CyberAgent, Inc.

It is time, so we would like to begin the financial results briefing for cyber agent for FY2023 first quarter. Please refer to the disclaimer included within the briefing material with respect to the online financial briefing results we will be sharing with you today. Our CEO Fujita will now introduce this quarter's results. So I will take you through the FY 2023 first quarter financial results. For us, the first quarter has ended. But it's been a while. I don't know how long it's been since we have marked operating loss for the quarter. This is due to the large investments in the FIFA World Cup Qatar 2022 that we incurred this quarter, but we are on track in terms of our company's plans. Excuse me. So this is just a one-off transient loss. Second quarter onwards, we should be back to Our usual levels, so we hope that you will be patient and not panic. With respect to media, ABEMA, due to the FIFA World Cup, has grown significantly. Excuse me. This is also due to Japan National Team's great performance, but the users have praised our service and the content holder has become quite interested in Abema and advertisers as well. has become quite interested as well. They are quite happy. And although this has not been reflected in the results, however, the intrinsic value of Abema has significantly increased and enhanced. Next, moving on to the ad business. This has, for the most part, tracked well. Moving on to the game business. This was actually bad timing because it was at the same time as the FIFA World Cup. But because we didn't have any anniversaries happening this quarter, we saw a decrease in sales and OP. But I will explain this in the next few pages. The next quarter onwards, this should be improving significantly. Now, consolidated sales. for the quarter. The achievement rate against the forecast is about 23%. So we finished one fourth of the year and we're at 23%. So for us, we're on track. So the top line, people may think that if the top line is not doing well and if we're recording on loss, it might be dangerous, but our top line is doing well. So we're doing, we're on track. As I mentioned earlier, this is just a one-off transient cost. So just because we recorded a loss, we hope that our long-term supporters will not panic and abandon us. Next quarter onwards, we will be back on track. And in terms of SG&A, it's as usual. It's on the same levels. In terms of the number of employees, we have not seen any major changes. It's as usual as well. And this is a PL. And no major changes with respect to the balance sheet either. In terms of the forecast, we have announced that the OP will be around 40 to 50 billion yen. So the first quarter performance is as we had expected. And we will be celebrating our 25th year, and we continue to increase our operating profits. So we believe that we are progressing as we initially expected. Moving on to the individual businesses. First, the internet ad business, for the most part, is doing well. The economy has fluctuated, and there are some sensitive advertisers who've reacted to the economic conditions, but for the most part, we are doing well. Especially in terms of the sales environment, it's not that bad, so we are... increasing the number of employees to prepare for the future. And as you can see, we are working on digital transformation with large companies. And of course, this will start to bear fruit later on. but we believe that this will contribute to the enhancement or increase of our sales for the internet app business. With respect to the game business, the first quarter, if you look at the first quarter in FY21 and 22, every year, if first quarter tends to be lower, the performance needs to be smaller because, and this is OP as well, because our game releases as you can see in the red flags we're going to be celebrating anniversaries in january and in march so Basically, we don't release titles from October to December. We usually release them from January to March. So we will be celebrating many title anniversaries in the second quarter. So we believe that we will be recouping significantly in the next quarter. And we should be back on track at the normal levels. Going forward. Tokyo Revengers we released last month and this is marking a great start and other than that we have Jujutsu Kaisen and Final Fantasy interesting titles are on the horizon and these will be released in the future and the media business The sales is growing strongly. World Cup. Many people may think that a successful World Cup means that this will be reflected into the sales immediately, but we broadcasted the World Cup. Actually, we offered it for free, and we sold the advertising salon before the World Cup began. So the environment surrounding this business is quite good. And the World Cup. This is the reason why we booked operating losses, but we can't tell you how much the investments were cost for because we have to, there are confidentiality obligations. And the number of downloads has continued to increase steadily. And with the World Cup, this has jumped significantly. During the FIFA World Cup, we saw a WAU of 34.09 million, but remaining or The number of people who are continuing to watch has been very important. And this has actually surpassed expectations. More people are continuing to watch our service. Many people who watch Abema for the first time and experience had a great experience. The fact that we were able to welcome new users is actually significant for our business going forward. And we hope that many users will be returning. So the FIFA World Cup for the cyber agent group was a huge event for us as a group as a whole. This is the Abema by numbers during FIFA World Cup. We saw young men especially watching the FIFA World Cup, especially the M1 tier. And in terms of the viewing style, real time was 56, but on demand was 44%. And for sports broadcasting, this is quite significant. And of course, because many of the games were in the middle of the night, but people were able to replay on demand or time shift replay as well. And many advertisers... Some advertisers came to us and said they wish that they had actually paid for us on demand. So it was quite new for the sports broadcasting. And in terms of breakdown by device, I actually watch on TV quite a lot. And I thought that would be the case as well. But smartphone was 43%. So still a large. a proportion of users are still watching on mobile devices. The reason why we bought the, we acquired the FIFA World Cup broadcasting rights is because we wanted people to experience the convenience and the high quality as well. And people said that highlight replay or time shift replay was very convenient. So these kind of features were offered before the FIFA World Cup, but finally people started to realize. But being able to broadcast at the same resolution as the Terraso TV is something that we worked on, all of the team members worked on before the World Cup. And We prepared beforehand, but we were able to communicate the allure and the appeal of our service well during this period. And of course, this does not tie to or reflect the sales immediately, however. Many people are offering, many companies are offering content to us as well, so our content portfolio is expanding as well. And there are other celebrities coming to us wanting to take part in our advertising on our programming and there are more advertisers also approaching us as well. So those kind of aspects improved significantly. And especially variety and sports grew. So these are content that have a high affinity with M1 tier. And in addition, we added a new boxing channel, sports channel. There are a lot of matches happening all day. And so it actually has a high affinity with a service like ours. And boxing is quite popular as well, we now know. So we would like to continue to focus and strengthen this area. And pay-per-view has become a standard or part of our standard service for Ambema. And we thought that the pay-per-view card boxing card actually wasn't that strong, but it was actually, we saw a lot of viewers. And shogi, Japanese chess, we are broadcasting this on pay-per-view. And the first match was broadcasted also on YouTube free. However, we can't tell you how many, but we saw many people purchasing our pay-per-view service once the shogi match. So as a watching format, pay-per-view is becoming routine for many of our users. And this is how the Abema performance is tracking. So of course, the FIFA World Cup success, we will see the results of that in the future. We believe that the positive influence is starting to show. Winticket is one of the peripheral businesses and it's continuing to grow strongly as it has done before. And of course, there's a high affinity between this and our broadcasting. And also, Babbel Label has become part of our group and has signed a five-year contract. with Netflix and they will be introducing our world class content to the rest of the world. It's not really realistic to actually take Abema abroad and make it global like Netflix, but Netflix will be an important partner for us to share our world class content globally. And in terms of our mid to long term strategy, It has continued to remain the same and we're focusing on this. We will continue to grow and enhance and increase monetization. And in terms of ads, we are strong in digital and internet. So we would like to continue to increase market share by maximizing our strength and And with the games as well, we would like to continue to make successful long run hits. And we haven't said anything new, but we hope to continue to progress, make progress. And in terms of this graph, we tend to make large investments. And we group on these investments. And of course, we're not in the black yet, but... we are have made a shift towards starting to make profits and increase our sales. That's it for myself. Thank you very much. This concludes cyber agents fi 2023 first quarter financial results briefing. Please contact our office should you have any questions. Thank you for joining us today.