Fiscal Year 2023 Second Quarter Consolidated Financial Results (Japanese GAAP)
August 9, 2023
Name of Listed Company: GMO Internet Group, Inc.
Exchange Listing: Tokyo Stock Exchange
Stock Code: 9449
URL: https://www.gmo.jp/en
Representative: Masatoshi Kumagai, Founder, Chairman and Group CEO
Official Contact: Masashi Yasuda, Director, Executive Vice President and Group CFO,
Deputy to Group CEO, Head of Group Management Division
Contact Number: +81-3-5456-2555
Date of Quarterly Report Release: August 10, 2023 Start Date of Dividend Payout: September 21, 2023
Supplementary documents available pertaining to quarterly financial results: Yes
Quarterly results briefing: Yes (live stream only and Q&A session for institutional investors)(all amounts rounded down to the nearest million yen)
1. Second Quarter Financial Results in the Year Ending December 2023 (01.01.2023- 06.30.2023)(1) Consolidated Operating Results (cumulative)(percentages shown represent year-on-year % change)
Profit Attributable to
Net Sales
Operating Profit
Ordinary Profit
Owners of the
ParentSix months ended¥ millions%¥ millions%¥ millions%¥ millions%

June 30, 2023
130,043
3.6
20,618 -33.4
22,536 -32.7
6,344 -59.1
June 30, 2022
125,556
4.2
30,94136.8
33,48241.8
15,50559.8(Note) Comprehensive Income: June 30, 2023: 18,497 million (-58.3%), June 30, 2022: 44,366 million (122.9%)
Net Profit per
Share
Six months ended

June 30, 2023
June 30, 2022

Net Profit per Share(Diluted)

¥

¥

59.47
143.9758.80
143.08(2) Consolidated Financial Condition
Total Assets
As ofShareholders’ Equity
Ratio

Net Assets¥ millions¥ millions%

June 30, 2023
1,669,248
169,322
4.8
December 31, 2022
1,542,740
154,688
4.7(Reference) Shareholders’ Equity: June 30, 2023: ¥79,369 million; December 31, 2022:¥72,176 million
2. Dividends
Annual Dividends
End of Q1

Year Ended 12/2022
Year Ending 12/2023
Year Ending 12/2023 (forecast)End of Q2

End of Q3

End of Term

Total

¥

¥

¥

¥

19.60
12.20

28.00
7.50

0.00

0.00

47.60

―

―

―

¥

3. Consolidated Results Forecast for the Year Ending December 31, 2023 (01.01.2023 – 12.31.2023)

As the Group's business “Internet Finance business,” "Cryptoassets business" and “Incubation
business” are affected by economic conditions, financial markets, cryptoassets and other market
conditions, it is difficult to forecast business performance, and therefore we do not disclose
consolidated business results and dividend forecast. GMO Financial Holdings Co., Ltd., oursubsidiary, discloses sales indicators, such as foreign exchange transaction volume, stock
brokerage trading value, CFD trading value, cryptoasset trading value and the number of customer
accounts, and operating revenue on a monthly basis.

*Notes(1) Changes to significant subsidiaries in the current term: No(2) Special accounting treatments used in preparation of the quarterly consolidated financial statements:
None(3) Changes in accounting policy, changes in accounting estimates, restatements
1. Changes resulting from revisions to accounting standard, etc.: Yes
2. Changes other than those specified above: None
3. Changes in accounting estimates: None
4. Restatements: None
(4) Number of Outstanding Shares (Common Shares)(Unit: shares)

1. Outstanding shares at period end (inc. treasury)

Q2 FYE 12/2023

110,113,337

FYE 12/2022

110,704,401

2. Treasury shares at period end

Q2 FYE 12/2023

3,768,567

FYE 12/2022

3,979,562

3. Average number of shares during the period

Q2 FYE 12/2023

106,682,977

Q2 FYE 12/2022

107,696,104*Quarterly financial results are not subject to quarterly review by independent auditors.
*Note regarding the appropriate use of result forecasts and other items
Although the Company aims to pay dividends quarterly with a payout ratio of 33% to net income
attributable to owners of the parent, because it is difficult to forecast business performance, the amountof dividend forecast is yet to be determined at this time. We will promptly disclose dividend forecast
when it becomes available.
On August 9, 2023, we plan to stream a financial results briefing live. The presentation andexplanation (voice) along with explanatory materials used on the day will be posted on our company
website (https://ir.gmo.jp/en/) promptly after the meeting.

