I mobile : FY2022 Q2 Consolidated Financial Results

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

March 9, 2022

Consolidated Financial Results for the Six Months

of the Fiscal Year Ending July 31, 2022

(Under Japanese GAAP)

Company name:	i-mobile Co., Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	6535
URL:	https://www.i-mobile.co.jp/
Representative:	Tetsuya Noguchi, Representative Director, CEO
Inquiries:	Yasuhiro Fumita, Director
Telephone:	[phone]

Scheduled date to file quarterly securities report:	March 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing:	Yes (for institutional investors and security analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months of the fiscal year ending July 31, 2022 (from August 1, 2021 to January 31, 2022)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
Six months ended	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen		%
January 31, 2022	10,160		28.5	3,268		26.8	3,331		29.1	2,266		33.4
January 31, 2021	7,909		62.1	2,577		57.5	2,581		59.4	1,698		52.4

Note: Comprehensive income	For the six months ended January 31, 2022:	2,268	million yen [33.6%]
		For the six months ended January 31, 2021:	1,698	million yen [54.3%]
		Basic earnings	Diluted earnings
		per share	per share
Six months ended		Yen	Yen
January 31, 2022		105.20	104.82
January 31, 2021		78.97	78.08

Note: The Company applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the current fiscal year. Figures for the first six months of the fiscal year ended July 31, 2021 are the figures after retrospective application of the accounting standard, etc.

(2) Consolidated financial position

	Total assets	Net assets	Equity-to-asset ratio
As of	Millions of yen	Millions of yen	%
January 31, 2022	23,715	14,913	62.7
July 31, 2021	18,992	14,720	77.4

Reference:	Equity
	As of January 31, 2022:	14,871	million yen
	As of July 31, 2021:	14,704	million yen

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended	-	0.00	-	100.00	100.00
July 31, 2021
Fiscal year ending	-	0.00
July 31, 2022
Fiscal year ending			-	35.00	35.00
July 31, 2022 (Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecast for the fiscal year ending July 31, 2022 (from August 1, 2021 to July 31, 2022)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Basic earnings
			owners of parent		per share
	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen		%	Yen
July 31, 2022	14,270	23.1	3,750	10.9	3,715		10.4	2,504		8.9	116.49
Note: Revisions to the earnings forecasts most recently announced: None

The Company applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the current fiscal year. Year on year changes show comparisons with the figures after retrospective application of the accounting standard, etc.

* Notes

1. Changes in significant subsidiaries during the period: (changes in specified subsidiaries resulting in changes in
   scope of consolidation): None

Newly included:	0 companies
Excluded:	0 companies

1. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and restatement
3. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
   2. Changes in accounting policies other than (i): None
   3. Changes in accounting estimates: None
   4. Restatement: None
4. Number of shares issued (common shares)
5. 1. Total number of issued shares at end of period (including treasury shares)

	As of January 31, 2022	21,848,196	shares
	As of July 31, 2021	21,848,196	shares
(ii) Number of treasury shares at end of period
	As of January 31, 2022	255,850	shares
	As of July 31, 2021	345,050	shares

(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended January 31, 2022	21,539,929	shares
Six months ended January 31, 2021	21,509,306	shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit firm.
• Proper use of earnings forecasts, and other special matters

The forward-looking statements, including business results forecasts, contained in this document are based on information currently available to the Company and certain assumptions deemed reasonable by the Company. Actual business results may differ considerably due to a variety of factors. See 1. Qualitative Information on Quarterly Financial Results, (3) Explanation of Forward-looking Information, Including Consolidated Earnings Forecasts on page 4 of the Quarterly Financial Results (Appendix).

Change in unit for presentation of amounts

The amounts for accounts and other items on the Company's quarterly consolidated financial statements were previously stated in thousands of yen. However, since the first quarter of the current fiscal year, the amounts have been stated in millions of yen.

For ease of comparison, the units of the amounts for the previous fiscal year and the first six months of the previous fiscal year have also been changed to millions of yen.

