Gmo Internet Group, Inc. · TSE:9449
Gmo Internet — Q2 2023 Earnings Presentation
118 slides from Gmo Internet's earnings presentation, Aug 9, 2023
Slide 1: Fiscal Year 2023 Second Quarter Results Presentation
Fiscal Year 2023 Second Quarter Results Presentation August 9, 2023 1
Slide 2: Overview, Group Overview, Segment Report, Topics
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 2
Slide 3: Overview | Executive Summary: Q2 FY2023 (Apr-Jun)
Overview | Executive Summary: Q2 FY2023 ( Apr-Jun ) Incubation business made a significant contribution in Q2’22. In Q2‘23 sales and profits decreased, partially due to extraordinary factors. Q2’22 Q2’23 YoY ( JPY billions ) Change ( Apr-Jun ) ( Apr-Jun ) Change Net Sales 69.4 64.4 -5.0 -7.3% Operat
Slide 4: Overview | Executive Summary: Q2 FY2023 (Apr-Jun)
Overview | Executive Summary: Q2 FY2023 ( Apr-Jun ) Evaluation Q2 Q1 42.5B ( Up 16.0％ YoY ) • Large deals in offline payments drive sales Net • Collection of No. 1 services sales JPY Internet Infrastructure • JPY 1 billion provisioned for bad debts OP JPY 6.0B ( Up 7.5％ YoY ) in the Freenance busine
Slide 5: Overview | Executive Summary: Q2 FY2023 (Apr-Jun)
Overview | Executive Summary: Q2 FY2023 ( Apr-Jun ) Net sales Operating Profit Down 5.0B YoY Down 10.1B YoY ( JPY billions ) ( JPY billions ) +1.9 +5.8 +0.8 ▲0.0 ▲0.3 19.8 +0.4 ▲0.1 ▲0.0 69.4 64.4 ▲12.3 ▲0.0 9.6 ▲10.1 ▲1.0 Q2‘ Infra Crypto Q2‘ Q2‘ Infra Crypto Q2‘ Finance Ad VC Other Finance Ad VC O
Slide 6: Extraordinary factors in Q2'23 | Overview
Extraordinary factors in Q2‘23 | Overview Provisions were made for non-performing loans to large customers in the finance- related businesses of Group companies. Business OP impact Segment Business description ( JPY billions ) Internet Infrastructure ( GMO Pepabo ) Factoring -1.09 Internet Finance (
Slide 7: Extraordinary factors in Q2'23 | Factors and Measures
Extraordinary factors in Q2’23 | Factors and Measures Measures have been initiated to prevent recurrence, not only in each business, but also as a Group governance issue. Factors Measures • Emphasizing 'GMO-ism,' a value we hold Group • Insufficient group governance due to the dear • Enhancing the G
Slide 8: Overview | Executive Summary: Q2 FY2023
Overview | Executive Summary: Q2 FY2023 Q2’22 Q2’23 YoY ( JPY billions ) Change (Jan-Jun) (Jan-Jun) Change Net Sales 125.5 130.0 +4.4 +3.6% Operating Profit 30.9 20.6 -10.3 -33.4% Ordinary Profit 33.4 22.5 -10.9 -32.7% Net Profit 15.5 6.3 -9.1 -59.1% 8
Slide 9: Overview | Shareholder Returns (Policy)
Overview | Shareholder Returns ( Policy ) Total Shareholder Dividend Payout Ratio Share Buyback Returns Ratio 50% Over 33% 17% Quarterly dividend Net profit at end of fiscal year to form basis of buyback in following year 9
Slide 10: Overview | Shareholder Returns (Dividend per share)
Overview | Shareholder Returns ( Dividend per share ) ( JPY ) 52.7 47.6 12.6 FY2023 Q2 29.5 30.8 10.8 28.0 Dividend per share 7.5 24.2 10.6 11.8 12.2 5.0 7.2 7.4 7.5 5.5 ■ Q4 ■ Q3 6.2 6.0 6.2 19.6 17.1 ■ Q2 12.2 ■ Q1 6.0 6.0 6.6 18 19 20 21 22 23 10
Slide 11: Overview | Shareholder Returns (Share buyback)
Overview | Shareholder Returns ( Share buyback ) Steady progress Progress plan (as at end-July) JPY 1.51B JPY 1.15B Cost of share * acquisition Number of 700K shares 431K shares * shares to be acquired *Upper limit; treasury shares acquired will be cancelled; acquisition period: 14 Feb 2023 - 9 Feb
Slide 12: Strengths
Strengths 12
Slide 13: Strengths (1): Operations and development of our own technology
Strengths (1) Operations and development of our own technology 13
Slide 14: Goal: Workforce of over 60% engineers & creators
Strengths (1) | Operations and development of our own technology 7,393 7,317 7,361 7,213 7,133 7,042 6,767 6,782 6,554 6,272 6,180 6,001 6,058 5,995 6,012 5,958 6,048 5,767 5,758 5,670 5,691 Goal: Workforce of over 5,454 48.9％ 49.9％ 60% 46.2％ 44.9％ 45.6％ 44.9％ engineers & creators Partners % Enginee