Contents
1. Qualitative Information Related to Financial Results. ............................................................................... 2(1) Operating results ........................................................................................................................... 2(2) Financial condition ......................................................................................................................... 9(3) Consolidated results forecast and other forward-looking information ........................................... 9
2. Quarterly Consolidated Financial Statements and Major Notes ............................................................. 10(1) Quarterly consolidated balance sheet ......................................................................................... 10(2) Quarterly consolidated statements of income and comprehensive income ................................ 12(3) Notes regarding the quarterly consolidated financial statements ............................................... 14
Notes regarding the going concern assumption .......................................................................... 14
Notes regarding changes impacting shareholders’ equity .......................................................... 14
Changes in accounting policies ................................................................................................... 14
Additional information .................................................................................................................. 14
Segment information ................................................................................................................... 15
Significant subsequent event....................................................................................................... 17―1―

1. Qualitative Information Related to Financial Results(1) Operating results◆ Overview of the Financial Results for the Six Months Ended June 30, 2023
(Unit: ¥millions)

Previous Q2

Current Q2

Change% Change

Net Sales

125,556

130,043

4,487

3.6%

Operating Profit

30,941

20,618-10,322-33.4%

Ordinary Profit

33,482

22,536-10,946-32.7%

Profit Attributable to Owners of the Parent

15,505

6,344-9,161-59.1%

Under the corporate slogan “Internet for Everyone,” GMO Internet Group has consistently focusedresources on the service to provide internet and service infrastructure since its foundation in 1995.
With the increased usage of the Internet, the volume of information available on the Internet and thevolume of transactions conducted over the Internet have increased exponentially, which has opened
new business opportunities for the Group one after another; and as a result, the Group reported
increases both in net sales and profit for the year ended December 31, 2022, marking its 14th
straight yearly increase.
While there are signs of economic recovery following the implementation of the countermeasures
to prevent the spread of COVID-19, the progress of Digital Transformation (DX) and the spread of
online consumption have been becoming an irreversible trend and there is an increasing need forservices provided by the Group.
Amidst such a business environment, (1) the Internet Infrastructure segment, comprising many ofJapan’s No.1 services, showed steady growth, with the expansion of customer base, mainly inPayment thanks to acquisition of large orders related to sales of cashless payment terminals. (2) In
the Online Advertising & Media segment, while revenue increased mainly in in-house products andour own media, profit decreased due partly to a temporary increase in costs. (3) In the Internet
Finance segment, OTC FX showed strong growth thanks to the efforts to improve profitability despite
recognition of provision of allowance for doubtful debts in the securities business in Thailand. (4) The
Cryptoassets segment continues to experience a severe environment as the trading in the overall
cryptoasset market has been sluggish.
As a result, for the six months ended June 30, 2023, the Company recorded net sales of ¥130,043
million (up 3.6% year-on-year), operating profit of ¥20,618 million (down 33.4% year-on-year),ordinary profit of ¥22,536 million (down 32.7% year-on-year) and net profit attributable to owners of
the parent of ¥6,344 million (down 59.1% year-on-year), an increase in net sales but a decrease inprofit due to an absence of profit contribution from the Incubation segment reported a year ago.

―2―

Net Sales and Operating Profit by Segment for the Six Months Ended June 30, 2023
(Unit: ¥millions)Internet Infrastructure
Net Sales
Operating Profit
Online Advertising & MediaNet Sales
Operating Profit
Internet Finance
Net Sales
Operating Profit
Cryptoassets
Net Sales
Operating Profit
Incubation
Net Sales
Operating Profit
Other
Net Sales
Operating Profit
Adjustment
Net Sales
Operating Profit
Total
Net Sales
Operating Profit

Previous Q2

Current Q2

Change% Change

71,425
11,86984,70913,001

13,284
1,132

18.6%
9.5%

16,405
1,474

17,339
1,026

934
-448

5.7%
-30.4%

21,1606,626

25,058
7,597

3,897
970

18.4%
14.7%

3,357
-238

2,161
-823

-1,196-584-35.6%－

13,392
10,414651
112-12,741-10,302-95.1%-98.9%

1,700
-93

2,421
-215

721
-122

42.4%
－

-1,886887-2,297
-79

-411
-967

－
－

125,556
30,941130,043
20,618

4,487-10,322

3.6%-33.4%◆Overview of Financial Results for the Three Months ended June 30, 2023
(Unit: ¥millions)

Net Sales
Operating Profit
Ordinary Profit
Profit attributable to Owners of
the Parent

Previous Q2
69,49019,812
21,382Current Q264,4509,627
10,603

9,074

2,412

Change% Change-5,040-7.3%-10,184-51.4%-10,779-50.4%-6,661-73.4%

During the three months ended June 30, 2023, the Internet Infrastructure segment showed solid
growth due to strong growth in Payment and Security services despite strategic investment in econtract service GMO Sign and recognition of provision of allowance for doubtful debts inecommerce solutions service. The Online Advertising & Media segment showed sluggish growth as
the transaction volume in certain major customers did not increase as expected while our own media
maintained a desirable level of pageviews. The Internet Finance segment reported strong growththanks to favorable FX market environment and internal measures focusing on profitability despite
recognition of provision of allowance for doubtful debts in the securities business in Thailand. The
cryptoassets segment continues to experience a severe environment due to continued sluggish
transaction volume.

