FY2020/5 Financial Results
Gunosy Inc.
First Section of The Tokyo Stock Exchange(Stock Code: 6047)
July 14, 2020

INDEX

Financial Results for FY2020

1

Financial Results for FY2020/5

P4

FY2021 Outlook

2

FY2021/5 Policy and Outlook

P 10

Business Overview of Media Business3

Overview of Media Business

P 25

Business Overview of Ad Business4

Overview of Advertising Business

P 33

New Business

5
6

Progress of New Business
APPENDIX

Ref er ence Mat er i al s:

Overview of Gunosy Inc.

（C） Gunosy Inc. All Rights Reserved.

P 37
P 47

Executive Summary1

W hile “MAU an d DAU” marked g ro w th in F Y2020/ 5 due t o aggr essive invest m ent f or
“ r egr owt h of G unos y ” , t her e wer e i ssu es w i t h p ro f i t ab i l i t y.

2

Sales in Q 4 r ecor ded a shar p dr op bot h Q onQ and YonY due t ot he det er ior at ion of t he adv er t is ing m ar k et by t he n ew co ro n avi ru s andt he im pac t of t he ren ew al o f ad vert i si n g g u i d el i n es.

3

I n t he ex is t ing ar ea, we will f ir s t f oc us on i mp ro vi n g p ro f i t ab i l i t y andt hen inc r eas e m edia v alue t hr ough im pr ov em ent of m edia r eliabilit yt o pr epar e f or f u t u re rei n vest men t .

4

We s ee t he accel erat i o n o f DX in t he wit h/ af t er Covid- 19 as a g ro w t h o p p o rt u n i t y andpr om ot e c r eat ion of new bus ines s es int er nally andac quis it ion of gr owt h dr iv er s t hr ough ex t er nal inv es t m ent .

（C） Gunosy Inc. All Rights Reserved.

PAGE |

3

1

Section 1

Financial Results for FY2020/5（C） Gunosy Inc. All Rights Reserved.

FY2020/5 Consolidated Results (On a YonY
comparison)
Sales and profits declined due to the renewal of advertising guidelines and the deterioration in
the advertising market caused by the spread of the new coronavirus. Meanwhile, the operating
margin improved YonY in Q4 due to flexible cost reduction.
(Million yen)

Q4
FY2019/5
Q4

Full year

FY2020/5
Q4

YonY

FY2019/5

FY2020/5

YonY

Net sales

3,835

2,696

70.3%

15,017

13,987

93.1%

Operating profit

446

359

80.5%

2,302

859

37.3%

Operating margin

11.6%

13.3%

-

15.3%

6.1%

Ordinary profit

445

354

79.5%

2,289

838

36.6%

Profit attributable toowners of parent

292

167

57.2%

2,009

386

19.2%

＊

-

* Loss on valuation of investment securities of 88 million yen was recorded in Q4.

Section 1（C） Gunosy Inc. All Rights Reserved.

PAGE |

5

FY2020/5 Consolidated Results (Compared to
the Plan)
Sales were almost in line with the revised full-year forecast announced on April 14, 2020.
Operating profit was 86.0% of the plan, despite thorough cost-cutting efforts including (1) advertisingexpenses, (2) live video production expenses and (3) outsourcing expenses.
(Million yen)Compared to the plan (Q4)
FY2020/5 Q4(plan)FY2020/5 Q4(result)

Compared tothe plan

Net sales

2,708

2,696

Operating profit

499

359

Operating margin

18.4%

13.3%

Ordinary profit

476

354

Profit attributable toowners of parent

345

167

＊

Compared to the plan (Full year)
FY2020/5(plan)FY2020/5(result)

Compared tothe plan

99.6%

14,00013,987

99.9%

71.9%

1,000

859

86.0%

-

7.1%

6.1%

74.4%

960

838

87.3%

48.3%

565

386

68.4%

-

* Loss on valuation of investment securities of 88 million yen was recorded in Q4.

Section 1（C） Gunosy Inc. All Rights Reserved.

PAGE |

6

*1

Total Number of Active Users

In Q4 we significantly reduced our advertising expenses. As a result, MAU declined QonQ, but in*2
line with increased activation of users due to "stay home", DAU remained at a high level in Q4 andachieved the target (double-digit growth YonY) announced in July 2019 at the beginning of thecurrent fiscal year.
YonY

POINT

＋12%

Progress of the investment target
announced at the beginning of thecurrent FY (DAU in FY2020/5 Q4 aiming to achieve
double-digit growth YonY)

Gunosy: FY2020/5 Q4

DAU： +15％（YonY）
LUCRA
Newspass
GunosyQ1Q2Q3

FY2016/5

Q4

Q1

Q2

Q3

FY2017/5

Q4

Q1

Q2

Q3

Q4

Q1

FY2018/5

Q2Q3

FY2019/5

Q4

Q1

Q2

Q3

Q4

FY2020/5*1 Average for each quarter of MAU (monthly active users) of “Gunosy”, “NewsPass” and “LUCRA”.
*2 Daily Active User

Section 1（C） Gunosy Inc. All Rights Reserved.