Slide 15: Strengths (2): Solid recurring revenues
Strengths (2) Solid recurring revenues 15
Slide 16: Indispensable products and recurring revenue business model
Strengths (2) | Solid recurring revenue Indispensable products that will not disappear and recurring revenue business model 16
Slide 17: Strengths (2) | Consolidated net sales
Strengths (2) | Consolidated net sales ( JPY billions ) 245.6* Sustainable growth 7.9 * Impacts from the application of accounting standards for revenue recognition ( accounting standard No. 29 ) 00 02 04 06 08 10 12 14 16 18 20 22 17
Slide 18: Analysis of consolidated net sales
Strengths (2) | Analysis of consolidated net sales 53.0% 241.6 245.6 36.1% 210.5 196.1 ( JPY billions ) 185.1 123.9 115.5 Solid recurring 154.2 100.5 revenues that 135.0 support sustainable 103.0 126.3 104.5 109.3 growth 82.9 79.2 79.4 69.9 130.1 110.0 117.7 93.1 Solid recurring revenue* 71.3 80.6 O
Slide 19: Strengths (2) | Analysis of solid recurring revenues
Strengths (2) | Analysis of solid recurring revenues Unit price Approx. JPY 10K*1 ( JPY ) 9,850*1 × Solid recurring ( JPY revenue 130.1*3 Approx. 13M contracts*2 billions ) Number of × contracts 13.22M*2 Approx. JPY 14 15 16 17 18 19 20 21 22 130B *3 19
Slide 20: Internet Infrastructure | Contracts
Internet Infrastructure | Contracts +0.58 +1.04 14.17 ( millions ) +1.31 +0.32 13.22 13.52 12.88 12.83 12.93 12.63 12.11 11.55 11.51 11.58 11.71 11.72 11.26 11.43 10.92 10.73 10.35 9.94 9.60 9.09 9.27 Solid revenue base 14.17M customers Increased approx. 0.81M/year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 21: 1. Overview 2. Group Overview 3. Segment Report
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 21
Slide 22: Group Overview | Business Segments (Composition)
Group Overview | Business Segments ( Composition ) Solid revenue base + financial customer base 16.71M customers Up 1.46M YoY *Net sales ratio is calculated based on the numbers before cancelling inter-segment transactions. *Number of customers is an aggregate number of customers ( the actual number
Slide 23: Group Overview | Listed Group Companies: Equity Share
Group Overview | Listed Group Companies: Equity Share Market Cap*1 Equity Share Stock Code Stock Name Exchange % Ownership*2 ( JPY billions ) ( JPY billions ) 9449 GMO Internet Group Prime 295.7 3769 GMO Payment Gateway Prime 819.1 40.7% 333.5 4051 GMO Financial Gate Growth 93.8 23.4%*3 21.9 7177 GM
Slide 24: Group Overview | Net Sales by Segment
Group Overview | Net Sales by Segment Changes in rules to ( JPY billions ) record the revenues* 69.4 64.6 65.5 64.4 61.2 62.5 1.2 0.9 59.2 4.3 12.8 2.0 56.4 57.5 6.8 56.0 53.6 52.8 53.2 5.7 1.2 0.7 12.7 12.2 3.6 50.9 50.8 11.3 2.0 11.3 Revenue down 1.4 0.8 2.7 49.1 49.1 10.0 47.5 48.0 1.6 8.2 6.9 10
Slide 25: Group Overview | Profit by Segment
Group Overview | Profit by Segment 19.84 ( JPY billions ) 10.16 12.47 0.07 11.12 10.99 10.53 0.10 Profit down 10.14 0.15 4.02 9.62 1.24 8.97 3.76 51.4% 8.28 8.13 2.34 8.01 3.65 7.06 3.83 6.51 0.42 1.48 3.85 2.97 5.95 0.66 3.10 2.68 5.26 0.01 3.81 6.09 0.92 5.73 5.53 4.46 5.00 5.34 5.37 2.12 0.35 0.3
Slide 26: 1. Overview 2. Group Overview 3. Segment Report
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 26
Slide 27: Internet Infrastructure | Collection of No.1 services
Internet Infrastructure | Collection of No. 1 services Domestic market share at 83.0 Strong No. 1 Domain Registry % ＊1 Domestic market share at Domain Registrar 81.2 Strong No. 1 % ＊2 Domestic market share at No. 1 Hosting & Cloud 57.7 % ＊3 No. 1 Ecommerce Platform 53K paid stores No.1 Domestic mark
Slide 28: Internet Infrastructure | Net Sales by Sub-Segment
Internet Infrastructure | Net Sales by Sub-Segment ( JPY billions ) 42.1 42.5 40.5 1.0 0.9 Changes in rules to 1.1 record the revenues* 38.0 36.6 0.7 35.8 0.8 34.6 34.3 0.7 34.7 33.5 33.5 33.9 0.7 0.5 0.5 Record 32.8 1.0 0.8 15.3 16.3 high 31.3 2.0 1.3 14.5 Revenue up 29.6 1.7 13.1 28.4 28.5 12.6 1.