Appendix

Index

1. Qualitative Information on Quarterly Financial Results ………………………….…………………………......	2
(1)	Explanation of Operating Results ……………………………………………………………………………	2
(2)	Explanation of Financial Position ……………………………………………………………………………	4
(3)	Explanation of Forward-looking Information, Including Consolidated Earnings Forecasts ………………...	5
2. Quarterly Consolidated Financial Statements and Notes ………………………………………………………..	6
(1)	Quarterly Consolidated Balance Sheet ………………………………………………………………………	6
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ……	7
(3)	Quarterly Consolidated Statement of Cash Flows ………………………………………………………………….	9
(4)	Notes to the Quarterly Consolidated Financial Statements………………………………………………..…	10
	Notes on Going Concern Assumption………………………………………………………………………..	10
	Notes on Significant Changes in Shareholders' Equity………………………………………………………	10
	Changes in Accounting Policies……………………………………………………………………………...	10
	Segment Information and Other Data...…………………………………………………………….………...	11
	Significant Subsequent Events………………………………………………………………………………..	11

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1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

During the first six months of the current fiscal year, amid the prolonged impact of the COVID-19 pandemic, the Japanese economy temporarily showed signs of returning to normal, including the lifting of the state of emergency, due to the vaccine rollout and the effect of various measures implemented by the Japanese government and local governments. However, with the rapid increase of case numbers in Japan due to a resurgence in new infections from the end of the year, the economic outlook remained uncertain. The i-mobile Group (the "Group") had no significant impact on its business performance due to the new coronavirus infection (COVID-19). However, if the economic impact becomes more prolonged and serious in the future, the Group's business performance could be adversely affected by such factors as a contraction in the Japanese advertising market due to a decrease in the number of advertisers, a shrinkage in the hometown tax donation market because of a decline in individual residence and income tax, and further restrictions on business activities.

The i-mobile Group is composed of two business segments - Online Advertising and Consumer Service - operating under the corporate vision "Creating a Business for the Future". In the market for the Hometown Tax

Donation business, which is the mainstay of the Consumer Service segment, the hometown tax donation amount in fiscal 2020 increased by approximately 1.4 times year on year to 672.5 billion yen while the number of hometown tax donations also increased by approximately 1.5 times to 34.89 million*1. In addition, the number of people eligible for the hometown tax donation credit (the number of people who actually made a hometown tax donation and were eligible for a residence tax credit) also increased year on year by approximately 1.3 times*1 to 5.524 million people, as it becomes more widely accepted as a stable system in line with its initial purpose of realizing regional revitalization*2.

Moreover, in the domestic online advertising market, which is a core business domain in the Online Advertising segment, online advertising expenditure in 2021 increased by 21.4% year on year to 2,705.2 billion yen, growth remained steady with the acceleration in the digitization of society serving as a tailwind. In particular, online advertising media expenditures grew 22.8% year on year to 2,157.1 billion yen, reflecting a rebound from the previous year, when consumption was sluggish due to the impact of COVID-19 and advertising placements declined. Due to an increase in time spent at home and the Tokyo 2020 Olympic and Paralympic Games, the number of users of video streaming services has grown resulting in a marked increase in demand for video ads*3. In the future, the domestic online advertising market is forecast to expand to approximately 3,300 billion yen*4 by fiscal 2024 due to growth in programmatic advertising, which includes social media advertising and video ads.

As an Internet marketing company in this business climate, the Group has worked to further enhance corporate value, leveraging the technology and marketing expertise from multiple angles cultivated in the core Online Advertising (Ad Network) business by developing new markets, and investing in growth business sectors. With Furunavi, the Hometown Tax Donation business which has functions for solving social issues, such as the revitalization of local communities, we improved recognition of the Furunavi brand and ran promotion activities to increase the number of local governments we do business with, and Furunavi-related services strengthened original plans for experience-based gifts in return such as dining and lodging gift certificates, working with local governments on. In the Online Advertising segment, we promoted the expansion of the Media Solution and App Operation businesses, which are both the focus areas. We also made Simple App Studio, Inc., which plans and operates health tech apps, a subsidiary in October 2021, and are working to grow our media-related business. Moreover, in the Ad Network business, we are striving to improve the earnings structure and ensure stable profits.

Furthermore, the Group has been further enhancing its efforts to solve social issues such as environmental and climate change problems, aiming to meet the expectations of society by engaging in management with sustainability from a medium- to long-term perspective as the starting point. We have endorsed the recommendations of the Task Force on the Climate-Related Financial Disclosures (TCFD), joined the TCFD Consortium, and launched the Hometown Tax Donation Regional Revitalization Collaboration Lab, which aims to solve local issues through a scheme that combines the corporate version of hometown tax donation and hometown tax donation. Since December 10, 2021, we have been providing support for the promotion of regional industries in a demonstration experiment

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