PAGE |

7

Breakdown of Net Sales*1

Gunosy Ads recorded a sales decline of approximately 20% QonQ, mainly due to deterioration in
the advertising market conditions caused by the new coronavirus. ADNW marked a sales
decline of approximately 60% due to a decline in market share resulting from the renewal ofadvertising guidelines. “Others” increased due to contributions from VIDPOOL and Grill, and theimpact of the newly consolidated Smarprise.
(Million yen)

4,500

Others
Game8
ADNW

136
54

Gunosy Ads*2
2

49
39

1,500

610

12
62
606

5
75

148

158
1,205

90

223

232
256

1,422

178

280

190

3,000

16

206

334

254

1,459

1,143

19
240

234

1,236

1,357

128
317
Main factors of decrease

1,480

1,298

251
320

980

1,097

815

530

625

ü Impact of the newcoronavirus.
ü Decline incompetitiveness of
ADNW due to the renewalof advertising guidelines

466

1,175

1,283

1,300

Q1

Q2

Q3

1,411

1,505

Q4

Q1

1,871

1,585

△7

△38

Q2

Q3

1,935

1,894

1,960

2,030

2,119

1,964

1,960
1,594

1,541

Main factors of decreaseü Impact of the newcoronavirus.

0

FY2017/5

FY2018/5

Q4

Q1

Q2

Q3

Q4

Q1

FY2019/5

Q2

Q3

Q4

FY2020/5*1. Sales of Gunosy Ads, ADNW and Game8 are presented on a non-consolidated basis. Internal trade adjustments are included in Others.
*2. Sales of Gunosy Ads are the total of “Gunosy”, “NewsPass” and “LUCRA”

Section 1（C） Gunosy Inc. All Rights Reserved.

PAGE |

8

Cost Structure
In Q4, considering the deterioration of market conditions and DAU upturn due to stay-home, advertising expenses weresignificantly reduced.Of the 560 million yen in personnel expenses, 25 million yen was due to the consolidation of Smarprise.
Personnel costs (535 million yen excluding Smarprise) decreased QonQ due to restraining of recruitment activities. Strict
monitoring was conducted on "other expenses", and significant reductions were achieved for multiple items such as outsourcing
expenses and utilities expenses.
3,781
3,646

POINT

Advertisingexpenses controlled
FY2020/5 Q3(Million yen)

3,307

580 million yen

FY2020/5 Q4

1,003
1,092

2,753

190 million yen

2,198
1,997
489

1,435
314
278

471
80

251
44

308

494

1,686
1,517

390

56

55

55

262

274

293

43

47

48

411

413

439

55

574

336
60

693

55

504
55
54

55

315

104

40

352
70

396

420
103

39

539

41

777

102

92

917
822

637

72

51
55

456
109

507

526

31

2,337

526
146

157

950

Q2

Q3

FY2017/5

Section 1

Q4

Q1

Q2

Other expenses

90
7

541
134

Live video production expenses

193

Advertising expenses

86

Rents

560

Personnel expenses

POINT

POINT

782

838

988 1,047

814

Q3

FY2018/5

Q4

Q1

Q2

Q3

FY2019/5

POINT

131

884

977 1,091 1,027

125Server expenses

413

Ad network costs

0

Q1

Factors for Decrease
Decline of revenue sharing with KDDI and reduction of office-related
expenses (excluding rent) and sales expenses

583

51

54

414

16

Sales growth of subsidiaries and effect of newly consolidated
Smartprise

22
19

806

588
562

55

678

493

547
460

547

447

389
336

2,313

1,055

Factors for Increase

952

1,160
911

1,582

3,362

3,109
2,908

3, 0001, 500

3,388

Q4

Q1

Q2

Q3

FY2020/5（C） Gunosy Inc. All Rights Reserved.

Q4

Total personnel
expenses declined

Q4: 560 million yen

535

25

millionyen

millionyen

Effect of a subsidiary
which was newly
consolidated.

PAGE |

9

2

Section 2

FY2021/5 Policy and Outlook（C） Gunosy Inc. All Rights Reserved.

Overall Summary
In light of the drastic change in the business environment due to the impact of the new coronavirus,
we have reviewed our company-wide medium- and long-term policies, including themanagement structure.

1

Summary of FY2020/5

Impact and Outlook of the2
New Coronavirus

3

Review of Medium- to
Long-term Policy

4Strengthen Management
Structure

5 Strengthen Financial Base

67

Section 2

Image of Medium- to
Long-Term Growth

We succeeded in expanding the user base of Gunosy throughaggressive investment. Meanwhile, it is an urgent issue to improve
profitability in light of the impact of the new coronavirus.

P 12

We are prepared for the fact that the advertising market will not recoverin the short term.Meanwhile, we see the situation as a good opportunity
to develop new business involving DX in our own technology area.

P 13

We re-examined medium- to long-term corporate and businessstrategies in light of the impact of the new coronavirus.

P 14-18

Two representative directors were appointed to promote business more
boldly and proactively.

P 19

We have built a very strong financial base and will promote cost
reduction to achieve a lean PL structure.