Slide 29: Internet Infrastructure | Operating Profit
Internet Infrastructure | Operating Profit ( JPY billions ) 6.99 6.28 6.00 5.53 5.58 5.36 4.67 4.74 4.93 4.75 Profit up 7.5% 4.01 4.02 3.76 3.87 3.61 3.58 3.72 3.15 3.09 2.93 YoY 2.76 2.58 Bad debt-related costs 1.09B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 18 19 20 21 22 2
Slide 30: Internet Infrastructure | Cryptosecurity
Internet Infrastructure | Cryptosecurity Dual crown Number of e-contract accounts: No.1 Number of contracts: No.1 30
Slide 31: Internet Infrastructure | Number of e-contract accounts
Internet Infrastructure | Number of e-contract accounts ( millions ) 1.46M Number of e-contract accounts 1.25 No.1 Increased User companies ( extract ) 2.0-fold 0.73 YoY 20/4/15 Declaration of Abolition of Seals 20/5/13 Campaign launched Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 32: Internet Infrastructure | Number of contracts
Internet Infrastructure | Number of contracts ( millions ) 2.47M Dual crown 2.00 Increased Number of contracts 2.0-fold 1.21 No.1 YoY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 18 19 20 21 22 23 32
Slide 33: Internet Infrastructure | Digital government
Internet Infrastructure | Digital government Adoption by 60 local governments was determined * Become No.1 in terms of the number of local governments introducing GMO Sign. Aim at triple crown. Local governments introducing GMO Sign ( extract ) Tokyo Gunma Yamaguchi Oita Shibuya-ku, Tokyo Adachi-ku,
Slide 34: Internet Infrastructure | Ecommerce Solutions: transaction volume
Internet Infrastructure | Ecommerce Solutions: transaction volume ( JPY billion ) 125 125 117 119 Up 74 77 0.1% 112 113 119 118 YoY 70 74 Freenance SUZURI, Canvath minne Ecommerce Platform Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 18 19 20 21 22 23 34
Slide 35: Internet Infrastructure | Price Increase
Internet Infrastructure | Price Increase Implemented cost increase in response to an increase in costs due to rise in electricity charges, weak yen, semiconductor shortages, etc. ▶No impact on customer retention rate and the number of new applications ▶Gradual impact on financial results due to pror
Slide 36: 1. Overview 2. Group Overview 3. Segment Report
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 36
Slide 37: Online Advertising & Media | Net Sales
Online Advertising & Media | Net Sales ( JPY billions ) Changes in rules to 13.6 13.5 record the revenues* 0.9 12.7 1.2 12.2 12.3 12.4 12.0 12.0 0.8 12.0 0.7 11.4 11.5 11.3 11.8 0.9 11.3 0.9 Revenue down 0.9 0.8 0.9 11.0 0.8 0.7 0.7 10.7 0.7 3.0 0.8 0.7 3.7 0.6 0.9% 3.1 2.8 2.7 3.5 2.8 2.9 2.7 2.6 3
Slide 38: Online Advertising & Media | Operating Profit
Online Advertising & Media | Operating Profit ( JPY billions ) 0.92 0.64 0.73 0.66 Profit down 34.6% 0.54 0.42 0.35 0.31 0.32 0.24 0.14 0.17 0.25 0.25 YoY 0.09 0.06 0.05 0.06 0.04 -0.02 -0.05 -0.13 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 18 19 20 21 22 23 38
Slide 39: 1. Overview 2. Group Overview 3. Segment Report
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 39
Slide 40: Internet Finance | Historical Performance by Quarter
Internet Finance | Historical Performance by Quarter 12.7 ( JPY billions ) 12.2 11.3 11.3 10.7 10.3 10.0 Revenue up 18.3% 9.1 9.0 8.1 8.2 7.9 7.5 7.4 7.5 7.4 7.3 6.7 6.9 6.3 6.5 Profit up 6.0 28.9% Net Sales * * 3.81 3.85 3.65 3.76 3.83 3.30 3.39 2.91 3.10 2.97 2.60 2.58 2.62 2.68 YoY 2.26 2.31 2.12
Slide 41: Internet Finance | Net sales by each product
Internet Finance | Net sales by each product ( JPY millions ) FX : Recovery 1,926 Continues CFD : Steady 2,302 2,369 418 554 1,127 8,185 5,946 5,095 5,124 4,873 Securities and others 3,754 CFDs / Stock Index Binary Options OTC-FX / Binary Options Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 42: Internet Finance | FX net sales and trading volume
Internet Finance | FX net sales and trading volume 840 533 FX profitability 339 288 improved 240 172 8,185 ■ Net sales of OTC-FX/binary options ( JPY millions ) 5,946 5,095 5,124 4,873 ■ FX Trading volume ( JPY trillions )* 3,754 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018
