CyberAgent : FY2023 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.

FY2023 Consolidated Financial Results [Japanese GAAP]

					November 1, 2023
Listed company name: CyberAgent, Inc.(herein referred as the "Company")	Listed stock exchange: TSE Prime Market
Code No.:	4751			URL https://www.cyberagent.co.jp/en/
Representative:	Representative Director CEO	Susumu Fujita
Inquiries:	Senior Managing Executive Officer	Go Nakayama	Tel [phone]
Scheduled date of the Annual General Meeting of Shareholders:	December 8, 2023
Scheduled date of dividend payment:	December 11, 2023
Scheduled filing date of the Annual Securities Report:	December 8, 2023
Preparation of supplementary references regarding financial results:	Yes
Holding the briefing of financial results:	Yes (streaming only)	(Amounts less than ¥1 million are rounded down)

1. Consolidated Financial Results for the Year Ended September 30, 2023 (October 1, 2022 - September 30, 2023)

1. Consolidated Results of Operations

								Operating									Net income			Comprehensive
		Net sales			Ordinary income		attributable to
			income							income
															owners of the parent
FY2023	¥ million	%			¥ million		%			¥ million		%		¥ million		%			¥ million	%
720,207	1.4			24,557	(64.5)				24,915		(64.1)			5,332		(78.0)				12,687	(64.7)
FY2022	710,575	6.6			69,114	(33.8)				69,464		(33.6)		24,219		(41.7)				35,963	(45.0)
		Basic earnings		Diluted earnings		Return on	Ordinary income		Operating income
				shareholders'
		per share			per share				on total assets					margin
						equity
				¥								¥				%					%					%
FY2023			10.53								9.60					3.7					5.8					3.4
FY2022			47.89								45.33					17.7					18.1					9.7
(Reference)Equity in gains/losses of associated companies	FY2023 ¥ -	91million	FY2022		¥ -313million
(2) Consolidated Financial Position
		Total assets					Equity			Shareholders'		Shareholders'			Equity per share
							equity		equity ratio
			¥ million							¥ million				¥ million					%					¥
FY2023	477,826								231,911					144,422					30.2						285.31
FY2022	383,698								222,915					144,264					37.6						285.15
(3) Consolidated Cash Flows
		Cash flows from					Cash flows from		Cash flows from					Cash and cash
									equivalents at the end
		operating activities			investing activities		financing activities
										of the year
				¥ million									¥million						¥ million							¥ million
FY2023				20,822									(40,290)					53,491							201,780
FY2022				17,946									(31,412)					(2,801)							168,035
2. Dividends
				Dividends per share						Amount of		Dividend ratio		Dividend on
																				dividends			equity
		1Q		2Q				3Q				Year-			Annual			(Consolidated)
							End				(Total)										(Consolidated)
		¥		¥				¥			¥			¥				¥ million					%			%
FY 2022		－		0.00				－			14.00				14.00		7,082			29.2			5.2
FY 2023		－		0.00				－			15.00				15.00		7,592			142.5			5.3
FY 2024		－		－				－			15.00				15.00												－
(forecast)

3. Forecast of the Consolidated Results for the Fiscal Year Ending September 30, 2024 (October 1, 2023 - September 30, 2024)

(% = Year-on-Year Change)

							Net income		Basic
	Net sales		Operating income	Ordinary income	attributable to	earnings
							owners of the parent	per share
	¥ million	%	¥ million	%	¥ million	%	¥ million	%	￥
Full year	750,000	4.1	30,000	22.2	30.000	20.4	8,000	50.0	15.80

(Note)For detailed information related to the forecast, please refer to "1. Results of Operations (4) Forecast" on page 3.

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. Changes in accounting policies, changes in accounting estimates, restatements
2. 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
3. Number of shares issued (common stock)

1. Number of shares issued at end of year (including treasury stock)

FY2023: 506,191,200

FY2022: 505,924,000

(2) Number of shares of treasury stock issued end of period

FY2023: 1,040	FY2022: 1,004

(3) Average number of shares during the year

FY2023: 506,048,563

FY2022: 505,655,340

(Reference)

Non-consolidated Results for the Fiscal Year Ended September 30, 2023 (October 1, 2022 - September 30, 2023)

(1) Non-consolidated Results of Operations

(% = Year-on-Year Change)

		Net sales	Operating income		Ordinary income		Net income
		¥ million	%	¥ million	%			¥ million	%		¥ million	%
FY2023		403,045		11.0	4,806	(60.3)				9,658	(33.4)		7,292	(27.2)
FY2022		363,045		15.3	12,102	(33.4)			14,502	(43.5)		10,018	－
		Basic earnings per	Diluted earnings
		share		per share
				¥			¥
FY2023				14.41			13.23
FY2022				19.81			18.67
(2) Non-consolidated Financial Position
	Total assets		Equity		Shareholders'		Shareholders'	Equity per share
			equity			equity ratio
FY2023		¥ million			¥ million		¥ million			%		¥
197,808			37,536		35,498			17.9		70.12
FY2022	132,442			36,306		34,612			26.1		68.41

• The Consolidated Financial Results is not subject to audit by independent certified public accountants or audit.
• Appropriate Use of Earnings Forecast and Other Matters.