P20-21In the current FY, we will concentrate on rebuilding existing businesses
as well as developing and creating new businesses.

P 22

FY2021/5 Forecast（C） Gunosy Inc. All Rights Reserved.

P 23-24

PAGE |

11

1
Summary of FY2020/5

Summary of FY2020/5

It was a year of aggressive investment in "Gunosy". As a result, we succeeded in expanding theuser base. Meanwhile, CPM was sluggish, mainly due to the new coronavirus. It is an urgent issue
to improve profitability.

Investment Results in Gunosy

Summary of Investments

MAU (Gunosy)
Gunosy Ads sales (Million yen)

New coronavirus /renewal of advertisingguidelines

MAU

+17%
(Q4 YonY)

1,960

2,030

2,119

1,964

MAU
1,960
1,594

Q3

Q4

Q1

Q2

Q3

Q4

Q3

Q4

Q1

Q2
Q3
2020年5⽉期

Q4

FY2019/5
Start
investment

Section 2

Gunosy's MAU marked substantial growth
due to aggressive investment in advertisingcentering on the coupon program.

FY2020/5
2020年5⽉期

Substanti
al growth

DAU

CPM

GrowthRemainedweakthroughout
the year

Q4: +15% (YonY)

Recent situation
Profitability deteriorated due to CPM decline mainly
caused by the new coronavirus

Control
investment（C） Gunosy Inc. All Rights Reserved.

PAGE |

12

2
Impact andOutlook of the
New Coronavirus

Impact and Outlook of the New Coronavirus

The advertising market may not achieve recovery in the short term and we are aware that we need to run our business on
the assumption that current situation will continue for the medium term. Meanwhile, we see this situation as a good
opportunity for profit growth outside the advertising area, as we have a greater opportunity to develop new businessinvolving DX in our own technology area.
Event that
occurred

Positive
Negative
Section 2

Futureopportunity- Increase in users through the"stay home“ initiative- An environment that can target highDAU's with limited investment inadvertising-

Increased opportunities forstart-up investment and M&A- Growing needs for DX- Increased opportunities to improve the valueof existing businesses through the digitizationof media content- Increased investment opportunities in new
businesses and opportunities for external
investment-

Increasing uncertainties of advertisers' budgets-

Risk of prolonged economic downturn including macroeconomic
stagnation and the advertising market（C） Gunosy Inc. All Rights Reserved.

PAGE |

13

3
Review of Mediumto Long-term Policy

Basic Premises of the Business Policy for
Medium- to Long-Term Growth

Past policy(Before Corona)

Future policy(With/After Corona)

Focus on regrowth of media business, mainly Gunosy(Currently, the return on investment in the media business has deteriorated due to the impact of
the new coronavirus)

In the existing area (media and advertising), focus on improving profitability first.
Actively invest in the DX business which is the new area (new businesses and external
investment)【既存領域】[ExistingArea]

Improved profitability
ActionIncrease the value of media andadvertising
improve media
reliability

Improve advertisingalgorithm【新規領域】[New Area]

Create a second source ofrevenueCreate new
businessinternally

Capture growth
opportunities
throughexternal
investment

Reinvestment after
improvements
Section 2（C） Gunosy Inc. All Rights Reserved.

PAGE |

14

3
Review of Mediumto Long-term Policy

Summary of Business Policy
Existing area
Media business

GunosyNews
Pass

New area
Advertisingbusiness

LUCRA

ADNW

New businessGame８(overseas)

OtokulGTL

Investment
business

So farAggressively invest in the media business to expandusers

Sow the seeds for new businesses(Otokul and GTL) and overseas
expansion of Game8 business

Invest in domestic
and overseas
markets

From now on

F ir st , f ocus on i mp ro vi n g p ro f i t ab i l i t y
in t he cur r ent F Y t hr ough i mp ro vi n g
med i a rel i ab i l i t y.

Aggr essive invest m ent
Creat e n ew so u rces o freven u e

I njec t f und
m or eaggr es s iv ely

MiddleMiddle High

MiddleMiddle - High

Aggressive
investment

Aggressive
investment

Aggressive
investment(mainly humanresources)

Plan bold capital
investment

Room forgrowthExpected
ReturnAdditional
investment of
resources(capital andhuman resources)

Improved※1
profitability

収益収
益収益

Collaboration with※2
KDDI

It is an important profit-contributing business which is expected
to generate stable cash flow

Additional
investment
focusing on
promisingareas

Control

Control

Control

Control investment (capital)

Aggressive investment (human resources and capital)*1: Assuming that profitability is on a steady recovery track with relatively high growth potential*2: Assuming that there is relatively high growth potential through enhanced collaboration with KDDI.

Section 2（C） Gunosy Inc. All Rights Reserved.

PAGE |

15

3
Review of Mediumto Long-term Policy

Business Policy: (1) Media(2) Advertising

In FY2020/5, while we expanded the user scale centering on Gunosy, improvement of profitability
remains an issue. In FY2021/5, we will focus on improving media and advertising value to improve
profitability.

