Environment
At present, we will execute growth investments with an eye to achieving consolidated/nonconsolidated operating surplus. We will consider switching to bolder growth investments once we haveconfirmed improved growth and profitability in the media business and have created investment
opportunities that could become growth drivers for the group.
Media business

Improve growth and profitability
by establishing our unique value
and improving UI and marketing
efficiencies.
l

Investment
policy for
growthl

At present, focus on productimprovement based on investment
within the scope of achieving operating
profitability on a non-consolidated basis
as a general guideline.
Consider increasing investment at atime when growth potential andimprovement in investment efficiency
are confirmed.
Raised by improving business structure

Portfolio status

Room
for
growthCapitalreturnInvestment

Investment

New business

Aim to achieve a market capitalization of ¥100 billion over the mid- to long-term

Guideline

Issues

Game8 group

Present

Discover promising investments(especially the next "slice")and
potential growth drivers for the
Gunosy Group

Create businesses that will
become new growth drivers witha group-wide perspective

l At present, promote investmentl Move from concentration in slicel At present, promote businesswithin the scope of consolidated
operating surplus as a guideline.
l Consider expanding investment at
a time when promising new
businesses begin to grow in termsof growth potential and return on
investment.

to diversified investmentl Continue to invest in India tocapture growth in the Indian
marketl Continue to invest selectively inJapanese startups

Growth potential raised through new businessdevelopment

Continue to invest in promising stocks inJapan/India

Acquire new growth drivers

FuturePresent
LowmidLodmidup

Mid-high

Lowmidup

Mid-high

Advertising expenses currently
under control, but plan toincrease gradually

Futureup

Mid-highcreation by leveraging ourstrengths such as our hightechnical expertise within thescope of maintaining operating
surplus on a non-consolidated andconsolidated basis.

Shifted upward by creating new businesses

Present

Mid-high

Mid-high

Mid-high

Invest to stabilize existing
businesses and develop new
businesses

Invest up to 1.5 billion yen by
FY2024/5

FutureCreateMid-high

CreateMid-high

Invest when a promisingbusiness emerges thatdeserves an investment phase（C） Gunosy Inc. All Rights Reserved.

28

Update on Figures in Medium-term Management Plan
Due to the change in investment policy in view of changes in the business environment, FY2023/5 results
are expected to be lower than the forecast disclosed in Q2. However, based on the status of existing/new
businesses, we aim to achieve the mid-term target for FY2024/5 as initially planned.
Numerical targets of the Medium-term Management Planannounced in Q2 (net sales and gross profit)

Supplementary information

Maintain mid-term targets on net sales and gross profit for
FY2023/5 (2nd year)

FY2024/5

Downside expected due to

1st year

2nd year

3rd year

UpsideDownside
expected

Maintain numericaltargets

restraint of advertising
investment since FY2022/5(Million yen)

Net sales
Gross profit

8,790

10.640
8,998

9,670

9,000

(See p. 31 for details)

FY2024/5 (3rd year)

Reinforce existing/new businesses
in FY2023/5 to achieve the plan

3,870

3,991

4,690

4,260

• Improve growth potential and profitability by

3,618

creating unique value in Gunosy andimproving KPI through continuous UI/UX
improvements.
• Drastically improve acquisition efficiency byenhancing campaigns with KDDI, etc.

(Target) (Result)(Target) (Forecast)(Target)FY2022/5

FY2023/5

FY2024/5

ResultForecast

Target• Move new businesses under review into theinvestment phase and turn them into new
growth drivers（C） Gunosy Inc. All Rights Reserved.

29

FY2023/5 Results Forecast (Consolidated)
We expect sales growth and profit decline YonY. slice, our equity method affiliate, is expected to post aloss, but extraordinary gain is expected to be recorded in connection with the Series C round. As a result,
we assume a large YonY increase in net income. (For details, see p. 36).

(Million yen)

FY2022/5 Full-year FY2023/5 Full-year(forecast)(result)

YonY

8,998

9,000

100.0%

Operating profit

412

200

48.5%

Operating margin

4.6%

2.2%

-

Ordinary profit

191

-312

-

Profit attributable toowners of parent

130

547

420.5%Net sales（C） Gunosy Inc. All Rights Reserved.