Slide 43: 1. Overview 2. Group Overview 3. Segment Report
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 43
Slide 44: Cryptoassets
Cryptoassets Mining Cryptoassets mining business Cryptoassets Exchange Cryptoassets exchange business Payment Cryptoassets payment ┗Issue stablecoin 44
Slide 45: Cryptoassets | Net Sales
Cryptoassets | Net Sales ( JPY billions ) 6.8 1.3 5.7 1.5 4.3 Revenue down 2.6 2.6 2.7 3.6 0.7 26.0% 2.3 2.1 0.6 5.4 1.6 1.8 2.0 2.0 YoY 1.2 1.2 1.6 4.1 1.2 1.2 0.6 1.5 1.4 0.2 0.2 0.8 1.2 1.2 0.4 1.0 0.2 0.8 0.9 ■ payment 0.6 1.4 0.7 0.2 2.1 2.0 1.7 0.3 0.7 * 0.2 ■ mining 1.4 0.2 1.4 0.0 1.6 0.1 1.
Slide 46: Cryptoassets | Operating Profit
Cryptoassets | Operating Profit ( JPY billions ) 4.02 2.34 Operating loss 0.48B 1.48 1.24 0.67 * 0.71 JPY 0.42 0.42 0.38 0.25 0.21 0.15 0.10 0.08 -0.22 -0.26 -0.33 -0.39 -0.48 -0.73 -0.82 -0.98 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 * The Company started recording hedging
Slide 47: 1. Overview 2. Group Overview 3. Segment Report
1. Overview 2. Group Overview 3. Segment Report i ) Internet Infrastructure ii ) Online Advertising & Media iii ) Internet Finance iv ) Cryptoassets 4. Topics 47
Slide 48: Safe and Secure Internet for Everyone
Security | Slogan Safe and Secure Internet for Everyone 48
Slide 49: Security | Three areas
Security | Three areas 1. Encryption security 2. Cyber security 3. Brand security 49
Slide 50: Japan's strongest white hat hacker organization
Japan's strongest white hat hacker organization 50
Slide 51: Cybersecurity business | Service usage
Cybersecurity business | Service usage 51
Slide 52: Cybersecurity business | Achievements
Cybersecurity business | Achievements Cyber Security Assessment More than 6,000 cases Received World's Encouragement Award largest contest No.1 from the Minister of Internal Affairs and Communications Largest Received a Received a contest in Japan No.1 letter of thanks from the National Police Agenc
Slide 53: Cybersecurity business | Achievements
Cybersecurity business | Achievements Security contests Initiatives with public authorities *4 The No.1 Japanese team in all four global IoT forensic technology assists investigations competitions it participated in Received a letter of appreciation from Nagano Prefectural Police 1st in Japan, *1 1s
Slide 54: Cybersecurity business | SaaS Products
Cybersecurity business | SaaS Products API linkages with group commercial products planned to expand the number of accounts (from September onwards). The biggest business risk in 2023 is Cyber Attacks From 980 yen/month yen Check your company's website for free Register by end-September 2023 for fre
Slide 55: Adapting to AI Technology
Adapting to Al Technology GMO
Slide 56: Adapting to AI Technology | Themes
Adapting to AI Technology | 3 Themes 1. Save Time & Cost 2. Improve the Quality of Existing Services 3. Provide New Services to the AI Industry 56
Slide 57: Adapting to AI Technology | Save Time & Cost
Adapting to AI Technology | Save Time & Cost Strengthening AI education Expert-led online seminars twice a month to deepen understanding of the latest trends and tools. *1 *2 Shota Kiuchi Masahiro Chaen CEO, SHIFT AI, Inc. Representative Director, TALMOOD, Inc. Advisor, GMO AI & Web3, Inc. Advisor,
Slide 58: Adapting to AI Technology | Improve the Quality of Existing Services
Adapting to AI Technology | Improve the Quality of Existing Services Embedding has started in various services to enhance functionality. Internet Infrastructure Online Ad & Media 58
Slide 59: Adapting to AI Technology | Provide New Services to the AI Industry
Adapting to AI Technology | Provide New Services to the AI Industry Sequential release of services that will become the infrastructure of the AI industry. *1 *2 *3 *1: "Japan's first GPU hosting service 'ConoHa for AI' for AI start-ups with ultrafast NVIDIA H100 and NVIDIA L4" (23/6/5). *2: "AI Star
