CrowdWorks : Summary of Financial Results for the First Quarter of the Fiscal Year Ending September 30, 2022 (Consolidated)

Summary of Financial Results for the First Quarter of the Fiscal Year Ending

September 30, 2022 [Japan Standards] (Consolidated)

				February 14, 2022
Company name:	CrowdWorks, Inc.		Stock listing:	Tokyo Stock Exchange
Security code:	3900	URL	https://crowdworks.co.jp
Representative:	Koichiro Yoshida, President and CEO
Inquiries:	Takatsugu Tsukii, Director			TEL: [phone]
Scheduled filing date of quarterly report:	February 14, 2022	Scheduled payment date of dividend:	-
Supplementary materials for the quarterly financial results:	Yes
Investor conference for the quarterly financial results:	None

(Million yen, rounded down)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending September 30, 2022 (From October 1, 2021 to December 31, 2021)

(1) Consolidated Financial Performance				(% figures show year-on-year increase or decrease)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
		Million yen		%	Million yen	%	Million yen	%	Million yen	%
Q1 FY ending Sep. 30, 2022	2,467		35.7	303	181.5	315	168.3	214	135.1
Q1 FY ended Sep. 30, 2021	1,818		(22.4)	107	-	117	-	91	-
Note: Comprehensive income	Q1 FY ending September 30, 2022: 214 million yen (171.7%)
		Q1 FY ended September 30, 2021: 78 million yen (-%)
		Profit per share	Diluted profit per share
				Yen		Yen
Q1 FY ending Sep. 30, 2022			14.09		13.86
Q1 FY ended Sep. 30, 2021			6.00		5.89
(2) Consolidated Financial Position
		Total assets		Net assets	Capital adequacy ratio
			Million yen		Million yen		%
As of Dec. 31, 2021			6,568		3,991		60.5
As of Sep. 30, 2021			-		-		-
Reference:	Shareholders' equity As of December 31, 2021: 3,976 million yen
		As of September 30, 2021: - million yen

As consolidated financial statements were not prepared for the fiscal year ended September 30, 2021, figures for the fiscal year ended September 30, 2021 are not provided.

2. Dividends

		Annual dividends per share
	End of Q1	End of Q2	End of Q3	End of Q4	Annual
	Yen	Yen	Yen	Yen	Yen
FY ending Sep. 30, 2022	-	0.00	-	0.00	0.00
FY ended Sep. 30, 2021	-
FY ending Sep. 30, 2022		0.00	-	0.00	0.00
(Forecast)
Note: Revision of most recently published dividend forecast: None

3. Consolidated Financial Forecasts for the Fiscal Year Ending September 30, 2022 (From October 1, 2021 to September 30, 2022)

(% figures represent year-on-year increase or decrease)

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Profit per share
				owners of parent
	Million yen		%	Million yen		%	Million yen		%	Million yen		%	Yen
Full year	10,000		-	750		-	-		-	-		-	-

Note: Revision of most recently published financial forecast: Yes

*	Notes
(1)	Changes in significant subsidiaries during the three-month period ended December 31, 2021		: None
	(Changes in specific subsidiaries affecting the scope of consolidation)
	No. of new companies: - (Company name:	) No. of excluded companies: - (Company name:		)
(2)	Application of accounting procedures specific to preparing quarterly consolidated financial statements	:		Yes
(3)	Changes in accounting principles, changes in accounting estimates and restatements
	(i) Changes in accounting policies associated with revision of accounting standards		:		Yes
	(ii) Changes in accounting policies other than the above (i)				:		None
	(iii)Changes in accounting estimates						:		None
	(iv) Restatements						: None
(4)	Number of outstanding shares (common stock)
	(i) Number of shares outstanding at term-end (including		Dec. 31, 2021	15,258,360 shares	Sep. 30, 2021			15,255,160 shares
	treasury shares)
	(ii) Number of treasury shares at term-end			Dec. 31, 2021	86 shares	Sep. 30, 2021			86 shares
	(iii)Average number of shares outstanding during term
		Dec. 31, 2021	15,256,654 shares	Dec. 31, 2020			15,225,074 shares
	(quarterly total)

• The summary of quarterly financial results is not subject to the quarterly review by certified public accountants or audit corporations.
• Explanation regarding the appropriate use of the earnings forecast, and other noteworthy items
  The forward-looking statements such as result forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable, and the Company makes no representations as to their achievability. Actual results may differ materially from the forecast, depending on a range of factors.

