Appier : Consolidated Financial Results for the six months ended June 30, 2022

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Consolidated Financial Results for the six months ended June 30, 2022 [IFRS]

August 12, 2022

Company name: Appier Group, Inc.

Stock exchange listing: Tokyo Stock Exchange

Stock code: 4180

URL: https://www.appier.com/

Representative: Chih-Han Yu, Representative Director and CEO

Contact: Koji Tachibana, Senior Vice President of Finance

Phone: [phone]

Scheduled date for filing of quarterly securities report: August 12, 2022

Scheduled date of commencing dividend payments: -

Supplementary briefing material on quarterly financial results: Yes

Quarterly financial results briefing: Yes (for institutional investors and analysts)

(Amounts are recorded to nearest million yen)

1. Consolidated Financial Results for the six months ended June 30, 2022

(1) Consolidated Operating Results (cumulative)

																			(% changes year-over-year)
																				(Millions of yen)
																			Net income
												Income (loss)					(loss)		Total
								Operating		Net income		attributable to
		Revenue		EBITDA *					before			comprehensive
				income (loss)				(loss)		owners of the
									income taxes			income
																	parent
																			company
Six months	ended	8,557		54.2	475		-	(92)			-		(195)	-	(233)		-	(233)		-	3,846		-
June 30, 2022
Six months	ended	5,550		37.7	(144)		-	(783)			-		(815)	-	(858)		-	(858)		-	(382)		-
June 30, 2021
* EBITDA = Operating income + Depreciation and amortization + Tax expenses included in operating expenses + IPO-related expenses
					Basic earnings per share				Diluted earnings per share
											Yen							Yen
Six months ended June 30, 2022						(2.30)						(2.30)
Six months ended June 30, 2021						(8.95)						(8.95)

*1 On January 29, 2021, the Company allotted common shares by 90,761,489 shares to the sole shareholder of the Company. Accordingly, basic earnings per share and diluted earnings per share are calculated as if the allotment of shares was executed at the beginning of the year ended December 31, 2021.

*2 Stock options equivalent to 1,496,163 shares of common stock as of June 30, 2022 are not included in the calculation of diluted loss per share, as they are antidilutive to earnings per share. Such stock options may potentially dilute basic earnings per share in the future.

(2) Consolidated Financial Position

				(Millions of yen)
			Total equity	Ratio of equity
			attributable to
	Total assets	Total equity	attributable to owners of
	owners of the parent
			the parent company
			company
As of June 30, 2022	35,111	26,712	26,712	76.1
As of December 31, 2021	31,206	22,836	22,836	73.2

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

2. Dividends

																						(Yen)
														Annual Dividends
					End of 1st				End of 2nd		End of 3rd		End of Year		Total
					Quarter				Quarter			Quarter
FY2021								-				0.00			-		0.00	0.00
FY2022								-				0.00
FY2022 (Forecast)													-		0.00	0.00
(Note) Revision of most recently announced dividend forecasts: No
3. Consolidated Financial Results Forecast for the year ending December 31, 2022
																			(% changes year-over-year)
																				(Millions of yen)
																			Net income
													Income					(loss)		Basic
									Operating			Net income	attributable to
	Revenue		EBITDA *			(loss) before			earnings
			income (loss)		(loss)		owners of the
								income taxes				per share
																parent
																			company
		%					%		%			%		%		%		Yen
FY2022	18,455	45.8		1,068		-	(84)	-	(196)	-		(287)	-	(287)	-	(2.83)

• EBITDA = Operating income + Depreciation and amortization + Tax expenses included in operating expenses + IPO-related expenses
  (Note) Revision of most recently announced consolidated financial results forecasts: Yes

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

(Notes)

1. Changes in Significant Subsidiaries during the Period: No
2. Changes in Accounting Policies and Changes in Accounting Estimates
3. 1. Changes in accounting policies required by IFRS: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
4. Number of Shares Issued (common stock)
5. 1. Total number of shares issued at the end of the period (including treasury stock): As of June 30, 2022: 101,334,580 shares
      As of December 31, 2021: 101,164,657 shares
   2. Total number of treasury stock at the end of the period:

As of June 30, 2022: 80 shares

As of December 31, 2021: None

1. Average number of shares during the period (cumulative): Six months ended June 30, 2022: 101,216,835 shares Six months ended June 30, 2021: 95,854,892 shares