Slide 60: No.1 AI Application Group
No.1 AI Application Group 60
Slide 61: Internet for Everyone
Internet for Everyone 61 61
Slide 62: Next earnings announcement and cautionary notes
We are planning on making an earnings announcement for FY2023 Third Quarter after 3 pm on November 13, 2023. This document includes projections based on expectations, premises and plans as of August 9, 2023. These projections may differ from actual results due to factors including changes in the glo
Slide 63: Appendix
Appendix 63
Slide 64: Group Overview, Financial condition and strategy, Consolidated results, ESG
Group Overview Financial condition and strategy Consolidated results ESG activities 64
Slide 65: Group Overview
Group Overview Company Name GMO Internet Group, Inc. Decentralized group management Founder, Chairman Masatoshi Kumagai in order to adapt rapid changes of and Group CEO Internet industry. Address (Group Head Office) Cerulean Tower 26-1 Sakuragaokacho, Shibuya-ku Tokyo (The 2nd Group Head Office) SHI
Slide 66: Group Structure by each segment (1/2)
Group Structure by each segment(1/2) GMO-AP (4784) GMO-IG (9449) GMO-TE GMO-PG GMO-FG (6026) (3769) (4051) Internet GMO-GSHD Online Advertising GMO-ME Infrastructure (3788) & Media (6180) GMO-PB (3633) GMO-RE (3695) Other GMO-PG：GMO PAYMENT GATEWAY GMO-AP：GMO ADPARTNERS Other GMO-FG：GMO FINANCIAL GA
Slide 67: Group Structure by each segment (2/2)
Group Structure by each segment(2/2) GMO CLICK GMO-IG(9449) Securities GMO-FH GMO-FH GMO-FH Internet Finance (7177) Cryptoassets (7177) (7177) GMO Coin GMO Gaika* （Gaika ex byGMO) Other Incubation Other Listed subsidiaries GMO-FH：GMO FINANCIAL HD *Gika ex byGMO has changed its name GMO Gaika as of J
Slide 68: Internet services operations
Internet services operations GMO-IG(9449) GMO-GSHD (3788) Domain GMO-PB (3633) Security Other Other GMO-PG (3769) GMO-IG Payment GMO-FG (4051) GMO-GSHD (3788) Hosting & cloud Other GMO-PB (3633) Other Provider GMO-IG GMO-PB (3633) E-commerce solutions Other Listed subsidiaries (stock code) 68
Slide 69: Group Overview, Financial condition and strategy, Consolidated results, ESG
Group Overview Financial condition and strategy Consolidated results ESG activities 69
Slide 70: Consolidated Cost Composition
Consolidated Cost Composition (JPY millions) 60,000 55,000 50,000 12,013 Human resources 11,270 12,227 Advertising and promotion 45,000 11,768 11,989 4,218 3,692 3,294 Depreciation and leases 40,000 10,602 4,327 4,047 3,749 4,162 Outsourcing costs 35,000 3,771 4,724 4,655 3,208 4,012 4,137 4,909 Com
Slide 71: Consolidated Balance Sheets
Consolidated Balance Sheets GMO GMO End of End of (JPY millions) Changes Financial HD Internet Group 12/2023 6/2023 (End of 6/2023) (End of 6/2023) Current Assets 1,408,015 1,513,238 105,222 1,063,280 141,380 Cash & Deposits 341,970 355,111 13,141 81,741 107,010 Fixed Assets 134,725 156,010 21,284 2
Slide 72: Consolidated Statements of income
Consolidated Statements of income Q2'22 Q2'23 supplementary (JPY millions) Changes (1-6/2022) (1-6/2023) information Net Sales 125,556 130,043 3.6% Gross Profit on Sales 80,087 75,743 -5.4% Operating Income 30,941 20,618 -33.4% （OP Margin） 24.6% 15.9% -8.7pt Non Operating Profit and Loss 2,541 1,918
Slide 73: Financial Strategy: Asset management and Procurement
Financial Strategy ・Avoid excessive risk-taking, considering balance of Shareholders equity ・Aiming to increase the absolute amount of Shareholders Equity, 100 Billion yen. Asset management Procurement ①Business All investments are subject to ①Multiple our Risk management policy, Agile procurement i
Slide 74: Financial Strategy | Procurement: Multi ways of financing
Financial Strategy｜Procurement① Multi ways of financing • Continuous procurement helps growth capital ensured. The way to procure Totall Interest-bearing debt Direct Indirect （JPY 100M） FY20 FY21 FY22 Domestic Total 2,083 2,946 3,911 Debt finance Corporate Bonds Corporate 166 659 717 Individual bond
Slide 75: Financial Strategy | Procurement: Lengthening term, Fixed interest rate