• Table of Contents of the Appendix

1. Qualitative Information Regarding the Quarterly (Cumulative) Accounts.....................................................................	2
(1)	Overview of Operating Results................................................................................................................................	2
(2)	Overview of Financial Position................................................................................................................................	3
(3)	Overview of Forecast of Operating Results Including Consolidated Financial Results ...........................................	3
2. Quarterly (Cumulative) Consolidated Financial Statements and Main Noted Items ......................................................	5
(1)	Quarterly (Cumulative) Consolidated Balance Sheet...............................................................................................	5
(2)	Quarterly (Cumulative) Consolidated Statements of Income and Comprehensive Income .....................................	6
(3)	Notes on Quarterly (Cumulative) Consolidated Financial Statements .....................................................................	8
	(Notes Regarding Going Concern Assumptions) .....................................................................................................	8
	(Notes on Significant Changes in the Amount of Shareholders' Equity) .................................................................	8
	(Application of Accounting Procedures Specific to Preparing Quarterly Consolidated Financial Statements)........	8
	(Changes in accounting policies) .............................................................................................................................	8
	(Segment information, etc.) .....................................................................................................................................	9
	(Business combinations-related matters) ...............................................................................................................	10
	(Material subsequent events) ..................................................................................................................................	11
3. Other ............................................................................................................................................................................	12
	Material Events Related to Going Concern Assumptions, etc................................................................................	12

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1. Qualitative Information Regarding the Quarterly (Cumulative) Accounts

(1) Overview of Operating Results

The forward-looking statements contained in this document are based on the judgments of the CrowdWorks Group (CrowdWorks, Inc. and its consolidated subsidiaries, hereinafter referred to as the "Group") as of the filing date of this document.

(1) Operating Results

In the first quarter of the current consolidated fiscal year, economic activities in Japan have resumed amid the prolonged COVID-19 crisis, but the economic environment remains uncertain due to the impact of infectious diseases caused by the variant strain.

In the Group, the COVID-19 crisis has led to changes in the values of companies and individuals regarding the way they work. This has led to an expansion of opportunities for women, seniors, and people with disabilities, who are potential labor forces, and an expansion of options for employees to work outside of working at companies, including side jobs or second jobs. With work- style reform laws gradually taking effect since April 2019, including legislation on equal wages for equal work in April 2020 and an extension of employment of older employees until age 70 effective by the revision of the Act on Stabilization of Employment of Elderly Persons in April 2021, the reform of employment system has been making progress.

In response to this trend, there have been structural changes in the way employees work, such as an increase in the number of companies that recruit human resources regardless of the type of employment, and the introduction at large companies of a four- day workweek system, which allows employees to work side jobs or second jobs. In addition, as off-line communication has been limited due to the coronavirus outbreak, the digitalization of corporate activities and the shift to e-commerce have brought about changes to the way human resources are procured, such as the utilization of external professionals (freelancers, side jobbers, double jobbers) and crowd workers working via the Internet. These developments have provided a boost to the Company's market, with 4.8 million registered users (0.55 million more users compared with the previous fiscal year) and 780,000 registered clients (80,000 more clients compared with the previous fiscal year) as of the end of December 2021.

In such an environment, under a policy to concentrate our investment in the matching business, which is our core business, the Company has been striving to achieve both growth and profit increase by improving productivity. As a result, the Group achieved a record quarterly operating surplus in the quarter under review owing to progress in productivity improvement initiatives; in addition to the fact that all indicators of the gross merchandise value (GMV), net sales, and gross profit of the matching business exceeded the performance forecast during the consolidated first quarter of this fiscal year.

In the matching business, there is a high corporate need for specialist personnel such as engineers and designers, and the use of specialist personnel (freelancers) on the premise of remote work is increasing. Demand for online office assistants is also booming due to the introduction of telework during the COVID-19 crisis and the digitization of business operations.

In the SaaS business, the number of subscribers who introduce CrowdLog, an SaaS service that efficiently manages the operation of freelancers and in-house human resources, is steadily increasing, and the Company plans to continue upfront investment.

As a result of the foregoing, the Group's business results for the consolidated first quarter of this fiscal year were net sales of 2,467,313 thousand yen (year-on-year increase of +35.7%), operating profit of 303,531 thousand yen (year-on-year increase of +181.5%), ordinary profit of 315,421 thousand yen (year-on-year increase of +168.3%), and profit attributable to owners of parent of 214,934 thousand yen (year-on-year increase of +135.1%).