The earnings forecast and forward-looking statements in this report are based on the Company's expectations and assumptions as of the date of this report. Actual results may differ materially due to various factors and uncertainties.

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. Results of Operations	2
(1)	Overview of Results of Operations	2
(2)	Overview of Financial Position	2
(3)	Overview of Cash Flow	2
(4)	Forecast	3
2. Basic Policy for the Selection of Accounting Standards	3
3. Consolidated Financial Statements and Key Notes	4
(1)	Consolidated Balance Sheets	4
(2)	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income	6
(3)	Consolidated Statements of Changes in Equity	8
(4)	Consolidated Statements of Cash Flows	10
(5)	Notes to Consolidated Financial Statements	11
(Notes Regarding the Going Concern Assumption)	11
(Changes in Accounting Policy)	11
(Changes in Presentation Method)	11
(Additional Information)	12
(Segment Information)	12
(Per Share Information)	15
(Significant Subsequent Events)	15

1

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. Results of Operations

(1) Overview of Results of Operations

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

As a result, during this consolidated fiscal year, net sales grew 1.4%year-on-year to ¥720,207 million, and operating income amounted to ¥24,557 million (64.5% decrease). Ordinary income amounted to ¥24,915 million (64.1% decrease), and net income attributable to owners of the parent decreased 78.0% to ¥5,332 million.

Earnings by business segments are discussed below.

(a) Media Business

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

Resulted from steady growth in the related sales of "ABEMA," a new TV of the future, net sales grew and amounted to ¥141,163 million for the period, a 25.9% year-on-year increase. With the distribution of the FIFA World Cup Qatar 2022 in the first quarter, operating loss amounted to ¥11,523 million, compared to operating loss of ¥12,419 million for the same period in the prior fiscal year.

(b) Internet Advertisement Business

The Group's Internet Advertisement Business includes Internet Advertising Division and AI Division, etc. Sales growth continues to outpace the internet advertising market*, demonstrating our market share gains,

Internet Advertisement Business recorded ¥405,373 million of net sales, up 7.6% year-on-year. Due to the upfront investment in artificial intelligence (AI) and Digital transformation (DX), operating income amounted to ¥18,317 million, a 25.1% year-on-year decrease.

*Internet market growth: forecast to increase by 6.8% year-on-year in FY2023.

Source: NIKKEI Advertising Research Institute / Forecast for Advertising Expenditure in FY2023 (Published in July 2023)

(c) Game Business

The Game Business includes Cygames, Inc., Colorful Palette Inc., Sumzap, Inc., and Applibot, Inc. etc.

Due to the decline in revenue of the high-profitability title, net sales amounted to ¥179,119 million, a 21.6% year- on-year decrease. Operating income amounted to ¥22,708 million, a 62.5% year-on-year decrease.

(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 ¥3,198 million (27.9% year-on-year decrease) and operating income of ¥1,840 million (a year-on-year decrease of 27.1%).

(e) Other Businesses

The Other Businesses segment includes Makuake, Inc., and REALGATE INC., etc.

This segment reported net sales of ¥28,976 million, a 12.7% year-on-year increase. Operating income amounted to ¥358 million, compared to operating loss of 16 million for the prior fiscal year.

(2) Overview of Financial Position

Total assets at the end of this fiscal year have increased by ¥94,128 million compared to the end of the previous fiscal year and amounted to ¥477,826 million. It is mainly due to the issuance of convertible bonds and the increase in Long- term bank loans.

Total liabilities have increased by ¥85,131 million compared to the end of the previous fiscal year and amounted to ¥245,915 million. This increase is mainly due to the issuance of convertible bonds and the increase in Long-term bank loans.

Total Equity have increased by ¥8,996 million compared to the end of the previous fiscal year and amounted to ¥231,911 million. It is mainly due to increase in retained earnings owing to the recording of Net income attributable to owners of the parent and Non-controlling interests.

(3) Overview of Cash Flow

As of the end of this fiscal year, Cash and cash equivalents increased by ¥33,745 million from the end of the previous fiscal year to ¥201,780 million.

The following is a summary of the major factor affecting the cash flow in this fiscal year.

