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 14, 2023

Consolidated Financial Results
for the Fiscal Year Ended May 31, 2023
(Under Japanese GAAP)
Company name:Gunosy Inc.
Listing:
Tokyo Stock Exchange
Securities code:
6047
URL:
https://gunosy.co.jp/
Representative:
Representative Director and President Yuya Taketani
Inquiries:
Corporate Officer and CFO
Tatsuyuki Iwase
Telephone:+81-3-5953-8030
Scheduled date of annual general meeting of shareholders:August 25, 2023
Scheduled date to commence dividend payments:–
Scheduled date to file annual securities report:
August 28, 2023
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, 2023 (from June 1, 2022 to May
31, 2023)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Fiscal year ended

Operating profit

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen

May 31, 2023

8,052

(10.5)(268)–(1,705)–(1,150)–

May 31, 2022

8,998

1.0

412

(42.5)

191(70.1)

130(66.1)

Note: Comprehensive income%

Millions of yen

For the fiscal year ended May 31, 2023:
For the fiscal year ended May 31, 2022:

Basic earnings
per share
Fiscal year ended

Diluted earnings
per share

Yen%

Millions of yen¥(1,110) million¥458 million[–%][1.1%]

Ratio of ordinary
profit to total assets

Ratio of operating
profit to net sales

%

%

%

Return on equity

Yen%

May 31, 2023

(47.99)–(10.2)(13.2)(3.3)

May 31, 2022

5.47

5.44

1.1

1.4

4.6

Reference:

Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended May 31, 2023:¥(1,428) million
For the fiscal year ended May 31, 2022:¥– 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, 2023

12,324

10,85787.5

449.24

May 31, 2022

13,518

11,93487.3

493.56

Reference:

EquityAs of May 31, 2023:
As of May 31, 2022:¥10,788 million¥11,804 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, 2023

(433)

604

0

5,100

May 31, 2022

(33)

(4,064)9

4,947

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

May 31, 2022
Fiscal year ended

May 31, 2023

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, 2024–

(Forecast)

Note: The forecasts of the annual dividends per share for the fiscal year ending May 31, 2024 are currently undetermined.

3. Consolidated earnings forecasts for the fiscal year ending May 31, 2024 (from June 1, 2023 to
May 31, 2024)
Net sales

Fiscal year ending
May 31, 2024

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

Operating profit

Millions ofyen%Millions of
yen

7,880

(2.1)

(500)

%

–

Millions of
yen

(999)

%

–

Millions ofyen(1,070)%–Yen(44.57)

* 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, Gunosy Capital Pte. Ltd., which was a consolidated subsidiary,
was excluded from the scope of consolidation for the current fiscal year due to completion of liquidation.
Furthermore, Grill Inc., which was a consolidated subsidiary, was excluded from the scope of consolidation due
to the sale of shares held.

(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, 2023

24,237,774 shares

As of May 31, 2022

24,237,774 shares(ii) Number of treasury shares at the end of the period
As of May 31, 2023

222,444 shares

As of May 31, 2022

320,009 shares(iii) Average number of shares outstanding during the period
Fiscal year ended May 31, 2023

23,976,325 sharesFiscal year ended May 31, 2022

23,781,658 shares

Note: The number of treasury shares includes shares of the Company held by the stock-granting ESOP trust account(118,442 shares for the fiscal year ended May 31, 2022, and 99,792 shares for the fiscal year ended May 31,2023).

[Reference] Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended May 31, 2023 (from June 1, 2022 to
May 31, 2023)(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, 2023

5,633

(16.5)

(376)

–

(387)

–

(665)

–

May 31, 2022

6,750

3.9

(39)

–

(243)

–

(134)

–

Basic earnings
per share
Fiscal year ended%

ProfitDiluted earnings
per share
Yen

Yen

May 31, 2023

(27.74)–

May 31, 2022

(5.66)–

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, 2023

11,075

10,11990.8

418.53

May 31, 2022

11,826

10,69789.7

443.65

Reference:

EquityAs of May 31, 2023:
As of May 31, 2022:%

Yen¥10,051 million¥10,611 million

2. Non-consolidated earnings forecasts for the fiscal year ending May 31, 2024 (from June 1, 2023 to
May 31, 2024)
Net sales
Millions of yen

Fiscal year ending
May 31, 2024

5,158

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

Ordinary profit% Millions of yen

(8.4)

(624)

% Millions of yen

–

(624)

