Gunosy, Inc. · TSE:6047

Gunosy — FY2023/5 Earnings Presentation

59 slides from Gunosy's earnings presentation, Jul 14, 2023

Slide 1: FY2023/5 Financial Results
FY2023/5 Financial Results Gunosy Inc. TSE Prime (6047) July 14, 2023
Slide 2: INDEX
1. Company Profile P3 2. Executive Summary P8 • Financial Highlights • Gunosy • Game8 • slice 3. Financial Results for FY2023/5 P 29 INDEX 4. FY2024/5 Outlook And Policy P 34 5. Initiatives in LLM P 42 6. Business Overview by Division P 47 7. Reference Materials P 54 （C） Gunosy Inc. All Rights Reser
Slide 5: History
History November 2021 June 2016 Achieved unicorn status in the fintech sector by raising “NewsPass” released significant funds in its Series B funding round November 2012 July 2018 Established Gunosy Capital Established Gunosy Inc. in and started investment Roppongi, Minato-ku, Tokyo business 2012 2
Slide 6: Gunosy Group Business Portfolio
Gunosy Group Business Portfolio Medium- to long-term growth driven by three businesses 1 2 3 ＋ New Media business Game8 group Investment businesses New • Gunosy • Game8 • Gunosy Capital • LLM • NewsPass • Smarprise • YOU IN • Au Service Today • Data accumulated since the inception of the company DAT
Slide 7: Growth image: market capitalization target of 100 billion yen
Growth Image Increase corporate value through growth of existing businesses and development of new businesses Aim for group-wide growth with a market capitalization of 100 billion yen as a medium- Investment to long-term target Game 8 Media business Established （C） Gunosy Inc. All Rights Reserved. 7
Slide 9: FY2023/5 Full-Year Summary
(Full Year) FY2023/5 Full-Year Summary FY2023/5 Net sales 8,052 million yen vs. forecast 97.6％ YoY 89.5％ (full-year) Operating profit -268 million yen vs. forecast - YoY - Gunosy Game8 Others By company Net sales 5,633million yen 1,666 million yen 751 million yen Operating profit -376 million yen 28
Slide 10: FY2023/5 Q4 Summary
(Q4) FY2023/5 Q4 Summary Media DAUs increased to 107% QoQ as retention rate of Gunosy business app improved Business remained strong despite a slowdown in the Game8 positive impact of major titles. Investment “slice” back on growth track （C） Gunosy Inc. All Rights Reserved. 10
Slide 11: (Q4) Sales Increase / Decrease
(Q4) Sales Increase / Decrease Gunosy app DAUs increased due to product improvement and investment in advertising. On the other hand, S/D for Gunosy Ads as a whole remained weak, resulting in lower sales due to slower than expected eCPM for programmatic advertising and the difficulty in capturing de
Slide 13: Business Model of the Gunosy App
Gunosy Business Model of the Gunosy App In the Gunosy app, we obtain content from external media (“content partners”) and offer the service to users free of charge. We provide advertising space to advertisers to serve ads to users, and we receive revenue from advertisers. Provide content Content par
Slide 14: Progress Summary of Gunosy's Key KPIs
Gunosy Progress Summary of Gunosy's Key KPIs In FY2023/5, we have made significant progress in improving retention rates, which we have been working on throughout the year. Advertising investments were executed as planned and DAUs increased both on a QoQ and YoY basis. On the other hand, both direct
Slide 15: Gunosy's Key KPIs (1/2)
Gunosy Gunosy's Key KPIs (1/2) DAUs increased QoQ and YoY due to an improved retention rate and the resumption of full advertising investment from Q3. Sales/DAU declined QoQ and YoY, reflecting weak sales activity during the March advertising season and lower eCPM from April DAU Product side Sales/D
Slide 16: Gunosy's Key KPIs (2/2)
Gunosy Gunosy's Key KPIs (2/2) Retention rate is improving due to product improvements such as push notifications and article algorithms. On the product side, we expect to see an improved return on investment in new user acquisition. Cumulative downloads Product side Retention rate Product side YoY
Slide 17: Gunosy Advertising Expenses and Estimated IRR
Gunosy Advertising Expenses and Estimated IRR Due to the improved retention rate and strong user acquisition efficiency, estimated IRR remained above the investment criteria in Q4, despite S/D decline. Advertising expenses (actual) Estimated IRR and advertising expenses Estimated IRR (Three-year IRR
Slide 18: Advertising Investment in Gunosy
Gunosy Advertising Investment in Gunosy In Q4, we invested in advertising, taking into account return on investment and other factors. Although the amount of investment was less than planned, the number of users increased as planned due to a strong retention rate. Advertising expenses (Plan and Resu
Slide 19: Hypothesis of S/D Decline and Status of Improvement
Gunosy Hypothesis of S/D Decline and Status of Improvement The system for monitoring sales-related KPIs was inadequate, resulting in delays in detecting a decline in the number of new contracts acquired. As a result, the number of advertising contracts declined, leading to a drop in S/D. We will foc
Slide 20: Valuation as an Investment Opportunity
Gunosy Valuation as an Investment Opportunity Gunosy's retention rate has improved and its product potential has expanded. Although S/D is currently below plan, we expect this to be a short-term issue that can be resolved by strengthening the sales operations. We continue to view Gunosy as an import
