CyberAgent, Inc.

We would like to begin cyber agents FY2025 second quarter earnings briefing. This session is being streamed. With respect to the content we will share with you today, Please refer to the declaimer included in the presentation material. President and CEO Fujita will take you through the earnings results. I'm the President Fujita. We would like to first start by apologizing For the inappropriate accounting practices, we discovered at the consolidated subsidiary, so we have correct the past annual securities report. We apologize for the inconvenience caused. We would like to now take you through the financial earnings results from January to March 2025. The recent results have been overall quite healthy. It's doing well compared to the previous fiscal year. In the previous fiscal year, we released a console game and we made an upward revision last year in the second quarter, but it's a console game. So immediately after release, we saw concentration of sales, and we knew that it was going to be a tough quarter this fiscal year. But overall, we've achieved our targets. So in terms of the content, we've done better than last fiscal year. The media and IP business. OP was 6.5 times of last fiscal year, so it's grown significantly. And in terms of the ad business, the sales and OP both increased. And with respect to the game business, I mentioned the console game that we released last year. So bearing that in mind, the sales and OP have decreased, but Q and Q we've seen significant improvements, increases, and we have also released a big title since. So overall we're in a very good position. This is a consolidated sales. The consulate sells for this fiscal this quarter, which 217 billion yen, so the revenue has gone up. and we it has increased slightly higher about 100 million since last year this is not something that we aim that but we saw that the console game last year was a very big hit we had to make up our revisions but we were over we have overcome that and we were able to increase our profits during this period sgna there are no major changes it's as usual The number of employees as well you we've seen the same trends and April, we do welcome many new graduates so next fiscal year, we will see a significant increase in the number of employees. pl is, as you can see here. As well as a balance sheet. No major changes here either. You know. This is the fiscal year forecast. So sales 820 billion yen, OP 42 billion yen. So this includes the response from the console game we released last fiscal year. But as of the end of the second quarter, sales and operating profit both. We have achieved our first half targets. So first quarter, we thought we were on track. But after the second quarter, we've seen that we will be able to achieve we have over achieved slightly. And we would like to go into the individual segments first starting with media and IP. So we have continued to increase sales, sales increased by building a multi-layered revenue stream. And we believe that we will be able to continue to increase profits. We streamed MLB this fiscal year as well. So we hope that this will enliven that platform. We have been focusing on improving our quality of content, drama, and variety programs, and we're seeing our efforts bear fruit. So Dead or In Love is actually offered on Netflix at the same time, but it's been in top 10 for a very long time. And also Love Power Kingdom is a new dating reality show But it is a big hit, even though it's new. So we would like to nurture this as a new IP. Of course, the one that you see below the half of the junior and high school students are watching this is very popular amongst the younger audience. So we believe that we have been able to produce high quality content. With respect to the IP business, We haven't really mentioned this, and you might think that we're suddenly investing in anime, but from 2018, we've actually invested in small amounts, creating relationships with production firms. And now we are taking a more leading role and we hope to accelerate our efforts in this area going forward. So since ABEMA's launch, we have been expanding our IP business. So Umamusume, Anime, and Game became a huge hit during this time. So Anime and Manga, we want to fortify our capabilities in this area and merchandising. So we would like to take on a wide range of businesses. We're involving IP. And recently we established a CIA America subsidiary in the US and we will conduct marketing activities there and we mark the apartment we. have also opened the doors to the manga apartment and we welcome many talented young manga artists, so we hope that this these efforts will. barefoot and CSO is anime production company led by Ogawa-san. And this has also launched as well. we want to start upstream and stream on abema mark do marketing and events and merchandising and take this global and create games as well so we have been successfully developing our ip ecosystem and we want to continue to continue to expand this moving on to the internet app business with respect to the internet app business we have continued to see nearly double digit growth in sales and OP as well. It's not near double digit, but it's close. So it's continued to grow at a very high rate. our strength in the internet ad business is that we have great operational know-how and technological prowess so we can produce the desired impact but recently what is new is that we have created graphs and analyzed the performance of advertising and so We have provided AI agents that can help with analysis and improve operational efficiency. And it's become such a quality that now we can start offering it to external clients. So we have started to sell the AI agents as AI worker from March of this year. Moving on to the game business. Last year, the graph jumped quite significantly. This is due to the console game we launched February 1 of last year. But of course, this year, we didn't see benefits from that. But still, queue on queue, we have been able to increase our sales. This is for January to March. So we haven't this hasn't been reflected in the second quarter results yet. But Gundam is doing very well already. And the user feedback has been great. And we're very much looking forward to its performance in the future. In 2025, we will be launching six titles, and we've already started providing four. Gundam is one, but we also have Chikawa Sakamoto Days. So these have been performing as we had expected. And Under the Act on Promotion of Competition for Specified Smartphone Software, external payment method has been introduced. So until now, the game division was paying huge platform commission fees. But by using external payment options, the profitability of the games will significantly increase. So we have high hopes that this will increase our profitability for games. Lastly, mid to long term strategy. So game and internet ads was contributing to profit and we were investing in the media business going forward, but the media and IP business is now driving profitability. So we hope that the media will become a weapon for the internet business. And we also want to create IPs that will become the concept or Cs for games. So we want to use our collective strength to further increase sales and profitability. That's it from me. Thank you very much. This concludes CyberAgent's FY2025 second quarter earnings briefing. Should you have any questions, please reach out to the IR team. Thank you for watching today.