Chatwork : Summary of Financial Results for the Six Months Ended June 30,2022

Summary of Financial Results for the Six Months Ended June 30, 2022

(Japanese GAAP) (Consolidated)

		August 12, 2022
Name of listed company:	Chatwork Co., Ltd.	Listing exchange: Tokyo Stock Exchange
Securities code:	4448	URL: https://go.chatwork.com/ja/
Representative:	Masaki Yamamoto, Representative director, CEO
Contact for inquiries:	Naoki Inoue, Director, CFO	Tel: [phone]

Scheduled date to file quarterly securities report : August 12,2022

Scheduled date to commence dividend payments: －

Preparation of supplementary materials on quarterly financial results: Yes

Holding of quarterly financial results meeting: Yes (for institutional investors and analysts)

(Amounts are rounded down to the nearest million yen)

1. Consolidated financial results for the six months ended June 30, 2022

1. Consolidated business results (from January 1, 2022 to June 30, 2022)

(% indicate year-on-year changes)

Revenue

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Six months ended June

2,150

－

(247)

－

(248)

－

(229)

－

30,2022

Six months ended June

－

－

－

－

－

－

－

－

30,2021

(Note)

Comprehensive income (millions of yen)

Six months ended June 30, 2022: (248) (－%) Six months ended June 30, 2021: (－) (－%)

Basic earnings per

Diluted earnings

share

per share

Six months ended June

Yen

Yen

(5.79)

－

30,2022

Six months ended June

－

－

30,2021

(Note)

1) Diluted earnings per share is not shown in the above table, because basic earnings per share is negative although there

are potensial shares.

1. 1. As consolidated financial statements are being prepared from the nine months ended September 30, 2021, figures for the six months ended June 30, 2021 and percentage change from the previous fiscal year are not shown.
2. Consolidated financial position

		Total assets		Net assets		Equity ratio
		Millions of yen	Millions of yen		%
As of June 30, 2022			5,301	3,290		61.0
As of December 31, 2021		5,168	3,402		64.3
(Reference) Equity	As of June 30,2022	3,232 million yen As of December	3,325 million yen
				31,2021

2. Cash dividends

		Annual cash dividends per share
	End of 1Q	End of 2Q	End of 3Q	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
Year ended December	－	0.00	－	0.00	0.00
31,2021
Year ended December	－	0.00	－	0.00	0.00
31,2022
Fiscal year ending December	－	0.00	－	0.00	0.00
31,2022(forecast)

(Note) Changes from forecast dividend most recently announced: No

3. Consolidated earnings forecast for fiscal year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

(% indicate year-on-year changes)

Revenue

Operating profit

Ordinary profit

Profit attributable to

Earnings per

owners of parent

share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

4,451

32.0

(1,086)

－

(1,082)

－

(1,047)

－

(26.49)

～4,552

～35.0

～(944)

～(940)

～(905)

～(22.89)

(Note) Changes from earnings forecast most recently announced : Yes

*Notes

(1) Changes in significant subsidiaries during the period	: No
(2) Application of special accounting methods for preparing quarterly	: No
	consolidated financial statements
(3) Changes in accounting policies, changes in accounting estimates, and restatement
1)	Changes in accounting policies due to amendment of accounting standards,	: Yes
	etc.
2)	Changes in accounting policies other than 1)	: No
3)	Changes in accounting estimates	: No
4)	Restatement	: No

For details, please refer to "Quarterly Consolidated Financial Statements and Significant Notes Thereto (4) Notes on Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 8 of the attached materials.

(4) Number of shares issued and outstanding (common shares)

1. Number of shares issued and outstanding at the end of the period (including treasury shares)
2. Number of treasury shares at end of the period
3. Average number of shares during the period (for the three months ended March 31, 2022)

As of June 30,2022	39,735,115	shares	As of December 31,	39,425,840 shares
2021
As of June 30,2022	2,153	shares	As of December 31,	877 shares
2021
Six months ended	39,537,258	shares	Six months ended	37,015,316 shares
June 30,2022	June 30, 2021

• Summary of quarterly financial results is not subject to quarterly reviews by certified public accountants or audit corporations.
• Explanation regarding appropriate use of earnings forecasts, and other notes

The earnings outlook and other forward-looking statements contained in this document are based on information currently available to and certain assumptions that are thought to be reasonable by the Company. Accordingly, such statements should not be construed as a guarantee of achieving the results by the Company. Actual results and the like may differ materially due to various factors. For the assumptions used for the forecast of financial results and notes on the use of the forecast of financial results, please refer to the attachment on page 3, entitled "1. Qualitative Information on Quarterly Financial Results

(3) Explanation on Future Forecast Information Including Consolidated Earnings Forecast".