30

Differences from the Medium-term Management Plan
disclosed in Q2
In light of the uncertain macro-environment, we shifted to a policy of curbing advertising investments
and placing priority on securing operating profit. As a result, both sales and gross profit in the next
fiscal year are expected to fall short of the levels disclosed in the Medium-term Management Plan.
However, we aim to ensure the growth/profitability of each business in FY2023/5, as well as to increase
the amount allowed for investment, and thereby achieve the initial target by FY2024/5.

Investment policy

Gunosy Ads
ADNW
Net
sales

Game8
OthersGrossprofit2023/5 plan

2023/5 plan(As of 2022/1)(At present)

Aggressive

Curbing investment

investment focusing

to prioritize securing

on scale expansion

profits

Difference

Supplementary information¥5.59 billion¥5.12 billion-¥460 million

Gunosy Ads¥1.17 billion¥2.1 billion¥0.81 billion¥1.17 billion¥1.88 billion¥0.81 billion¥0 million

labout half of the amount planned.
l User numbers were lower thanprojected at the time of Q2
disclosure, resulting in a decline in- ¥220 million¥0 million

Total¥9.67 billion¥9 billion-670 million

Group total¥4.26 billion¥3.61 billion- 640 million

Reduced advertising investment tosales.

Game8l

Fading momentum of existingsmartphone game titlesl Volatility of overseas operations
considered
Decrease in gross profit due to lower
sales（C） Gunosy Inc. All Rights Reserved.

31

Policy: Media BusinessWe will focus on improving retention rate and profitability through ongoing UI/UX enhancements andthe creation of our unique value by leveraging our own resources. In order not to miss theopportunity to increase advertising investment, we want to be prepared with a business environment thatallows for a high return on investment.
Strive to continuously improve the basic UI/UX as media, and create unique value

Management policyby leveraging Gunosy's technology and the unique resources of the partnershipwith KDDI.
Continue to curb advertising investment, giving priority to securing profits andInvestment policy

improving return on investment. Limit new hiring to certain positions due to active
hiring of new recruits in the past year.
StrategyllContinuous improvementof basic KPIslll

Increase
retention
ratelImprove
profitability
Gunosy Ads
+ADNW

l
l
l

Develop summary content
Campaign initiatives with KDDI
Enhance content, including headlines
Optimize personalization and article delivery
algorithms
Campaign initiatives with KDDI
Optimize personalization and article delivery
algorithms

Optimize ad delivery algorithms
Develop ad spots and introduce new tools
Improve profitability by acquiring new users（C） Gunosy Inc. All Rights Reserved.

32

Policy: Game8 Group
Anticipating changes in the business environment, such as the maturation of the smartphone gamemarket, the management structure was changed: The CEO was replaced by Shunsuke Sawamura(former COO), from Kentaro Nishio (founder of Game8). (See p. 40 for details). We will strive to acquire
new growth drivers while maintaining stable operation of existing businesses.

Management policy

Investment policy

Focus on creating new pillars of growth based on stable growth ofgame walkthrough media

Invest in human resources to some extent in new business areas

Strategy

Achieve mid-term targets bychanging the management
structure
Stablegrowth ofexisting
businesseslllCreate new
growthpillarslGain a stable share of PVs in both domestic
and international media
Expand solution support to game publishers
Develop new businesses in the areas of
Web3 and management support

Promote new business development byleveraging strengths accumulated throughexisting businesses such as IP（C） Gunosy Inc. All Rights Reserved.

33

Investment Policy
Approximately 5 billion yen has been invested to date. slice, one of our strategic investments, has growninto a key growth driver in the medium to long term. We will continue to explore investments in India andJapan with the aim of finding the "next slice".

Examine mainly seed- to early-stage companies and aim to captureManagement policy

high-growth areas outside the company through pure investments
and strategic investments.

Investment policy

Invest up to approx. ¥1.5 billion by FY24/5

Strategy
Discover attractive investment opportunities

lamong various target companies in our
extensive deal sourcing network.
India
Capturegrowth inIndia

Promotedomestic
investment
selectively

l

Japan

l

Shift from strategic investment
concentration in slice to portfolio
diversification. Aim to establish a portfoliothat is able to capture growth of the Indian
market as a whole.

