Bengo4.com, Inc. · TSE:6027
Bengo4.com — Q3 FY3/2024 Earnings Presentation
74 slides from Bengo4.com's earnings presentation, Feb 14, 2024
Slide 1: FY3/2024 Q3 Results
FY3/2024 Q3 RESULTS Bengo4.com,Inc. Feb. 14, 2024
Slide 2: Contents
Contents 01 FY3/2024 Q3 Results （P3-P9） 02 Business Overview （P10-P33） 03 Appendix （P34-P73） 1
Slide 3: Vision and Mission
VISION・MISSION VISION Drive a paradigm shift for the better world. Be the Professional-Tech Company. MISSION Do what only professionals can do. Contribute to society using expert knowledge and technologies. 2
Slide 4: FY3/2024 Q3 Results
FY3/2024 Q3 Results 3
Slide 5: Revision of Forecast
Revision of Forecast Consolidated accounting commenced from Q3. The business results of LIC CO., Ltd. are included in net sales of support services for lawyers. 11,400 Mil. yen （Mil.Yen） 12,000 CloudSign support service for lawyers, etc. 8,710 8,000 6,877 5,318 4,132 4,000 3,132 2,318 1,657 0 2017.3
Slide 6: Topics for FY3/2024 Q3
Topics for FY3/2024 Q3 Net sales increased 28.0% YoY. Operating profit rose 27.8% YoY. Net Sales 8,020 Mil. JPY + 28.0 % YoY EBITDA 1,305 Mil. JPY + 44.5 % YoY Operating Profit 887 Mil. JPY + 27.8 % YoY Ordinary Profit 931 Mil. JPY + 32.9 % YoY Net Profit 571 Mil. JPY + 32.7 % YoY *EBITDA = Operatin
Slide 7: Quarterly trend of Net Sales
Quarterly trend of Net Sales In Q3, net sales of support service for lawyers increased due to the commencement of consolidated accounting. The number of new customers using CloudSign and the number of contracts sent using the service showed steady growth. 3,075 （Mil.Yen） （2,690） Business Lawyers Lib
Slide 8: Quarterly Trend in ARR
Quarterly Trend in ARR Total ARR passed the 10 billion yen mark. Like the rapidly growing CloudSign service, support service for lawyers ARR can also be expected to generate ARR of 5 billion yen now that LIC CO., LTD. has joined the Group. 10,020 YoY Mil. JPY 43.7% （Mil.Yen） CloudSign 10,000 32.1% S
Slide 9: Quarterly trend of SGA
Quarterly trend of SGA In Q3, amortization of goodwill was recorded as a result of the commencement of consolidated accounting. Bengo4.com's non-consolidated results showed an increase in SG&A expenses, primarily personnel expenses, as recruitment progressed as planned. 2,050 （Mil.Yen） （1,872） 2,000
Slide 10: Quarterly trend of Operating Profits
Quarterly trend of Operating Profits Operating profit and EBITDA for Q3 stood at 337 million yen and 511 million yen respectively. Even excluding goodwill amortization expenses from LIC Co., Ltd's operating profit, LIC Co., Ltd contributed to profitability. （Mil.Yen） 400 395 35.0% 379 Operating Prof
Slide 11: Business Overview
Business Overview 10
Slide 12: CloudSign
CLOUDSIGN 11
Slide 13: Trend in net sales
Trend in net sales Q3 sales were 1,421 million yen, rising 30.8% YoY. Variable sales grew 37.1% YoY due to an upswing in the number of contracts, and the ratio of variable sales to net sales increased gradually. Sales E-contract market Trend in net sales Mil.Yen 1,421 ■ Spot Sales Advertising revenu
Slide 14: Trend in the number of contracts
Trend in the number of contracts （The number of contracts sent bearing an electronic signature and a timestamp） The number of contracts sent increased steadily, surpassing 2.09 million in the quarter, Record number of increases from Q2 to Q3 Trend in the number of contracts Network effects of electr
Slide 15: CloudSign introduction in different industries
CloudSign introduction in different industries The introduction of CloudSign continued to accelerate, especially among large companies and local governments. Banks, securities, insurance and other financials IT services, information, telecommunications, human resources and media Construction / Real
Slide 16: Status of Introduction by Local Governments
