CrowdWorks : Summary of Financial Results for the Fiscal Year Ended September 30, 2021 (Non-Consolidated)

Summary of Financial Results for the Fiscal Year Ended September 30, 2021

[Japan Standards] (Non-Consolidated)

				November 15, 2021
Company name:	CrowdWorks, Inc.		Stock listing:	Tokyo Stock Exchange
Security code:	3900	URL	https://crowdworks.co.jp
Representative:	Koichiro Yoshida, President and CEO
Inquiries:	Takatsugu Tsukii, Director			TEL: [phone]
Scheduled date of ordinary general meeting of shareholders:	December 22, 2021	Scheduled payment date of dividend:	-
Scheduled filing date of securities report:	December 23, 2021
Supplementary materials for the financial results:	Yes
Investor conference for the financial results:	Yes (for institutional investors and security analysts)

(Million yen, rounded down)

1. Financial Results for the Fiscal Year Ended September 30, 2021 (From October 1, 2020 to September 30, 2021)

(1) Financial Performance								(% figures show year-on-year increase or decrease)
	Net sales		Operating profit			Ordinary profit		Profit
	Million yen		%	Million yen			%	Million yen	%	Million yen		%
FY ended Sept. 30, 2021	7,769		42.3	575			-		645	-		622		-
FY ended Sept. 30, 2020	5,458		16.9	(364)			-		(331)	-		(105)		-
	Profit	Diluted profit		Return on		Ordinary profit to	Operating profit to
	per share		per share		equity			total assets	net sales
		Yen		Yen				%		%			%
FY ended Sept. 30, 2021	40.84		40.08				18.0		11.5			7.4
FY ended Sept. 30, 2020	(6.91)		-				(3.3)		(6.6)			(6.7)

(Reference) Equity in net income of affiliates FY ended Sept. 30, 2021 (20) Million yen FY ended Sept. 30, 2020 - Million yen Note: Diluted profit per share of the previous fiscal year is not stated, as net loss per share is recorded, while there is a balance of

subscription rights to shares.

(2) Financial Position

		Total assets	Net assets	Capital adequacy ratio	Net asset value per share
		Million yen	Million yen		%	Yen
FY ended Sept. 30, 2021		6,201	3,794		60.9	247.53
FY ended Sept. 30, 2020		5,038	3,153		62.6	207.09
(Reference) Shareholders' equity	FY ended Sept. 30, 2021 3,776 Million yen	FY ended Sept. 30, 2020 3,152 Million yen
(3) Cash Flow Position
		Cash flows	Cash flows		Cash flows	Cash and cash equivalents
	from operating activities	from investing activities	from financing activities	at end of period
		Million yen	Million yen		Million yen	Million yen
FY ended Sept. 30, 2021		868	(95)		5	4,219
FY ended Sept. 30, 2020		-	-		-	-

2. Dividends

		Annual dividends per share		Dividends	Dividend	Dividends to
			net assets
						(total)	payout ratio
	End of Q1	End of Q2	End of Q3	End of Q4	Annual	ratio
	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
FY ended Sept. 30, 2020	-	0.00	-	0.00	0.00	-	-	-
FY ended Sept. 30, 2021	-	0.00	-	0.00	0.00	-	-	-
FY ending Sept. 30, 2022	-	0.00	-	0.00	0.00		-
(Forecast)

3. Financial Forecasts for the Fiscal Year Ending September 30, 2022 (From October 1, 2021 to September 30, 2022)

(% figures represent year-on-year increase or decrease)

Net sales

Operating profit

Ordinary profit

Profit

Profit

per share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

First half year (Total)

-

-

-

-

-

Full year

-

-

-

-

-

Note: As a result of acquisition of stocks of CODEAL Corporation in October 2021, the Company will start to report consolidated financial results from the fiscal period ending September 2022. Please refer to 1. Summary of Financial Performance (4) Future Prospects and the attached sheet "Announcement of Consolidated Financial Forecasts Associated with Transition to Consolidated Financial Reporting" for consolidated financial forecasts.