Grand policy

Individual policy• Improve customer experience by renewing
algorithms,• Invest in content in audio domain

Improve profitability

(1)
Media
business

Increase media value

improve media
reliability(2)
Advertisingbusiness• Improve the customer experience bytargeting the smartphone beginners
segment, which is currently our main userbaseEnhance
attractive content
and services• Deliver trend information to broader age
groups and venture into D2C

Improve profitability
Increase advertising value

Improve advertisingalgorithm

GunosyAds
ADNW

Improve reliability（C） Gunosy Inc. All Rights Reserved.

• Brush up the advertising algorithm of an
automatic bidding function "UOP"developed by Gunosy• Improve reliability by expanding thefunction to examine ad fraud and media• Build up the number of advertisers throughsolid sales based on the improvement ofadvertising effectiveness by algorithms

PAGE |

16

3
Review of Mediumto Long-term Policy

Business Policy: (3) New BusinessWe will actively invest in growth opportunities centered on the DX domain and aim at creating
new earnings drivers.

Grand policy

Individual policy• Promote overseas business• Strategic use of data
• Expand the solution menu according to thevalue chain of game companies

Create new earnings drivers• Establish business base throughadvertising revenues• Dramatic growth through expansion into
the e-commerce domain(3)
New
Business
Aim to establish abusiness in areas wherehigh potential is expected
including DX domain andoverseas
Tech Lab

Section 2• Promote cooperation with existing partners• In addition, provide proprietary
technologies for the DX domain that is
expected to grow in the "with or after
Covid-19" environment（C） Gunosy Inc. All Rights Reserved.

PAGE |

17

3
Review of Mediumto Long-term Policy

Business Policy :(4) Investment BusinessTo capture promising growth opportunities that go beyond the media and advertising areas, we planaggressive external investment of up to 4.5 billion yen over the next two years.
Outline of Investment

Approximate
amountAreas

Portfolio A• e-commerce• Overseas startup companies
Risk

¥1-2B

ReturnHigh

High

Proactively invest to capture
growth areas• Fintech• Infrastructure …etc.

Total investment

Up to 4.5
billion yen* over the next 2 years.

Portfolio B
Risk

ReturnMid

Proactively invest to
capture growth areas•DX area•Growth areain the "with orafter Covid-¥1-2.5B
Portfolio C
Risk
Low

Section 2

Mid• Invest in tech startups• M&A of growing companies• Invest in startup fund as anLP

19"environment

ReturnLow

Actively promote investment
as an LP to strengthen our
network to explore
investment opportunities（C） Gunosy Inc. All Rights Reserved.

•Businessrelated to
Game8… etc.

PAGE |

18

4
Strengthen
Management StructureManagement Structure

In order to respond to changes in social conditions triggered by the spread of the new coronavirus andto promote business more boldly and proactively, we strengthened our leadership by adding
Kimura Shinji as a representative director, who is versed in advanced businesses and has a wealth ofglobal knowledge, to our board of directors.

Kimura ShinjiPrevious
post

Director

Representative Director andNew post
Chairman, Group Chief
Executive Officer (CEO)Taketani Yuya

Previous
post

Representative Director andCEO

New post

Representative Director andPresident

To improve media value through improvement of media reliability and to achieve
growth in the with/after Covid-19 environment, we built a system that allows us tomake bold and proactive decisions.
Section 2（C） Gunosy Inc. All Rights Reserved.

PAGE |

19

5
Strengthen Financial
Base

Financial Structure

We have built a very strong financial base, with ample cash and free of debt.

B/S as of 5/31/2020 (In million yen)
Cash obtained bycommitment lines

Unused commitment
lines

Execute commitment line

In Q4, we concluded[Current assets] 10,676[Liabilities] 1,840

commitment line
agreements of a totalof 4 billion yen with

Ample cash basecreated by existing
media businesses

major financial

Consolidated
cash anddeposits

institutions.
Secured working capital* for

9,075

about 2 years.

[Net assets] 10,921[Non-current assets]
2,085[Total assets] 12,762* Funds corresponding to fixed expenditures, excluding variable costs such as ADNW costs and revenue sharing costs, etc., and advertising expenses over which expenditures
can be controlled.

Section 2（C） Gunosy Inc. All Rights Reserved.

PAGE |

20

5Strengthen Financial
Base

Cost reduction (Existing Businesses)

We will promote cost reduction to achieve a lean PL structure.

(1) Control advertising expenses•

FY2020/5: 2,510 million yen à FY2021/5 (expected): 670 million yen (-1,840
million yen)•In the current fiscal year, we will curb investment for scale expansion as we will
first focus on improving profitability and increasing media value throughimproving media reliability.

(2) Reduce fixed costs•

Reduce total executive compensation•

Reduce fixed costs, such as recruitment-related expenses and outsourcing
expenses of Gunosy (non-consolidated), to FY2019/5 level as a benchmark.
(ex. Plan to reduce recruitment-related expenses and outsourcing expenses (combined) byapprox. 25% from FY2019/5.)•

Section 2

Expect to reduce some office operating expenses (such as utility costs) during
the WFH period.

（C） Gunosy Inc. All Rights Reserved.

