CyberAgent, Inc.

We would like to now begin CyberAgent's FI25 third quarter results briefing. This session is being streamed. With respect to the information that will be shared today, please refer to the disclaimer included in the presentation material. CEO Fujita will take us through the results. I'm Fujita's CEO. I would like to take you through the results of our third quarter. We have seen very many, many hits, gain hits. So we've seen great results for this quarter. Overall, the OP was 2.4 times year and year. So the original plan, the budget that we had initially planned, our results have significantly overachieved them. So we can cover bisector media and IP business. In the third quarter, we thought that it might be a tough quarter. However, it did over exceed our expectations. It's just the advertising business. It's usually a very stable, healthy business, but we've seen decrease in sales and OP. We've seen some large clients leave our service. Other than that, the operations are in progress as usual. So we would like to get this back on track by doing what we do best and gain business. has increased by 3.2 times year-on-year in terms of OP. This is due to the two titles that we released during this time, which became great hits. And I would like to talk about that later in my presentation. These are the trends in the consolidated sales. So it's expanding very stably, very well. And moving on to the consolidated OP, sales and OP both. In the third quarter for us, it tends to be lower every year, but this quarter, we've seen very positive trends in both sales and OP. Here are the SG&A expenses. In terms of the number of employees, we did welcome new graduates in April this quarter, but these are the trends that we have seen. Here's the PL. And this is the balance sheet as well. Today, We announced an upward revision to our forecast. We finished the third quarter and we were planning to do $42 billion in operating profit, $820 billion in sales, but we've overachieved these targets already significantly in the game. We've seen hit gains and we're seeing very strong progress. So we have made significant upward revisions to our targets. Uma Musume has been a historical huge hit. And we've seen profits increase. And after that cycle was over, we've seen a little drop. And in FY23, we announced that we will be increasing sales and operating profit. And we were quite confident because we were planting the seeds to achieve that. But we believe that we've shown a very cool performance over the last three years. The net income for this quarter was 31 billion. We would like to go into each of the businesses, first starting with media and IP. This is growing by 17.7% year on year, so it's grown quite steadily. These are the services and subsidiaries included in the media and IP business. This is the OP I mentioned before that we expected this quarter to be a little bit tough, but from the third quarter, we actually acquired a barcasing risk for MLB. It was quite costly, but even given that, we've grown by 7.8 times year-on-year, so it's doing quite well. Here are the trends in WAU. MLB is also doing great, but on the other hand, our original programs, we've produced great hits, one after the other, so that's had significant impact. So the Abema, Vardy, and Drama programs that we create have become hits. So we have romance, programs that have become very popular among the teens, especially the one that you see in the upper left corner. I fell in love today. That's a great hit. And we're also releasing great animation hits as well. We have five animated series that we've started to broadcast. Some of them are on our own original IP. The Summer Hikaru Died is also aired on Netflix. It's number one on Abema, number two on Netflix. So this has become a smash hit. So Abema is at the center. We're strengthening the group synergy and we're working together with the Real Gate Company to open hotels that utilize IP. so we're developing a holistic ip ecosystem moving on to the internet advertising business i mentioned at the beginning of the presentation we lost one client that was quite that did a lot of business with us and that's to be expected in this business but aside from that our business is still doing quite well, quite stable. So we hope to make up for the loss with other from other aspects from other elements. So we don't want to panic. And in terms of OP, we usually see an uptick in hr because we welcome a lot of uh individuals at this time uh new staff at this time so the op margin decreased to 3.3 percent but this is this was to be expected what we will do is remains the same we aim to increase our share by bringing high advertising effectiveness so we will continue to focus in this area and continue to hone our competitive edge Moving on to the game business. We released two new titles in the third quarter and they became huge hits. And they have contributed to the significant increase in sales and OP. Of course, our existing titles are doing well, but the new titles are contributing significantly. So we've started to shift towards external payment and the more external payment we have, the higher the margin or impact we will see. So we hope that this trend will continue in the future. This has increased or improved our OP. April 16th, we released a new Gundam game. This truly has become a sticky game and it's an IP that's loved all around the world. So it's become a great hit and it's been quite stable since launch. And on June 17th, we released Shadowverse. And this has also become a huge hit. So it was only released two weeks ago. It's only been two weeks since the release of this game. It was released towards the end of the third quarter, but it is contributing significantly. And our proportion of games that have become a hit that we've released is quite high. And this is because we have great know-how development power within the group so that we can be very proud and we boast this very high success rates. And with respect to Uma Musume, June 26 we released an English version and this is the third huge hit next to Gundam and Shadowverse and We've seen great strong trends in the recent period because the English version is doing well as well. And Shadowverse and MMSMED, these are our own IP. And of course, they will contribute to a better OP margin as well, profitability. And the English version is all generated, sales is generated abroad. Up until the third quarter, We've released six games in FY25, and we plan to release Hello Kitty's game in 144 countries around the world. So that's a new update, new information that I would like to share at this time. So we will continue to grow the media and IP business around ABEMA. and we want to expand globally as well. The Uma Musume game that we have been working on and all of the other game titles are starting to generate significant revenue globally as well. So we are nearing this global vision that we have painted in the past. So we are getting closer and closer to achieving this. That concludes my part of the presentation. Thank you. We would like to conclude CyberHS FI25 third quarter results briefing. Should you have any questions, please reach out to the IR team. Thank you for watching today.