%

–

Yen

(26.02)* 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(Additional information) .................................................................................................................. 14(Related to the Consolidated Statement of Income) ......................................................................... 15(Segment information, etc.) .............................................................................................................. 16(Per share information) ..................................................................................................................... 17(Significant subsequent events) ........................................................................................................ 19-1-

1. Overview of Business Results, etc.
(1) Overview of Business Results for the Period Under Review
Regarding the business environment surrounding the Group, smartphones continued to become
increasingly common, with the percentage of smartphone users in Japan rising by 3 percentage points
compared to the previous year to 77.3% in 2022 (Source: Ministry of Internal Affairs andCommunications). In addition, despite the impact of various factors in Japan and overseas such as theresurgence of COVID-19 continuing from 2020, the situation in Ukraine, and surging prices,
advertising expenditures recorded their highest levels ever for the full year at 7,102.1 billion yen(104.4% of the previous year’s expenditures) in 2022. Even amid these circumstances, strong online
advertising expenditures against the backdrop of the digitalization of society are contributing to market
growth, with the market growing by 114.3% from the previous fiscal year to 3,091.2 billion yen, an
approximately 1-trillion yen increase in just three years, since the market first surpassed 2 trillion yen
in 2019 (Dentsu Inc. study).
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. In the current fiscal year, we implemented theincreased investment in advertising aimed at the renewed growth of Gunosy decided in the third quarteras planned. By strengthening investment, not only did new users increase as planned, but also our user
retention rate improvement policy that we have pursued since the first quarter steadily produced results,
succeeding in increasing user numbers compared to the previous quarter. While continuing ourinvestment in Gunosy, we will continue our strict ad examinations, and we are committed to thecreation of advertising experiences so that every user can enjoy the news media comfortably.
For new businesses, we continue investing in growth opportunities internally and externally. YOU IN, abrand of tea developed to provide “mood pairing,” continued to enjoy strong demand as a gift as well
as a strong buying by foreign tourists to Japan in offline sales, confirming demand in the inboundchannel. Furthermore, at our equity-method affiliate GaragePreneurs Internet Pvt. Ltd.
(GaragePreneurs), in December 2022 we began providing new products in compliance with the Digital
Lending Guidelines announced by the Reserve Bank of India (RBI).
Regarding revenues, net sales related to Gunosy Ads amounted to 4,869 million yen for the current
fiscal year. Net sales related to ad networks amounted to 629 million yen for the current fiscal year
while continuing strict ad examinations.
Regarding expenses, continuing advertising investments for Gunosy’s renewed growth resulted inrecording advertising expenses of 1,065 million yen (down 21.9% compared with the previous fiscal
year), while media costs decreased as a result of a decrease in net sales related to ad networks.
Additionally, while we recorded 1,428 million yen in investment losses through the equity method forour equity-method affiliate GaragePreneurs, with the change in our ownership ratio due to a third-party
allocation of newly issued shares on June 2022, we recorded a gain on change in equity of 1,001
million yen.
As a result, for the current fiscal year, net sales decreased by 10.5% from the previous fiscal year to
8,052 million yen, ordinary losses were 1,705 million yen compared to ordinary profit of 191 million in
the previous fiscal year, and loss attributable to owners of parent was 1,150 million yen compared to
profit attributable to owners of parent of 130 million yen in the previous fiscal year.
The cumulative number of downloads of all Gunosy, NewsPass, and au Service Today in Japan for thecurrent fiscal year increased by 5.13 million from the end of the previous fiscal year to 65.44 million.
Moreover, on February 15, 2023, we ended service for LUCRA, one of our apps. As of the conclusionof service, we had reached 75 million downloads for our four apps including LUCRA’s cumulative
downloads.
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 decreased by 1,194 million yen from the end of the previous
fiscal year to 12,324 million yen. This is mainly attributable to a decrease in cash and deposits (adecrease of 567 million yen from the end of the previous fiscal year), a decrease in accounts receivable- trade (a decrease of 102 million yen from the end of the previous fiscal year), a decrease ininvestment securities (a decrease of 240 million yen from the end of the previous fiscal year), and adecrease in deferred tax assets (a decrease of 223 million yen from the end of the previous fiscal year).
(Liabilities)
Liabilities at the end of the current fiscal year decreased by 116 million yen from the end of theprevious fiscal year to 1,466 million yen. This is mainly attributable to a decrease in accounts payable trade (a decrease of 216 million yen from the end of the previous fiscal year) and an increase inadvances received (an increase of 118 million yen from the end of the previous fiscal year).
(Net assets)
Net assets at the end of the current fiscal year decreased by 1,077 million yen from the end of theprevious fiscal year to 10,857 million yen. This is mainly attributable to a decrease in retained earnings(a decrease of 1,231 million from the end of the previous fiscal year) and a decrease in treasury shares(a decrease of 156 million yen from the end of the previous 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 increased by
152 million yen from the previous fiscal year to 5,100 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 433 million yen(compared with 33 million yen used during the previous fiscal year). This is mainly attributable torecording loss before income taxes of 851 million, a decrease in trade payables of 203 million yen, andan increase in advances received of 120 million.
(Cash flows from investing activities)
Capital provided by investing activities during the current fiscal year amounted to 604 million yen(compared with 4,064 million yen used during the previous fiscal year). This is mainly attributable topayments into time deposits of 891 million yen, proceeds from withdrawal of time deposits of 1,816
million yen, and purchase of investment securities of 323 million yen.
(Cash flows from financing activities)
Capital provided by financing activities during the current fiscal year amounted to 0 million yen(compared with 9 million yen provided during the previous fiscal year). This is mainly attributable toproceeds from disposal of treasury shares of 16 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, 2019 May 31, 2020 May 31, 2021 May 31, 2022 May 31, 2023
Equity ratio (%)