• Table of Contents of the Attachment

○ Table of Contents of the Attachment	1
1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation on Business Results	2
(2)	Explanation on Financial Position	2
(3)	Explanation on Future Forecast Information Including Consolidated Earnings Forecast	3
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statement of Income (cumulative)	5
	and Quarterly Consolidated Statement of Comprehensive Income (cumulative)
(3)	Quarterly Statement of Cash Flows	7
(4)	Notes on Quarterly Consolidated Financial Statements	8
	(Notes on Going Concern Assumption)	8
	(Notes on Substantial Changes in the Amount of Shareholders' Equity)	8
	(Changes in Accounting Policies)	8
	(Segment Information, Etc.)	9
	(Significant Subsequent Events)	9

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1. Qualitative Information on Quarterly Financial Results

1. Explanation of Business Results

Business results

In the six months ended June 30, 2022, the Company continued its proactive endeavors to reinforce sales activities for acquiring new customers, strengthen advertising and marketing activities, and enhance functions of existing services in an effort to achieve continuous business growth.

As a result, the Company achieved net revenue of 2,150,486 thousand yen, operating loss of 247,922 thousand yen, ordinary loss of 248,036 thousand yen and loss attributable to owners of parent of 229,057 thousand yen for the six months ended June 30, 2022. In addition, As an upfront investment, the steady progress in recruitment, and further acceleration of advertising and marketing activities have resulted in a negative impact on each level of profit below operating income.

The following describes the business results by each segment.

(Chatwork Segment)

In the Chatwork segment, the Company continued to demonstrate the advantages of Chatwork, its mainstay service, and endeavored to add new functions and cultivate customers. These efforts led to net revenue of 2,019,804 thousand yen and segment loss of 290,803 thousand yen.

Furthermore, the Chatwork segment is the Company's mainstay business and all indirect costs, including the headquarters functions, are expensed to maintain and expand this segment. Accordingly, the entire amount of the indirect costs is recorded as expenses in this segment.

(Security Segment)

With regard to the security segment, the Company makes it a policy to not expand the business proactively. As a result, net revenue was 130,681 thousand yen and segment profit stood at 42,881 thousand yen. Furthermore, since the entire amount of indirect costs is recorded for the Chatwork segment as stated above, the recorded segment profit of the security segment is the amount obtained by deducting only the direct costs required for conducting the segment, including advertising expenses, promotion expenses and outsourcing expenses, from the net revenue of the segment.

(2) Explanation on Financial Position

(Assets)

Total assets as of June 30, 2022 increased by 133,928 thousand yen compared with the end of the previous fiscal year to 5,301,963 thousand yen. This was mainly due to an increase in intangible assets of 142,927 thousand yen.

(Liabilities)

Total liabilities as of June 30, 2022 increased by 246,073 thousand yen compared with the end of the previous fiscal year to 2,011,145 thousand yen. This was mainly due to an increase in short-term borrowings of 300,000 thousand yen, an increase in contract liabilities of 122,938 thousand yen, and a decrease in accounts payable - other of 150,967 thousand yen.

(Net Assets)

Net assets as of June 30, 2022 decreased by 112,144 thousand yen compared with the end of the previous fiscal year to 3,290,817 thousand yen. This was mainly due to an increase in share capital of 68,218 thousand yen, an increase in capital surplus of 68,218 thousand yen, and a decrease in retained earnings of 229,057 thousand yen. As a result, the equity ratio was 61.0% (64.3% at the end of the previous fiscal year).

(Cash Flows)

Cash and cash equivalents as of June 30, 2022 increased by 25,652 thousand yen compared with the end of the previous fiscal

year to 3,225,706 thousand yen. The status of each cash flow and their factors for the six months ended June 30, 2022 are as

follows.

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