Financial results by segment are as follows:

1. Matching Business
   In the matching business for the first quarter under review, the GMV, net sales, and gross profit have exceeded the performance forecast, thanks to the continuous investment in web advertising and hiring human resources through strengthening the sales structure. In addition, the Group recorded a record-high quarterly operating profit by working to further improve productivity.
   As a result, the GMV, which indicates the total amount of transactions, was 4,552,789 thousand yen (year-on-year increase of +24.5%), net sales were 2,421,779 thousand yen (year-on-year increase of +34.9%), gross profit was 1,050,771 thousand yen (year-on-year increase of +31.6%), and segment profit was 337,337 thousand yen (year-on-year increase of +116.4%).
2. SaaS Business
   During the first quarter under review, the SaaS business achieved by cultivating large corporate clients and strengthening marketing, the number of customers introducing business management tools increased steadily, and measures were taken to increase the unit price.
   As a result, net sales and gross profit were 42,689 thousand yen (year-on-year increase of +89.6%), and segment loss was 36,643 thousand yen (previous-years segment loss was 48,234 thousand yen).

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(2) Overview of Financial Position

Since consolidated financial statements were not prepared for the 10th consolidated fiscal year, comparative information for quarterly consolidated financial statements is not presented.

(Assets)

Total assets at the end of the first quarter of this consolidated fiscal year were 6,568,790 thousand yen. Current assets stood at 6,014,084 thousand yen, and for the main components, cash and deposits stood at 4,391,841 thousand yen, and accounts receivable - trade stood at 788,258 thousand yen, while accounts receivable - other stood at 795,040 thousand yen. Non-current assets stood at 554,706 thousand yen, and for the main components, property, plant and equipment stood at 63,061 thousand yen, intangible assets stood at 128,368 thousand yen, and investments and other assets stood at 363,276 thousand yen.

(Liabilities)

Total liabilities at the end of the first quarter of this consolidated fiscal year were 2,577,481 thousand yen. Current liabilities stood at 2,523,960 thousand yen, and for the main components, deposits received stood at 1,191,959 thousand yen, and accounts payable - other stood at 690,227 thousand yen. Non-current liabilities stood at 53,520 thousand yen.

(Net assets)

Net assets at the end of the first quarter of this consolidated fiscal year stood at 3,991,309 thousand yen. The increase in net assets was due to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.

(3) Overview of Forecast of Operating Results Including Consolidated Financial Results

It can be assumed that the domestic online market for human resources matching will also continue to expand in the medium- to long-term future owing to the structural shortages of human resources and the accelerated social trend toward seeking diversified work styles.

The fiscal year ending September 2022 is the final fiscal year of the "Three-year productivity improvement plan" for which we have been working on since the fiscal year ended September 2020. As with the fiscal years so far, we aim to achieve growth and profit increase by promoting productivity improvement and business structure reform while continuing to make concentrated investments in the matching business.

Although the economic situation remains uncertain due to the spread of COVID-19 variants, companies are diversifying their means of securing human resources regardless of the type of employment or work in the face of COVID-19, which has continued since 2020. In particular, there is a high demand for matching specialist (freelance) personnel in the fields of engineering, design, and office administration, and growth more than 40% is continuing.

As a result of the above, for the financial results for the Group for the fiscal year ending September 2022, we revised upward the GMV (gross merchandise value) to 18,500 million yen, net sales to 10,000 million yen, gross profit to 4,600 million yen, operating profit to 750 million yen, and Non-GAAP operating profit excluding share-based remuneration expenses to 850 million yen.

Consolidated Financial Forecasts for the Fiscal Year Ending September 30, 2022

Since the Company has shifted to consolidated financial statements again from the fiscal year ending September 30, 2022, year- on-year comparisons are not provided. Please see "[Reference] Comparison with Consolidated Conversion Results for the Fiscal Year Ended September 30, 2021" below for a comparison of consolidated results for the fiscal year ended September 30, 2021.

(% figures show year-on-year increase or decrease)

	GMV											Non-GAAP
	(Gross		Net sales		Gross profit		Operating profit
					operating profit
	merchandise value)
	Million		%	Million		%	Million		%	Million		%	Million		%
	yen		yen		yen		yen		yen
FY2022
Full year Forecast	18,500		-	10,000		-	4,600		-	750		-	850		-
(Consolidated)
[Appendix]
FY2021	15,347		-	7,769		-	3,484		-	575		-	593		-
Full-year Result
(Non-consolidated)

(Note 1) Since the Company has shifted to consolidated financial results from the fiscal year ending September 30, 2022, year- on-year comparisons are not provided.

(Note 2) The Company discloses non-GAAP operating profit as a measure of its essential operating performance. non-GAAP operating profit is the sum of financial accounting figures (Japan GAAP) exclude stock compensation expense.

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