Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

July 15, 2022

Consolidated Financial Results
for the Fiscal Year Ended May 31, 2022
(Under Japanese GAAP)
Company name:Gunosy Inc.
Listing:
Tokyo Stock Exchange
Securities code:
6047
URL:
https://gunosy.co.jp/
Representative:
Yuya Taketani, Representative Director and President
Inquiries:
Yuki Maniwa, Director and CFO
Telephone:+81-3-5953-8030
Scheduled date of annual general meeting of shareholders:August 26, 2022
Scheduled date to commence dividend payments:–
Scheduled date to file annual securities report:
August 29, 2022
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for institutional investors andanalysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended May 31, 2022 (from June 1, 2021 to May
31, 2022)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Fiscal year ended

Operating profit

Millions of yen%

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

Millions of yen%

Millions of yen%

May 31, 2022

8,998

1.0

412

(42.5)

191(70.1)

130(66.1)

May 31, 2021

8,910

(36.3)

717(16.6)

642(23.4)

383(0.8)

Note: Comprehensive income

For the fiscal year ended May 31, 2022:
For the fiscal year ended May 31, 2021:

Basic earnings
per share
Fiscal year ended

Diluted earnings
per shareYen¥458 million¥453 million

Return on equity

Yen[1.1%][24.2%]

Ratio of ordinary
profit to total assets

Ratio of operating
profit to net sales

%

%

%

May 31, 2022

5.47

5.44

1.1

1.4

4.6

May 31, 2021

16.32

16.09

3.5

4.9

8.0

Reference:

Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended May 31, 2022:¥– million
For the fiscal year ended May 31, 2021:¥– million(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

May 31, 2022

13,518

11,93487.3

493.56

May 31, 2021

13,275

11,40485.0

479.36

Reference:

EquityAs of May 31, 2022:
As of May 31, 2021:¥11,804 million¥11,284 million%

Yen(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal year ended

Cash flows frominvesting activities

Millions of yen

Cash and cash
equivalents at end of
periodCash flows fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

May 31, 2022

(33)

(4,064)9

4,947

May 31, 2021

983

(1,079)

(1)

8,952

2. Cash dividends
Annual dividends per share
First
SecondThird
quarter-end quarter-end quarter-end
Yen
Fiscal year ended

May 31, 2021
Fiscal year ended

May 31, 2022

Yen

Fiscalyear-end

Yen

Total cash
dividends(Total)

Total

Yen

Ratio of
Payout ratio dividends to(Consolidated) net assets(Consolidated)

Yen Millions of yen

%

%

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

–

–

–

–

–

–

–

–

Fiscal year ending

May 31, 2023–

(Forecast)

Note: The forecasts of the annual dividends per share for the fiscal year ending May 3, 2023 are currently undetermined.

3. Consolidated earnings forecasts for the fiscal year ending May 31, 2023 (from June 1, 2022 to
May 31, 2023)
Net sales
Millions ofyen

Fiscal year ending
May 31, 2023

9,000

(Percentages indicate year-on-year changes.)
Profit attributable to Basic earnings per
Ordinary profit
owners of parent
share

Operating profit%

0.0Millions ofyen%Millions ofyen

200 (51.5)

(312)

%

–

Millions ofyen%

547 320.5

Yen

22.88

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
Note: Although not a change in specified subsidiaries, VIDPOOL Inc., which was a consolidated subsidiary, was
excluded from the scope of consolidation for the current fiscal year due to completion of liquidation.
Additionally, Gunosy Capital Inc. and Gunosy Capital Partners were newly established and turned into
subsidiaries, and are included in the scope of consolidation for the current fiscal year.
Furthermore, although not a change in specified subsidiaries, GaragePreneurs Internet Pvt. Ltd. (hereinafter“GaragePreneurs”) is included in the scope of application of the equity method starting from the current fiscal
year, as a Director of the Company was elected as Director of GaragePreneurs at the GaragePreneurs Board of
Directors meeting held on April 29, 2022.

(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
Note: For details, refer to “3. Consolidated Financial Statements and Significant Notes Thereto (5) Notes to theConsolidated Financial Statements (Changes in accounting policies)” on page 13 of the attached material.