Slide 22: Game8
Game8 Game8 As expected, the positive impact of the major titles launched in 3Q subsided to some extent, but profits remained at a high level and made a significant contribution as a pillar to the Group's overall profit for the full year. We will continue to operate existing businesses in a stable m
Slide 24: Services provided by "slice"
slice Services provided by "slice" “slice” provides a financial platform that allows easy borrowing and flexible repayment for the Indian market. slice UPI slice borrow slice mini （C） Gunosy Inc. All Rights Reserved. 24
Slide 25: "slice" and Gunosy - Major Events to Date
slice "slice" and Gunosy - Major Events to Date Since our initial investment in September 2019, we have made multiple investments to provide maximum support for slice's business expansion. GaragePreneurs Internet Pvt Ltd., which operates 2015 Jun "slice" established Percentage of ownership by the Gu
Slide 26: Status of Compliance with Digital Lending Guidelines
*1 slice Status of Compliance with Digital Lending Guidelines To comply with the Digital Lending Guidelines issued by the Reserve Bank of India (RBI), changes to the product experience were required by the end of November 2022, and the new product release was completed within the deadline. September
Slide 27: Progress on KPIs
slice Progress on KPIs "slice" entered a period of re-growth after the completion of the product release that complied with the Digital Lending Guidelines. Since the product relaunch, "slice" has been cautiously extending credit to creditworthy users and has achieved organic growth with very low mar
Slide 28: Our View on slice's Growth Potential
slice Our View on slice’s Growth Potential - Nov 2022 - June 2022 - Dec 2022 Response to RBI Accelerated growth Regulations Regrowth Following the product relaunch, monthly Rapid Response complete losses have been growth significantly reduced and this trend is expected to continue. “slice” has exper
Slide 30: FY2023/5 Consolidated Results for Q4
FY2023/5 Consolidated Results for Q4 As for net sales in FY2023, Gunosy's DAUs grew steadily from the beginning of the year, but sales declined year-over-year due to the sluggish performance of ADNW as well as the weaker-than-usual performance of direct media buying. In addition to the decline in sa
Slide 31: Total Number of Active Users (MAUs)
Total Number of Active Users *(MAUs) Due to the successful advertising investments in Gunosy, MAUs bottomed out and turned into an expansionary trend throughout the period. LUCRA (Service ended in February 2023) NewsPass + au Service Today Gunosy Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY202
Slide 32: Breakdown of Net Sales
Breakdown of Net Sales *1 Overall, net sales remained stable compared to the previous quarter, supported by strong product KPIs. On a YoY basis, however, sales declined due to sluggish growth in Gunosy Ads, mainly driven by weak uptake in direct media buying demand, in addition to poor performance i
Slide 33: Cost Structure
Cost Structure Costs continued to be tightly controlled. Personnel costs decreased sequentially. Other costs increased due to one-off expenses such as PPA costs related to slice and recruitment costs. 3,646 3,781 3,362 (Million yen) 1025 1,111 3,000 983 2,337 2,304 917 2,135 2,085 2,187 2,176 2,110
Slide 35: Business / Investment Policy Updates
Business / Investment Policy Updates In the existing businesses, the growth of the Gunosy app and the Game8 business in particular will be key to strengthening profit generation in the short to medium term. We continue to value "slice" as a medium to long-term growth driver, while being mindful of r
Slide 36: Policy for FY2024/5: Overall Summary
Policy for FY2024/5: Overall Summary Aiming to achieve consolidated and non-consolidated operating profitability in FY2025/5, FY2024/5 will be a year of investment. We will continue to invest in advertising for Gunosy app, aiming for a revenue scale that will allow the company to be profitable on a
Slide 37: Operating Profit Trends
Operating Profit Trends In FY2024/5, we will work to improve sales and gross profit by making upfront investments in the Gunosy app, and to improve operating margin by strengthening productivity throughout the organization, in order to achieve consolidated and non-consolidated operating profitabilit
Slide 38: Sales Forecast by Business
Sales Forecast by Business The Gunosy app is expected to achieve sales growth of over 10% due to upfront investments, and Game8 is also expected to achieve stable growth. Although overall sales will decline due to the underperformance of some businesses, we expect to maintain gross profit levels by
Slide 39: FY 2024/5 Full-Year Outlook (Consolidated)
FY 2024/5 Full-Year Outlook (Consolidated) As for ordinary profit, we plan to record a non-cash loss due to share of profit/loss of entities accounted for using equity method related to “slice”. With the re-growth of AUM, the above profit/loss is expected to improve significantly YoY. (Million yen)
Slide 40: FY 2024/5 Full-Year Outlook (Consolidated – 1H and 2H)
FY 2024/5 Full-Year Outlook (Consolidated – 1H and 2H) Net sales and profit/loss in each category are expected to improve in the second half of the fiscal year. In particular, ordinary profit and profit/loss are expected to improve significantly in the second half compared with the first half, mainl