Status of Introduction by Local Governments Of 210 local governments that have introduced electronic contracts, 146 local governments (approx. 70%) have introduced CloudSign※. Expanding the number of municipalities introducing the system while maintaining market share. Prefectures Local governments
Slide 17: Progress of CloudSign reviews
Progress of CloudSign reviews The number of negotiations increased steadily as a result of expansion in CloudSign review sales personnel. A good start on expanding sales was made and are expected to contribute to MRR accumulation in the next fiscal year and beyond. https://www.cloudsign.jp/review/ 1
Slide 18: Realization of multi-product in electronic contracting
Realization of multi-product in the area of electronic contracting Focus on launching peripheral areas such as management of contracts and review,armed with the No.1 position in the contract conclusion market. 2015 2022 release Management of release contracts Conclusion of 300 billion yen a contract
Slide 19: Bengoshi.com
BENGOSHI.COM Bengoshi means lawyer 18
Slide 20: Trend of the number of visitors
Trend of the number of visitors The number of monthly site visitors via Google Search remained on a recovery trend, although it depended on whether there were hit articles Bengoshi.com News. Trend of the number of visitors (monthly) (visitors) 18,000,000 10,916k 9,000,000 0 2012.3 2013.3 2014.3 2015
Slide 21: The number of paid users (Individual)
The number of paid users（Individual） The number of paid individual users remained flat. What paid users can see Trend of the number of paid users （users） 200,000 188,533 187,785 184,404186,390 182,569 183,639 185,573 178,291 181,188 169,328 172,797 165,186 164,958167,684 161,339 159,214 100,000 Answ
Slide 22: The number of the registered lawyers
The number of the registered lawyers The number of registered lawyers reached 27,370, reflecting the inclusion of Hanreihisho users and accounting for a 61% share of lawyers in Japan. Number of paid lawyers increases to 14,080. Cross-selling of Bengoshi.com Library, etc. to Hanreihisyo users. Trend
Slide 23: Bengoshi.com's Growth Strategy
Bengoshi.com's Growth Strategy and Simultaneous Rollout for Corporate Legal Affairs 01. Enhancement of the Bengoshi.com site In addition to a comprehensive legal consultation site, the company is developing specialized sites by legal field. Strengthen media traffic and expand customer attraction sup
Slide 24: Development and provision of Legal as a Service (LaaS)
Development and provision of Legal as a Service (LaaS) - Integration of all products - Compliance Legal check reform Document detection creation Electronic All fee-paying companies, contracts Research lawyers and municipalities we have （Including precedents） Contract creation and 35,000 review compa
Slide 25: Growth image based on LaaS
Growth image based on LaaS Improvement of ARPPU due to increased value-added and increased product ARR 50,000 Improvement of ARPPU Mil.Yen ARR 25,000 Annual ARPPU: 600,000 yen Mil.Yen Paying users: 80,000 companies ARR Annual ARPPU: 500,000 yen Paying users: 50,000 companies 10,000 Mil.Yen As of Dec
Slide 26: Target market for LaaS expanding
The main users of LaaS are corporate legal departments, and the target market is expanding. The target market for LaaS has expanded to include the corporate legal affairs market in addition to the lawyer and contract markets. Legal needs continue to grow and the market is expected to continue to gro
Slide 27: Future M&A Strategy
Future M&A Strategy Our M&A strategy is (1) M&A to acquire Legal Brain data and (2) M&A to increase the number of peripheral products that make up LaaS. LIC CO.,Ltd acquired in October 2023, (1) acquires precedent data, and (2) provides precedent search services. Compliance Legal reform check Docume
