CyberAgent : FY2022 First Quarter Consolidated Financial Results

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

FY2022 First Quarter Consolidated Financial Results [Japanese GAAP]

														January 26, 2022
Listed company name: CyberAgent, Inc.					Listed stock exchange: TSE 1st section
Code No.:	4751					URL https://www.cyberagent.co.jp/en/
Representative:	President			Susumu Fujita
Inquiries:	Senior Managing Executive Officer	Go Nakayama				Tel [phone]
Quarterly report submission date: January 27, 2022	Dividend payment start date	－
Preparation of Supplementary Materials for Quarterly Financial Results: Yes
Presentation of Quarterly Financial Results: Yes (live stream only)
								(Amounts less than ¥1 million rounded down)
1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending September 2022
(1) Consolidated results of operations (cumulative)								(% = Year-on-Year Change.)
		Net sales	Operating income		Ordinary income	Profit attributable	Comprehensive
			to shareholders of	income
												parent
		¥ million	%	¥ million	%		¥ million		%	¥ million		%	¥ million		%
1Q FY2022		171,090	30.6	19,804	180.6		19,836		186.1		6,091		107.9	8,831		－
1Q FY2021		131,014	13.3	7,058	(8.7)		6,932		(10.2)		2,930		101.3	(1,262)		－
		Basic earnings	Diluted earnings
		per share	per share
1Q FY2022				¥			¥
		12.05			11.39
1Q FY2021			5.80			5.46

(Note) The Company conducted a four-for-one stock split of common stocks as of April 1, 2021. The "Basic earnings per share " and "Diluted earnings per share" are calculated assuming that the said stock split was conducted at the beginning of the previous consolidated fiscal year.

(2) Consolidated financial position

	Total assets	Net assets	Shareholders'	Shareholders'
	equity	equity ratio
As of 1Q FY2022	¥ million	¥ million	¥ million	%
353,904	195,788	126,669	35.8
As of FY2021	382,578	194,145	128,883	33.7

2. Dividends

			Annual dividends
	1Q		2Q	3Q		Year end	Total
FY2021		¥	¥	¥		¥	¥
	－	0.00	－		11.00	11.00
FY2022		－
FY2022 (Forecast)			－	－		－	－

(Note 1) Revisions to most recent dividend forecast: None

(Note 2) The year-end dividend for FY2022 is to be determined.

3. Forecast of the Consolidated Results for the Fiscal Year Ending September 2022 (October 1, 2021 - September 30, 2022)

The Company has continuously disclosed the earnings forecast in the rapidly evolving internet industry. However, the game business expects that the operation status of the existing games and launch dates of upcoming games may cause large fluctuations in the business performance in the near future. This makes it difficult to calculate appropriate and reasonable figures for the consolidated earnings forecast for the fiscal year ending September 30, 2022. Thus, the Company decided to refrain from disclosing the forecast for fiscal 2022 at this time.

The Company will closely monitor the progress and disclose the forecast as soon as it becomes possible to calculate it. For detailed information related to the forecast, please refer to "1. Qualitative Information on Quarterly Financial Results

(3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information" on page 2.

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

*Notes

(1) Changes in Significant Subsidiaries during the Period: None

(Changes in specified subsidiaries due to changes in the scope of consolidation)

New : －(Company name:	－)
Excluded : －(Company name:	－)

1. Application of simplified accounting methods and/or special accounting methods: None
2. Changes in accounting policies, changes in accounting estimates, restatements
3. 1. Changes associated with revisions of accounting standards: Yes
   2. Changes other than those included in i) : None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of shares issued

1. Number of shares issued and outstanding at end of period (including treasury stock)

1Q FY2022:	505,706,400 shares	FY2021: 505,706,400 shares
(2) Number of shares of treasury stock issued and outstanding at end of period
1Q FY2022:	226,604 shares	FY2021: 251,404 shares

(3) Average number of shares during the period (cumulative quarterly period)

1Q FY2022: 505,475,657 shares	1Q FY2021: 504,658,084 shares

(Note) The Company conducted a four-for-one stock split of common stocks as of April 1, 2021. The "Average number of shares during the period (cumulative period) " is calculated assuming that the said stock split was conducted at the beginning of the previous fiscal year.