PAGE |

21

6
Image ofMedium- to LongTerm Growth

Image of Medium- to Long-Term Growth

In the current fiscal year, we concentrated on rebuilding existing businesses as well as developing and creating new
businesses based on a stable financial base.
Based on the current conditions, we are considering reviewing the various target indicators for the FY2022/5 in our medium- tolong-term vision, which was announced in January 2019. New mid-term target indicators will be set and announced by the endof the FY2021/5.
Present(3) New area (Investment business)
Discontinuous growththrough initiatives inhigh-growth areas(2) New area (new internal business)
Create new sources ofrevenue(1) Existing area
Toward a regrowth paththrough improving
media reliability

Section 2（C） Gunosy Inc. All Rights Reserved.

PAGE |

22

7
FY2021/5 Forecast

FY2021/5 Forecast (Consolidated)

Assuming that the deterioration of the advertising market due to the influence of the new coronavirus
will not recover in the short term, we expect YonY sales decline. Meanwhile, on a profit basis, weplan to increase profits YonY through thorough cost reductions.
(Million yen)

FY2020/5(result)
Net sales

FY2021/5(full-year forecast)

13,987

10,297 - 11,297

YonY

73.6% - 80.8%

Operating profit859

1,030 - 1,414 119.9% - 164.5%

Operating margin

6.1%

10.0% - 12.5%

Ordinary profit

838

1,011 - 1,395 120.6% - 166.3%

Profit attributable to owners ofparent386

615 - 882 159.3% - 228.2%

Section 2（C） Gunosy Inc. All Rights Reserved.

-

PAGE |

23

7
FY2021/5 Forecast

Assumptions for FY2021/5 Forecast

Impact of the newcoronavirus

Section 2• Both the lower and upper ranges of the forecast are based on theassumption that the advertising market will not recover in the current
fiscal year.
• It is assumed that the increased activation of users under "stay home"
due to new coronavirus will be gradually normalized as economic
activity resumes.

Upper range scenario• Forecast in case initiatives to improve profitability in the media andadvertising businesses and new measures in the ADNW area, etc.,
produce certain results in a short period of time

Lower range scenario• Forecast that incorporates highly probable results obtained from a
conservative point of view regarding initiatives to improve profitability inthe media and advertising businesses and new measures in the ADNW
area, etc.

（C） Gunosy Inc. All Rights Reserved.

PAGE |

24

3

Section 3

Overview of Media Business（C） Gunosy Inc. All Rights Reserved.

(1) Summary of Media Business in Q4
In Q4, despite significant reduction of advertising expenditures, the DAU of each media
remained strong, positively affected by the increase in traffic due to "stay home".
GunosyNewsPass

Enhance content to support“stay home”

Summary

Q4• DAU remained
strong due tostay-home“Corona Action” tab

Delivery / takeout information

Visualize congestion status ofretail stores

Feature article for the time athome• DAU hit a record
high due to stayhome(Maintain and expand
DAU while controlling
advertising investment)

Investment

Restrain

LUCRA• DAU remained
strong due tostay-home(Maintain DAU while
controlling advertising
investment)

Slightly restrain

Restrain

MAU

DAU
Section 3（C） Gunosy Inc. All Rights Reserved.

PAGE |

26

(2) Media Business Policy for Improved Profitability
We will promote the sound development of media to improve profitability by increasing media
value. At the same time, we will work to improve the customer experience through the renewal of thealgorithms, to launch new content based on macro trends and to build monetization methods otherthan advertising.
Issues

Policy to cope with issues

2

Issues and policy
to cope with toincrease media

1

Coupons peaked out and lackof attractive content

value

Deterioration in theadvertising market due to theimpact of Covid-19

Section 3

3

Restore soundmedia
Based on macro trend,

launch of new content andimprovement of user
experience according tocharacteristics of apps

Diversification ofmonetization methods

Renewal of algorithms

Deterioration of user
experience due to theincrease of sensational
content

not to rely on advertising（C） Gunosy Inc. All Rights Reserved.

PAGE |

27

(3) Improve Media Relaiability
In order to establish a competitive advantage over the medium to long term, we will promote theenhancement of media value for the benefit of all three sides (buyers, sellers and society)based on our corporate philosophy, "Optimally deliver information to people around the world”.

Advertisers andadvertising agencies
The most stringent
advertising examination
standard in the industry

Content Partners

1

2

Develop and operate the moststringent advertising guidelines in
the industry

New and attractive
content

Enhance newer and more
attractive content together withpartner companies

GunosyImprove the user
experience through DX
Promote the use of DX in
media in line with user needs,
including a venture into theaudio domain

Section 3

3

Renewal of thealgorithms
Delivering content that gives users
a sense of trust over the medium
to long term

Users（C） Gunosy Inc. All Rights Reserved.

PAGE |

28

(4) Enhance User Experience
We will promote development of functions tailored to the user characteristics of each app andexpansion of content and services.

GunosyNewsPass

Started operational test of money-saving

Gunosy points that can be kept
within the Gunosy app
Moneysaving
points* Image

Money-saving point function that can beaccumulated within the Gunosy app. Points
can be exchanged for Amazon Gift Vouchers.

