DeNA : FY2023Q1 Results Briefing Q&A Summary

Summary of Key Questions and Answers

From the Operating Results Briefing for Q1 FY2023

The following is a summary of the key questions and answers from the operating results briefing for the first quarter of FY2023, held on August 9, 2023.

Q1 You have mentioned that the Healthcare & Medical Business has a seasonality strong Q4, but compared to Q3 FY2022 the losses have not shrunk. How do you intend to achieve your goal of profitability for the full fiscal year in FY2023?

A1 The Healthcare & Medical Business has local municipalities, etc. as customers for many of the businesses, and there is a tendency to be back loaded to the second half.

For example, in the Healthcare Area, for our Data Use Business the first half is preparation, and we tend to see the results come through in Q4. This was the pattern we saw last fiscal year. We see a similar trend in the Medical Business. Therefore there is no need to be concerned about the comparison with Q3 FY2022. We are in the middle of making progress towards our goal of achieving profitability for the full fiscal year.

Q2 The revenue of the Healthcare & Medical Business in Q3 FY2022 was about the same level as for Q1 FY2023. I believe there is seasonality, but how should we assess the Q1 level? Please also comment on the earnings structure.

A2 We recommend looking at the Healthcare & Medical Business on a full fiscal year basis. The scale of this business is still relatively small, so the performance of an individual quarter may have variability depending on when individual projects are recognized, among other considerations.

In our view we have made steady progress in the business in Q1 towards full fiscal year growth. For example, in the Data Use Business in the Healthcare Area, the cumulative number of clients has increased significantly compared to the same period last year. In the Data Health Business, for local municipalities 2023 is the formulation year for the Japanese government Data Health Plan, meaning there is demand for services that we can work to address and produce results over the full fiscal year. In the Medical Area we are seeing steady growth in the number of facilities using Join, and as I mentioned during the presentation we are also making progress in building up peripheral areas.

Q3 Based on the DATA HORIZON financial results disclosure and the Allm official gazette, etc., compared to the April - June quarter last fiscal year my estimate is that the actual losses have expanded. Can you comment on this?

A3 Last fiscal year we conducted M&A, and brought Allm and DATA HORIZON into the DeNA Group. We aim to achieve a return to profitability for the full fiscal year and are proceeding with our plan while considering the investment size.

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Q4 How is the initial performance of takt op., which was launched on June 28?

A4 We have put a lot of work into this title to make it the best it could possibly be, and we think it's off to a steady start, including the positive qualitative response we received after launch. We plan to have updates to make sure this game is enjoyed over the long term. We are also working on a future China launch.

Q5 What has been the response to the closed beta tests for Captain Tsubasa, which is scheduled for launch in the future in the Game Business?

A5 We are making steady progress towards the launch of this game.

Q6 Existing title performance continues to decline in the Game Business. Is there a possibility of a segment loss in the Game Business?

A6 The Game Business is volatile. That being said, after a seasonally strong period for existing games, where we have in-game events, etc., there is often a drop that follows. In general, if we have a buildup of new titles then the possibility you mentioned should not occur.

Overall our goal for the company is to achieve an increase in revenue and operating profit for the full fiscal year.

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