*The Consolidated Financial Results is not subject to audit.

*Appropriate Use of Earnings Forecast and Other Matters

The forecast of performance is based on our expectations and assumptions as of the date the forecast was made. Our actual results could differ materially from those listed in this forecast because of various risks and uncertainties. For information related to the forecast indicated above, please refer to"1. Qualitative Information on Quarterly Financial Results (3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information" on page 2.

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Table of Contents
1. Qualitative Information on the Quarterly Financial Results....................................................................................	2
(1)	Explanation of Consolidated Financial Results.................................................................................................	2
(2)	Explanation of Consolidated Financial Position................................................................................................	2
(3)	Explanation of Forcast of Consolidated Finantial Results and Other Forward-Looking Information.................	2
2. Quarterly Consolidated Financial Statements and Key Notes...............................................................................	3
(1)	Quarterly Consolidated Balance Sheets...........................................................................................................	3
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income.....................................................................................................................................	4
(3)	Notes to Quarterly Consolidated Financial Statements....................................................................................	5
(Notes Regarding the Going Concern Assumption)...........................................................................................	5
(Notes Regarding Significant Changes in Shareholders' Equity) ......................................................................	5
(Notes Change in Accounting Policies)...............................................................................................................	5
(Segment Information) .......................................................................................................................................	6

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English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

1. Qualitative Information on the Quarterly Financial Results

(1) Explanation of Consolidated Financial Results

The CyberAgent Group has taken advantage of the growth of the smartphone market. At the same time, the group has been investing in ABEMA, the TV for future, to grow it in the medium to long-term mainstay.

As a result, during the cumulative consolidated first quarter, Net sales grew 30.6% year on year to ¥171,090 million, and Operating income amounted to ¥19,804 million (180.6% increase). Ordinary income amounted to ¥19,836 million (186.1% increase), and profit attributable to shareholders of parent increased 107.9% to ¥6,091 million.

Earnings by business segments are discussed below.

(a) Media Business

The Media Business includes "ABEMA", "WINTICKET" and "Ameba", etc.

While investing in "ABEMA", the TV for future, Net sales grew and amounted to ¥24,996 million for the period, a 22.4% year-on-year increase. Operating loss amounted to ¥3,840 million, compared to operating loss of ¥3,926 million for the same period in the prior fiscal year.

(b) Internet Advertisement Business

The Group's Internet Advertisement Business includes Internet Advertisement Division, AI Division, and CyberZ, Inc., etc.

With our strength which maximizes the advertising effectiveness, this segment achieved a record high of Net sales. It reported ¥87,831 million in Net sales, up 14.7% year on year. Operating income gained 0.7%, reaching ¥5,746 million.

(c) Game Business

The Game Business includes Cygames, Inc., Craft Egg, Inc., Sumzap, Inc., and Applibot, Inc. etc.

A new game title which launched in February 2021 contributed to the results, Net sales amounting to ¥58,329 million, a 94.7% year-on-year increase. Operating income was ¥17,130 million, a 1,405.7% year-on-year increase.

(d) Investment Development Business

The Investment Development Business consists of the CyberAgent corporate venture capital business and the fund operations of CyberAgent Capital, Inc. The Investment Development Business recorded Net sales of ¥2,461 million (53.7% year-on-year decrease) and operating income of ¥1,969 million (a year-on-year decrease of 57.5%).

(e) Other Businesses

The Other Businesses segment includes Makuake, Inc., REALGATE INC., Zelvia Co., Ltd. and others.

This segment reported Net sales of ¥6,347 million, a 21.5% year-on-year increase. Operating income amounted to ¥152 million (a year-on-year decrease of 47.4%).