―3―

Net Sales and Operating Profit by Segment for the Three Months ended June 30, 2023
(Unit: ¥millions)
Previous Q2

Current Q2

Change% Change

36,666
5,586

42,548
6,007

5,881
421

16.0%
7.5%

8,512
547

8,435
358

-77
-189

-0.9%
-34.6%

10,363
2,975

12,265
3,834

1,901
858

18.3%
28.9%

1,294
-397

958
-484

-336
-86

-26.0%－

12,856
10,162456
3-12,399-10,158-96.4%-100.0%

865
-3

973
-92

108
-89

12.6%
－

-1,068941-1,187
0

-119
-940

－
－

69,49019,81264,4509,627-5,040-10,184-7.3%-51.4%

Internet Infrastructure
Net Sales
Operating Profit
Online Advertising & MediaNet Sales
Operating Profit
Internet Finance
Net Sales
Operating Profit
Cryptoassets
Net Sales
Operating Profit
Incubation
Net Sales
Operating Profit
Other
Net Sales
Operating Profit
Adjustment
Net Sales
Operating Profit
Total
Net Sales
Operating Profit

Segments results for the three months ended June 30, 2023 are as follows.
1) Internet Infrastructure
The Internet Infrastructure segment provides basic and service infrastructure for customers operating
business in an online environment. Domain, hosting & cloud, ecommerce solutions, payment andsecurity - the five major businesses in this segment – are all developed and offered in-house andeach holds top share in their respective markets in Japan. In addition, the segment includes
consumer Internet provider services. The following is a breakdown of results in each of thebusinesses comprising this segment.
i. Domain
Positioned as a gateway to the Group’s infrastructure segment, the domain business has steadilygrown its customer base with a low-pricing strategy mainly through the Company and GMO Pepabo.
The number of domain registration and renewals during the three months ended June 30, 2023
increased to 1.75 million (up 32.2% year-on-year), the total number of domains under management
as of June 30, 2023 increased to 7.58 million (up 7.1% year-on-year) and overseas domain sales
showed strong growth. As a result, net sales were ¥2,388 million (up 6.4% year-on-year).
ii. Hosting & cloud
The hosting & cloud business responds to growing diversification of client needs through shared,
dedicated, VPS and cloud-based offerings under a multi-brand strategy mainly through the Company,
GMO GlobalSign Holdings and GMO Pepabo. Thanks to the favorable growth in sales of retail server,
the number of web hosting contracts as of June 30, 2023 was 1,115 thousand (up 1.8% year-onyear) and net sales were ¥5,048 million (up 10.5% year-on-year).

―4―

iii. Ecommerce solutions
Ecommerce solutions are offered mainly by GMO Pepabo and GMO MAKESHOP and comprises EC
platforms that provide platforms for online stores, minne, a C2C handmade market, SUZURI, an
original merchandise production/sales service, and O2O support service. In EC platform, the numberof paid stores as of June 30, 2023 decreased 10.2% year-on-year to 53 thousand despite anincrease in the number of users of the free plan of Color me shop that allows to open an online store
without a monthly fee, and the total transaction volume was ¥118.8 billion (down 0.2% year-on-year)
due to the impact of the change in the consumption trends. minne was also affected by the change inthe consumption trends, and the total transaction volume decreased by 11.6% year-on-year to ¥3.2
billion. On the other hand, Makeshop which offers high-price plans showed solid growth, and net
sales were ¥4,046 million (up 11.7% year-on-year).
iv. Security
This business offers security services to provide secure and safe Internet for everyone, including
digital certification security such as SSL server certificates and e-contract service GMO Sign
provided mainly through GMO GlobalSign Holdings, cybersecurity provided by GMO Cybersecurity
by Ierae, and brand security provided by GMO BRAND SECURITY Inc. Results of GMO
Cybersecurity by Ierae have been included in the consolidated results from the three months ended
June 30, 2022. e-contract service GMO Sign showed steady growth in the number of contracts withlarge increases in the number of customers and contract transmission. As a result, this sub-segment
reported net sales of ¥3,573 million (up 15.6% year-on-year).
v. Payment
Payment services are mainly operated by GMO Payment Gateway and offer comprehensive
payment-related service and finance-related services. In the payment-related service, the number oftransactions and the transaction volume showed favorable growth due to steady expansion of the
Ecommerce market in online/recurring payments and an increase in the number of stores using thenext-generation payment platform “stera” terminal in the face-to-face payments. As a result, net sales
increased to ¥16,302 million (up 28.8% year-on-year).
vi. Provider
In this sub-segment, the Company offers Internet provider services for consumers. The number ofsubscriptions at June 30, 2023 was 2.27 million (up 0.4% year-on-year) and net sales were ¥10,191
million (up 6.1% year-on-year) due to stable growth in the fixed line service.
Overall, the Internet Infrastructure segment recorded net sales of ¥42,548 million (up 16.0% year-onyear) and operating profit of ¥6,007 million (up 7.5% year-on-year) despite recognition of provision ofallowance for doubtful debts of approximately ¥1.1 billion for certain customers in the factoringbusiness in a consolidated subsidiary of GMO Pepabo.
2) Online Advertising & MediaThe Online Advertising & Media segment provides marketing solutions for online businesses. The
following is a breakdown of results in each of the businesses comprising this segment.
i. Online advertisingThis sub-segment provides comprehensive Internet advertising services such as advertising agency
and ad platform mainly through GMO AD Partners and GMO TECH. Net sales were ¥4,512 million(down 8.6% year-on-year) mainly because the transaction volume in certain major customers did notincrease as expected.
ii. Internet media
This sub-segment provides advertising space through operation of our own media and the marketing
support services mainly through GMO Media. Net sales were ¥2,792 million (up 16.3% year-on-year)
mainly due to a steady growth in pageviews in our own media.