(3) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of May 31, 2022

24,237,774 shares

As of May 31, 2021

23,947,774 shares(ii) Number of treasury shares at the end of the period
As of May 31, 2022

320,009 shares

As of May 31, 2021

407,734 shares(iii) Average number of shares outstanding during the period
Fiscal year ended May 31, 2022

23,781,658 sharesFiscal year ended May 31, 2021

23,508,375 shares

Note: The number of treasury shares includes shares of the Company held by the stock-granting ESOP trust account(131,367 shares for the fiscal year ended May 31, 2021, and 118,442 shares for the fiscal year ended May 31,2022).

[Reference] Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended May 31, 2022 (from June 1, 2021 to
May 31, 2022)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Fiscal year ended

Operating profit

Ordinary profit

Millions of yen%

Millions of yen

May 31, 2022

6,750

3.9

(39)

–

(243)

–

(134)

–

May 31, 2021

6,498

(47.6)

65(91.0)

48(93.6)

72(59.7)

Basic earnings
per share%

ProfitDiluted earnings
per share

Fiscal year ended

Yen

May 31, 2022

(5.66)–

May 31, 2021

3.06

3.02

Yen

Millions of yen%

Millions of yen%

(2) Non-consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

May 31, 2022

11,826

10,69789.7

443.65

May 31, 2021

12,005

10,72788.7

452.18Reference:

EquityAs of May 31, 2022:
As of May 31, 2021:%

Yen¥10,611 million¥10,644 million

2. Non-consolidated earnings forecasts for the fiscal year ending May 31, 2023 (from June 1, 2022 to
May 31, 2023)
Net sales
Millions of yen

Fiscal year ending
May 31, 2023

6,385

(Percentages indicate year-on-year changes.)
Basic earnings
Profitper share

Ordinary profit% Millions of yen

(5.4)

1

% Millions of yen

–

0

%

–

Yen

0.03

* Financial results reports are exempt from audit conducted by certified public accountants or an audit
corporation.
* Proper use of earnings forecasts, and other special matters
Earnings forecasts and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions deemed reasonable, and are not intended to guarantee
achievement. Actual results may differ significantly from forecasts due to a wide range of factors. For
assumptions underlying earnings forecasts and notes on the use of forecasts, refer to “1. Overview ofBusiness Results, etc. (4) Future Outlook” on page 4 of the attached material.

Attached Material
Index
1. Overview of Business Results, etc. ........................................................................................................... 2(1) Overview of Business Results for the Period Under Review ............................................................. 2(2) Overview of Financial Position for the Period Under Review ........................................................... 3(3) Overview of Cash Flows for the Period Under Review ..................................................................... 3(4) Future Outlook ................................................................................................................................... 4
2. Basic Stance Concerning Choice of Accounting Standards...................................................................... 5
3. Consolidated Financial Statements and Significant Notes Thereto .......................................................... 6(1) Consolidated Balance Sheets.............................................................................................................. 6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ......... 8(Consolidated Statements of Income) ................................................................................................ 8(Consolidated Statements of Comprehensive Income)....................................................................... 9(3) Consolidated Statements of Changes in Equity................................................................................ 10(4) Consolidated Statements of Cash Flows .......................................................................................... 12(5) Notes to the Consolidated Financial Statements .............................................................................. 13(Notes on going concern assumption) .............................................................................................. 13(Changes in accounting policies)...................................................................................................... 13(Changes in presentation) ................................................................................................................. 13(Segment information, etc.) .............................................................................................................. 14(Per share information) ..................................................................................................................... 16(Significant subsequent events) ........................................................................................................ 18-1-