(1) Cash flows from operating activities

Net cash provided by operating activities was ¥20,822 million of inflow (¥17,946 million of inflow in the previous fiscal year). The major inflow included net income gains, and the major outflow included income tax payments.

(2) Cash flows from investing activities

Net cash used in investing activities was ¥40,290 million of outflow (¥31,412 million of outflow in the previous fiscal year). Major outflow included acquisition of Non-current assets.

(3) Cash flows from financing activities

Net cash provided by financing activities was ¥53,491 million of inflow (¥2,801 million of outflow in the previous fiscal year). Major inflow included income from Long-term bank loans, and the issuance and redemption of convertible bonds.

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.

(4) Forecast

With respect to earnings forecasts for the next fiscal year (ending September 2024), Internet Advertisement Business and Media Business will continue to increase sales, consolidated sales are expected to be ¥750 billion (up 4.1% from the previous fiscal year). By extending the lifespan of existing titles, releasing new titles in Game Business, reducing the deficit on "ABEMA", the new TV of the future, and improving operating income in Internet Advertisement Business, Consolidated operating income is expected to be ¥30 billion (up 22.2% from the previous fiscal year). The company expects to increase revenues and profits compared to the previous fiscal year.

Therefore, Consolidated ordinary income is expected to be ¥30 billion and Net income attribute to owners of the parent is expected to be ¥8 billion (up 50.0% from the previous fiscal year).

Also, the Company recognizes that the return of profits to shareholders is an important management priority and intends to continue to pay dividends along with increasing the value of our shares over a medium to long-term through business growth and improving capital efficiency. Since the fiscal year 2016, the Company is investing in "ABEMA", the new TV of future, to develop it into a medium to long-term pillar, and set "DOE 5% or more" as a management indicator from the fiscal year 2017, to gain a medium to long-term support from our shareholders even during the investment period. Therefore, as a result of the publication of the full-year earnings forecast for the fiscal year 2024, the year-end dividend forecast is ¥15 yen to achieve the DOE of 5% or more.

We will submit this matter to the 27th Annual General Meeting of Shareholders to be held in December 2024.

The forecast is based on our expectations and assumptions as of the date the forecast was made. Our actual results could differ from those listed in this forecast because of various factors.

2. Basic Policy for the Selection of Accounting Standards

The Group has adopted the generally accepted accounting standards in Japan, considering the comparability of consolidated financial statements as to comparison with other periods and other companies.

3

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.

3. Consolidated Financial Statements and Key Notes

(1) Consolidated Balance Sheets

		(Unit: ¥ million)
	FY2022	FY2023
	(As of September 30, 2022)	(As of September 30, 2023)
Assets
Current assets
Cash and deposits	165,907	199,579
Trade notes and accounts receivable, and contract	72,371	83,372
assets
Inventories	4,262	8,977
Operational investment securities	16,457	19,034
Other current assets	34,887	40,768
Allowance for doubtful receivables	(36)	(489)
Total current assets	293,850	351,242
Non-current assets
Property and equipment
Buildings and structures, net	11,346	12,250
Tools, furniture and fixtures, net	5,846	8,358
Other	1,781	3,977
Total property and equipment	18,974	24,586
Intangible assets
Goodwill	4,843	7,084
Software	5,076	6,053
Software in progress	10,205	16,313
Other	1,927	4,106
Total intangible assets	22,054	33,557
Investments and other assets
Investment securities	22,907	36,749
Long-term bank loans	226	108
Deferred tax assets	6,783	7,540
Other	18,896	24,053
Allowance for doubtful receivables	(17)	(77)
Total investments and other assets	48,797	68,375
Total non-current assets	89,826	126,519
Deferred assets	21	64
Total assets	383,698	477,826

4

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.

		(Unit: ¥ million)
	FY2022	FY2023
	(As of September 30, 2022)	(As of September 30, 2023)
Liabilities
Current liabilities
Trade accounts payable	59,212	71,597
Other payables	15,954	20,682
Short-term bank loans	2,380	3,142
Income taxes payable	5,036	3,115
Current portion of convertible bonds	20,023	－
Other	27,407	34,824
Total current liabilities	130,014	133,362
Non-current liabilities
Convertible bonds	20,102	60,584
Long-term bank loans	3,750	43,355
Provision for long service rewards for employees	2,787	3,401
Asset retirement obligation	2,250	2,406
Deferred tax liabilities	371	1,040
Other	1,505	1,763
Total non-current liabilities	30,768	112,552
Total liabilities	160,783	245,915
Equity
Shareholders' equity
Common stock	7,239	7,369
Capital surplus	11,636	12,218
Retained earnings	119,204	117,448
Treasury stock	(1)	(1)
Total shareholders' equity	138,079	137,034
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities	5,887	7,196
Foreign currency translation adjustments	298	191
Total other comprehensive income	6,185	7,388
Stock acquisition rights	1,747	2,092
Non-controlling interests	76,903	85,396
Total Equity	222,915	231,911
Total liabilities and equity	383,698	477,826