Section 3

Improved the

UI and UX to make it easily

viewable to smartphone beginners

Optimizevisibility* Image

LUCRA
Become a trend information
media that allows users to get trend
information easily and in a money-saving way
every day

D2C

* ImageOrganize links to various content and services.
Adjust and increase the size of images andtext for easier retrieval of information to makemajor news stories easier to read andunderstand.

Create a media that will allow female users of
all ages to acquire trend information “easily”
and “in a money-saving way every day”. Also
preparing to launch D2C business which
covers products that enrich our lives.

（C） Gunosy Inc. All Rights Reserved.

PAGE |

29

As a Media Company that Provides "Joy of Sound”
Set up "radiko" tab and start trial distribution (from July 1, 2020).
Quickly respond not only to function to "read" the news but also to "listen to" the news.

Enhance user
experience

Unlimited radio
streaming on thesmartphone

Section 3（C） Gunosy Inc. All Rights Reserved.

PAGE |

30

As a Media Company that Provides "Joy of Sound”
Audio content achieved a significant increase in total number of views within about a month of its
release. Basic KPIs remained solid compared to the existing video content which implies high potential.

Total number of views

Total number ofviews

Status of KPI verification

Significant
growthContent
view
through rate
(VTR)

スマホやパソコンでラジオ聞き放題！
End of 2020/5

Section 3

Clickthrough rate
(CTR)

End of 2020/6

Audience
retention
rate after 1
minute（C） Gunosy Inc. All Rights Reserved.

Approx. 2.5 times
the video content

Approx. 1.3 times
the video content

Approx. 1.7 times
the video content

PAGE |

31

Game8
Big titles continued to gain PV share. Record-high levels of sales and operating profit weremaintained. (Q4 results are for the period from January to March 2020 due to a gap with the parent
company's consolidated accounting period.)

Results*

Recent situation (April-June 2020)

Sales and profit growth (YonY)
Sales and operating profit continued to be strong 317

3 5
0 ,0 0 ,0 0320

3 0 ,0 0 ,0 0

256

234

232

(Million yen)

2 5
0 ,0 0 ,0 0

Sal esOperating income

190

206

223

240

Achieved 500

million PV per

2 0 ,0 0 ,0 0

148

158

1 5
0 ,0 0 ,0 0

90

80

71

1 0 ,0 0 ,0 0

91

95

111

116
57

54

113

113

Q3

Q4

month!

(According to a press release from
Game8 on 2020/5/1)

50

17

5 0
, 0 ,0 0

0

Q1

Q2

Q3

Q4

Q1

Q2

FY2018/3

Q3Q4

FY2019/3

Q1

Q2

FY2020/3

declined* Non-consolidated results (before consolidated adjustment)

FY2020/3 Q4

Sales
Operating profit
Section 3

RPM

YonY

320 million
113 million

136.6%
198.4%（C） Gunosy Inc. All Rights Reserved.

due to deterioration ofadvertising market

PAGE |

32

4

Section 4

Overview of Advertising Business（C） Gunosy Inc. All Rights Reserved.

Status of Number of Advertisers
The number of advertisers marked a sharp decline in April due to a renewal of advertisingguidelines and a deterioration of advertising market conditions caused by the new coronavirus.
Today, the major bottom was hit and is on a gradual recovery.
Q4 Number ofadvertisers
Gunosy ads
ADNW

The number ofReduced byapprox. 30%

advertisers is on

ecovery
Gradual ra gradual
recovery.
Strengthen sales toadvertisers with highdemand, even in the
Feb

Mar

Apr
Q4

Section 4

May

Jun

"with corona" situation.

Q1（C） Gunosy Inc. All Rights Reserved.

PAGE |

34

Composition of Advertisers

The composition of advertisers has changed significantly in response to the renewal of ouradvertising guidelines and the deterioration of the advertising market due to the new coronavirus.
In order to support a wide range of advertisers, we will promote the media of reliability andrenewal of algorithms.
FY5/2020 Q3

FY5/2020 Q4

Health15%

Gaming1%

BeautyBeauty39%

App ４%

BeautyHealthFinance
App (non-gaming)
GamingRecruitment
Real estate
OthersFinance 6%

Health29%

Section 4

23%
Gaming

5%

App

Finance

10% 11%

健⾷
Health美容
Beauty⾦融
Financeアプリ（ゲーム除く）
App(non-gaming)
ゲーム
Gaming
⼈材
Recruitment
Real estate
不動産
Others
その他

Rate ofhealth and beauty

Rate of
App, finance and gaming

Rate ofhealth and beauty

Rate of
App, finance and gaming

68%

12%

38%

25%

（C） Gunosy Inc. All Rights Reserved.