1. Overview of Business Results, etc.
(1) Overview of Business Results for the Period Under Review
Regarding the business environment surrounding the Group during the fiscal year ended May 31, 2022,
smartphones have continued to become increasingly common, with the percentage of smartphone users
rising by 5 percentage points compared to the previous year to 74.3% in 2021 (Source: Ministry ofInternal Affairs and Communications). In addition, the impact of COVID-19 continuing from 2020
eased during the second half of the year, helping the advertising market achieve a significant recovery
overall, with advertising expenditures of 6,799.8 billion yen (110.4% of the previous year’s
expenditures) in 2021. Among expenditures, internet advertising expenditures reached 2,705.2 billion
yen (121.4% of the previous year) and, for the first time, exceeded the total expenditures of the four
traditional media, which amounted to 2,453.8 billion yen (Source: Dentsu Inc.).
Under these circumstances, for the existing media business, the Group has focused on improving
profitability at Gunosy, and on au Service Today and NewsPass, which are apps hosted collaboratively
with KDDI Corporation, to ensure growth through a closer partnership with KDDI. Gunosy is designed
to be a news media for the new era that will serve as an infrastructure for society, and initiatives are
implemented to enable optimal delivery of “must-know information” with high social value and “wantto-know information” with high personal value. After the restart of investments in advertising andpromotion in the current fiscal year, the retention rate of new users increased significantly, which
boosted the profitability per user. Continuing strict ad examinations, we commit to the creation ofadvertising experiences so that every user can enjoy the news media comfortably. Additionally,
game8.jp, which is a game strategy media operated by consolidated subsidiary Game8 Inc., constantly
kept monthly page views on a high level and steadily grew its overseas business.
For new businesses, we continue investing in growth opportunities internally and externally. YOU IN, a
D2C brand of tea developed to provide “mood pairing,” extended its market, such as by opening popup stores in Tokyo and even Osaka. For GaragePreneurs Internet Pvt. Ltd. (hereinafter“GaragePreneurs”), an existing investee of the Company, more strategic investments were made inpurchasing mandatory convertible preference shares due to the conversion of mandatory convertible
bonds in November 2021, and in purchasing additional mandatory convertible preference shares in
February 2022. To strengthen the partnership with GaragePreneurs, Yuki Maniwa, Director and CFO of
the Company, was elected as Director of GaragePreneurs at the GaragePreneurs Board of Directors
meeting held on April 29, 2022, and GaragePreneurs became an equity-method affiliate of theCompany.
Regarding revenues, net sales related to Gunosy Ads amounted to 5,582 million yen for the current
fiscal year. Net sales related to ad networks amounted to 986 million yen for the current fiscal year
while continuing strict ad examinations. Game8 Inc., a consolidated subsidiary, grew its overseas
business and achieved stable performance in its domestic business, which greatly contributed to theconsolidated financial results.
Regarding expenses, continuing advertising investments for Gunosy’s renewed growth resulted inrecording advertising expenses of 1,365 million yen (up 75.7% compared with the previous fiscal
year), while media costs decreased as a result of a decrease in net sales related to ad networks.
As a result, for the current fiscal year, net sales increased by 1.0% from the previous fiscal year to
8,998 million yen, ordinary profit decreased by 70.1% to 191 million yen, and profit attributable toowners of parent decreased by 66.1% to 130 million yen.
The cumulative number of downloads of all Gunosy, NewsPass, LUCRA, and au Service Today (after
its renewal release) in Japan for the current fiscal year increased by 6.21 million from the end of theprevious fiscal year to 69.82 million.
Descriptions related to segment information are omitted because the Group has only one major
segment, the Media business.

-2-(2) Overview of Financial Position for the Period Under Review(Assets)
Assets at the end of the current fiscal year increased by 243 million yen from the end of the previous
fiscal year to 13,518 million yen. This is mainly attributable to a decrease in cash and deposits (adecrease of 2,459 million yen from the end of the previous fiscal year), a decrease in accounts
receivable - trade (a decrease of 103 million yen from the end of the previous fiscal year), an increase
in investment securities (an increase of 3,018 million yen from the end of the previous fiscal year), anda decrease in other under investments and other assets (a decrease of 252 million yen from the end of
the previous fiscal year).
(Liabilities)
Liabilities at the end of the current fiscal year decreased by 287 million yen from the end of theprevious fiscal year to 1,583 million yen. This is mainly attributable to a decrease in accounts payable trade (a decrease of 172 million yen from the end of the previous fiscal year), a decrease in accounts
payable - other (a decrease of 49 million yen from the end of the previous fiscal year), and a decrease inincome taxes payable (a decrease of 93 million yen from the end of the previous fiscal year).
(Net assets)
Net assets at the end of the current fiscal year increased by 530 million yen from the end of theprevious fiscal year to 11,934 million yen. This is mainly attributable to an increase in retained earnings(an increase of 50 million yen from the end of the previous fiscal year), a decrease in treasury shares (adecrease of 138 million yen from the end of the previous fiscal year), an increase in deferred gains orlosses on hedges (an increase of 55 million yen from the end of the previous fiscal year), and anincrease in foreign currency translation adjustment (an increase of 241 million yen from the end of theprevious fiscal year).
(3) Overview of Cash Flows for the Period Under Review
Cash and cash equivalents (hereinafter referred to as “capital”) for the current fiscal year decreased by
4,004 million yen from the previous fiscal year to 4,947 million yen. The following describes thesituation of the current fiscal year details for each type of cash flow.
(Cash flows from operating activities)
Capital used by operating activities during the current fiscal year amounted to 33 million yen(compared with 983 million yen provided during the previous fiscal year). This is mainly attributable torecording profit before income taxes of 232 million yen, a decrease of 103 million yen in tradereceivables, a decrease of 172 million yen in trade payables, and income taxes paid of 299 million yen.
(Cash flows from investing activities)
Capital used by investing activities during the current fiscal year amounted to 4,064 million yen(compared with 1,079 million yen used during the previous fiscal year). This is mainly attributable topayments into time deposits of 1,545 million yen and purchase of investment securities of 2,938
million yen.
(Cash flows from financing activities)
Capital provided by financing activities during the current fiscal year amounted to 9 million yen(compared with 1 million yen used during the previous fiscal year). This is mainly attributable toproceeds from disposal of treasury shares of 12 million yen.