Financial Strategy｜Procurement②③ Lengthening term・Fixed interest rate • Aiming to build a strong financial base Debt balance average term Fixed interest rate ratio （Year） FY20 FY21 FY22 （％） FY20 FY21 FY22 Corporate bond 2.4 5.7 3.9 Corporate bond 100.0 100.0 100.0 Debt finance Debt finance 3.0 3.8 3
Slide 76: Financial Strategy | Asset management: Cash on hand
Financial Strategy｜Asset management②Cash on hand • Keeping enough repayment cash(the amount for debt financing repayment next year and for corporate bond’s repayment next 2 years) （100M Yen） FY20 FY21 FY22 cash and cash equivalents 2,186 2,340 3,222 Balance of interest debt within 187 2,057 793 3Yea
Slide 77: Others | Credit rating
Others｜Credit rating Thinking • Plan to maintain current rating and aiming to be upgraded. • Having conversation with R&I before-hand, when decision making on a huge investment to be carried out. Current situation Rating agency Issuer Rating JCR A-(Stable) R&I BBB+(Stable) 77
Slide 78: Group Overview, Financial condition and strategy, Consolidated results, ESG
Group Overview Financial condition and strategy Consolidated results ESG activities 78
Slide 79: Global Operations | Global Net Sales
Global Operations | Global Net Sales (JPY billions) 9.2% 8.2％ 7.4％ 5.93 Net sales 6.1％ 6.4% 5.12 5.5％ YoY 4.84 Global Sales Ratio 15.8%UP 3.07 2.80 2.86 Net Sales Since Q2 FY2020, MacroKiosk is no longer a consolidated subsidiary. We deducted MacroKiosk values from net sales retroactively to Q1 FY20
Slide 80: Internet Infrastructure
Internet Infrastructure 80 80
Slide 81: Internet Infrastructure | Breakdown of Operating Profit
Internet Infrastructure | Breakdown of Operating Profit (JPY billions) 5.58 Payment business 4.38 Other Cost distribution 3.63 3.12 2.42 2.60 1.73 1.95 1.59 1.68 1.38 1.27 -0.34 -0.42 -0.40 -0.38 -0.64 -0.85 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 18 19 20 21 22 23 81
Slide 82: Internet Infrastructure | Provider - KPIs
Internet Infrastructure | Provider - KPIs Revenue Subscriptions (JPY millions) (thousands) Changes in rules to record the revenues* 2,262 2,271 2,213 10,524 10,593 10,191 2,087 9,606 8,429 1,650 6,460 1,202 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 83: Internet Infrastructure | Provider - KPIs (number of lines)
Internet Infrastructure | Provider - KPIs（number of lines) Optical line (Since July 2021) Others Mobile Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2022 2023 83
Slide 84: Internet Infrastructure | Domain Registration - KPIs
Internet Infrastructure | Domain Registration - KPIs Revenue Contracts (JPY millions) (thousands) 7,585 Changes in rules to record 7,084 the revenues* 6,920 6,704 6,573 2,388 6,050 2,244 2,144 2,179 2,020 1,902 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 85: Internet Infrastructure | Domain business
Internet Infrastructure | Domain business ②2009～ Registry (wholesale) ①1999～ ③2012～ Registrar (registration/sale) Japan Overseas 85
Slide 86: Internet Infrastructure | Domain business contracts progress
Internet Infrastructure | Domain business contracts progress (thousands) 1,795 1,161 67.1%* 957 Renewal rate: 696 656 614 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2022 2023 * Renewal rate for domains registered between September 2016 and May 2021 (2nd ren
Slide 87: Internet Infrastructure | Hosting & Cloud - KPIs
Internet Infrastructure | Hosting & Cloud - KPIs Revenue Contracts (JPY millions) (thousands) Changes in rules to record the revenues* 1,095 1,115 1,025 5,048 917 4,569 866 815 3,946 3,726 3,610 3,519 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 88: Broad ASP shopping cart businesses
Broad ASP shopping cart businesses Recurring revenue and transaction revenue through a natural cross-selling Feature Online store Payment Service Business model Recurring Transaction Revenue Number of stores x unit price GMV x commission rate, etc. Reportable segments Ecommerce Solutions Payment 88
Slide 89: Internet Infrastructure | Ecommerce solutions - KPIs
