CyberAgent, Inc.

It is time, so we would like to begin the FY 2021 third quarter results presentation for cyber agent. This session is being live streamed. Our CEO, please note the disclaimer, forward looking statement, the disclaimer about the forward looking statement. And then our CEO, Fujita, will take you through the results. This is Fujita, the CEO. So this is the third quarter, April to June. I would like to take you through the results for the third quarter. Earlier, we announced a significant upward revision of our forecast. The game and ad business overall performed much better than our expectations, so we have made an upward revision of the forecast. The media business year-on-year sales expanded by 1.5 times. and the ad business usually is lower in the third quarter, but we did set a new record, record high. And with the game business, Umama Smith Pretty Derby became a huge hit. So this has contributed to the results for the full quarter. So these are some of the key reasons why we have made the upward revisions this quarter. And this is the quarterly results. we actually went public in the march of 2000 and of course we have continued to increase ourselves and profitability but as you can see we've actually significantly accelerated our growth and in terms of the quarterly lp so the 225.8 was the record high, which was in the second quarter, and we did even better than the 44.5 this quarter. However, the SG&A actually remained around the same. So as an intranet business, our performance has been quite ideal, and this is why we have been able to improve our profitability significantly. Every year in April, We do welcome many new graduates, so we do increase, the headcount increases this quarter. And then for the following couple quarters, it will be around the same level. And this is the P&L. And this is the balance sheet. And we did make an upward revision, 2021 September, So we are going to plan to do $650 billion in sales, $100 billion in OP. So this is the upper revision we have just announced. So as we started to wrap about $30 billion in OP, of course, Abema, we have been making upfront investment in Abema, and Uma Musume has significantly contributed to our favorable performance. So that is why we have made this significant revision. and forecast. Three months ago, we did make an upward revision as well from about OP was around 30 billion to around 60 billion. And in three months time, we have made another upward revision to 100 billion in OP. And if we look at the achievement rate up to the end of the third quarter, we've done more than three quarters. So we believe that the upper revision is within reach. Now going into the specific businesses, starting with the internet ad business. As I mentioned earlier, usually January to March, especially March, when many of our customers' fiscal year ends, we tend to grow significantly during that period. In the third quarter, we usually see a drop in our sales, but the fact that it we've actually were able to do higher in the third quarter, proves that it was a very favorable quarter for us. And with COVID and the state of emergency announcement, many companies, clients decided not to advertise so much, but this is on the recovery path now. And the OP, however, come down a little bit. And if you have covered us for a long time, you know that this doesn't really change. It hasn't changed over the years. So it's just temporary. So the reason why our internet app business is doing so well is that the Kiwami prediction AI, as well as other innovative technologies and products, and 80% of our advertisers have implemented these technologies. So Kiwami prediction AI and Kiwami prediction TD they have they're using these technologies to improve their advertising effectiveness and we have released new services as well. So in this field, we believe that other companies will find it quite difficult to catch up to us. Moving on to the game business. Mamusume Pretty Derby was released previous quarter, and our growth has changed significantly since then. So we did 92.3 billion in sales in the last quarter, and the OP also was nearly around half, 44.24. So with respect to Mama Smith Pretty Derby, I would like to have Mr. Chikaishi talk about the game in more detail. Thank you. He's from Cygames. My name is Chikaishi, a director of Cygames, and let me tell you a little bit about the Mama Smith Pretty Derby. First of all, since we released the game in February 24th, 2021, numerous keywords related to the game has ranked high and many people have shown great interest for the game. We have fans that we cultivate by promoting the content in various media, as well as new users from among horse racing fans. And we recorded in approximately five months over 9 million downloads. We have continued to promote the game on various media platforms, including anime and manga, and in June and July, we have streamed the TV anime series for the Umamuse Pretty Derby on Abema, and Blu-ray discs of the second series of the TV anime ranked in third in the Oricon rankings. And as of the end of June, we have sold 170,000 copies. And the manga, Umama's Messenger of Gray, has also sold more than 1 million copies. So the use of cross media has produced a synergy effect and the wide range of content has been very well received. Also on August 28th and 29th, we will have an online live event using ABEMA's pay-per-view function. So we will continue to focus on our efforts on cross media promotion seeking advantage of our group synergy. In the game, Umama Smith Pretty Derby, we have characters that are named after real