77.7

84.8

85.0

87.3

87.5

Equity ratio based on fair value (%)

323.5

170.1

169.2

151.4

119.6

Interest-bearing debt to cash flows
ratio (Years)

–

–

–

–

–

–

3,487.3––

Interest coverage ratio (Times)

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. Furthermore, as there was no interest paid from the interest
coverage ratio (times) for the fiscal year ended May 31, 2023, it has not been provided.

(4) Future Outlook
For the fiscal year ended May 31, 2023, while gauging trends in COVID-19 and other macroenvironmental factors, based on improvements in the user retention rate and advertising revenues, fromthe third quarter we expanded investment in advertising for Gunosy’s renewed growth. In the fiscal
year ending May 31, 2024, we will run our business with a policy of strengthening investment inadvertising. However, given the overall uncertainty in the macroenvironment including increasing
geopolitical risks and the resulting fluctuations in the financial markets, we will expand investment
while carefully considering our investment results.
Based on these conditions, while strengthening investment in advertising for the renewed growth of
Gunosy in the coming fiscal year, the Group will continue to work to improve our user retention rate
and profitability per user. Additionally, for au Service Today, run jointly with KDDI Corporation, and
NewsPass, the Group will focus on improving products to increase adoption by au users. For Game8
Inc., a consolidated subsidiary, while continuing stable operations of game8.jp, which is a gamestrategy media, the Company will create drivers for growth by developing overseas businesses andother new businesses. Regarding our equity-method affiliate GaragePreneurs Internet Pvt. Ltd.
(GaragePreneurs), since we began releasing new products in compliance with the Digital Lending
Guidelines announced by the Reserve Bank of India (RBI) in December 2022, we have run ourbusiness with a goal of renewed growth. The Company will continue to make efforts, such as assigning
Directors from the Company, to maximize the corporate value of GaragePreneurs and strengthen thepartnership with the Company. Furthermore, to achieve non-linear growth, the Company will continue
investments and M&A for external start-ups with great 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, 2024, based on
the business factors outlined above, net sales are projected to be 7,880 million yen (a decrease of 2.1%
from the previous fiscal year), operating loss to be 500 million yen (compared with an operating loss of
268 million yen in the previous fiscal year), ordinary loss to be 999 million yen (compared with an
ordinary loss of 1,705 million yen for the previous fiscal year), and loss attributable to owners of parent
to be 1,070 million yen (compared with a loss attributable to owners of parent of 1,150 million in theprevious fiscal year).

-4-

To make a financial results forecast for the fiscal year ending May 31, 2024, the numbers ofdownloads, net sales, and expenses for the existing business areas are determined as follows:(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, and au Service Today will reach
69.93 million at the end of the fiscal year ending May 31, 2024.
(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 1,189 million yen will be required for the
fiscal year ending May 31, 2024, 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.