Slide 41: Balance Sheet Status
Balance Sheet Status A strong financial foundation is in place and sufficient cash and deposits are maintained to allow for flexible investment. Existing investments are primarily in slice and are expected to generate high returns. While strengthening the ability to generate short-term cash flow, ma
Slide 43: Activity Results for FY2023/5
LLM Activity Results for FY2023/5 *1 We recognized the emergence of LLM as an innovative technology and started developing LLM-based services early on. After repeated trial and error, we have completed releases for three projects. We have been actively involved in research and development from the e
Slide 44: Hypotheses about the LLM in its Early Years And Insights Gained to Date
Hypotheses about the LLM in its Early Years And Insights LLM Gained to Date While we recognize that LLM poses certain risks to existing businesses, we also see it as a technology that offers significant business opportunities for both existing and new businesses. Among the challenges for social impl
Slide 45: Gunosy AI (tentative name)
LLM Gunosy AI (tentative name) Gunosy AI is a system that uses LLM (Large-scale Language Model). It mimics human processes and generates appropriate responses based on data held by companies. It can be deployed directly as a web service or on other platforms through API-compatible tools such as LINE
Slide 46: Structure to Promote LLM
LLM Structure to Promote LLM Kentaro Nishio, Director of Gunosy and founder of Game8, has been appointed Director in charge of the commercialization of Gunosy AI (tentative name). After establishing a new department, we plan to increase the number of development trials and accumulate knowledge for i
Slide 48: Media Business: Gunosy
Media Business Gunosy A special tab was made available for the WBC (World Baseball Classic), which attracted a lot of attention. Proactively addressing users' needs for "information they want to know" also contributed to the increase in active users. Special tab was made available for the WBC (March
Slide 49: Media Business: au Service Today
Media Business au Service Today Measures are being taken to further expand user contact points on au Service Today, a portal site for au users. Continuous efforts are being made to improve the user experience in obtaining information and to enhance the user interface. Measures to further expand user
Slide 50: Media Business: Ad Network (ADNW)
Media Business Ad Network (ADNW) Despite efforts to increase cross-selling with Gunosy Ads, both impressions and CPMs remained sluggish due to changing market conditions. Number of Impressions and CPM (Million imp) 60,000 ¥40 ¥31.33 imp CPM ¥29.06 ¥27.70 45,000 30,000 ¥20 ¥15.14 50,988 ¥12.59 46,718
Slide 51: Investment: Japan and India portfolio
Investment Investment *1 The overall cumulative investment remains in the range of approximately 5 billion yen. There was no major change in the overall portfolio. * Investments made since October 2018, when the investment project was launched, are included in the following: Share Main investee comp
Slide 52: Status of the Estimated Value of the Investment Portfolio
Investment Status of the Estimated Value of the Investment Portfolio FY2019/5 FY2020/5 FY2021/5 FY202/5 FY2023/5 Investment ratio 0.98 0.99 1.11 5.36 5.16 (Million yen) *1 25,741 26,546 Accumulated investment “Accumulated investment” and Estimated value + Sale price *2 “Estimated value + Sale price”
Slide 53: New Business: YOU IN
New Business YOU IN Gift demand remained strong and purchases by foreign tourists were solid in store in May, suggesting that demand in the inbound market is also strong. Sales continue to grow. @all day place shibuya Offline sales (May 20-21, 2023) Sales Sales continue to grow Growth +91% FY2022/5
Slide 55: Overview of Gunosy Inc.
Overview of Gunosy Inc. Basic Information Representative Director and Chairman, Company name: Gunosy Inc. Officers: Group Chief Executive Officer (CEO), Shinji Kimura Representative: Shinji Kimura Representative Director and President, Yuya Taketani Yuya Taketani Director and Chief Investment Office
Slide 56: Our Management Team
Our Management Team The management structure for FY2023/5 is as follows. We are continuing to strengthen our governance, including the transition from a non-statutory Compensation Committee to a non-statutory Nomination and Compensation Committee in December 2021. (*) N&C N&C N&C Representative Chie
Slide 57: From "Gunosy Way" to "Gunosy Pride"
From “Gunosy Way” to “Gunosy Pride” The concept of "Gunosy Way", which had been defined as a milestone for Gunosy to follow, was redesigned as "Gunosy Pride“, which inherits the original thoughts and concepts. 1 “Triple win” philosophy Benefit the customer, the user, and the world. Benefit yourself,
Slide 58: Disclaimer
Disclaimer Forward-looking statements contained in these materials are prepared from judgments and assumptions based on information available at the time of preparing the materials, and do not guarantee their accuracy. These materials contain financial data that have not been audited by an independe
Slide 59: Optimally deliver information to people around the world
Optimally deliver information to people around the world

