CrowdWorks : Summary of Financial Results for the Third Quarter of the Fiscal Year Ending September 30, 2022 (Consolidated)

Summary of Financial Results for the Third Quarter of the Fiscal Year Ending

September 30, 2022 [Japan Standards] (Consolidated)

				Aug. 15, 2022
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 filing date of quarterly report:	Aug. 15, 2022	Scheduled payment date of dividend:	-
Supplementary materials for the quarterly financial results:	Yes
Investor conference for the quarterly financial results:	No

(Million yen, rounded down)

1. Consolidated Financial Results for the Third Quarter (Cumulative) of the Fiscal Year Ending September 30, 2022 (From October 1, 2021 to June 30, 2022)

(1) Consolidated Financial Performance							(% figures show year-on-year increase or decrease)
				Net sales	Operating profit		Ordinary profit		Profit attributable to
						owners of parent
				Million yen	%	Million yen		%	Million yen		%		Million yen		%
Q3 (Cum.) FY ending Sep.	7,778	-		882		-	877			-		600		-
		30, 2022
Q3 (Cum.) FY ended Sep.	-	-		-		-	-			-		-		-
		30, 2021
Note:	Comprehensive income Q3 (Cum.) FY ending September 30, 2022: 602 million yen (-%)
				Q3 (Cum.) FY ended September 30, 2021: - million yen (-%)
				Profit per share	Diluted profit per share
						Yen				Yen
Q3(Cum.) FY ending Sep.		39.37		38.76
		30, 2022
Q3(Cum.) FY ended Sep.		-				-
		30, 2021
(2) Consolidated Financial Position
				Total assets		Net assets		Capital adequacy ratio
						Million yen			Million yen				%
	As of Mar. 31, 2022		7,338		4,425				59.5
	As of Sep. 30, 2021		-				-				-
Reference:	Shareholders' equity As of June 30, 2022: 4,369 million yen
				As of September 30, 2021: - million yen
2. Dividends
							Annual dividends per share
				End of Q1		End of Q2	End of Q3	End of Q4		Annual
				Yen		Yen		Yen		Yen		Yen
FY ending Sep. 30, 2022			-		0.00	-		0.00			0.00
FY ended Sep. 30, 2021			-		0.00	-
FY ending Sep. 30, 2022									0.00			0.00
	(Forecast)
Note:	Revision of most recently published dividend forecast: None

3. Consolidated 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 attributable to	Profit per share
				owners of parent
	Million yen		%	Million yen		%	Million yen		%	Million yen		%	Yen
Full year	10,400		-	890		-	-		-	-		-	-

Note: Revision of most recently published financial forecast: Yes

*	Notes
(1)	Changes in significant subsidiaries during the current consolidated period			:		None
	(Changes in specific subsidiaries affecting the scope of consolidation)
	No. of new companies: - (Company name:	) No. of excluded companies: - (Company name:		)
(2)	Application of accounting procedures specific to preparing quarterly consolidated financial statements	:		Yes
(3)	Changes in accounting principles, changes in accounting estimates and restatements
	(i) Changes in accounting policies associated with revision of accounting standards		:		Yes
	(ii) Changes in accounting policies other than the above (i)				:		None
	(iii)Changes in accounting estimates						:		None
	(iv) Restatements						: None
(4)	Number of outstanding shares (common stock)
	(i) Number of shares outstanding at term-end (including		Jun. 30, 2022	15,271,160 shares	Sep. 30, 2021			15,255,160 shares
	treasury shares)
	(ii) Number of treasury shares at term-end			Jun. 30, 2022	86 shares	Sep. 30, 2021			86 shares
	(iii)Average number of shares outstanding during term
		Jun. 30, 2022	15,261,134 shares	Jun. 30, 2021			15,237,382 shares
	(quarterly total)

• The summary of quarterly financial results is not subject to the quarterly review 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.