(2) Explanation of Consolidated Financial Position

Total assets at the end of this consolidated first quarter have decreased by ¥28,674 million compared to the end of the previous fiscal year and amounted to ¥353,904 million. It is mainly due to the decrease in Cash and deposits by corporate tax and dividend paid.

Total liabilities have decreased by ¥30,317 million compared to the end of previous fiscal year and amounted to ¥158,115 million. This decrease is mainly due to a decrease in Income tax payable with payment of corporate tax, etc.

Total net assets have increased by ¥1,643 million compared to the end of the previous fiscal year and amounted to ¥195,788 million. It is mainly due to increase in retained earnings owing to the recording of Profit attributable to shareholders of parent and Non-controlling interests.

(3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information

With the purpose "To break through stagnation with new power and the internet," the Group has expanded its business in the internet industry. Our current strategy is to build up profits in the internet advertising and the game business, invest adequately in the media business, and develop ABEMA into a medium to a long-term pillar.

As for the strategy by segment, in the media business, the Company will continue to increase weekly active users of ABEMA and strengthen monetization including the related businesses. In the Internet advertising business, we will strive to expand our market share by leveraging our operational and technical capabilities, and in the game business, we will strengthen the operation of ongoing games and aim to make new games successful.

Regarding the earnings forecast, the game business expects that the operation status of the existing games and launch dates of upcoming games may cause large fluctuations in the business performance in the near future. This makes it difficult to calculate appropriate and reasonable figures for the consolidated earnings forecast for the fiscal year ending September 30, 2022. Thus, the Company decided to refrain from disclosing the forecast for fiscal 2022 at this time. The Company will closely monitor the progress and disclose the forecast as soon as it becomes possible to calculate it.

The dividend forecast is also to be determined according to the management guidance of the DOE 5%.

2

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

2. Quarterly Consolidated Financial Statements and Key Notes

(1) Quarterly Consolidated Balance Sheets

					(Unit: ¥ million)
				FY2021	1Q FY2022
				(As of September 30, 2021)	(As of December 31, 2021)
Assets
	Current assets
		Cash and deposits	181,451	157,221
		Notes and accounts receivable-trade	75,300	－
		Notes and accounts receivable-trade,and		－	72,665
		contract assets
		Inventories	3,226	3,486
		Sales investment securities	18,969	15,983
		Other	22,832	24,151
		Allowance for doubtful accounts	(130)	(127)
		Total current assets		301,650	273,381
	Non-current assets
		Property, plant and equipment	16,740	18,804
		Intangible assets
		Goodwill	4,957	5,326
		Other	21,484	21,133
		Total intangible assets		26,442	26,460
		Investments and other assets
		Other	37,800	35,319
		Allowance for doubtful accounts	(97)	(98)
		Total investments and other assets		37,702	35,220
		Total non-current assets	80,885	80,485
	Deferred assets		42	36
	Total assets	382,578	353,904
Liabilities
	Current liabilities
		Notes and accounts payable-trade	56,055	58,078
		Short-term loans payable	1,037	4,080
		Income tax payable	29,723	3,396
		Other	53,898	43,352
		Total current liabilities		140,714	108,907
	Non-current liabilities
		Convertible bonds	40,228	40,202
		Long-term loans payable	1,174	3,300
		Accrued long service rewards for	1,851	1,907
		employees
		Asset retirement obligations	1,974	2,079
		Other		2,489	1,717
		Total non-current liabilities	47,718	49,208
	Total liabilities		188,433	158,115
Net assets
	Shareholders' equity
		Capital stock	7,203	7,203
		Capital surplus	11,198	11,100
		Retained earnings	100,794	101,378
		Treasury stock		(67)	(61)
		Total shareholders' equity	119,128	119,621
	Other comprehensive income
		Valuation difference on available-for-sale	9,517	6,783
		securities
		Foreign currency translation adjustments		237	265
		Total other comprehensive income	9,755	7,048
	Subscription rights to shares		1,320	1,421
	Non-controlling interests	63,940	67,697
	Total net assets		194,145	195,788
Total liabilities and net assets	382,578	353,904

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