• Notes

1. Changes in accounting principles, changes in accounting estimates and restatements

(i)	Changes in accounting policies associated with revision of accounting standards	:	None
(ii)	Changes in accounting policies other than the above (i)	:	None
(iii)	Changes in accounting estimates	:	None
(iv)	Restatements	:	None

1. Number of outstanding shares (common stock)
2. 1. Number of shares outstanding at term-end (including treasury shares)
   2. Number of treasury shares at term-end
   3. Average number of shares outstanding during the term

As of Sept. 30, 2021	15,225,160	shares	As of Sept. 30, 2020	15,225,160 shares
As of Sept. 30, 2021	86	shares	As of Sept. 30, 2020	86 shares
FY ended Sept. 30,	15,218,184	shares	FY ended Sept. 30,	15,218,184 shares
2021	2020

• The summary of financial results is not subject to audit by certified public accountants or audit corporations.
• Explanation regarding the appropriate use of the earnings forecast, and other noteworthy items
  The forward-looking statements such as result forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable, and the Company makes no representations as to their achievability. Actual results may differ materially from the forecast, depending on a range of factors.

CrowdWorks, Inc. (3900) Summary of Financial Results for the Fiscal Year Ended September 30, 2021

• Table of Contents of the Appendix

1. Summary of Financial Performance...............................................................................................................................	2
(1)	Summary of Financial Performance for the Fiscal Year Ended September 30, 2021 ...............................................	2
(2)	Summary of Financial Position for the Fiscal Year Ended September 30, 2021 ......................................................	3
(3)	Summary of Cash Flows for the Fiscal Year Ended September 30, 2021 ................................................................	3
(4)	Future Prospects.......................................................................................................................................................	3
2. Basic Policy in Selection of Accounting Standards........................................................................................................	4
3. Financial Statements and Important Notes.....................................................................................................................	5
(1)	Balance Sheet...........................................................................................................................................................	5
(2)	Statement of Income ................................................................................................................................................	7
(3)	Statement of Changes in Equity ...............................................................................................................................	8
(4)	Statement of Cash Flows .......................................................................................................................................	10
(5)	Notes on Financial Statements ................................................................................................................................	11
	(Notes Regarding Going Concern Assumptions) ....................................................................................................	11
	(Changes in Reporting Method)..............................................................................................................................	11
	(Additional information).........................................................................................................................................	11
	(Segment Information, etc.) ....................................................................................................................................	11
	(Equity in Net Income of Affiliates) ....................................................................................................................	12
	(Per Share Information) .........................................................................................................................................	13
	(Material Subsequent Events) ................................................................................................................................	14

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CrowdWorks, Inc. (3900) Summary of Financial Results for the Fiscal Year Ended September 30, 2021

1. Summary of Financial Performance

(1) Summary of Financial Performance for the Fiscal Year Ended September 30, 2021

The forward-looking statements contained in this document are based on the judgments of CrowdWorks, Inc. (hereinafter, the "Company") as of the end of the current fiscal year under review.

1. Operating Results

With a vision of a "Our goal is to reward your talent" since its establishment, the Company has been promoting online human resources matching with crowdsourcing at its core, whereby individuals can earn rewards using the Internet.

In the fiscal year under review, a state of emergency has been declared again owing to the spread of the novel coronavirus, and the severe economic environment continued. In this situation, in line with the biggest theme "Work-style reforms" which is the primary theme of "Dynamic Engagement of All Citizens" advocated by the government, opportunities for women, senior citizens, and people with disabilities, who are potential workers, to play an active role have been expanding, and company employees have been expanding their options to work outside of working for companies such as pursuing side jobs and side business, and individual values for working styles are diversifying. With work-style reform laws gradually taking effect since April 2019, including legislation on equal wages for equal work in April 2020 and an extension of employment of older employees until age 70 effective by the revision of the Act on Stabilization of Employment of Elderly Persons in April 2021, the trend of reviewing the conventional employment system has spread widely.