• • On January 29, 2021, the Company allotted common shares by 90,761,489 shares to the sole shareholder of the Company. Accordingly, total number of shares issued at the end of the period and average number of shares during the period are calculated as if the allotment of shares was executed at the beginning of the year ended December 31, 2021.
• This quarterly financial report is outside the scope of quarterly review procedures by a certified public accountant or an audit firm.
• Explanation of the Proper Use of Financial Results Forecasts and Other Notes

(Caution Concerning Forward-Looking Statements)

The forward-looking statements including the financial results forecast herein are based on information currently available to the Company and certain assumptions that can be deemed reasonable and are not intended as the Company's commitment to achieve such forecasts. Actual results may differ significantly from these forecasts due to a wide range of factors. For conditions prerequisite to the financial results forecast and the points to be noted in the use thereof, please refer to "1. Qualitative Information on Consolidated Financial Results for the Period (3) Explanation on Future Forecast Information including Consolidated Financial Results Forecast" of the Appendix.

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Contents of Appendix

1. Qualitative Information on Consolidated Financial Results for the Period …………………………………	2
(1)	Explanation on Operating Results …………………………………………………………………	2
(2)	Explanation on Financial Position …………………………………………………………………	3
(3)	Explanation on Future Forecast Information including Consolidated Financial Results Forecast ….	5
2. Condensed Consolidated Financial Statements and Major Notes …………………………………………	6
(1)	Condensed Quarterly Consolidated Statements of Financial Position ………………………………	6

1. Condensed Quarterly Consolidated Statements of Profit or Loss

	and Condensed Quarterly Consolidated Statements of Comprehensive Income……………………	7
(3)	Condensed Quarterly Consolidated Statements of Changes in Equity ………………………………	9
(4)	Condensed Quarterly Consolidated Statements of Cash Flows ……………………………………	10
(5)	Notes to Condensed Quarterly Consolidated Financial Statements……………………………….…	11
	Notes on Going Concern Assumption …………………………………………………...…...….….	11
	Notes on Significant Changes in the Amount of Equity Attributable to
	Owners of the Parent Company …………………………………………………...…….…………	11
	Segment Information …………………………………………………………………………….… 11
	Events after the reporting period …………………………………...………………………………	11

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English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

1. Qualitative Information on Consolidated Financial Results for the Period

(1) Explanation on Operating results

The Company's mission is "Turning AI into ROI by Making Software Intelligent".

During the six months ended June 30, 2022, demands for our services have been expanded because of the enhancement of our sales team and the efforts of continuous improvements of our solutions. ARR (*1) as of June 2022 was ¥16,585 million, a 53.1% growth from ¥10,834 million as of June 2021. Revenue for the six months ended June 30, 2022 was ¥8,557,210 thousand (up 54.2% year-over-year).

Gross profit for the six months ended June 30, 2022 was ¥4,291,298 thousand (up 58.4% year-over-year). This was due to an improvement in gross profit margin by enhancement of our CrossX algorithm and increase in the proportion of revenue derived from our other solutions, primarily AIQUA, AiDeal and AIXON, which have higher gross profit margins.

EBITDA (*3) was ¥474,845 thousand (¥143,530 thousand loss in the same period of the previous fiscal year), operating loss was ¥91,976 thousand (¥782,664 thousand loss in the same period of the previous fiscal year), loss before tax was ¥195,380 thousand (¥815,045 thousand loss in the same period of the previous fiscal year), and loss attributable to owners of the parent company was ¥233,195 thousand (¥858,351 thousand loss in the same period of the previous fiscal year) due to upfront investments in sales personnel and engineers for future business expansion.

(*1) Annual recurring revenue. For solutions provided under a consumption-based pricing structure, the ARR is calculated by annualizing the average monthly recurring revenue (*2) for the relevant period multiplied by 12. For solutions provided under a subscription-based pricing structure, the ARR is calculated by annualizing the recurring revenue for the last month of the relevant period multiplied by 12. The ARR for June 2022 is calculated by multiplying the one-month average of recurring revenue from January 2022 to June 2022 by 12 for solutions provided under the consumption-based pricing structure, and by multiplying the recurring revenue for June 2022 by 12 for solutions provided under the subscription-based pricing structure.

(*2) Revenue from recurring customers. For solutions provided under the consumption-based pricing structure, this refers to (1) customers that have used the Company's solutions for four or more quarters in a row and (2) new customers within the latest twelve months that have used the Company's solutions for three or more months in a row. For solutions provided under the subscription-based pricing structure, this refers to customers who have a contract with the Company for more than one year.

(*3) EBITDA = Operating income + Depreciation and amortization + Tax expenses included in operating expenses + IPO-related expenses

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