―5―Overall, the Online Advertising & Media segment recorded net sales of ¥8,435 million (down 0.9%
year-on-year), and operating profit of ¥358 million (down 34.6% year-on-year) mainly due to anincrease in headcount as a result of human resource investment made in FY2022.
3) Internet Finance
The Internet Finance segment provides online financial services for retail investors mainly through
GMO Click Securities, a consolidated subsidiary of GMO Financial Holdings. The customer basecontinues to expand, with the number of OTC FX accounts increasing to 1,455 thousand (up 4.1%
year-on-year) and the number of securities accounts increasing to 516 thousand (up 4.5% year-onyear). The OTC FX improved profitability compared to FY2022 Q2 through enhanced efforts toimprove profitability despite a year-on-year decrease in the transaction volume. CFD maintained thetransaction volume at the high level.
Overall, the Internet Finance segment recorded net sales of ¥12,265 million (up 18.3% year-onyear) and operating profit of ¥3,834 million (up 28.9% year-on-year) despite recognition of provisionof allowance for doubtful debts of approximately ¥1.0 billion related to the securities business inThailand.
4) Cryptoassets
The Cryptoassets segment operates businesses pertaining to “mining,” “exchange” and “payment” ofcryptoassets. Performance of each business is as follows.
i. Cryptoassets mining
The Cryptoassets mining business runs mining centers. Profitability decreased year-on-year due toexternal factors including increased hash rates, and net sales amounted to ¥169 million (down 57.0%
year-on-year).
ii. Cryptoassets exchangeThis sub-segment is engaged primarily in spot trading and leveraged transactions of cryptoassets
mainly through GMO Coin, a consolidated subsidiary of GMO Financial Holdings. The customer base
expanded with the number of customer accounts as of June 30, 2023 increasing to 574 thousand (up9.1% year-on-year). On the other hand, because of a decline in the trading value due to the sluggish
trends in the cryptoasset market, net sales decreased to ¥789 million (down 11.4% year-on-year).
Overall, the Cryptoassets segment reported net sales of ¥958 million (down 26.0% year-on-year)
and operating loss of ¥484 million (operating loss of ¥397 million for the three months ended June 30,2022).
5) Incubation
This segment is engaged in investing in domestic and overseas internet related companies aimed at
capital gains, supporting business expansion, and supporting corporate value improvement mainly
through GMO Venture Partners. Net sales were ¥456 million (down 96.4% year-on-year), andoperating profit was ¥3 million (down 100.0% year-on-year) due to sales of shareholdings.
(Reference1)

Changes in Operating Results and Financial Condition by Quarter

Net sales
Operating profit
Ordinary profit
Profit attributableto owners of the parent(- represents loss)
Total assets
Shareholders’ equity(Unit: ¥millions)
Q2 2023
64,4509,627
10,603Q2 2022
69,49019,812
21,382Q3 202257,5787,069
8,955

Q4 202262,5615,736
3,586

Q1 2023
65,593
10,99011,933

9,074-1,651

-644

3,931

2,412

1,433,731
78,904

1,545,403
74,209

1,542,740
72,176

1,624,445
75,4391,669,248
79,369―6―

(Reference2)
Table: Quarterly Results by Segment
I Net Sales by Segment
Internet Infrastructure
Provider (ISP)
DomainHosting & cloud
Ecommerce solutions
Security
Payment
Other
Total
Online Advertising & Media
Online advertisingInternet media
Internet research & other
Total
Internet Finance
Total
Cryptoassets
Cryptoassets exchange
Cryptoassets mining
Cryptoassets payment
Total
Incubation
Total
Sub total
Other
Adjustment
Net Sales(Unit: ¥millions)Q1 2023
Q2 2023