Internet Infrastructure | Ecommerce solutions - KPIs Revenue Contracts (ASP shopping cart)* (JPY millions) (thousands) Other Transaction revenue (minne・SUZURI) Recurring revenue (ASP shopping cart) Changes in rules to record the revenues* 4,195 4,046 67.7 3,687 65.1 64.2 3,622 63.9 59.7 53.6 2,816 2
Slide 90: Internet Infrastructure | Security business
Internet Infrastructure｜Security business Having our own Certificate Authority, we can provide both of types ◆E-sign ◆Digital-Sign Proof strength ◎ ○ (Electronic Signature Law Article 3) Process Approved by Certificate Verified by email Authority Less load for contractual Merit strict governance par
Slide 91: Internet Infrastructure | Security business | Our vision
Internet Infrastructure | Security business | Our vision Contribute to the world that securely connects important information Digital ID Digital Asset Asset certification Finance, Information and Rights IDaaS E-Sign IoT for Certification for semiconductors Individual ID Certification for device ID I
Slide 92: Cybersecurity business | Synergy
Cybersecurity business | Synergy Use our customer base Main Marketing strategy service/product Local governments Certain large companies Push Large & medium- sized companies Pull small and medium-sized companies 92
Slide 93: Cybersecurity business | Mid- to long-term growth
Cybersecurity business | Mid- to long-term growth Expand the business scale by using the customer base and introducing SaaS products SaaS products Using the the customer base Existing business 93
Slide 94: Internet Infrastructure | Payment processing - Our Role
Internet Infrastructure | Payment processing -Our Role Connecting merchants and payment companies through ‘contracts,’ ‘payment information,’ and ‘money flow’. Consumer Merchant GMO-PG Payment Company ※1 consolidated subsidiaries 155,598 stores 40+ Credit card (As of end-June 2023) companies EC Conv
Slide 95: Internet Infrastructure | Payment Quarterly KPIs
Internet Infrastructure | Payment Quarterly KPIs Group-wide annual TRX value reaches approx. ¥14.0 trillion 155,598 Proportion of Representative contract in online TRX value：approx. 40%*4 *1 The standards for calculation the number of operating stores have been revised from Q3 FY2023. Figures exclud
Slide 96: Online Advertising & Media
Online Advertising & Media 96 96
Slide 97: GMO-Research | Audience Engagement Platform
GMO-Research | Audience Engagement Platform Audience 3 Number of Engagement Consumer’s Voice increase Platform Client-side API Panel-side API Quality (Supply-side) Management 2 1 Client-side Panel-side API connection API connection increase increase * Prepared based on Presentation material of GMO-R
Slide 98: GMO-Research | Business Model
GMO-Research | Business Model Standardization of low-cost internet research tools which were previously developed on a per- company basis Survey Tabulation Past Creation /Analysis Each company’s own system Research Company A Survey Distribution Company A Panel Data Collection Company’s own Survey Ta
Slide 99: GMO-Research | What's happening in the Sample Panel Market
GMO-Research | What’s happening in the Sample Panel Market ・Established Market Research companies continue to outsource online sample management ・Marketers easily perform lite research with panels (consumers) with Self Service Platforms ・API connections with other sample panel providers using lite r
Slide 100: Internet Finance
Internet Finance 100 100
Slide 101: Allowance for doubtful accounts in the Thai securities business
Regarding the recording of the allowance for doubtful accounts in the Thai securities business As a result of reviewing the recoverability of credit transaction loans and others, where a subsidiary in Thailand received deposits as collateral from customers in credit transactions, due to the decline
Slide 102: Extraordinary loss in the Thai securities business