• Table of Contents of the Appendix

1. Qualitative Information Regarding the Quarterly Accounts...........................................................................................	2
(1)	Overview of Operating Results................................................................................................................................	2
(2)	Overview of Financial Position................................................................................................................................	3
(3)	Overview of Forecast of Operating Results Including Consolidated Financial Results ...........................................	3
2. Quarterly Consolidated Financial Statements and Main Noted Items ............................................................................	5
(1)	Quarterly Consolidated Balance Sheet.....................................................................................................................	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income ...........................................................	6
(3)	Notes on Quarterly Consolidated Financial Statements ...........................................................................................	8
	(Notes Regarding Going Concern Assumptions) .....................................................................................................	8
	(Notes on Significant Changes in the Amount of Shareholders' Equity) .................................................................	8
	(Application of Accounting Procedures Specific to Preparing Quarterly Consolidated Financial Statements)........	8
	(Changes in accounting policies) .............................................................................................................................	8
	(Segment information, etc.) .....................................................................................................................................	9
	(Material subsequent events) ...................................................................................................................................	9
3. Other ............................................................................................................................................................................	10
	Material Events Related to Going Concern Assumptions, etc................................................................................	10

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1. Qualitative Information Regarding the Quarterly Accounts

(1) Overview of Operating Results

The forward-looking statements contained in this document are based on the judgments of the CrowdWorks Group (CrowdWorks, Inc. and its consolidated subsidiaries, hereinafter referred to as the "Group") as of the filing date of this document.

(1) Operating Results

During this third quarter consolidated cumulative period, the Japanese economy is expected to resume full-scale economic activities and revitalize the economy due to progress in vaccinations against COVID-19 infections and the effects of various policies. However, the outlook for the domestic and overseas economies remains uncertain due to factors such as the mutated strain of COVID-19 and the social unrest in Russia and Ukraine. In the Group, the COVID-19 crisis has led to changes in the values of companies and individuals regarding the way they work. This has led to an expansion of opportunities for women, seniors, and people with disabilities, who are potential labor forces, and an expansion of options for employees to work outside of working at companies, including side jobs or second jobs. 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 reform of employment system has been making progress.

In response to this trend, there have been structural changes in the way employees work, such as an increase in the number of companies that recruit human resources regardless of the type of employment, and the introduction at large companies of a four- day workweek system, which allows employees to work side jobs or second jobs. In addition, as off-line communication has been limited due to the coronavirus outbreak, the digitalization of corporate activities and the shift to e-commerce have brought about changes to the way human resources are procured, such as the utilization of external professionals (freelancers, side jobbers, double jobbers) and crowd workers working via the Internet. These developments have provided a boost to the Company's market, with 5.08 million registered users (0.59 million more users compared with the previous fiscal year) and 812,000 registered clients (80,000 more clients compared with the previous fiscal year) as of the end of June 2022.

In such an environment, under a policy to concentrate our investment in the matching business, which is our core business, the Company has been striving to achieve both growth and profit increase by improving productivity. As a result, in this third quarter consolidated cumulative period, all indicators of gross merchandise volume, sales, and gross profit in the matching business performed well against the revised disclosed forecast, and the company achieved its highest quarterly operating profit ever by continuing its efforts to improve productivity.

In the matching business, there is a high corporate need for specialist personnel such as engineers and designers, and the use of specialist personnel (freelancers) on the premise of remote work is increasing. Demand for online office assistants is also booming due to the digitization of business operations.

In the SaaS business, CrowdLog which is provided as a SaaS service that efficiently manages the operation of freelancers and in- house human resources, is steadily increasing, including the acquisition of major customers, and the Company plans to continue upfront investment.

As a result of the foregoing, the Group's business results for the consolidated third quarter (cumulative) of this fiscal year were net sales of 7,778,413 thousand yen, operating profit of 882,726 thousand yen, ordinary profit of 877,905 thousand yen, and profit attributable to owners of parent of 600,824 thousand yen.

(Note) Since the Company has been preparing quarterly consolidated financial statements since the first quarter of the current fiscal year, comparative information regarding the quarterly consolidated statements of income is not provided.

Financial results by segment are as follows:

1. Matching Business
   In the matching business for the third quarter under review, gross merchandise volume, sales, and gross profit were all in line with the revised forecast through continued investment in web advertising and strengthening of the sales structure by hiring human resources. In addition, the Group recorded a quarterly operating profit through efforts to improve productivity.
   As a result, the GMV, which indicates the total amount of transactions, was 14,138,453 thousand yen, net sales were 7,619,492 thousand yen, gross profit was 3,354,677 thousand yen, and segment profit was 1,031,983 thousand yen.
2. SaaS Business
   During the third quarter under review, the Company continued to focus on developing new clients through continued efforts to cultivate large corporate clients and strengthen marketing in the SaaS business, as well as on improving the unit price per contract through the addition of new functions.
   As a result, net sales and gross profit were 156,053 thousand yen, and segment loss was 142,616 thousand yen.

