CyberAgent, Inc.

It is time, so we would like to begin cyber agents earnings briefing for FY 2022 second quarter. This session is being live streamed. Please refer to the disclaimer indicated in the presentation material with respect to the content shared with you today. Our CEO Fujita will take you through the results. This is the CEO Fujita. So I would like to take you through the FY 2022 January to March second quarter earnings results. First of all, overall, for the most part, our business has performed strongly, is doing well. So there's not really anything to say in particular that there's nothing really noteworthy for this quarter. Overall, our sales increased by 16.9% year on year. We launched Uma Musume last year in the second quarter, but the OP is nearly the same as the previous year, same quarter. and revenues from up and down related businesses increased significantly, and so the profitability has improved. And with respect to the app business, sales and OP reached a new record high this quarter. And with respect to games, we did have successful anniversaries. Therefore, sales and OP grew queue on queue. This is the consolidated sales. After Uma Musume was released, there was a boom following the release. And this quarter, there were some concerns expressed about the impact from that. performs strongly and the OP is not the highest it's the second highest in the past so it's nearly it's on the same level as the second highest OP and the SG&A is 37.1 billion yen we spent a little bit more on marketing expenses there's nothing else in particular that should be mentioned with SG&A with respect to SG&A And the total headcount currently is 6,267 at the end of March. And as of April 1st, we will be welcoming 349 new graduates. So the next quarter, you will see a jump in the number of employees. And this is the profit loss statement. And the balance sheet is here. So we have $170 billion in terms of cash deposits as an entire group. We have also announced an annual forecast. We haven't announced this in the past. Now that we're past the second half, first half of the year, we know where our business is heading. So we have estimated the next half of the year, and the total for this year comes out to be 700 billion yen, OP is 70 billion yen. Uma Musume was released last year, and we want to overcome the impact from that and achieve a soft landing but as you can see the top line you can see that it significantly jumped last fiscal year until then we had a steady increase we went from 480 billion to 660 or 70 billion last year but we would like to continue to grow all of our business in and achieve a soft landing this is the detailed forecast So we want to do a net profit of 25 billion. And this is the progress to date achievement rate. Sales is 51.7%, so we've done a little bit more than half. And with respect to operation, an ordinary profit is around 65%. So we are quite confident that we will be able to achieve the forecast that we have shared with you. Now going forward, I would like to take you through the performance of each individual business. As I mentioned before in the beginning, internet and business is doing very well. So we've achieved record sales and likewise the OP was also a record high and not only have we achieved record high sales, but we have made upfront investments in AI and DX. We are making upfront investments in DX, especially in terms of collaborative DX. We are working together with strong big companies. We have alliances with large enterprises. And if these produce results, we believe that this will grow into another large revenue stream. And this is something that I say each time, but we have the technology and also the operational capability, and that enables us to maximize advertising effectiveness. So this might seem normal, but we are able to grow stably because of these strengths for many years. Moving on to the game business. We released a huge hit last year. So, of course, it's been quite difficult to handle the situation since. But for the last, this quarter, we had an anniversary for Uma Musume, the first anniversary for Uma Musume and also a Grand Blue Fantasy anniversary this year as well. So this also contributed to the growth quarter on quarter. And OP as well, we, were able to achieve 21 billion yen in OP. With respect to Uma Musume, we've achieved more than 14 million downloads so far. So last year, it was very popular. But after one year, we still have a very strong support from the audience. And from April, 10th we started a new to relaunch the new TV commercial and you can still it's still on air but it's generated a lot of buzz so this is going to generate buzz and therefore we're seeing strong support for the property the game and going forward we will be releasing Final Fantasy and Jesus Christ and we have great expectations for these games So we plan to release these gains within the year. Moving on to the media business. Media business as well, doing well. And top line is growing, of course, steadily. And also the operating losses have improved. Likewise, we're not in the black yet. We're still making upfront investments, however, The situation is improving, it's growing steadily. So Abema, we're investing, making upfront investments and you can see that it's growing very nicely. Especially, these are some of the popular titles. This fiscal year, we started airing the new series of Demon Slayer, so that's very popular. and we got married this is our original title and that became a huge hit as well and also we have different news programs as well so that's also helping the viewership having said that we didn't have major events this quarter but even after COVID, we have continued to grow very strongly. And recently, we have started airing MLB as well. It did support the growth loss last year, last fiscal year and also started again. And compared to the last season, we're seeing viewership increase increased by 1.7 times. And in June, we will have Tenshin Nasukawa versus Takeru. This is a very high profile match or fight between these two. And this will be offered as pay-per-view. So we will have that event happening in June. And also, if you buy a new Amazon Fire TV series, you will see the Abema button. on those devices, remote controls. So we will be available on even more devices as well. And if you buy a new TV, most of all new TVs will come with an Abema button on the remote control. So we believe that we are well equipped to expand viewership through TV as well. And related to that, we announced this the other day, but November, FIFA World Cup Qatar will be taking place and we will be airing all 64 matches live and for free on Abema. Of course, World Cup is the number one content, global content. So by airing this, we believe that this will contribute significantly to the recognition and awareness of Abema and its growth. so ahead of the world cup we are using a lot of development resources for this to air this content we want to actually offer very high quality resolutions similar to the level offered through bs programs as well. But we have time shifts as well as on demand replay various functionality as well to provide the one of a kind viewing experience. And we believe that people who watch Abema who watch these skates on Abema will feel that they is truly a unique experience, a truly great experience. And in terms of sales, we've increased sales for Abema for all these different areas advertising as well as the other properties pay-per-view and especially catering online sports betting win ticket is has grown at an accelerated pace so within the catering channel we have original program midnight caring which airs and this is helping to push this growth. But the Kaling market is actually growing recently by 1.3 times. And even though the market is growing, we've also managed to grow our market share to 31%. So of course, we were latecomers, and we started from zeros from scratch, this wind ticket capability, but we are market growth is currently at 31%. And so there's a strong affinity between Abema and Winticket. And we believe that we're able to compete with other players, we've shown proven that. And this is something that I've said from the very big for a long time, but we are going to have advertising subscription business, and also expand the related businesses as well. So we so we will accelerate our monetization effort. And this I also say off quite have said many times as well, but with respect to media, we will continue to grow and invest in ABEMA and also continue to run the advertising business and game business and make sure that we can actually release, generate a new revenue stream. So in the past, we've actually invested in the smartphone business or video content business and We want to make that new businesses more sustainable. But currently, we have advertising business and game business and the profits that we receive from those businesses, we are investing in the media business so it will become a stable revenue source in the future. And we are aiming to become a company with medium to long term supporters. That's it for my presentation. Thank you very much. This concludes CyberAgent's FY 2022 second quarter earnings briefings. If you should have any questions, please contact the IR team. Thank you very much for joining us today.