Gunosy — FY2023/5 Earnings Presentation on 6ix

Gunosy — FY2023/5 Earnings Presentation

Slide 1: FY2023/5 Financial Results

Slide 2: INDEX

Slide 3: Company Profile

Slide 4: Optimally deliver information to people around the world

Slide 5: History

Slide 6: Gunosy Group Business Portfolio

Slide 7: Growth image: market capitalization target of 100 billion yen

Slide 8: Executive Summary: FY2023/5 Financial Highlights

Slide 9: FY2023/5 Full-Year Summary

Slide 10: FY2023/5 Q4 Summary

Slide 11: (Q4) Sales Increase / Decrease

Slide 12: Executive Summary: Gunosy

Slide 13: Business Model of the Gunosy App

Slide 14: Progress Summary of Gunosy's Key KPIs

Slide 15: Gunosy's Key KPIs (1/2)

Slide 16: Gunosy's Key KPIs (2/2)

Slide 17: Gunosy Advertising Expenses and Estimated IRR

Slide 18: Advertising Investment in Gunosy

Slide 19: Hypothesis of S/D Decline and Status of Improvement

Slide 20: Valuation as an Investment Opportunity

Slide 21: Executive Summary: Game8

Slide 22: Game8

Slide 23: Executive Summary: slice

Slide 24: Services provided by "slice"

Slide 25: "slice" and Gunosy - Major Events to Date

Slide 26: Status of Compliance with Digital Lending Guidelines

Slide 27: Progress on KPIs

Slide 28: Our View on slice's Growth Potential

Slide 29: Financial Results for FY2023/5

Slide 30: FY2023/5 Consolidated Results for Q4

Slide 31: Total Number of Active Users (MAUs)

Slide 32: Breakdown of Net Sales

Slide 33: Cost Structure

Slide 34: FY2024/5 Outlook And Policy

Slide 35: Business / Investment Policy Updates

Slide 36: Policy for FY2024/5: Overall Summary

Slide 37: Operating Profit Trends

Slide 38: Sales Forecast by Business

Slide 39: FY 2024/5 Full-Year Outlook (Consolidated)

Slide 40: FY 2024/5 Full-Year Outlook (Consolidated – 1H and 2H)

Slide 41: Balance Sheet Status

Slide 42: Initiatives in LLM

Slide 43: Activity Results for FY2023/5

Slide 44: Hypotheses about the LLM in its Early Years And Insights Gained to Date

Slide 45: Gunosy AI (tentative name)

Slide 46: Structure to Promote LLM

Slide 47: Business Overview by Division

Slide 48: Media Business: Gunosy

Slide 49: Media Business: au Service Today

Slide 50: Media Business: Ad Network (ADNW)

Slide 51: Investment: Japan and India portfolio

Slide 52: Status of the Estimated Value of the Investment Portfolio

Slide 53: New Business: YOU IN

Slide 54: Reference Materials: Overview of Gunosy Inc.

Slide 55: Overview of Gunosy Inc.

Slide 56: Our Management Team

Slide 57: From "Gunosy Way" to "Gunosy Pride"

Slide 58: Disclaimer

Slide 59: Optimally deliver information to people around the world