Summary of Financial Results for the Nine Months Ended September 30, 2021

Summary of Financial Results for the Nine Months Ended September 30, 2021

(Japanese GAAP) (Consolidated)

		November 12, 2021
Name of listed company:	Chatwork Co., Ltd.	Listing exchange: Tokyo Stock Exchange
Securities code:	4448	URL: https://go.chatwork.com/ja/
Representative:	Masaki Yamamoto, Representative director, CEO
Contact for inquiries:	Naoki Inoue, Director, CFO	Tel: [phone]

Scheduled date to file quarterly securities report : November 12,2021

Scheduled date to commence dividend payments: －

Preparation of supplementary materials on quarterly financial results: Yes

Holding of quarterly financial results meeting: Yes (for institutional investors and analysts)

(Amounts are rounded down to the nearest million yen)

1. Consolidated financial results for the nine months ended September 30, 2021

1. Consolidated business results (from January 1, 2021 to September 30, 2021)

(% indicate year-on-year changes)

Revenue

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Nine months ended

2,315

－

(340)

－

(342)

－

(341)

－

September 30,2021

Nine months ended

－

－

－

－

－

－

－

－

September 30,2020

(Note) Comprehensive income (millions of yen)

Nine months ended September 30, 2021: (344) (－%) Nine months ended September 30, 2020: (－) (－%)

Basic earnings per

Diluted earnings

share

per share

Nine months ended

Yen

Yen

(9.22)

－

September 30,2021

Nine months ended

－

－

September 30,2020

(Note) Diluted earnings per share for the nine months ended September 30, 2021 is not shown in the above table, because basic earnings per share is negative although there are potensial shares.

(2) Consolidated financial position

		Total assets	Net assets		Equity ratio
			Millions of yen	Millions of yen		%
As of September 30, 2021		3,139	1,639		49.5
As of December 31, 2020		－	－		－
(Reference) Equity	As of September	1,552 million yen As of December	－ million yen
	30,2021		31,2020

2. Cash dividends

		Annual cash dividends per share
	End of 1Q	End of 2Q	End of 3Q	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
Year ended December	－	0.00	－	0.00	0.00
31,2020
Year ended December	－	0.00	－	0.00	0.00
31,2021
Fiscal year ending December	－	0.00	－	0.00	0.00
31,2021(forecast)

(Note) Changes from forecast dividend most recently announced: No

3. Consolidated earnings forecast for fiscal year ending December 31, 2021 (from January 1, 2021 to December 31, 2021)

(% indicate year-on-year changes)

Revenue

Operating profit

Ordinary profit

Profit attributable to

Earnings per

owners of parent

share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

3,368

38.9

(761)

－

(764)

－

(762)

－

(20.59)

(Note) Changes from earnings forecast most recently announced : Yes

*Notes

(1)	Changes in significant subsidiaries during the period (changes in specified	: No
	subsidiaries resulting in the change in scope of consolidation)
(2)	Application of special accounting methods for preparing quarterly	: No
	consolidated financial statements

1. Changes in accounting policies, changes in accounting estimates, and restatement

1. Changes in accounting policies due to amendment of accounting standards, : No etc.

2)	Changes in accounting policies other than 1)	: No
3)	Changes in accounting estimates	: No
4)	Restatement	: No

(4) Number of shares issued and outstanding (common shares)

1. Number of shares issued and outstanding at the end of the period (including treasury shares)
2. Number of treasury shares at end of the period
3. Average number of shares during the period (for the nine months ended September 30, 2021)

As of September	37,124,187	shares	As of December 31,	36,880,640	shares
30,2021	2020
As of September	41	shares	As of December 31,	41	shares
30,2021	2020
Nine months			Nine months
ended September	37,042,534	shares	ended September	36,612,754	shares
30,2021			30, 2020

• Summary of quarterly financial results is not subject to quarterly reviews by certified public accountants or audit corporations.

* Explanation regarding appropriate use of earnings forecasts, and other notes

The earnings outlook and other forward-looking statements contained in this document are based on information currently available to and certain assumptions that are thought to be reasonable by the Company. Accordingly, such statements should not be construed as a guarantee of achieving the results by the Company. Actual results and the like may differ materially due to various factors. For the assumptions used for the forecast of financial results and notes on the use of the forecast of financial results, please refer to the attachment on page 3, entitled "1. Qualitative Information on Quarterly Financial Results

(3) Explanation of Future Forecast Information Including Consolidated Earnings Forecast."

• Table of Contents of the Attachment

○ Table of Contents of the Attachment	1
1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation on Business Results	2
(2)	Explanation of Financial Position	2
(3)	Explanation on Future Forecast Information Including Consolidated Earnings Forecast	3
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statement of Income (cumulative)
	and Quarterly Consolidated Statement of Comprehensive Income (cumulative)	5
(3)	Notes on Quarterly Consolidated Financial Statements	7
	(Notes on Going Concern Assumption)	7
	(Notes on Substantial Changes in the Amount of Shareholders' Equity)	7
	(Segment Information, Etc.)	7
	(Business Combinations, Etc.)	8
	(Significant Subsequent Events)	8

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1. Qualitative Information on Quarterly Financial Results

1. Explanation of Business Results

Business results

In the nine months ended September 30, 2021, the Company continued its proactive endeavors to reinforce sales activities for acquiring new customers, strengthen advertising and marketing activities, and enhance functions of existing services in an effort to achieve continuous business growth.

In addition, we made Chatwork Storage Technologies Co., Ltd. a consolidated subsidiary for the purpose of expanding our services to realize our long-term vision of a Business Super Apps.

As a result, the Company achieved net revenue of 2,315,518 thousand yen, operating loss of 340,872 thousand yen, ordinary loss of 342,056 thousand yen and loss attributable to owners of parent of 341,599 thousand yen for the nine months ended September 30, 2021. In addition, As an upfront investment, the steady progress in recruitment, and further acceleration of advertising and marketing activities have resulted in a negative impact on each level of profit below operating income.

The following describes the business results by each segment.

(Chatwork Segment)

In the Chatwork segment, the Company continued to demonstrate the advantages of Chatwork, its mainstay service, and endeavored to add new functions and cultivate customers. These efforts led to net revenue of 2,141,687 thousand yen and segment loss of 391,443 thousand yen.

Furthermore, the Chatwork segment is the Company's mainstay business and all indirect costs, including the headquarters functions, are expensed to maintain and expand this segment. Accordingly, the entire amount of the indirect costs is recorded as expenses in this segment.

(Security Segment)

With regard to the security segment, the Company makes it a policy to not expand the business proactively. As a result, net revenue was 173,830 thousand yen and segment profit stood at 50,570 thousand yen. Furthermore, since the entire amount of indirect costs is recorded for the Chatwork segment as stated above, the recorded segment profit of the security segment is the amount obtained by deducting only the direct costs required for conducting the segment, including advertising expenses, promotion expenses and outsourcing expenses, from the net revenue of the segment.

(2) Explanation of Financial Position

(Assets)

Total assets as of September 30, 2021 wewe 3,139,123 thousand yen. The main items were cash and deposits of 1,360,415 thousand yen and goodwill of 406,138 thousand yen.

(Liabilities)

Total liabilities as of September 30, 2021 were 1,499,210 thousand yen. The main items were advances received of 638,897 thousand yen and long-term borrowings of 382,500 thousand yen.

(Net Assets)

Net assets as of September 30, 2021 were 1,639,913 thousand yen. The main items were share capital of 1,462,055 thousand yen and 1,447,915 thousand yen.

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