Strengthen our deal sourcing network
while taking a stake in venture capital asa limited partner.
Continue to invest selectively.

（C） Gunosy Inc. All Rights Reserved.

34

sliceShift to a growth strategy focused on profitability while maintaining growth. Although loss may be
accounted for under the equity method for the full year, the business itself is expected to return toprofit by the end of this fiscal year.

Business policy of slice

Previous policy

Aggressive investment
focusing on expansionof scale

Future policy

Aiming to move thedigital credit business
into the black while
maintaining growth（C） Gunosy Inc. All Rights Reserved.

35

Supplementary Information on Consolidated Full-year
Forecasts
Due to profit and loss accounted for under equity method, ordinary loss is expected to be posted, but
extraordinary income to be recorded in connection with the execution of slice's funding round inJune 2022. As a result, the profit/loss of slice, our equity method affiliate, will have a positive
impact on profit.
Major factors of change

Consolidated Full-year
Forecasts

Consolidated operating
profitConsolidated ordinary
profit1

200 million yen

Profit/loss of slice, our equitymethod affiliatelAlthough a loss is expected on a fullyear basis, the business itself is
expected to return to profit on a single
month basis by the end of this fiscallAmount of projected loss includes
assumed amortization of goodwill,
which is currently under discussion
with the audit firm.

1-312 million yen

22Gain on change in equity related toslicelProfit attributable toowners of parent

547 million yen

An extraordinary income of approx.
980 million yen expected to berecorded as a result of the change in
our equity due to the fundraising(series C round in June 2022, see p.
9)* The treatment is in accordance with Article 18 of "Practical Guidelines for Equity Method Accounting" and the amount is currently under discussion with the audit firm.
Should there be any additional material changes in the recorded amounts in FY2023/5 that should be disclosed, due to changes in our equity or other factors, we willpromptly disclose them. For details, please refer to the attached documents to FY2022/5 Consolidated Financial Results (Japanese GAAP) (3. Consolidated financial
statements and significant notes thereto (5) Notes to consolidated financial statements (Significant subsequent events)).

（C） Gunosy Inc. All Rights Reserved.

36

Management Structure（C） Gunosy Inc. All Rights Reserved.

37

Our Management TeamThe management structure for FY2023/5 is as follows. We are continuing to strengthen our governance,
including the transition from a non-statutory Compensation Committee to a non-statutory Nomination
and Compensation Committee (*) in December 2021.
(*) N&C
N&C

N&C

Representative Chief Director andChairman, Group Chief Executive
Officer (CEO)

Representative
Director andPresident

Shinji
KimuraYuya
Taketani
N&C

Director (Outside)

SuguruTomizuka

Director and Chief
Investment Officer (CIO)(to assume office)Hiroki
ManiwaN&C

Director (Outside)

Junichi
Shiroshita

Director

Director

KentaroNishioTakuyaSawadaN&C

Director (Outside)

Hirokazu
Mashita

Director (Outside)

Lei-Isabelle
Nakao（C） Gunosy Inc. All Rights Reserved.

38

Structural Changes to Further Strengthen Future External
Investments
The position of Chief Investment Officer was established to grow and accelerate the investment
business. At the same time, we aim to establish a structure that combines bold decision-making
with appropriate governance by clearly separating offensive and defensive roles

Director and Chief
Investment Officer

Corporate Officer and Chief
Financial Officer

Tatsuyuki Iwase

Yuki Maniwa

Graduated from the Faculty of Business andCommerce, Keio University. Joined Gunosy afterworking at Bank of Tokyo-Mitsubishi UFJ(currently MUFG Bank), Deloitte Tohmatsu
Consulting LLC. and PricewaterhouseCoopers
Aarata LLC. Became Corporate Officer, Chief ofCorporate Division in June 2021.

Graduated from the Faculty of Engineering, The
University of Tokyo. Joined Goldman Sachs
Japan in 2005. Joined Coubic Inc. and then
Gunosy Inc. in Oct. 2018 and became Director of
Gunosy Capital Inc. Became Director and CFO in
August 2019.

