CyberAgent : FY2023 Third Quarter Consolidated Financial Results

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.

FY2023 Third Quarter Consolidated Financial Results [Japanese GAAP]

			July 26, 2023
Listed company name: CyberAgent, Inc.	Listed stock exchange: TSE Prime Market
Code No.:	4751	URL https://www.cyberagent.co.jp/en/
Representative:	Representative Director CEO	Susumu Fujita
Inquiries:	Senior Managing Executive Officer	Go Nakayama	Tel [phone]
Quarterly report submission date: July 27, 2023	Dividend payment start date	－
Preparation of Supplementary Materials for Quarterly Financial Results: Yes

Presentation of Quarterly Financial Results: Yes (live stream only)

(Amounts less than ¥1 million rounded down)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending September 2023

(1) Consolidated results of operations (cumulative)												(% = Year-on-Year Change.)
																					Net income
			Net sales	Operating income	Ordinary income	attributable to		Comprehensive
			owners of the				income
																					parent
			¥ million		%	¥ million	%		¥ million	%	¥ million	%	¥ million	%
3Q FY2023		534,973		0.1	18,966	(66.1)		19,460	(65.4)	3,602	(82.6)	10,696	(64.3)
3Q FY2022		534,348		9.8	55,898	(27.9)		56,266	(27.7)	20,701	(37.4)	29,927	(39.8)
			Basic earnings			Diluted earnings
				per share					per share
3Q FY2023								¥							¥
							7.11							6.34
3Q FY2022					40.94							38.76
.
(2) Consolidated financial position
				Total assets						Equity			Shareholders'					Shareholders'
											equity					equity ratio
As of 3Q FY2023						¥ million							¥ million				¥ million						%
				464,650							229,301				142,839						30.7
As of FY2022					383,698							222,915				144,264						37.6
2. Dividends
													Annual dividends
				1Q				2Q						3Q			Year end		Total
FY2022					¥						¥			¥				¥						¥
				－				0.00				－				14.00		14.00
FY2023					－				0.00				－
FY2023 (Forecast)																				15.00		15.00
(Note) Revisions to most recent dividend forecast: No
3. Forecast of the Consolidated Results for the Fiscal Year Ending September 2023
(October 1, 2022 - September 30, 2023)
																					(% = Year-on-Year Change.)
																					Net income			Basic
		Net sales		Operating income	Ordinary income	attributable to owners	earnings per
																					of the parent			share
		¥ million	%			¥ million			%			¥ million		%	¥ million			%		¥
Full year		720,000	1.3				25,000		(63.8)		25,000		(64.0)	6,000			(75.2)		11.85
(Note) Revisions to most recent consolidated earnings forecast: 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: None

(Changes in specified subsidiaries due to changes in the scope of consolidation)

New : －(Company name:	－)
Excluded : －(Company name:	－)

1. Application of simplified accounting methods and/or special accounting methods: None
2. Changes in accounting policies, changes in accounting estimates, restatements
3. 1. Changes associated with revisions of accounting standards: Yes
   2. Changes other than those included in i) : None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of shares issued

(1) Number of shares issued and outstanding at end of period (including treasury stock)

3Q FY2023: 506,097,200 shares

FY2022: 505,924,000 shares

(2) Number of shares of treasury stock issued and outstanding at end of period

3Q FY2023: 1,040 shares

FY2022: 1,004 shares

(3) Average number of shares during the period (cumulative quarterly period)

3Q FY2023: 506,018,346 shares

3Q FY2022: 505,576,066 shares

*The Consolidated Financial Results is not subject to audit. *Appropriate Use of Earnings Forecast and Other Matters

The forecast of performance is based on our expectations and assumptions as of the date the forecast was made. Our actual results could differ materially from those listed in this forecast because of various risks and uncertainties. For information related to the forecast indicated above, please refer to "1.Qualitative Information on the Quarterly Financial Results (3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information" on page 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.
Table of Contents
1. Qualitative Information on the Quarterly Financial Results	2
(1)	Explanation of Consolidated Financial Results	2
(2)	Explanation of Consolidated Financial Position	2
(3)	Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information	2
2. Quarterly Consolidated Financial Statements and Key Notes	3
(1)	Quarterly Consolidated Balance Sheets	3
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income	4
(3)	Notes to Quarterly Consolidated Financial Statements	5
(Notes Regarding the Going Concern Assumption)	5
(Notes Regarding Significant Changes in Shareholders' Equity)	5
(Notes Change in Accounting Policies)	5
(Additional Information)	5
(Segment Information)	6

1

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 the Quarterly Financial Results

(1) Explanation of Consolidated Financial Results

The CyberAgent Group has taken advantage of the growth of the smartphone market. At the same time, the group has been investing in ABEMA, a new TV of the future, to grow it in the medium to long-term mainstay.

As a result, during the cumulative consolidated third quarter, Net sales grew 0.1% year on year to ¥534,973 million, and Operating income amounted to ¥18,966 million (66.1% decrease). Ordinary income amounted to ¥19,460 million (65.4% decrease), and Net income attributable to owners of the parent decreased 82.6% to ¥3,602 million.