Q2 2022

Q3 2022

Q4 2022

9,606
2,244
4,569
3,622
3,090
12,657874
36,666

10,009
2,379
4,693
3,846
3,285
13,108749
38,074

9,944
2,130
4,703
4,173
3,838
14,5791,174
40,544

10,011
2,291
4,810
3,995
4,658
15,386
1,007
42,161

10,191
2,388
5,048
4,046
3,573
16,302996
42,548

4,937
2,401
1,174
8,512

5,076
2,598
1,211
8,886

4,755
2,613
1,401
8,770

4,628
2,856
1,418
8,904

4,512
2,792
1,130
8,435

10,363

10,002

11,38912,792

12,265

890
394
10
1,294

527
241
6
775

1,654
270
154
2,079

921
278
2
1,202

789
169
0
958

12,856
69,693865-1,06869,490057,738903-1,06357,578062,783958-1,18162,561

195
65,255
1,447-1,11065,593456
64,664973-1,18764,450Q2 2022
5,586
547
2,975
-397
10,162
18,874-3
941
19,812Q3 2022
4,753
737
2,683
-821
-96
7,256
-85
-101
7,069

Q4 2022
5,363
-24
-17
717
-223
5,816
-60
-20
5,736

Q1 2023
6,994
668
3,762
-338
108
11,194-122-80
10,990Q2 2023
6,007
358
3,834
-484
3
9,719
-92
0
9,627

II Operating Profit by Segment
Internet Infrastructure
Online Advertising & MediaInternet Finance
Cryptoassets
Incubation
Sub total
Other
Adjustment
Operating Profit―7―

(Reference3)
Description of businesses in each segment
Business Segment
DomainHosting & cloud

Ecommerce
solutionsInternet
Infrastructure

Security

Payment

OnlineAdvertising &Media

Main Operations
・Domain registry services including “.shop” and “.tokyo”
・Domain registrations services: Onamae.com, MuuMuu Domain, and
VALUE-DOMAIN
・Provision, operation, management, and maintenance of shared, VPS,
dedicated and cloud-based web hosting services including Onamae.com
Rental Server, ConoHa by GMO, Z. com Cloud, GMO Cloud VPS, GMO
Cloud ALTUS, GMO Cloud Private, Lolipop!, heteml, and 30days Album
・Operation of EC platform to set up net shop offered by Color me shopand MakeShop.
・Operation of C2C handmade marketplace “minne”
・Operation of production/sales service of original merchandise including
SUZURI and canvath・Operation of ecommerce/O2O support services, etc.
・Operation of OMAKASE, reservation management service forrestaurants
・Web design, operational support and system consulting, etc.
・DomainSSL, OrganizationSSL, and other SSL certificates, code signing
certificates, PDF document signing, client certificates and other digital
certificate services
・e-contract service “e-contract service GMO Sign”
・Cybersecurity service including vulnerability assessment of web andsmartphone applications, penetration test and security incident response
・Brand security service including brand protection measures, detectionand elimination of fake products, provision of trademark management
system, and acquisition and management of domain name
・PG Multi-Payment Service for mail order and ecommerce business,
comprehensive payment processing services for public sector, andfinance-related service including early payment service, transaction
lending, and GMO payment after delivery

Provider・GMO TokuToku BB and other Internet provider services.

Onlineadvertising・Comprehensive online advertising service including listing, mobile andad networks, reward advertising, affiliate advertising.
・Advertising planning and production

・Operation of online media such as community site for teenage girls“prican,” programming educational portal “coeteko,” point site “Point
Town,” game platform “gesoten,” joint purchase coupon site “Kumapon”
Internet media
and aesthetic medical ticket purchase site “KIREIPASS,” life informationsite for career women “michill” and ad distribution to own media
・SEM Media: Sales of SEO.
Internet research ・Provision of Internet research systems, management and operation of& other
research panel including GMO Research Cloud PanelInternet FinanceInternet finance・Operation of online securities trading, FX trading, CFD trading, etc.
・Spot trading and leveraged transactions of cryptoassets, etc.

Cryptoassets

Cryptoassets
exchange
Cryptoassets
miningCryptoassets
payment
Venture capital・Investment in private Internet startups

Incubation

・Operation of mining centers
・Issuance and redemption of stablecoin “GYEN” and “ZUSD”―8―

(2) Financial condition
Assets, Liabilities and Net Assets(Assets)
As of June 30, 2023, total assets increased ¥126,507 million from December 31, 2022 to ¥1,669,248
million. Major factors included an increase of ¥31,468 million in various assets due to fluctuations incustomer assets in the Securities segment (deposits, margin transaction assets, loan secured by
securities, short-term guarantee deposits and variation margin paid), an increase of ¥52,699 million
in cryptoassets under custody and an increase of ¥13,141 million in cash and deposits.
(Liabilities)
As of June 30, 2023, liabilities increased ¥111,874 million from December 31, 2022 to ¥1,499,925
million. Major factors included an increase of ¥52,259 million in deposits received for cryptoassets,
an increase of ¥41,800 in bonds and an increase of ¥28,136 million in various liabilities due tofluctuations in customer assets in the Securities segment (deposits received, margin transaction
liability, guarantees received, variation margin received, and loans payable secured by securities).
(Net Assets)
As of June 30, 2023, net assets increased ¥14,633 million from December 31, 2022 to ¥169,322
million. Major factors included an increase of ¥3,532 million in earned surplus (consisting of anincrease from recording profit attributable to owners of the parent totaling ¥6,344 million, a decrease
from dividend payments of ¥1,302 million and a decrease from retirement of treasury stock of ¥1,510
million), an increase of ¥7,433 million in non-controlling interests and an increase of ¥2,309 million inforeign currency translation adjustments.