PAGE |

35

Ad Network (ADNW)*Both numbers of impressions and CPMs fell due to the impact of the new coronavirus andrenewal of advertising guidelines. The decline in impressions is because of a decrease incompetitiveness caused by strict advertising examination, resulting in a temporary decrease inmarket share.
Number of
Impressions and CPM(million imp)
60,000imp\40\36.84 \35.75

CPM\30.70 \30.70\29.71 \29.98\31.33\29.0645,000\27.70\25.10\19.50 \19.80
30,000\16.90\21.10\15.14\18.40\20
50,98815,00027,34830,78830,142Q2

Q333,68038,61039,585Q1

Q236,33039,52938,87240,900Q4Q1Q238,39041,13843,32546,71834,543

0

\0

Q1

Q4

FY2017/5

Q3

FY2018/5

Q3

FY2019/5

Q4

Q1

Q2

Q3

Q4

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

Section 4（C） Gunosy Inc. All Rights Reserved.

PAGE |

36

5

Progress of New Business- New Business: p. 38-44- Investment business: p. 45-46

Section 5（C） Gunosy Inc. All Rights Reserved.

Service Status

New Business

InvestingBusiness

We are creating money-saving consumption experience for our customers with enhanced content for
fun and savings.
Most recently, we started testing an e-commerce service that is highly compatible with user needs.

Content of “Otokul”“Tokumaro Store” provides e-commerce

Started atest of ecommercecovering
daily
necessities

Give away
prizes bylottery

Coupons

Content for savings

e-commerce

Section 5

From July 2020

Points

Articleson moneysaving
informationSelling bargain items in limited
quantities（C） Gunosy Inc. All Rights Reserved.

PAGE |

38

Status of KPI

New Business

InvestingBusiness

We are verifying monetization through advertising revenue. The user loyalty of Otokul is high and thereturn on investment is good compared to existing media. We will strengthen our investment in
the e-commerce area and aim to make Otokul a new source of revenue.
Return on investment using the advertisingmodel (compared to existing apps)

User loyalty
QuestionIf this service was no longer available
tomorrow, what would you think?

High user loyalty
About 80% of users find this service valuable.

Acquisition
costs

◎

Retention◎

Revenue peruser(advertisingmodel)△

Return on
investment◎

Not disappointed

20.1%
Very disappointed

43.3%
A little disappointed

36.2%

Strengthen investment in e-commerce areas
to enhance profitability
Very disappointed
A little disappointed
Not disappointed (not very
convenient)
Not using anymore

New source of revenue(Questionnaire to Otokul users on 2020/05/13; n = 2,381)

Section 5（C） Gunosy Inc. All Rights Reserved.

PAGE |39

GTL

Outline of Gunosy Tech Lab

New Business

InvestingBusiness

Gunosy Tech Lab was established as a specialized organization to study further data utilization andinformation recommendation. We output research results in the form of our apps provided to users,
provision to external companies, and publication of papers.

Our own service

Application
andimplement
ation ofresearch
resultsT e c hL a bPresentatio
ns ofresearch
results

Academy/ International
Conference

A specialized organization that
researches the promotion of datautilization and information
recommendation

Services provided
in cooperation withexternal partners

Application
andimplement
ation ofresearch
results

Application andimplementation of research
results

Promotion ofresearch

Joint research with
universities

Fostering
throughsharing

Lecture atuniversities

Graduate School of*1
Engineering, The
University of Tokyo
Fujio Toriumi, Associate
Professor
Toyohashi University of *2
Technology
Mitsuo Yoshida, AssistantProfessor

R&D
Servitization oftechnologies
External companies(ToB)

Publication of papers

Provisionof services

Press Release: https://gunosy.co.jp/news/161*1: Dr. Fujio Toriumi, Associate Professor Graduate School of Engineering, The University of Tokyo*2: Mitsuo Yoshida, Assistant Professor Toyohashi University of Technology

Section 5（C） Gunosy Inc. All Rights Reserved.

PAGE |

40

New Business

GTL

InvestingBusiness

Status of Development of New Businesses

We will continue activities to monetize our proprietary technologies.
On June 30, 2020, a press release
issued for GuhackPartner companies
Activities are ongoing with eachpartner.

Tech

Lab

Our aim

Section 5

KDDI CORPORATION

Hakuhodo DY Media Partners

Sports Nippon Newspapers
Co., Ltd.

Toshiba Data Corporation

Promote DX (digital transformation)

Aim to earn profits outside the media and advertising areas suchas business development through collaboration and provision of ourtechnology through SaaS model, etc.

（C） Gunosy Inc. All Rights Reserved.

PAGE |

41

GTL

Release of “Guhack”

New Business

InvestingBusiness

We launched "Guhack", a SaaS platform for optimizing results acquired by TV commercials (Press
release on June 30, 2020).

DX business

A SaaS platform for optimizing results
acquired by TV commercials

SaaS platform(1) Dashboard for visualizing andanalyzing results(2) Improvement actions can be taken
also during the broadcast period.
(3) Make it easier to explain theeffectiveness of commercials insideand outside the company
Evaluation points

Attractive dashboard-

Elimination of the difficulties of internal analysis (e-commerce
services)

Customizable- Flexibility to respond to requests for functional development(web-based services)

Section 5（C） Gunosy Inc. All Rights Reserved.