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, 2022
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, 2023

6,492
772
612
7,877

5,925
669
677
7,272

15
10
26

8
4
12

63
50
114

40
0
40

5,180
241
76
5,499
5,641
13,518

4,940
18
39
4,998
5,051
12,324

(Millions of yen)
As of May 31, 2022
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, 2023

637
297
73
348
7
13
185
1,563

421
325
42
466
0
9
172
1,438

3
16
20
1,583

9
19
28
1,466

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

4,099
4,099
2,478
(307)
10,369

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

16
90
311
419
68
–
10,857
12,324

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Fiscal year ended
May 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission expenses
Idle asset expenses
Loss on investments in investment partnerships
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of investment securities
Gain on change in equity
Gain on reversal of share acquisition rights
Other
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on valuation of investment securities
Loss on sale of shares of subsidiaries and associates
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent-8-

Fiscal year ended
May 31, 2023

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

8,052
4,945
3,106
3,375
(268)

0
23
1
24

19
12
4
35

0
13
204
21

–
15
–
23

–

1,428

5
245
191

4
1,473
(1,705)

80
–
10
–
91

9
1,001
18
14
1,042

–
50
–
50
232
171
(76)
95
137
6
130

65
111
11
188
(851)
93
224
317
(1,169)(18)(1,150)(Consolidated Statements of Comprehensive Income)(Millions of yen)
Fiscal year ended
May 31, 2022
Profit (loss)
Other 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, 2023
137

(1,169)

24
55
(14)

(30)
35
(1)

255

55

321
458

59
(1,110)451(1,091)6(18)

(3) Consolidated Statements of Changes in Equity
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
other thanshareholders’equityTotal changes
during period
Balance at endof period

Accumulated other comprehensive income

SharecapitalCapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity

4,094

4,094

3,659

(602)

11,245

5

5

130

(79)

138

Valuation
Foreign
Total
difference Deferred currency
accumulatedongains or translaotheravailable- losses on tion
comprehenfor-salehedges adjustsive income
securities
ment
23

–

15

38

NonSharecontrolacquisiTotal net
ling
tion
assetsinterrights
ests

83

36

11,404

10

10

130

130

59

59

24

55

241

321

2

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- 10 -

For the fiscal year ended May 31, 2023
(Millions of yen)
Shareholders’ equity

Balance at
beginning of
periodChanges during
periodLossattributableto owners ofparentSharecapitalCapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity

4,099

4,099

3,709

(463)

11,444(1,150)Purchase oftreasuryshares
Disposal oftreasurysharesNet changes
in items
other thanshareholders‘
equityTotal changes
during period
Balance at endof period

Accumulated other comprehensive income(80)

NonValuation
Foreign
Share control
Total
Total netdifference Deferred currency
accumulated acquisitio lingassetson
gains or translan rights interotheravailable- losses on tion
ests
comprehenfor-salehedges adjustsive income
securities
ment
47

55

257

360

86

43

11,934(1,150)(1,150)

(0)

(0)

(0)

156

75

75

(30)

35

54

59

(17)

(43)

(2)

–

–

(1,231)156(1,075)

(30)

35

54

59

(17)

(43)

(1,077)

4,099

4,099

2,478

(307)

10,369

16

90

311

419

68

–

10,857- 11 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended
May 31, 2022
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Foreign exchange losses (gains)
Interest income
Interest expenses
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on change in equity
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
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from sale of investment securities
Payments for sale of shares of subsidiaries resulting inchange in scope of consolidation
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
Proceeds from disposal of treasury shares
Proceeds from issuance of shares
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, 2023

232
28
–
23
(27)
(0)
0
(80)
50

(851)
22
65
23
(145)
(19)
–
(9)
111

–

1,428

–
103
(172)
(47)
38
(1)
15
104
266
0
(0)
(299)
(33)

(1,001)
72
(203)
49
(111)
120
20
104
(322)
19
–
(129)
(433)

(1,545)–(2,938)
233

(891)
1,816
(323)
29

–

(33)

(5)

–

201

0

(10)
(4,064)

6
604

1,000
(1,000)
12
9
(12)
9

–
–
16
–
(15)
0

83

(18)