(3) Consolidated results forecast and other forward-looking information
For the fiscal year ending December 31, 2023, the Group plans to increase both net sales andoperating profit, mainly in Internet Infrastructure segment. Meanwhile, there are certain factors thatcannot be reasonably predicted at this point, including: (1) fluctuation of cryptoasset prices andglobal hash rate trends in Cryptoassets business, (2) potential impact of economic situations andmarket conditions in Internet Finance segment, and (3) when and how much capital gains will be
realized in Incubation segment. Accordingly, we do not disclose the consolidated results forecast for
the fiscal year ending December 31, 2023.

―9―2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheet
Previous Fiscal Year(As of Dec 31, 2022)(Unit: ¥millions)
2nd Quarter
Current Fiscal Year(As of June 30, 2023)

AssetsCurrent Assets
Cash and deposits

341,970

355,111

Trade notes, accounts receivable and contract
assets33,96333,329Operational investment securities

11,724

12,934

Cryptoassets under custody

61,751

114,451

Securities segment deposits

486,478

511,116

Securities segment margin transaction assets

143,065

141,288

Securities segment loan secured by securities

12,695

10,786

Securities segment short term guarantee deposits

73,97573,006

Securities segment variation margin paid

94,219105,706

Other

156,759

161,753

Provision for doubtful debts
Total Current Assets-8,590-6,246

1,408,015

1,513,238

45,82558,241

Fixed Assets
Tangible fixed assets
Intangible fixed assets
Goodwill

17,70816,727

Software11,472

12,141

Other

16,756

17,053

Total intangible fixed assets

45,93645,922

Investment securities

29,78033,515

Deferred tax asset

4,053

4,356

Other

9,791

21,808Provision for doubtful debts-662-7,833

Investments and other assets

Total investments and other assets
Total Fixed Assets
Total Assets―10―

42,963

51,846

134,725

156,010

1,542,740

1,669,248

Previous Fiscal Year(As of Dec 31, 2022)(Unit: ¥millions)
2nd Quarter
Current Fiscal Year(As of June 30, 2023)

Liabilities
Current Liabilities
Trade notes and accounts payable

14,43012,563

Short term debt

222,018

179,673－

10,200Current portion of bonds
Amount payable

47,07544,206

Deposits received for cryptoassets

61,734113,994

Securities segment deposits received

53,57362,436

Securities segment margin transaction liability

35,92930,867

Securities segment guarantees received

554,407574,623

Securities segment variation margin received

11,25915,219Securities segment loans payable secured by securities

26,233

26,391

Accrued corporate tax, etc.

7,324

11,092

Allowance for bonuses

2,293

1,710

Allowance for bonuses to directors
Allowance for contract loss

657

347

6,341

6,341

Advance payment received

3,195

3,694

Contract liabilities

18,314

20,573

Deposits received

122,657

110,082

Other

20,202

22,953

1,207,649

1,246,972

Corporate bonds

51,00082,600Convertible bonds with equity warrants

20,77020,660Long term debt

97,373138,014

Deferred tax liability

1,319

1,353

Other

8,988

9,378

179,451

252,006

949

946

Total Current Liabilities
Fixed Liabilities

Total Fixed Liabilities
Statutory Reserve
Financial instruments transaction liability reserve
Total Statutory Reserve
Total Liabilities

949

946

1,388,051

1,499,925

Net Assets
Shareholders’ Equity
Capital stock

5,000

5,000

Capital surplus

33,28033,795

Earned surplus

37,73041,262

Treasury stock-10,166-9,672

Total Shareholders’ Equity

65,84370,385

3,397

3,950

Accumulated Other Comprehensive Income
Other securities valuation differences
Deferred hedging profit (loss)

48

-162

Foreign currency translation adjustments

2,886

5,195

Total Accumulated Other Comprehensive Income

6,332

8,983

Equity Warrants
Non-controlling Interests
Total Net Assets
Liabilities, Net Assets Total

―11―

43

50

82,46989,902

154,688

169,322

1,542,740

1,669,248

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income
2nd Quarter (cumulative)(Unit: ¥millions)
2nd Quarter
Previous Fiscal Year
(6 months to June 2022)
125,556

2nd Quarter
Current Fiscal Year
(6 months to June 2023)
130,043

Cost of Sales

45,46854,300Gross Profit on Sales

80,08775,743

Sales, General & Administrative Expenses

49,14655,124

Operating Profit

30,941

20,618Net Sales

Non Operating Revenue
Dividends received

589

402

2,148

780

Gain on sale of investment securities

18

750

Gain on investments in partnership

152

450

Foreign exchange gain

Other

420

1,286

3,330

3,670

Interest paid

396

826

Bond issuance cost

30

305

Equity method investment losses

229

139

Other

132

480

Total Non Operating Expenses

788

1,751

33,482

22,536

Gain on sale of investment securities
Reversal of financial instruments transaction
liability reserve
Other

