CyberAgent : FY2023 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.

FY2023 First Quarter Consolidated Financial Results [Japanese GAAP]

January 25, 2023

Listed company name: CyberAgent, Inc.

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]

Quarterly report submission date: January 26, 2023

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 2023

(1) Consolidated results of operations (cumulative)

(% = Year-on-Year Change.)

Net income

Net sales

Operating income

Ordinary income

attributable to

Comprehensive

owners of the

income

parent

¥ million

%

¥ million

%

¥ million

%

¥ million

%

¥ million

%

1Q FY2023

167,577

(2.1)

(1,255)

－

(939)

－

(5,002)

－

(3,768)

－

1Q FY2022

171,090

30.6

19,804

180.6

19,836

186.1

6,091

107.9

8,831

－

Basic earnings

Diluted earnings

per share

per share

1Q FY2023

¥

¥

(9.88)

－

1Q FY2022

12.05

11.39

(Note) Diluted earnings per share for the first quarter of the fiscal year ending September 2023 is not presented in the above table. Because basic earnings per share was negative although there are dilutive shares.

(2) Consolidated financial position

	Total assets	Equity	Shareholders'	Shareholders'
	equity	equity ratio
As of 1Q FY2023	¥ million	¥ million	¥ million	%
423,028	211,696	131,975	31.2
As of FY2022	383,698	222,915	144,264	37.6

2. Dividends

			Annual dividends
	1Q		2Q	3Q		Year end	Total
FY2022		¥	¥	¥		¥	¥
	－	0.00	－		14.00	14.00
FY2023		－
FY2023 (Forecast)			－	－		15.00	15.00

(Note) Revisions to most recent dividend forecast: None

3. Forecast of the Consolidated Results for the Fiscal Year Ending September 2023 (October 1, 2022 - September 30, 2023)

(% = Year-on-Year Change.)

	Net sales		Operating income	Ordinary income	Net income	Basic
		attributable to	earnings
							owners of the parent	per share
	¥ million	%	¥ million	%	¥ million	%	¥ million	%	¥
Full year	720,000	1.3	40,000	(42.1)	40.000	(42.4)	15,000	(38.1)	29.64
-50,000	-(27.7)	-50,000	-(28.0)	-20,000	-(17.4)	-39.53

(Note) Revisions to most recent forecast: None.

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 FY2023: 505,938,400 shares

FY2022: 505,924,000 shares

(2) Number of shares of treasury stock issued and outstanding at end of period

1Q FY2023: 1,004 shares

FY2022: 1,004 shares

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

1Q FY2023: 505,930,926 shares

1Q FY2022: 505,475,657 shares

*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 Forecast of Consolidated Financial 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
(Additional Information)	5
(Segment Information)	6

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. 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, a new TV of the future, to grow it in the medium to long-term mainstay.

As a result, during the cumulative consolidated first quarter, net sales decreased 2.1% year on year to ¥167,577 million, and operating loss amounted to ¥1,255 million, compared to operating income of ¥19,804 million for the same period in the prior fiscal year. Ordinary loss amounted to ¥939 million, compared to ordinary income of ¥19,836 million for the same period in the prior fiscal year. And net loss attributable to owners of the parent amounted to ¥5,002 million, compared to net income attributable to owners of the parent of ¥6,091 million for the same period in the prior fiscal year.

Earnings by business segments are discussed below.

(a) Media Business

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

Resulting from a significant increase in sales of "ABEMA", a new TV of the future, and related businesses, net sales grew and amounted to ¥33,485 million for the period, a 34.0% year-on-year increase. Due to the distribution of the FIFA World Cup Qatar 2022 and others, operating loss amounted to ¥9,356 million, compared to operating loss of ¥3,840 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.

The business remained strong despite being partially affected by the economic condition. It reported ¥95,639 million in net sales, up 8.9% year on year. Operating income was ¥5,001 million, a 13.0% year-on-year decrease.

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

As the major game titles' anniversary season drew near, net sales amounted to ¥40,916 million, a 29.9% year- on-year decrease. Operating income was ¥5,212 million, a 69.6% 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 ¥139 million (94.3% year-on-year decrease) and operating loss of ¥286 million, compared to operating income of ¥1,969 million for the same period in the prior fiscal year.

(e) Other Businesses

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

This segment reported net sales of ¥6,076 million, a 4.3% year-on-year decrease. Operating loss amounted to ¥130 million, compared to operating income of ¥152 million for the same period in the prior fiscal year.

(2) Explanation of Consolidated Financial Position

Total assets at the end of this consolidated first quarter have increased by ¥39,329 million compared to the end of the previous fiscal year and amounted to ¥423,028 million. It is mainly due to the issuance of convertible bonds.

Total liabilities have increased by ¥50,548 million compared to the end of previous fiscal year and amounted to ¥211,331 million. This increase is mainly due to the issuance of convertible bonds.

Equity have decreased by ¥11,218 million, compared to the end of the previous fiscal year and amounted to ¥211,696 million. It is mainly due to decrease in retained earnings owing to the dividend payment.

1. Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information
   Forecast of FY2023 has not been revised from its original publication on October 26, 2022.

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)
			FY2022	1Q FY2023
			(As of September 30, 2022)	(As of December 31, 2022)
Assets
	Current assets
		Cash and deposits	165,907	198,697
		Trade notes and accounts receivable and	72,371	71,879
		contract assets
		Inventories	4,262	5,384
		Sales investment securities	16,457	17,542
		Other	34,887	38,114
		Allowance for doubtful accounts	(36)	(37)
		Total current assets	293,850	331,580
	Non-current assets
		Property and equipment	18,974	19,116
		Intangible assets
		Goodwill	4,843	4,764
		Other	17,210	18,624
		Total intangible assets	22,054	23,389
		Investments and other assets
		Other	48,814	48,879
		Allowance for doubtful accounts	(17)	(16)
		Total investments and other assets	48,797	48,862
		Total non-current assets	89,826	91,368
	Deferred assets	21	79
	Total assets	383,698	423,028
Liabilities
	Current liabilities
		Trade accounts payable	59,212	65,929
		Short-term bank loans	2,380	3,040
		Income tax payable	5,036	2,318
		Other	63,385	68,627
		Total current liabilities	130,014	139,914
	Non-current liabilities
		Convertible bonds	20,102	60,681
		Long-term bank loans	3,750	3,622
		Provision for long service rewards for	2,787	2,942
		employees
		Asset retirement obligations	2,250	2,331
		Other	1,877	1,839
		Total non-current liabilities	30,768	71,416
	Total liabilities	160,783	211,331
Equity
	Shareholders' equity
		Capital stock	7,239	7,244
		Capital surplus	11,636	11,639
		Retained earnings	119,204	107,120
		Treasury stock	(1)	(1)
		Total shareholders' equity	138,079	126,003
	Accumulated other comprehensive income
		Unrealized gain on available-for-sale	5,887	5,896
		securities
		Foreign currency translation adjustments	298	75
		Total other comprehensive income	6,185	5,972
	Stock acquisition rights	1,747	1,875
	Non-controlling interests	76,903	77,845
	Total equity	222,915	211,696
Total liabilities and equity	383,698	423,028

3