(4,004)
8,952
4,947

152
4,947
5,100

(5) Notes to the Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Changes in accounting policies)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 31, June 17, 2021, hereinafter “Accounting Standard for Fair
Value Measurement Implementation Guidance”) from the beginning of the current fiscal year, and it
has applied the new accounting policy provided for by the Accounting Standard for Fair Value
Measurement Implementation Guidance prospectively in accordance with the transitional measuresprovided for in paragraph 27-2 of the Accounting Standard for Fair Value Measurement
Implementation Guidance. These changes to our accounting policy do not affect our Consolidated
Financial Statements.
(Changes in presentation)(Consolidated Statements of Cash Flows)
For the previous fiscal year, “Foreign exchange losses (gains)” was included in “Other, net” under“Cash flows from operating activities.” The Company decided to present it separately starting from thecurrent fiscal year because its financial importance increased. To reflect the presentation change, areclassification 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
76 million yen recorded in “Other, net” under “Cash flows from operating activities” is reclassified into
“Foreign exchange losses (gains)” under “Cash flows from operating activities” with an amount of (27)
million yen and “Other, net” with an amount of 104 million yen.
For the previous fiscal year, “Purchase of property, plant and equipment” under “Cash flows frominvesting activities” was presented separately. However, as it has decreased in financial importance, inthe current fiscal year it has been included in “Other, net” under “Cash flows from investing activities.”
To reflect the presentation change, a reclassification is made to the consolidated financial statements forthe 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 “Purchase of property, plant and equipment” under “Cash flows frominvesting activities” and the (0) million yen recorded in “Other, net” have been reclassified into “Other,
net” with an amount of (10) million yen.

- 13 -

(Additional information)(Making GaragePreneurs Internet Pvt. Ltd. an equity-method affiliate through a share acquisition)
Regarding the compulsory convertible debentures of GaragePreneurs Internet Pvt. Ltd. owned by theCompany and its subsidiaries, in December 2021, following their conversion, the Company acquired
compulsory convertible preference shares issued by (GaragePreneurs), and with the additional
acquisition of compulsory convertible preference shares on February 4, 2022, the Company and its
subsidiaries came to own 17.77% of the voting rights in GaragePreneurs. With this acquisition ofshares and assigning of Directors from the Company, GaragePreneurs became an equity-method
affiliate of the Company.
An overview of GaragePreneurs is provided below.
(1) Name

GaragePreneurs Internet Pvt. Ltd.

(2) Business

Digital credit business(3) Start of the application of the equity method

March 31, 2022

(4) Ratio of voting rights after share acquisition

17.77%(1) Period for the financial results of investee companies included in the Consolidated Statements ofIncome for the current fiscal year
The closing date for GaragePreneurs, our investee company, is the final day of March, two months
different from our consolidated closing date.
Because the start date of the application of the equity method for GaragePreneurs is March 31,
2022, in the Consolidated Statements of Income for the current fiscal year, financial results for theinvestee company from April 1, 2022 to March 31, 2023 are included in share of profit (loss) ofentities accounted for using equity method.
(2) Overview of accounting processes implemented(a) Historic costs and breakdown for investee company(Millions of yen)
Acquisition consideration

Cash

3,556

Expenses directly required for
acquisition

Advisory fees, etc.

Historic costs

27
3,584

(b) Amount, reason for incurrence, amortization method, and amortization period for the goodwill
included in the investment securities that was incurred(i)Amount of goodwill included in the investment securities that was incurred
229 million yen
Furthermore, based on reasonable information that could be acquired when preparing theconsolidated financial statements at the end of the previous fiscal year, we conducted
provisional accounting processes for the distribution of the historic costs, and theseaccounting processes have been made permanent in the current fiscal year.

(ii) Reason for incurrence
Goodwill incurred due to the excess earning power expected in future business years.
(iii) Amortization method and amortization period
Straight-line method over eight years(c) Money allocated to intangible fixed assets aside from the goodwill included in the investment
securities that was incurred
Money allocated to intangible fixed assets aside from goodwill totals 729 million yen.
- 14 -

(Related to the Consolidated Statement of Income)Impairment losses
The Group recorded impairment losses on the following asset groups.
Current fiscal year (June 1, 2022 to May 31, 2023)(Millions of yen)
Location

Shibuya-ku, Tokyo

Use

Type

Business assets

AmountBuildings and structures

0

Property, plant andequipment (other)

1

Intangible fixed assets(other)32

Investments and other assets(other)

30

Total

65

(a) History leading to the recognition of amortization losses
With revisions to the Company’s business plan, as the estimation period for the remaining usefullife of our main assets, as a result of comparing future cash flow based on the business plan withthe book value of fixed assets, because future cash flow fell below book value, we havedepreciated the book value to the recoverable value and recorded the amortization loss on theamount of the reduction in question as an extraordinary loss.
(b) Method for asset grouping
The Group conducts assets grouping using the minimum unit created by mostly independent cash
flows based on the main business categories.
(c) Calculation method for the recoverable value
The recoverable value is measured using the utility value, and the recoverable value is calculated
as zero as no future cash flow is expected.