19,830

57

－

3

13

0

Total Extraordinary Profit

19,84461

Total Non Operating Revenue
Non Operating Expenses

Ordinary Profit
Extraordinary Profit

Extraordinary Loss
Provision of financial instruments transaction
liability reserve
Compensation for customer’s loss

13

－

241

－

Loss on valuation of investment securities－

892

Impairment loss

340

320

Other

22

21

Total Extraordinary Loss

617

1,234

Net Profit before Adjustment for Tax, etc.

52,70921,363

Corporate, Municipal and Enterprise Taxes

9,365

9,097

Corporate Tax etc. Adjustment

4,050

-483

Total Corporate Taxes, etc.

13,415

8,614

Net Profit

39,293

12,749Profit Attributable to Non-controlling Interests

23,788

6,404

Profit Attributable to Owners of the Parent

15,505

6,344

―12―

Quarterly consolidated statement of comprehensive income
2nd Quarter (cumulative)(Unit: ¥millions)
2nd Quarter
Previous Fiscal Year
(6 months to June 2022)
39,293

Net Profit

2nd Quarter
Current Fiscal Year
(6 months to June 2023)
12,749Other Comprehensive Income
Other securities valuation differences

-929

981

-9

-307

Foreign currency translation adjustments

6,181

4,975

Share of other comprehensive income (loss) of associates
accounted for using equity method

-169

98

Deferred hedging loss

Total other comprehensive income

5,072

5,748

Comprehensive Income

44,366

18,497(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

18,73925,626

8,995
9,502

―13―

(3) Notes regarding the quarterly consolidated financial statements(Notes regarding the going concern assumption)
Not applicable.
(Notes regarding changes impacting shareholders’ equity)
Pursuant to the resolution at the Board of Directors meeting held on February 13, 2023, theCompany retired 591,064 shares of treasury stock, which resulted in decreases in earned surplus
and treasury stock of ¥1,510 million, respectively. We also acquired 380,000 shares of treasury stockfor ¥1,015 million pursuant to the resolution at the Board of Directors meeting held on that day.
As a result, earned surplus and treasury stock as of June 30, 2023 were ¥41,262 million and¥9,672 million, respectively.
(Changes in accounting policies)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
On January 1, 2023, the Company applied “Implementation Guidance on Accounting Standard for
Fair Value Measurement” (Accounting Standards Board of Japan (“ASBJ”) Guidance No.31, June 17,
2021, “Implementation Guidance on Accounting Standard for Fair Value Measurement”), and the new
accounting policies stipulated in the Implementation Guidance on Accounting Standard for Fair Value
Measurement are applied prospectively pursuant to the transitional treatment stipulated by
Paragraph 27-2 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement. The application had no impact on the quarterly consolidated financial statements.
(Additional information)(Application of Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System)Effective January 1, 2023, the Company and its certain domestic consolidated subsidiaries
transitioned from the consolidated taxation system to the group tax sharing system and accordingly
follow “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System”(Practical Issues Task Force (PITF) No.42, August 12, 2021, “PITF No.42”) for accounting treatment
and disclosure of corporate tax, local corporate tax and tax effect accounting. Based on Paragraph
32 (1) of PITF No.42, the Company believes that there is no impact of the changes in accounting
policies as a result of the application of PITF No.42.

―14―

(Segment information)
I 2nd Quarter of Previous Fiscal Year (01.01.2022-06.30.2022)
1. Information relating to net sales and profit or loss by reportable segment(Unit: ¥millions)
Reportable Segment

Adjustment Consolidated(*ii)
P/L (*iii)

Total

Other
(*i)

13,392

124,012

1,543－

125,556

－

－

1,729

156

-1,886－21,1603,357

13,392

125,741

1,700-1,886

125,556

6,626

-238

10,41430,147-93887

30,941

Internet
Infrastructure

Online Ad& MediaInternet
Finance

Sales to unaffiliatedcustomers

70,856

15,257

21,1483,357Internal transactions
or transfer

569

1,147

12

Total

71,425

16,405

Segment Profit/Loss

11,8691,474

Cryptoassets Incubation

Net Sales*Notesi. “Other” represents real estate leasing and other businesses not included in reportable segments.
ii. Segment profit/loss adjustment (¥887 million) is an elimination of inter-segment transactions.
iii. Segment profit/loss is based on operating profit in the quarterly consolidated statement of income.
2. Information on impairment losses on fixed assets or goodwill, etc. by reporting segment(Significant impairment loss on fixed assets)
For the six months ended June 30, 2022, the Online Ad & Media segment, the Cryptoassets
segment and Other recognized impairment loss on fixed assets of ¥34 million, ¥12 million and ¥293
million, respectively.
(Significant change in goodwill)In the Internet Infrastructure segment, the amount of goodwill recognized as a result of thebusiness combination with GMO Cybersecurity by Ierae, Inc. at the end of the three months ended
March 31, 2022 was a provisional amount as the allocation of acquisition cost was not completed.
During the three months ended June 30, 2022, the allocation of acquisition cost was completed,and the tentative accounting treatment was determined, which resulted in the change in the amountof goodwill from ¥7,724 million (provisional amount) to ¥7,606 million.