5

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. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income

		(Unit: ¥ million)
	FY2022	FY2023
	(Oct.1, 2021 to Sep.30, 2022)	(Oct.1, 2022 to Sep.30, 2023)
Net sales	710,575	720,207
Cost of sales	491,417	527,802
Gross profit	219,158	192,404
Selling, general and administrative expenses	150,044	167,847
Operating income	69,114	24,557
Non-operating income
Interest income	139	189
Dividends income	384	374
Rent income	163	525
Other	311	175
Total non-operating income	999	1,263
Non-operating expenses
Interest expenses	54	127
Depreciation	56	170
Loss on valuation of investment securities	86	115
Equity in losses of associated companies	313	91
Foreign exchange losses	9	191
Other	128	207
Total non-operating expenses	648	904
Ordinary income	69,464	24,915
Extraordinary gain
Gain on sales of investment securities	491	－
Gain on sales of investments in subsidiaries and	805	1,000
associated companies
Other	336	470
Total extraordinary gains	1,633	1,470
Extraordinary losses
Loss on impairment of long-lives assets	7,742	1,453
Loss on payment compensation	－	628
Other	557	1,772
Total extraordinary loss	8,299	3,854
Income before income taxes	62,798	22,532
Income taxes-current	21,155	12,006
Income taxes-deferred	2,229	(417)
Total income tax	23,385	11,588
Net income	39,413	10,943
Net income attributable to non-controlling interests	15,194	5,611
Net income attributable to owners of the parent	24,219	5,332

6

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.

Consolidated Statements of Comprehensive Income

		(Unit: ¥ million )
	FY2022	FY2023
	(Oct. 1, 2021 to Sep. 30, 2022) (Oct. 1, 2022 to Sep. 30, 2023)
Net income	39,413	10,943
Other comprehensive income
Unrealized gain(loss) on available-for-sale securities	(3,516)	1,829
Foreign currency translation adjustments	70	50
Share of other comprehensive income(loss) of	(3)	(136)
associated companies
Total other comprehensive income(loss)	(3,450)	1,743
Comprehensive income	35,963	12,687
(Comprehensive income attributable to)
Owners of the parent	20,649	6,534
Non-controlling interests	15,313	6,152

7

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. Consolidated Statements of Changes in Equity
   FY2022 (Oct. 1, 2021 to Sep. 30, 2022)

(Unit: ¥ million)

						Shareholders' equity
		Common	Capital		Retained		Treasury		Total
				shareholders'
		stock	surplus		earnings		stock
						equity
Balance at the beginning of year		7,203	11,198		100,794			(67)		119,128
Cumulative effect of changes							(17)							(17)
in accounting policies
Balance at the beginning of year, as		7,203	11,198		100,777			(67)		119,110
restated
Change in the year
Issuance of new shares			35		35										71
(Exercise of stock acquisition rights)
Cash dividends							(5,560)							(5,560)
Disposal of treasury stock					65								66		131
Change in the parent's ownership
interest due to transactions with					84										84
noncontrolling interests
Change in scope of consolidation					252		(231)							20
Net income attributable to owners of the						24,219							24,219
parent
Net changes in the year
Total changes of items in the year			35		438		18,427					66		18,968
Balance at the end of year		7,239	11,636		119,204			(1)		138,079
	Accumulated other comprehensive income
										Stock			Non-	Total
	Unrealized	Foreign
	Total other		acquisition		controlling
	gain on	currency			Equity
	comprehensive			rights			interests
	available-	translation
		income
	for sales	adjustments
	securities
Balance at the beginning of year	9,517		237		9,755		1,320			63,940	194,145
Cumulative effects of changes															(17)
in accounting policies
Balance at the beginning of year, as	9,517		237		9,755		1,320			63,940	194,127
restated
Change in the year
Issuance of new shares															71
(Exercise of stock acquisition rights)
Cash dividends															(5,560)
Disposal of treasury stock															131
Change in the parent's ownership
interest due to transactions with															84
noncontrolling interests
Change in scope of consolidation															20
Net income attributable to owners of															24,219
the parent
Net change in the year	(3,630)		60		(3,569)		426			12,962	9,819
Total changes of items in the year	(3,630)		60		(3,569)		426			12,962	28,787
Balance at the end of year	5,887		298		6,185		1,747			76,903	222,915

8