racehorses. And we have faithfully reproduced the characteristics and history of each racehorse. We started with 25 characters, but now we have 36 characters that fans can race and train. And we will continue to add new characters so that users can continue to enjoy the game. And we will continue to add new functions. In June, we added a new room match function, which allows players to go up against other players. And this has been well received by our users as well. We will continue to add new training scenarios and update the game so that it will become a long run hit. We will continue to provide content that we hope will be loved for a long time to come. So we hope to have your continued support. So we released Uma Musume and it became a big hit. Within our group, usually we release about one or two new game titles that become very popular. And as you can see here, group overall we are utilizing our group know-how and our resources talent and also a capital to invest sufficiently in their development and we hope to continue to do so to create great titles going forward and these are some of the titles that we are planning to release within the year for this fiscal year and some have already been announced And this is a very popular global game, Final Fantasy smartphone game will also be released. Our group is going to be releasing that. And this will be available globally. So we have high expectations for this title. And after the Demon Slayer, there's another popular anime called Jujutsu Kaisen Phantom Parade. So we are going to develop a new game for that. And we have high expectations for this new title as well. And we have some console games that we are developing at the moment. So we have a very, we have great top class game creators. And so we hope to release very high quality games in the near future. Moving on to the media business. It may seem like we haven't grown in the third quarter, but you will see the breakdown later. Last year, we had a pay-per-view group over one quarter, and that didn't happen this quarter. But if you take that into consideration, we have grown considerably well. Now, the number of other McDonald's has exceeded 68 million, and so we have continued to increase the number of downloads. And with respect to WAU, after we went over 10 million, it seemed like we didn't break through. But in July, we had a lot of programs, very good lineup. So for the recent period, we have seen very good WAU trends. And one of the reasons why we're seeing such great WAU is the MLB games, 166 games that we're broadcasting live, especially with Shohei Ohtani. So this is actually helping promote ABEMA. And we also exclusively live streamed Copa America, as well as the Open, British Open, together with TV Asahi. And also very important shogi games, as well as Japanese chess games. So there's one more game left, I believe, but we basically live streamed all of the Japanese chess major competitions. And we're very good at variety drama. And we also have more drama that depicts the dark side of modern society as well. So the lineup of our drama is expanding as well. We are working with TV Asahi collaborating our great content with their great content as well, and also working together with their popular news program as well. So we're working even more closely with TVS on HEAP. And I mentioned pay-per-view and how last year, many artists, we aired their live events and it was a trend. It was a boom and it started to settle down. But in July, we have actually added more to the lineup. The state of emergency has been in place for a very long time. So many of the artists have started to have online live events. So we're having many of the live events in July onwards. And as you can see from this graph, We grew last year, last fiscal year, because of pay-per-view. And you can see how pay-per-view contribution has decreased. But in the fourth quarter, we should see pay-per-view contributing once again more significantly and growing in the fourth quarter. And wind ticket is also doing well as well. This is for catering, cycling. so this is a resell of win tickets and we're we actually the latest comer to this industry and then we created our own service acquired the rights and worked with abema to try to grow this business and it's only been two years since we released the service but we're actually already catching up to the industry's top class top players and if we proceed at the space we'll probably take them over so we have abimas actually this is a very good match with other men as well we've proven that so this is the mid to long-term sales pipeline or plan So we have advertising care subscription and related business as well. And these are areas that we will be monetizing of business. And we are actually having a lot of these things are becoming more transparent and visible now. So this hasn't changed our midterm. and long-term pillar, but we want to make sure that the app is not going to be volatile, and we want to make sure that it becomes larger and we can increase monetization. And the app business has been our main business since we went public, since we were founded. So we came to increase sales and maximizing advertising effectiveness. And has been a very great hit, but we hope to stably develop these hit titles, we already have the structure in place to do so. So we hope to continue to release successful games. That is it from myself. Thank you very much for listening. This concludes the FI 2021 third quarter results presentation. Should you have any questions, please contact our IR team. Thank you for joining us today.