―15―

II 2nd Quarter of Current Fiscal Year (01.01.2023-06.30.2023)
1. Information relating to net sales and profit or loss by reportable segment(Unit: ¥millions)
Reportable Segment

Adjustment Consolidated(*ii)
P/L (*iii)

Total

Other
(*i)

651

127,851

2,192－

130,043

－

－

2,068

229

-2,297－25,0582,161

651

129,919

2,421-2,297130,043

7,597

-823

112

20,914-215-79

20,618Internet
Infrastructure

Online Ad& MediaInternet
Finance

Sales to unaffiliatedcustomers

84,007

15,98625,0442,161Internal transactions
or transfer

702

1,352

13

Total

84,70917,339Segment Profit/Loss

13,001

1,026

Cryptoassets Incubation

Net Sales*Notesi. “Other” represents real estate leasing and other businesses not included in reportable segments.
ii. Segment profit/loss adjustment (¥-79 million) is an elimination of inter-segment transactions.
iii. Segment profit/loss is based on operating profit in the quarterly consolidated statement of income.
2. Information on impairment losses on fixed assets or goodwill, etc. by reporting segment(Significant impairment loss on fixed assets)
For the six months ended June 30, 2023, the Internet Finance segment recognized impairment
loss on fixed assets of ¥320 million.

―16―

(Significant subsequent event)(Acquisition of shares of GMO Aozora Net Bank based on the Shareholders Agreement)
The Company and its consolidated subsidiary GMO Financial Holdings, Inc. (the “Group”) resolved
at the Board of Directors meeting held on June 19, 2023 to acquire class shares of GMO Aozora Net
Bank owned by Aozora Bank, Ltd. based on the “Shareholders Agreement” entered into with Aozora
Bank, Ltd. on June 24, 2016 and the “Agreement Concerning Amendment of Shareholders
Agreement and Succession of Status” between the three companies including GMO Financial
Holdings, Inc. on July 21, 2016 (the “Agreements”), and acquired the shares on July 18, 2023.
1. Reason for acquisition
Pursuant to the terms of the Agreements concerning the acquisition of the class shares, theGroup decided to acquire the class shares as five years have elapsed since GMO Aozora Net
Bank officially commenced its Internet banking business.
2. Overview of the equity-method affiliate whose shares were additionally acquired
(1)

Name

GMO Aozora Net Bank, Ltd.

(2)

Location

1-2-3 Dogenzaka, Shibuya-ku, Tokyo(3)

Name & title of representative

Takehito Kaneko, Chairman and Representative Director
Takeshi Yamane, President and Representative Director(4)

Business description

Internet banking business(5)

Capital¥21,629 million ( as of March 31, 2023)(6)

Date of establishment

February 28, 1994

(7)

Major shareholders andvoting rights ratio

Aozora Bank, Ltd.:GMO Internet Group, Inc.:
GMO Financial Holdings, Inc.:

3. Overview of the counterparty of the share acquisition
(1)

Name

Aozora Bank, Ltd.

(2)

Location

6-1-1 Kojimachi, Chiyoda-ku, Tokyo(3)

Name & title of representative

Kei Tanikawa, CEO(4)

Business description

Banking business(5)

Capital¥100,000 million ( as of March 31, 2023)(6)

Date of establishment

April 1, 1957

(7)

Consolidated net assets¥431,119 million ( as of March 31, 2023)(8)

Consolidated total assets¥7,184,070 million ( as of March 31, 2023)―17―85.12%
7.43%
7.43%

4. Number of shares acquired, acquisition price, and shareholdings before and after the acquisition(1)

Number of shares held
before acquisition(2)

Number of sharesacquired(3)

Acquisition price(4)

Number of shares
held after acquisition

74,260 shares (common stock)(Number of voting rights: 74,260, % of voting rights held: 14.87%)
348,710 shares (Class A shares)
1,894 shares (Class B shares)(Number of voting rights: 0)¥9,753 million (Note)(Note) The acquisition price is net of allowance for contract loss of¥6,341 million recorded on the consolidated balance sheet, and theamount paid to acquire the class shares is ¥16,095 million.
424,864 shares (common stock)(74,260 common shares, 348,710 Class A shares, 1,894 Class B
shares)(Number of voting rights: 74,260, % of voting rights held: 14.87%)

The impact of this share transfer on the consolidated results for the fiscal year ending December
31, 2023 is expected to be insignificant.

―18―