Earnings by business segments are discussed below.

(a) Media Business

The Media Business includes "ABEMA", "WINTICKET" and "Ameba", etc.

Resulted from steady growth in related sales of "ABEMA", a new TV of the future, Net sales grew and amounted to ¥100,336 million for the period, a 22.6% year-on-year increase. With the distribution of the FIFA World Cup Qatar 2022 in the first quarter, operating loss amounted to ¥11,461 million, compared to operating loss of ¥9,779 million for the same period in the prior fiscal year.

(b) Internet Advertisement Business

The Group's Internet Advertisement Business includes Internet Advertisement Division, AI Division, and CyberZ, Inc., etc.

While continuing to upfront investment, this segment achieved a record high of Net sales. It reported ¥301,323 million in Net sales, up 5.9% year on year. Operating income was ¥13,816million, a 28.8% year-on-year decrease.

(c) Game Business

The Game Business includes Cygames, Inc., Colorful Palette Inc., Sumzap, Inc., and Applibot, Inc. etc. Due to the slowdown after the anniversary events of major titles, Net sales amounting to ¥136,808 million, a

21.2% year-on-year decrease. Operating income was ¥20,253 million, a 58.2% year-on-year decrease.

(d) Investment Development Business

The Investment Development Business consists of the CyberAgent corporate venture capital business and the fund operations of CyberAgent Capital, Inc. The Investment Development Business recorded Net sales of ¥2,586 million (22.9% year-on-year decrease) and operating income of ¥1,446 million (a year-on-year decrease of 31.7%).

(e) Other Businesses

The Other Businesses segment includes Makuake, Inc., REALGATE INC., Zelvia Co., Ltd. and others.

This segment reported Net sales of ¥21,496 million, a 11.2% year-on-year increase. Operating income amounted to ¥369 million (a year-on-year increase of 3.6%).

1. Explanation of Consolidated Financial Position
   (Financial position)
   Total assets at the end of this consolidated third quarter have increased by ¥80,952 million compared to the end of the previous fiscal year and amounted to ¥464,650 million. It is mainly due to the issuance of convertible bonds and the increase in Long-term bank loans.
   Total liabilities have increased by ¥74,566 million compared to the end of previous fiscal year and amounted to ¥235,349 million. It is mainly due to the issuance of convertible bonds and the increase in Long-term bank loans.
   Equity have increased by ¥6,385 million compared to the end of the previous fiscal year and amounted to ¥229,301 million. It is mainly due to increase in Non-controlling interests.
2. Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information

The forecast of FY2023 has been revised from its original publication on October 26, 2022. For details, please refer to the "Notice on Revisions to FY2023 Earnings Forecast" released today (July 26, 2023).

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. Quarterly Consolidated Financial Statements and Key Notes

(1) Quarterly Consolidated Balance Sheets

				(Unit: ¥ million)
			FY2022	3Q FY2023
			(As of September 30, 2022)	(As of June 30, 2023)
Assets
Current assets
	Cash and deposits	165,907	203,842
	Trade notes and accounts receivable and	72,371	68,618
	contract assets
	Inventories	4,262	8,598
	Operational investment securities	16,457	21,088
	Other	34,887	42,175
	Allowance for doubtful accounts	(36)	(466)
	Total current assets	293,850	343,857
Non-current assets
	Property and equipment	18,974	23,456
	Intangible assets
	Goodwill	4,843	7,399
	Other	17,210	25,118
	Total intangible assets	22,054	32,518
	Investments and other assets
	Other	48,814	64,824
	Allowance for doubtful accounts	(17)	(76)
	Total investments and other assets	48,797	64,748
	Total non-current assets	89,826	120,723
Deferred assets	21	68
Total assets	383,698	464,650
Liabilities
Current liabilities
	Trade accounts payable	59,212	63,631
	Short-term bank loans	2,380	3,160
	Income tax payable	5,036	1,801
	Other	63,385	54,224
	Total current liabilities	130,014	122,818
Non-current liabilities
	Convertible bonds	20,102	60,617
	Long-term bank loans	3,750	43,466
	Provision for long service rewards for	2,787	3,203
	employees
	Asset retirement obligations	2,250	2,441
	Other	1,877	2,802
	Total non-current liabilities	30,768	112,531
Total liabilities	160,783	235,349
Equity
Shareholders' equity
	Common stock	7,239	7,325
	Capital surplus	11,636	11,861
	Retained earnings	119,204	115,827
	Treasury stock	(1)	(1)
	Total shareholders' equity	138,079	135,012
Accumulated other comprehensive income
	Unrealized gain on available-for-sale	5,887	7,657
	securities
	Foreign currency translation adjustments	298	169
	Total other comprehensive income	6,185	7,827
Stock aquisition rights	1,747	2,024
Non-controlling interests	76,903	84,436
Total Equity	222,915	229,301
Total liabilities and equity		383,698	464,650

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