Former Position

New position

Former Position

New position

Director andCorporate Officer andChief Investment
Officer

Chief Financial
Officer

Background

1. With the growing importance of the investment business, such as slice, Maniwa who was responsible
for both offensive and defensive roles as the head of investment business and CFO, is now
concentrating on the "offensive" area as CIO, aiming to promote the acceleration of medium- and longterm growth.
2. Iwase, currently serving as Corporate Officer, Chief of Corporate Division, is taking over the role of CFO
from Maniwa, thereby establishing a solid structure that will allow for bolder decision making while
ensuring proper governance.
（C） Gunosy Inc. All Rights Reserved.

39

Game8 Group
Anticipating changes in the business environment, the CEO was changed from Nishio, founder ofGame8, to Sawamura, former COO.

Representative Director,
President and CEO

Former Position

Directorof
GunosyRepresentative Director andChairman（Founder）

Shunsuke Sawamura

Kentaro Nishio

Graduated from the School of Business
Administration, Kwansei Gakuin University.
Joined Recruit Co. in 2007. Joined Gunosy as
Chief Operating Officer in September 2018 afterworking for several companies as an executive ofinvestment portfolio companies and JVs. Became
Director and Chief Operating Officer in June 2019.

Co-founded Labit Inc. while a student at Tokyo
Metropolitan University and became Representative
Director in 2013. After transferring the business to a
subsidiary of Recruit Holdings, founded Game8 andcurrently serves as Representative Director. Joined
Gunosy in 2015 after Game8 became a subsidiary of
Gunosy. Became Director of Gunosy in August 2020,
after having served as Corporate Officer of Gunosy
since September 2018.

New position
Representative
Director, President andCEO

Former Position

New position
Representative
Director and Chairman（Founder）

Background

1. As a result of considering the optimal management structure in the midst of changes in Game8's position
and management environment since its founding, it was decided that Sawamura, who had supported thegrowth of Game8 as COO in both offensive and defensive roles, would be best suited to assume theposition of CEO.
2. Nishio will focus on creating business opportunities, both existing and new, while supporting Sawamura as
Chairman and assuming a greater role in group management than ever before.
（C） Gunosy Inc. All Rights Reserved.

40

Reference Materials: Overview of Gunosy Inc.

（C） Gunosy Inc. All Rights Reserved.

41

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 May
2022)
6047 (TSE Prime)

Audit corporation:

Ernst & Young ShinNihon LLC

Director (Outside), Hirokazu Mashita

Number of
employees:258(as of the end of May 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.

42

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.

43Effect of Application of Equity Method on "slice" in
FY2022/5 (Supplementary information)

Points1.

Our voting interest in “slice” is in the range of 15%-20% as defined in "Accounting Standard for
Equity Method". We started application of the equity method upon completion of dispatch of
directors to slice at the end of FY2022/5 (see p.9 for details).

2.

However, profit/loss from slice was not accounted for in FY2022/5, which is expected to startfrom FY2023/5 Q1.

3.

Accordingly, no profit/loss related to the application of equity method was accounted for as ofthe end of FY2022/5. In the B/S, the accounting treatment for the reclassification of holding
purpose (available-for-sale securities to shares of subsidiaries and associates) and the foreign
currency translation adjustments were applied. **While the accounting treatment was applied based on the assumption that positive goodwill is recognized for “slice” as a result of equity method accounting, theconsolidated financial statements of “slice” were still under audit by a local auditor at the time of the release of the Financial Results. If negative goodwill were toarise as a result of a material change in the net assets of “slice”, the said negative goodwill should be recognized as profit in a lump sum in FY2022/5. Should any
material events or circumstances arise in the future that should be disclosed, we will promptly disclose them.

4.

Determination of the amount of goodwill, etc. through PPA (Purchase Price Allocation)
procedure and its amortization period is still under discussion with the auditing firm as a matter
affecting the profit/loss for FY2023/5.

（C） Gunosy Inc. All Rights Reserved.

44

Gunosy's Advertising Investment (FY22/5 Q3 – FY23/5)

PolicyAdvertising investment with aview to achieving a
consolidated operating
surplus on a full-year basis• 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.

45

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.

46

Optimally deliver information to people around the world