- 15 -

(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, 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 are no property, plant and equipment owned
outside Japan.
3. Information by major customer
Customer name

Net sales (Million yen)

Related segment

Google LLC

942

Media business

For the fiscal year ended May 31, 2023
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 are no property, plant and equipment owned
outside Japan.
3. Information by major customer
Customer name

Net sales (Million yen)

Related segment

KDDI Corporation

823

Media business- 16 -

[Information about impairment losses on non-current assets by reportable segment]
For the fiscal year ended May 31, 2022
There is no relevant information.
For the fiscal year ended May 31, 2023
Segment information is omitted because the Group has only one major segment, the Media business.
Furthermore, amortization losses were 65 million yen in the current fiscal year.
[Information about amortization amount and unamortized balance of goodwill by reportable segment]
For the fiscal year ended May 31, 2022
Segment information is omitted because the Group has only one major segment, the Media business.
For the fiscal year ended May 31, 2023
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.
(Per share information)(Yen)
For the fiscal year
ended May 31, 2022

For the fiscal year
ended May 31, 2023

493.56449.24

Basic earnings (loss) per share

5.47(47.99)Diluted earnings per share

5.44

–

Net assets per share(Notes) 1. Regarding diluted earnings per share in the current fiscal year, while there are residual shares, they are notprovided as there were diluted losses per share.
2. 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 (loss) per share and diluted earnings per share, they are included in treasury shares that are excluded
when calculating the average number of shares during the period.
3. 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 118,442 shares for the previous fiscal year and 99,792 sharesfor the current fiscal year. In the calculation of basic earnings (loss) per share and diluted earnings per share,
the number of the treasury shares excluded from the average number of shares during the period is 124,677
shares for the previous fiscal year and 109,735 shares for the current fiscal year.
4. The basis for the calculation of basic earnings (loss) per share and diluted earnings per share is as follows:- 17 -

For the fiscal year
ended May 31, 2022

For the fiscal year
ended May 31, 2023

Basic earnings (loss) per share
Profit (loss) attributable to owners ofparent (Million yen)130

(1,150)

Amount not attributed to commonshareholders (Million yen)––

Profit (loss) attributable to owners ofparent related to common shares(Million yen)130

(1,150)23,781,658

23,976,325––

Increase in number of shares ofcommon shares (Shares)

127,308–(Share acquisition rights) (Shares)(127,308)(–)

Average number of shares ofcommon shares outstanding during
the period (Shares)

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

For the fiscal year
ended May 31, 2022

7th share acquisition rights
48,000 units(48,000 common shares)
Issued on July 29, 2016
9th share acquisition rights
1,600 units(1,600 common shares)
Issued on July 29, 2019

Overview of residual shares notincluded in calculation of diluted
earnings per share due to lack ofdilutive effect10th share acquisition rights
14,100 units(14,100 common shares)
Issued on September 14, 2020
11th share acquisition rights
123,200 units(123,200 common shares)
Issued on June 2, 2021
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

- 18 -For the fiscal year
ended May 31, 2023
7th share acquisition rights
30,000 units(30,000 common shares)
Issued on July 29, 2016
9th share acquisition rights
1,600 units(1,600 common shares)
Issued on July 29, 2019
10th share acquisition rights
8,700 units(8,700 common shares)
Issued on September 14, 2020
11th share acquisition rights
82,900 units(82,900 common shares)
Issued on June 2, 2021
12th share acquisition rights
8,000 units(8,000 common shares)
Issued on September 30, 2021
13th share acquisition rights
23,000 units(23,000 common shares)
Issued on May 2, 2022
14th share acquisition rights
31,800 units(31,800 common shares)
Issued on June 29, 2022

4. The basis for calculating net assets per share is as follows:
As of May 31, 2022

As of May 31, 2023

Total net assets (Million yen)

11,934

10,857

Amount deducted from total net
assets (Million yen)

129

68

(Share acquisition rights) (Million
yen)

(86)

(68)

(Non-controlling interests) (Million
yen)

(43)

(–)

11,804

10,78823,917,765

24,015,330

Year-end net assets related tocommon shares (Million yen)
Number of common shares at yearend used to calculate net assets per
share (Shares)(Significant subsequent events)
There is no relevant information.

- 19 -