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(2) Overview of Financial Position

(Assets)

Total assets at the end of the third quarter of this consolidated fiscal year were 7,338,779 thousand yen. Current assets stood at 6,703,227 thousand yen, and for the main components, cash and deposits stood at 4,974,397 thousand yen, and accounts receivable - trade stood at 841,526 thousand yen, while accounts receivable - other stood at 823,857 thousand yen. Non-current assets stood at 635,552 thousand yen, and for the main components, property, plant and equipment stood at 56,016 thousand yen, intangible assets stood at 116,142 thousand yen, and investments and other assets stood at 463,393 thousand yen.

(Liabilities)

Total liabilities at the end of the third quarter of this consolidated fiscal year were 2,913,495 thousand yen. Current liabilities stood at 2,861,746 thousand yen, and for the main components, accounts payable - other stood at 843,482 thousand yen and deposits received stood at 1,211,647 thousand yen. Non-current liabilities stood at 51,749 thousand yen.

(Net assets)

Net assets at the end of the third quarter of this consolidated fiscal year stood at 4,425,284 thousand yen. The increase in net assets was due to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.

(Note) Since consolidated financial statements were not prepared for the 10th consolidated fiscal year, comparative information for quarterly consolidated financial statements is not presented.

(3) Overview of Forecast of Operating Results Including Consolidated Financial Results

It can be assumed that the domestic online market for human resources matching will also continue to expand in the medium- to long-term future owing to the structural shortages of human resources and the accelerated social trend toward seeking diversified work styles.

The fiscal year ending September 2022 is the final fiscal year of the "Three-year productivity improvement plan" for which we have been working on since the fiscal year ended September 2020. As with the fiscal years so far, we aim to achieve growth and profit increase by promoting productivity improvement and business structure reform while continuing to make concentrated investments in the matching business.

The current economic climate continues to be uncertain due to the spread of a mutated strain of COVID-19 and concerns about the global situation. Against the backdrop of the COVID-19 pandemic that has lasted since 2020, companies are diversifying their means of securing human resources regardless of the type of employment or work in the face of COVID-19, which has continued since 2020. In the fiscal year ending September 30, 2022, matching demand for specialized human resources (freelancers) in the matching business, such as engineers and designers and administrative assistants, expanded, and we not only increased the number of companies placing orders by strengthening our sales system to customers, but also improved the unit price of orders. In addition, the number of companies placing orders has increased due to the strengthening of the sales system for customers. In addition, through productivity improvement efforts, the Company has been building a system to continuously generate operating profit by increasing gross profit per employee while expanding the number of employees. In the third quarter of the current consolidated cumulative period, both GMV, net sales, and gross profit remained steady, and Non-GAAP operating profit was 922 million yen, 118.4% ahead of the revised earnings forecast for the first quarter of the current fiscal year.

As a result of the above, we have decided to revise our full-year earnings forecast for the fiscal year ending September 30, 2022, again in light of the progress made in exceeding the revised forecast, which was revised upward in the first quarter of the current fiscal year. As a result, the new forecasts are 19,000 million yen for GMV, 10,400 million yen for net sales, 4,700 million yen for gross profit, 890 million yen for operating profit, and 970 million yen for Non-GAAP operating profit after adding back stock compensation expenses. The full-yearNon-GAAP operating profit forecast of 970 million yen has been revised because the Group will continue to make additional investments in the fourth quarter of the current fiscal year in order to achieve sustainable growth over the medium to long term.

Consolidated Financial Forecasts for the Fiscal Year Ending September 30, 2022

Since the Company has shifted to consolidated financial statements again from the fiscal year ending September 30, 2022, year- on-year comparisons are not provided. Please see "[Reference] Comparison with Consolidated Conversion Results for the Fiscal Year Ended September 30, 2021" below for a comparison of consolidated results for the fiscal year ended September 30, 2021.

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

	GMV											Non-GAAP
	(Gross		Net sales		Gross profit		Operating profit
					operating profit
	merchandise value)
	Million		%	Million		%	Million		%	Million		%	Million		%
	yen		yen		yen		yen		yen
FY2022
Full year Forecast	19,000		-	10,400		-	4,700		-	890		-	970		-
(Consolidated)
[Appendix]	15,347		-	7,769		-	3,484		-	575		-	593		-
FY2021

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