-3-

(Reference) Changes in indicators related to cash flows
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended
ended
ended
ended
ended
May 31, 2018 May 31, 2019 May 31, 2020 May 31, 2021 May 31, 2022
Equity ratio (%)

75.1

77.7

84.8

85.0

87.3

Equity ratio based on fair value (%)

334.7

323.5

170.1

169.2

151.4

Interest-bearing debt to cash flows
ratio (Years)

–

–

–

–

–

–

3,487.3–

Interest coverage ratio (Times)

6,219.8

16,675.3

Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on fair value: Total market value of shares / Total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debts / Cash flows
Interest coverage ratio: Cash flows / Interest paid
(Notes) 1. The indicators were calculated using consolidated financial figures.
2. The total market value of shares was calculated based on the number of shares outstanding, excluding
treasury shares.
3. In the description above, “Cash flows” represent cash flows from operating activities.
4. Interest-bearing debts include all debts recorded on the Consolidated Balance Sheets for which interest is
paid. Interest paid is the interest expenses paid shown on the Consolidated Statements of Cash Flows.
5. The interest coverage ratio was not calculated for the fiscal years ended May 31, 2020 and 2022, as the cash
flows from operating activities were negative.

(4) Future Outlook
For the fiscal year ended May 31, 2022, the Company determined how much advertising investment tobe made for Gunosy’s renewed growth by carefully considering the impact of the COVID-19 pandemic
on the Company’s business, other macro environments, the retention rate of users, and the situation ofadvertising revenues. For the fiscal year ending May 31, 2023, although the adoption of smartphones is
expected to grow continuously, the Company expects that unclear factors in will remain in macro
environments, including the resurgence of COVID-19 caused by new variants, increased geopoliticalrisk, and changes in financial markets caused by such factors. Therefore, the Company will identify
effective investments and carefully make advertising investments in such targets.
Based on these conditions, for Gunosy, the Group will carefully determine how much advertising
investment to be made in the next fiscal year while making efforts to improve the retention rate of users
and profitability per user. Additionally, for au Service Today, a new collaborative business with KDDI
Corporation, and NewsPass, the Group will focus on improving products to increase adoption by au
users. For Game8 Inc., a consolidated subsidiary, the Company will help game8.jp, which is a gamestrategy media, constantly contribute to profits and the subsidiary create drivers for growth throughdeveloping overseas and other new businesses. For GaragePreneurs Internet Pvt. Ltd. (hereinafter“GaragePreneurs”), an investee of the Company, the Company will make efforts, such as assigning
Directors from the Company, to ensure that GaragePreneurs can grow as an equity-method affiliate tomaximize corporate value and strengthen the partnership with the Company. Furthermore, to achieve
non-linear growth, the Company will continue active investments and M&A for external start-ups withgreat potential, while developing new businesses, such as YOU IN, a D2C brand.
Regarding the consolidated financial results forecast for the fiscal year ending May 31, 2023, based on
the business factors outlined above, net sales are projected to be 9,000 million yen (an increase of 0.0%
from the previous fiscal year), operating profit to be 200 million yen (a decrease of 51.5% from theprevious fiscal year), ordinary loss to be 312 million yen (compared with ordinary profit of 191 million
yen for the previous fiscal year), and profit attributable to owners of parent to be 547 million yen (anincrease of 320.5% from the previous fiscal year).
To make a financial results forecast for the fiscal year ending May 31, 2023, the numbers ofdownloads, net sales, and expenses for the existing business areas are determined as follows:-4-