PAGE |

42

New Business

GTL

InvestingBusiness

Recent Research & Development Theme

We are promoting research projects through industry-academia partnership and the publication as
research papers.
Technical theme

Recent Works and Publications

Improvepersonalization
logic

•
•

Improve CVR
prediction and support
creating advertisingmaterials••

Recommendations
to casual users

Improve accuracyof article
classification

Impact on Gunosy

Improve personalization logic
Development of a novel embedding method for news recommendation(presented at DEIM2020)
Development of a multileaving method (presented at Recsys2019)

Deliver articles
optimized for users

Support for creating effective advertising materials
Interpretable CVR prediction from advertising material (presented at
KDD2019)
Discontinueation prediction of advertising material (presented at
JSAI2020)

Improveadvertising
performance•

Analysis of the relationship between the diversity of user behavior andservice engagement (presented at DEIM2020, joint researchwith Dr.
*Fujio Toriumi, University of Tokyo)

Improve UX for
casual users•

Construction of news classification model by media characteristics(presented at Natural Language Processing Symposium)

improve media
reliability••*1: Dr. Fujio Toriumi, Associate Professor Graduate School of Engineering, The University of Tokyo

Section 5（C） Gunosy Inc. All Rights Reserved.

PAGE |

43

GTL(Reference) Implementation imageof R&D results

InvestingBusiness

New BusinessWe also promote the implementation of research results to realize higher quality media andadvertising.

Technologies to be
implemented in thecurrent FY

Expected Effects

What we are aimingfor

Section 5

Article delivery
algorithm-

Eliminate low-quality articles
Enhance personalization
logic

Delivering articles
according to user
characteristics-

Enhance article distribution
algorithms for casual users

Enhancement of
automatic adbidding function-

For an automatic bidding
function "UOP" developed by
Gunosy, implement enhanceduser modeling with advertisingfeature value

Restoring soundness in media, improvement of user satisfaction andoptimization of advertising delivery

Improving profitability through improvement of media value andadvertising value（C） Gunosy Inc. All Rights Reserved.

PAGE |

44

GC

Investment Status

New Business

InvestingBusiness

So far, we have promoted investment selecting promising stocks under strict investment
criteria. Despite the market downturn due to the new coronavirus, our existing
investments remained in a sound financial position.

Invested in six stocks (total approx. 800 million yen)

Zoomcar, Inc.

Instamojo, Inc.

Caster Corporation

Online payment service for small
businesses

Online assistant service, etc.

sumutasu inc.

Fairassets Technologies India Pvt. Ltd.

GaragePreneurs Internet Pvt Ltd.

Online real estate direct purchaseservice

Online loan brokerage service

A digital micro-lending platform foryoung people

Online car rental andcar sharing businesses

Section 5（C） Gunosy Inc. All Rights Reserved.

PAGE |

45

GC/Gunosy

Recently Invested Stocks

New Business

InvestingBusiness

In June 2020, we made an additional investment in GaragePreneurs Internet Pvt Ltd. whichruns "slice", a cashless payment and digital micro-lending platform for young people in India(previous investment in October 2019).
Outline of “slice”

India
X
FintechFinancial digital platformü A cashless payment and digital micro-lending service thatenables credit settlement using smartphones and credit
cards, mainly for students and young working people withshort years of service.
ü "slice" expanded rapidly in India capturing the demand of
students and young people who have difficulty in obtaining
credit through traditional methods and cannot makecashless payments.

Background of Increased Investment
ü "slice" has achieved rapid growth since the investment by
Gunosy Capital in October 2019.
ü Most recently, it has gained solid support in India as afinancial platform with approximately 2 million users.
ü Additional investment was made directly by Gunosy
anticipating potential collaboration.

Section 5（C） Gunosy Inc. All Rights Reserved.

PAGE |

46

APPENDIX

6

Section 6

Reference Materials:
Overview of Gunosy Inc.

（C） Gunosy Inc. All Rights Reserved.

Overview of Gunosy Inc.
Basic Information
・Company name:Gunosy Inc.

・Representative:

Shinji Kimura

Representative Director and Chairman,
・Officers: Group Chief Executive Officer (CEO),
Shinji Kimura
Representative Director and President,
Yuya Taketani

Yuya Taketani
・Established:

November 14, 2012

・Fiscal year end:May・Capital:

4,077 million yen (as of the end of
Feb 2020)
6047 (First Section of The Tokyo
Stock Exchange)
Ernst & Young ShinNihon LLC

・Stock Code:・Audit corporation:

Director, Tetsuya Nagashima
Director and CFO, Yuki Maniwa

・Number of employees: 251 (as of the end of May 2020, on
a consolidated basis)
・Head office:Ark Mori Building, 1-12-32 Akasaka,
Minato-ku, Tokyo
・Business:
Development and operation of
information curation service andother media

Director and CDO, Keisuke Osone
Director (Outside), Takashi Kamiyama
Director (Outside), Suguru Tomizuka
Director (Outside), Hirokazu Mashita
Corporate Auditor, Masakazu Ishibashi,
Corporate Auditor (Outside), Kenji
Shimizu
Corporate Auditor (Outside), Noboru
Kashiwagi（C） Gunosy Inc. All Rights Reserved.

PAGE |48

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.

PAGE |

49

Optimally deliver information to people around the world