In response to this trend, there are an increasing number of enterprises who want to acquire human resources in forms that are free from the traditional style. Major companies representing Japan are shifting toward allowing their employees to have a side job or side business, aiming to increase the incomes of their own employees, to improve motivation, and to secure and retain excellent human resources. In addition, there is a growing movement to respond to new ways of working and new lifestyles (New Normal), such as the acceleration of the digital shift in society as a whole. Corporate needs related to human resource procurement are changing, as exemplified by the digitization and e-commerce of corporate activities, the accompanying expansion of the acceptance of external specialists (freelancers, double jobbers, etc.), and the use of crowd workers who work via the Internet. These developments have provided a boost to the Company's market, with 4.7 million registered users (594 thousand more users compared to the previous fiscal year) and 760 thousand registered clients (90 thousand more clients compared to the previous fiscal year) as of the end of September 2021.

In such an environment, the Company established a policy to concentrate our investment in the matching business, which is our core business, and has been working to increase profitability by increasing the growth rate and improving productivity. As a result, the Company achieved an operating surplus in the fiscal year under review owing to progress in productivity improvement initiatives in addition to all indicators of the total contract value, net sales and gross profit of the matching business having achieved the performance forecast.

Demand from enterprises for engineers, designers, and other professionals remains high, and the use of external specialists through the Internet and crowd workers is expected to increase also in the future. In addition, while the COVID-19 pandemic is ongoing, many companies have introduced telework and digitalized their business operations and marketing activities, leading to an increase in demand for online office assistants as well as steady growth in the matching business for high-priced,high-continuation, and high-end human resources, with engineers and designers at the core.

In the SaaS business, the number of subscribers who introduce CrowdLog, an SaaS service that efficiently manages the operation of freelancers and in-house human resources, is steadily increasing, and the Company plans to continue upfront investment.

As a result of the foregoing, the Company's business results for this fiscal year were net sales of 7,769,472 thousand yen, operating profit of 575,194 thousand yen, ordinary profit of 645,191 thousand yen, and net profit of 622,421 thousand yen.

Financial results by segment are as follows:

1. Matching Business
   In the matching business for this fiscal year, the total contract value, net sales, and gross profit have achieved the performance forecast owing to continued investment through selection and concentration, and implementation of productivity improvement projects. As for selling, general, and administrative expenses, operating profit exceeded the performance forecast owing to continued investment in online advertising and efforts to improve productivity while strengthening the sales structure by increasing the number of staff.
   As a result, total contract value, which indicates the total amount of transactions, was 15,227,773 thousand yen, net sales were 7,649,817 thousand yen, gross profit was 3,381,722 thousand yen, and segment profit was 773,895 thousand yen.
2. SaaS Business
   In the SaaS business for this fiscal year, the introduction of business management tools for enterprises reached a record high, and the number of customers is steadily expanding. The Group worked to expand sales and raise unit prices by cultivating major corporate clients and collaborating with companies. In addition, the Group made upfront investments in marketing and the development of new functions and service improvement toward further expansion of growth.
   As a result, net sales and gross profit were 119,406 thousand yen, and segment loss was 166,388 thousand yen.

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CrowdWorks, Inc. (3900) Summary of Financial Results for the Fiscal Year Ended September 30, 2021

(2) Summary of Financial Position for the Fiscal Year Ended September 30, 2021

(Assets)

Total assets at the end of this fiscal year stood at 6,201,268 thousand yen, up 1,162,625 thousand yen from the end of the previous fiscal year. The increase in total assets is due to an increase in current assets accompanying the merger of subsidiaries and business expansion. Current assets stood at 5,707,154 thousand yen, and for the main components, cash and deposits stood at 4,219,115 thousand yen, accounts receivable - trade stood at 733,569 thousand yen and accounts receivable - other stood at 717,996 thousand yen. Non-current assets stood at 494,114 thousand yen, and for the main components, property, plant and equipment, stood at 70,906 thousand yen, intangible assets stood at 34,345 thousand yen, and investments and other assets stood at 388,861 thousand yen.