(a) Number of downloads
The number of new downloads is calculated based on some factors, such as advertising expenses to be
spent, actual past cost per download (Advertising expenses / Number of new downloads), and an
expected decrease in the download rate. The financial results forecast is made based on the assumptionthat the cumulative number of downloads of all Gunosy, NewsPass, LUCRA, and au Service Today(after its renewal release) will reach 74 million at the end of the fiscal year ending May 31, 2023.
(b) Net sales
Net sales related to Gunosy Ads are calculated based on past performance and other factors, such as thenumber of downloads, the retention rate of users who downloaded apps, and the profitability ofretained users. Net sales related to ad networks are calculated based on past performance and otherfactors. Net sales related to other media are also calculated based on past performance and otherfactors.
(c) Cost of sales
The calculation is based on labor costs calculated from the human resource plan and actual past costs,
such as server costs.
(d) Selling, general and administrative expenses
The calculation takes into account advertising expenses of 718 million yen will be required for the
fiscal year ending May 31, 2023, to achieve the expected number of downloads described above, as
well as other factors including amortization of goodwill, labor costs calculated from the humanresource plan, and actual past costs, such as rent expenses on buildings and other factors.
As GaragePreneurs, an equity-method affiliate of the Company, increased capital through a third-party
allocation of newly issued shares in June 2022, a gain on change in equity of 0.98 billion yen is
expected to be recorded as extraordinary income on the Consolidated Statements of Income for the firstquarter of the fiscal year ending May 31, 2023. For details, refer to “Significant subsequent events” onpage 15 of the attached material.

2. Basic Stance Concerning Choice of Accounting Standards
The Group prepares its consolidated financial statements using Japanese GAAP. Carefully observing thetrend of introducing International Financial Reporting Standards (IFRS) in the future, the Group will makeefforts to establish a system to appropriately adapt to trends.

-5-

3. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated Balance Sheets(Millions of yen)
As of May 31, 2021
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets-6-

As of May 31, 2022

8,952
876
599
10,427

6,492
772
612
7,877

12
19
31

15
10
26

87
70
157

63
50
114

2,162
166
329
2,658
2,847
13,275

5,180
241
76
5,499
5,641
13,518(Millions of yen)
As of May 31, 2021
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Advances received
Provision for point card certificates
Provision for share awards
Other
Total current liabilities
Non-current liabilities
Provision for share awards
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

As of May 31, 2022

809
346
166
349
9
9
171
1,863

637
297
73
348
7
13
185
1,563

7
–
7
1,870

3
16
20
1,583

4,094
4,094
3,659
(602)
11,245

4,099
4,099
3,709
(463)
11,444

23
–
15
38
83
36
11,404
13,275

47
55
257
360
86
43
11,934
13,518

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Fiscal year ended
May 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Foreign exchange gains
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Consumption tax difference
Commission expenses
Idle asset expenses
Loss on investments in investment partnerships
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Gain on reversal of share acquisition rights
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent-8-

Fiscal year ended
May 31, 2022

8,910
5,077
3,832
3,115
717

8,998
5,007
3,991
3,578
412

0
–
8
2
11

0
23
–
1
24

0
29
0
12
34
5
4
86
642

0
–
–
13
204
21
5
245
191

51
13
65

80
10
91

12
12
695
320
(36)
284
411
27
383

50
50
232
171
(76)
95
137
6
130

(Consolidated Statements of Comprehensive Income)(Millions of yen)
Fiscal year ended
May 31, 2021
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-9-

Fiscal year ended
May 31, 2022
411

137

26
–
16

24
55
(14)

–

255

42
453

321
458

426

451

27

6

(3) Consolidated Statements of Changes in Equity
For the fiscal year ended May 31, 2021
Shareholders’ equity

Balance at
beginning of
periodChanges during
periodIssuance of
new shares exercise ofshareacquisitionrightsProfitattributableto owners ofparentPurchase oftreasuryshares
Disposal oftreasurysharesDecreasefromliquidationof
consolidated
subsidiaries
Net changes
in items
other thanshareholders’equityTotal changes
during period
Balance at endof period

SharecapitalCapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity

4,077

4,077

3,318

(653)

10,819

16

16

(2)

(0)

(3)

89

16

10,921

33

33

383

383

(0)

(0)

(0)

50

28

28

(21)

(21)

383

(22)

(Millions of yen)
Accumulated other comprehensive
incomeShareValuation
NonTotalacquisiTotal net
difference
Foreigncontrolling
accumulatedtion
assetsoncurrencyinterests
otherrightsavailable- translation
comprehenfor-saleadjustment
sive income
securities

(21)

26

16

42

(5)

19

56

16

16

341

50

425

26

16

42

(5)

19

482

4,094

4,094

3,659

(602)

11,245

23

15

38

83

36

11,404- 10 -

For the fiscal year ended May 31, 2022
(Millions of yen)
Shareholders’ equity

Balance at
beginning of
periodChanges during
periodIssuance of
new shares exercise ofshareacquisitionrightsProfitattributableto owners ofparentDisposal oftreasurysharesNet changes
in items otherthanshareholders’equityTotal changes
during period
Balance at endof period

SharecapitalCapitalsurplusRetainedearnings

4,094

4,094

3,659

5

5

Accumulated other comprehensive income

NonShare
Valuation
Foreign
conTotalacquisiTotal net
difference Deferred currency
trolling
Total shareaccumulatedtion
assetsTreasuryongains or translainterholders’
otherrightssharesavailable- losses on tionests
equitycomprehensive
for-salehedges adjustincome
securities
ment
(602)

130

(79)

138

11,245

23

–

15

38

83

36

11,404

10

10

130

130

59

59

24

55

241

321

2

6

331

5

5

50

138

199

24

55

241

321

2

6

530

4,099

4,099

3,709

(463)

11,444

47

55

257

360

86

43

11,934- 11 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended
May 31, 2021
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Interest income
Interest expenses
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other
Decrease (increase) in prepaid expenses
Increase (decrease) in advances received
Increase (decrease) in provision for share awards
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment
Purchase of investment securities
Proceeds from sale of investment securities
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee
deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Purchase of treasury shares
Proceeds from disposal of treasury shares
Proceeds from issuance of shares
Payments from liquidation of consolidated subsidiaries
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 12 -

Fiscal year ended
May 31, 2022

695
266
64
(0)
0
(51)
12
151
70
122
(59)
(233)
5
171
1,215
0
(0)
(231)
983

232
28
23
(0)
0
(80)
50
103
(172)
(47)
38
(1)
15
76
266
0
(0)
(299)
(33)

–
(6)
(1,114)111(19)(1,545)(10)(2,938)
233
(5)

1

201

(51)
(1,079)0(4,064)3,500(3,500)
(0)
5
33
(24)
(15)
(1)

1,000
(1,000)
–
12
9
–
(12)
9

(26)

83

(123)
9,075
8,952

(4,004)
8,952
4,947

(5) Notes to the Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition and relevant ASBJ regulations)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.
29, March 31, 2020, hereinafter “Revenue Recognition Accounting Standard”) and relevant ASBJ
regulations from the beginning of the current fiscal year.
Accordingly, for some transactions of services the Group provides, whereas previously revenue wasrecognized as the total amount of the consideration received from the customer, now it is recognized as
the net amount, which is calculated by deducting payments to third-parties from the total amount of theconsideration, for transactions in which the Group acts as an agent. As a result, net sales and cost of
sales decreased by 115 million yen for the current fiscal year.
The application of the Revenue Recognition Accounting Standard and relevant ASBJ regulations issubject to the transitional treatment provided for in the proviso to paragraph 84 of the Revenue
Recognition Accounting Standard, but there is no effect on the opening balance of retained earnings ofthe current fiscal year.
In accordance with the transitional treatment provided for in paragraph 89-2 of the Revenue
Recognition Accounting Standard, figures for the previous fiscal year have not been restated inaccordance with the new approach to presentation.
(Application of the Accounting Standard for Fair Value Measurement and relevant ASBJ regulations)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement
No. 30, July 4, 2019, hereinafter “Fair Value Measurement Accounting Standard”) and relevant ASBJ
regulations from the beginning of the current fiscal year, and it has applied the new accounting policy
provided for by the Fair Value Measurement Accounting Standard and relevant ASBJ regulations
prospectively in accordance with the transitional measures provided for in paragraph 19 of the Fair
Value Measurement Accounting Standard and paragraph 44-2 of the “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019).
As a result of the application, whereas previously corporate bonds and other receivables that areconsidered financial instruments whose fair values are very difficult to measure were recorded on theConsolidated Balance Sheets at their historic costs, now they are recorded on the balance sheets at theirfair values that are measured by using unobservable inputs based on the best information available even
if no observable input is available.
(Changes in presentation)(Consolidated Statements of Cash Flows)
For the previous fiscal year, “Loss (gain) on valuation of investment securities” was included in “Other,
net” under “Cash flows from operating activities.” The Company decided to present it separately
starting from the current fiscal year because its financial importance increased. To reflect thepresentation change, a reclassification is made to the consolidated financial statements for the previous
fiscal year.
As a result, on the Consolidated Statements of Cash Flows for the previous fiscal year, the amount of
183 million yen recorded in “Other, net” under “Cash flows from operating activities” is reclassified
into “Loss (gain) on valuation of investment securities” with an amount of 12 million yen and “Other,
net” with an amount of 171 million yen.
For the previous fiscal year, “Proceeds from disposal of treasury shares” was included in “Other, net”
under “Cash flows from financing activities.” The Company decided to present it separately starting- 13 -