Regarding the recognition of Extraordinary in the Thai securities business Regarding More Return shares, in Q1'23, our subsidiary in Thailand recorded an Extraordinary loss of 890 million yen on investment securities valuation due to a significant decline in the fair value of the same shares acquire
Slide 103: Internet Finance | Domestic FX Volume and share transition
Internet Finance |Domestic FX Volume and share transition Trading volume decreased but profitability improved. Domestic trading volume Domestic share USD／JPY （JPY Trilion） (Sum of 3 companies ※1 (Sum of 3 companies SHARE18.9%: At the end June 2023 JAN 2003 JAN 2018 JAN 2023 GMOFH made this material
Slide 104: Internet Finance | CFD Transaction and Revenue transition
Internet Finance | CFD Transaction and Revenue transition Transaction(right) （JPY Trillion） Revenue (left) （JPY Million） Transaction volume YoY 21.5 %Down Profit YoY 17.7% UP Trading volume has decreased, focusing on U.S. stock index and crude oil and natural gas * Prepared based on Results Presenta
Slide 105: Internet Finance | CFD deposit margin balance
Internet Finance | CFD deposit margin balance （JPY billion） YoY 5.9 %UP * Prepared based on Results Presentation of GMO-Financial Holdings 105
Slide 106: Internet Finance | FX Business Model
Internet Finance | FX Business Model • Effective matching and thorough risk minimization with cover transactions executed with counter parties as soon as customer orders exceed acceptable risk position. GMO CLICK Securities ● ● ● Hedge the client transactions ● ● ● that exceed Cover order Method (1)
Slide 107: Cryptoassets
Cryptoassets 107 107
Slide 108: Cryptoasset Business
Cryptoasset Business Mining Mining Business Crypto Exchange Exchange business asset Payment Payment business ┗ Issuing Stablecoin 108
Slide 109: Cryptoasset Exchange Business | Transaction volume
Cryptoasset Exchange Business | Transaction volume （JPY Billion） YoY 64.5 %DOWN ＜ New Services ＞ 26 th April, started FX service 8 th July, added 3 new Coins (FIL, SAND and CHZ） * Prepared based on Results Presentation of GMO-Financial Holdings 109
Slide 110: Cryptoasset Exchange Business | Accounts and deposit asset transition
Cryptoasset Exchange Business | Accounts and deposit asset transition Client Asset Accounts under Cryptoasset （thousand accounts） Custody accounts （JPY Billion） YoY 47 K UP Deposit Asset YoY 62.5 %DOWN * Prepared based on Results Presentation of GMO-Financial Holdings 110
Slide 111: Cryptoassets Exchange | Business model
Cryptoassets Exchange | Business model OTC Trading Exchange Trading Hedging counter part positions Offering the order matching platform by cover order Liquidity Provider Customer Broker Trading Cover order Trading BUY Exchange SELL Main income：Spreads Main income：Transaction fee （buy and sell spread
Slide 112: GMO Aozora Net Bank
GMO Aozora Net Bank 112
Slide 113: Net Bank | Number of business accounts
Net Bank | Number of business accounts （Thousands） 89 77 1 66 about .9-fold 57 47 UP YoY 39 32 27 23 19 16 13 10 6 3 4 0 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 19 20 21 22 23 113
Slide 114: Net Bank | Total number of contracted Embedded Financial service
Net Bank |Total number of contracted Embedded Financial service （per contract） 504 454 Strong trend 420 367 322 281 233 196 158 127 103 79 59 29 39 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 19 20 21 22 23 114
Slide 115: Group Overview, Financial condition and strategy, Consolidated results, ESG
Group Overview Financial condition and strategy Consolidated results ESG activities 115
Slide 116: ESG | Sustainability management for SDGs
ESG｜Sustainability management for SDGs Our business help Social and environmental issues to be solved. ・ ・ ・ 116
Slide 117: ESG | Disclosure processes
ESG｜Disclosure processes ◼ Released our Activities for SDGs ■Drawn up basic sustainability policy 2021 ◼ Set up sustainability promotion committee ◼ Updated CG report Preferentially atempting to expand ◼ Introduced of a group executive officer 2022 system ESG disclosure ◼ Expanding ESG disclosure ht
Slide 118: Internet for Everyone
Internet for Everyone 118 118