(Liabilities)

Total liabilities at the end of this fiscal year stood at 2,406,704 thousand yen, up 521,337 thousand yen from the end of the previous fiscal year. The increase in liabilities is due to an increase in current liabilities owing to the merger of subsidiaries and business expansion. Current liabilities stood at 2,375,954 thousand yen, and for the main components, accounts payable - other stood at 671,216 thousand yen and deposits received stood at 1,119,373 thousand yen. Non-current liabilities stood at 30,750 thousand yen. (Net assets)

Net assets at the end of this fiscal year stood at 3,794,564 thousand yen, up 641,287 thousand yen from the end of the previous fiscal year. The increase in net assets was due to an increase in retained earnings resulting from the recording of profit of this fiscal year.

(3) Summary of Cash Flows for the Fiscal Year Ended September 30, 2021

Cash and cash equivalents as of the end of this fiscal year amounted to 4,219,115 thousand yen. The status of each cash flow for the fiscal year under review is as follows:

(Cash flows from operating activities)

Revenues from operating activities were 868,792 thousand yen. Major increase factors for the cash flow were record of income before income taxes of 638,773 thousand yen, depreciation of 27,310 thousand yen, a decrease in investment securities for sale of 16,922 thousand yen, an increase in allowance for doubtful accounts of 13,745 thousand yen, an increase in accounts payable - other of 84,626 thousand yen, an increase in deposits received of 91,600 thousand yen, and an increase in advances received of 73,144 thousand yen. The main reasons for the decrease on the other hand were an increase in notes and accounts receivable - trade of -51,260 thousand yen and an increase in accounts receivable - other of -109,733 thousand yen.

(Cash flows from investing activities)

Payments from investing activities were 95,370 thousand yen. The main increase in cash flow was 34,582 thousand yen in proceeds from refund of leasehold deposits. On the other hand, the main reasons for the decrease were purchase of investment securities 31,193 thousand yen, payments for investments in capital 59,491 thousand yen and purchase of shares of subsidiaries and associates 24,994 thousand yen.

(Cash flows from financing activities)

Revenues provided by financing activities were 5,086 thousand yen. Major increase factor for the cash flow was proceeds from issuance of shares of 5,400 thousand yen.

(4) Future Prospects

It can be assumed that the domestic online market for human resources matching will also continue to expand in the medium-tolong-term future owing to manpower shortages at enterprises and the accelerated social trend toward seeking diversified work styles. The Company has changed its mission to "Talent infrastructure" and its vision to "Our goal is to reward your talent" and will continue to provide ways for individuals to earn rewards.

The fiscal year ending September 2022 is the final fiscal year of the "profit generation through productivity improvement" which we have been working on over the three years since the fiscal year ended September 2020. As with the fiscal year under review, we aim to achieve a full-year operating surplus by promoting productivity improvement and business structure reform while continuing to make concentrated investments in matching business.

With regard to the impact of COVID-19, although the situation remains uncertain, the Company maintains its future growth strategy at this time.

As a result of the above, for the fiscal year ending September 2022, the group performances are expected to be 17,268 to18,053 million yen of Gross Merchandise Value (GMV), 8,861 to 9,264 million yen of net sales, 3,998 to 4,179 million yen of gross profit, 700 million yen of operating profit and 800 million yen of Non-GAAP earnings excluding share-based remuneration expenses.

In addition, the Company acquired stocks of CODEAL Corporation, which provides the direct matching platform CODEAL for IT human resources, and made it a subsidiary. As a result, the Company will conduct consolidated financial reporting from the first quarter of the fiscal year ending September 2022 and thereafter. We consider that the acquisition of CODEAL Corporation will enable the acquisition of client and worker assets owned by CODEAL Corporation and the expansion of a new monthly billing service model, which will lead to the securing of profitability and the strengthening of growth potential in the matching business over the medium-tolong-term.

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