from the current fiscal year because its financial importance increased. To reflect the presentation
change, a reclassification is made to the consolidated financial statements for the previous fiscal year.
As a result, on the Consolidated Statements of Cash Flows for the previous fiscal year, the amount of(10) million yen recorded in “Other, net” under “Cash flows from financing activities” is reclassified
into “Proceeds from disposal of treasury shares” with an amount of 5 million yen and “Other, net” with
an amount of (15) million yen.
(Segment information, etc.)[Segment information]
Segment information is omitted because the Group has only one major segment, the Media business.
[Related information]
For the fiscal year ended May 31, 2021
1. Information by product and service
Omitted because net sales to outside customers in the single product/service category accountfor more than 90% of net sales on the Consolidated Statements of Income.
2. Information by geographical area
(1) Net sales
Omitted because net sales to outside customers in Japan account for more than 90% of net sales
on the Consolidated Statements of Income.
(2) Property, plant and equipment
There is no relevant information because there is no property, plant, or equipment owned
outside Japan.
3. Information by major customer
Omitted because any customer who constitutes net sales to outside customers does not accountfor 10% or more of net sales on the Consolidated Statements of Income.
For the fiscal year ended May 31, 2022
1. Information by product and service
Omitted because net sales to outside customers in the single product/service category accountfor more than 90% of net sales on the Consolidated Statements of Income.
2. Information by geographical area
(1) Net sales
Omitted because net sales to outside customers in Japan account for more than 90% of net sales
on the Consolidated Statements of Income.
(2) Property, plant and equipment
There is no relevant information because there is no property, plant or equipment owned
outside Japan.

- 14 -

3. Information by major customer
Customer name

Net sales (Million yen)

Related segment

Google LLC

942

Media business[Information about impairment losses on non-current assets by reportable segment]
For the fiscal year ended May 31, 2021
There is no relevant information.
For the fiscal year ended May 31, 2022
There is no relevant information.
[Information about amortization amount and unamortized balance of goodwill by reportable segment]
For the fiscal year ended May 31, 2021
Segment information is omitted because the Group has only one major segment, the Media business.
For the fiscal year ended May 31, 2022
Segment information is omitted because the Group has only one major segment, the Media business.
[Information about gain on bargain purchase by reportable segment]
There is no relevant information.

- 15 -

(Per share information)(Yen)
For the fiscal year
ended May 31, 2021

For the fiscal year
ended May 31, 2022

Net assets per share

479.36493.56

Basic earnings per share

16.32

5.47

Diluted earnings per share

16.09

5.44

(Notes) 1. In the calculation of net assets per share, the Company’s shares that are recorded as treasury shares under theshareholders’ equity and held by the stock-granting ESOP trust account are included in treasury shares thatare excluded from the total number of outstanding shares at the end of the period. In the calculation of basic
earnings per share and diluted earnings per share, they are included in treasury shares that are excluded whencalculating the average number of shares during the period.
2. In the calculation of net assets per share, the number of the treasury shares excluded from the total number ofoutstanding shares at the end of the period is 131,367 shares for the previous fiscal year and 118,442 sharesfor the current fiscal year. In the calculation of basic earnings per share and diluted earnings per share, thenumber of the treasury shares excluded from the average number of shares during the period is 136,402
shares for the previous fiscal year and 124,677 shares for the current fiscal year.
3. The basis for the calculation of basic earnings per share and diluted earnings per share is as follows:
For the fiscal year
ended May 31, 2021

For the fiscal year
ended May 31, 2022

Basic earnings per share
Profit attributable to owners of parent(Million yen)

383

130

–

–

383

130

23,508,375

23,781,658––

Increase in number of shares ofcommon shares (Shares)

335,894

127,308(Share acquisition rights) (Shares)(335,894)(127,308)

Amount not attributed to commonshareholders (Million yen)
Profit attributable to owners of parent
related to common shares (Million
yen)
Average number of shares ofcommon shares outstanding during
the period (Shares)

Diluted earnings per share
Adjustment for profit attributable toowners of parent (Million yen)

- 16 -

For the fiscal year
ended May 31, 2021

For the fiscal year
ended May 31, 2022
7th share acquisition rights
48,000 units(48,000 common shares)
Issued on July 29, 2016

Overview of residual shares notincluded in calculation of diluted
earnings per share due to lack ofdilutive effect

7th share acquisition rights
73,000 units(73,000 common shares)
Issued on July 29, 2016

9th share acquisition rights
1,600 units(1,600 common shares)
Issued on July 29, 2019

8th share acquisition rights
40,000 units(40,000 common shares)
Issued on July 27, 2018

10th share acquisition rights
14,100 units(14,100 common shares)
Issued on September 14, 2020

9th share acquisition rights
12,400 units(12,400 common shares)
Issued on July 29, 201911th share acquisition rights
123,200 units(123,200 common shares)
Issued on June 2, 2021

10th share acquisition rights
16,800 units(16,800 common shares)
Issued on September 14, 2020

12th share acquisition rights
17,000 units(17,000 common shares)
Issued on September 30, 2021
13th share acquisition rights
23,000 units(23,000 common shares)
Issued on May 2, 2022

4. The basis for calculating net assets per share is as follows:
As of May 31, 2021

As of May 31, 2022

Total net assets (Million yen)

11,404

11,934

Amount deducted from total net
assets (Million yen)

120

129

(Share acquisition rights) (Million
yen)

(83)

(86)

(Non-controlling interests) (Million
yen)

(36)

(43)

11,284

11,80423,540,040

23,917,765

Year-end net assets related tocommon shares (Million yen)
Number of common shares at yearend used to calculate net assets per
share (Shares)- 17 -

(Significant subsequent events)
Capital increase through a third-party allocation of newly issued shares by an equity-method affiliate
GaragePreneurs Internet Pvt. Ltd. (hereinafter “GaragePreneurs”), the Company’s equity-method
affiliate with headquarters in India, increased capital through a third-party allocation of newly issued
shares in June 2022. The following describes the outline.
1. Overview of the equity-method affiliate that increases capital(1) Name

GaragePreneurs Internet Pvt. Ltd.

(2) Address

747, Pooja Building, 80ft Road, 4th Block, Koramangala, Bangalore –560034, India(3) Name and position ofrepresentative

Rajan Bajaj (Founder)(4) Business

Digital credit business

2. Overview of capital increase through a third-party allocation of newly issued shares(1) Increased capital

Approximately 50 million US dollars(2) Date of closing

June 29, 2022

(3) The Company’s ownership ratio
before capital increase

18.46%(4) The Company’s ownership ratio
after capital increase

17.77%

3. Effects on the consolidated profits and losses for the next fiscal year
After the transaction described above, the Company still owns 15% or more of all outstanding shares of
GaragePreneurs, and a Director assigned from the Company remains. Therefore, the transaction
described above is considered a capital increase through a third-party allocation of newly issued sharesby an equity-method affiliate. Accordingly, a gain (loss) on change in equity caused by the capitalincrease is expected to be recorded as extraordinary income on the Consolidated Statements of Incomeof the Company’s consolidated financial statements for the next fiscal year.
Based on the amount paid until June 29, 2022, the gain on change in equity is estimated to be about 0.98
billion yen. However, the gain on change in equity may change due to some reasons, such as a change inthe ownership ratio until the end of the first quarter of the fiscal year ending May 31, 2023.

- 18 -