Slide 28: Zeirishi.com
ZEIRISHI.COM Zeirishi means tax accountant 27
Slide 29: Zeirishi.com
Zeirishi.com Japan’s largest tax consultation portal site which has 1,529k visitors/month. 1. Tax Accountant introduction service Provide introduction service by experienced tax coordinators. They choose the best one for client from among 6,427 registered tax accountants. 2. Tax consultation service
Slide 30: Trend in net sales
Trend in net sales Aggressive marketing investments, such as web advertising, are increasing our positioning in the industry by the day. Sales grew significantly, increasing 39.6% YoY Trend in net sales YoY 39.6% Mil.Yen 300 293 253 233 224 210 182 174 173 153 154 150 129 138 135 138 137 126 118 105
Slide 31: Business Lawyers
BUSINESS LAWYERS 30
Slide 32: Business Lawyers
Business Lawyers Japan’s largest Corporate legal portal site which has 515k visitors/month. 1. Registered lawyers The lawyer who works in Nishimura & Asahi, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu, Anderson Mori & Tomotsune, TMI etc. 2. “Business Lawyers Library” Browse practical books
Slide 33: Business Lawyers Library also grows steadily
Business Lawyers Library also grows steadily The number of users of Business Lawyers exceeded 100,000. The number of companies that have introduced Business Lawyers Library—a service that allows users to browse legal books and journals—has exceeded 1,400. Trend of the users (monthly) Number of compa
Slide 34: AI assistant functionality implemented
AI assistant functionality implemented On December 13, 2023, AI Assistant feature was built into Business Lawyers Library. Product development for monetization based on user feedback began. 33
Slide 35: Appendix
APPE NDIX © Bengo4.com, Inc. 2024 34 Appendix
Slide 36: Summary for FY3/2024 Q3
Summary for FY3/2024 Q3 Net sales increased 38.7% YoY. Operating profit rose 4.4% YoY. Mil.Yen FY3/2024 Q3 FY3/2023 Q3 FY3/2024 Q2 YoY QoQ Actual Actual Actual Net Sales 3,075 2,218 +38.7% 2,553 +20.5% CoGS 688 358 +92.1% 472 +45.6% Gross Profit 2,387 1,860 +28.4% 2,080 +14.8% SGA 2,050 1,537 +33.4%
Slide 37: Balance Sheet
Balance Sheet Net assets increased 343 million yen due to higher retained earnings. Equity ratio of 42.2% due to M&A Mil.Yen FY3/2024 Q3 FY3/2024 Q2 QoQ Current Assets 5,148 4,225 +922 Cash and equivalents 3,189 2,401 +787 Fixed Assets 3,920 1,577 +2,343 Total Assets 9,068 5,803 +3,265 Current Liabi
Slide 38: Corporate Profile
Corporate Profile Name Bengo4.com, Inc. Place 4-1-4 Roppongi, Minato-ku, Tokyo Date of 4th Jul., 2005 establishment Representative Taichiro Motoe Director Consolidated: 505, Employees Non-consolidated: 479 (As of December 31, 2023) Group LIC CO., Ltd and EOC.com Co., Ltd. companies 37
Slide 39: Vision and Mission
VISION・MISSION VISION Drive a paradigm shift for the better world. Be the Professional-Tech Company. MISSION Do what only professionals can do. Contribute to society using expert knowledge and technologies. 38
Slide 40: ESG policy
ESG policy We will work to build a sustainable society, where everyone has unrestricted access to the wisdom of professionals, by operating our business with an awareness of ESG. Environment l Promote paperless operations with the non- use of personal seals. l Promote remote work to reduce energy co
Slide 41: Board Members
Board Members Representative Director, President and CEO Director Taichiro Motoe Masaoki Sawada Joined Anderson Mori & Tomotsune Foreign Law Joint Enterprise Joined SBI Securities Co., Ltd. Engaged in corporate sales, targeting listed and subsequently founded Authense Law Office. and unlisted compan
Slide 42: Company history
会社沿革 AI business Announced Legal Brain initiative Released Bengoshi.com AI chat legal consultation Released CloudSign Review 2023 Released Bengoshi.com LIBRARY AI Assistant LIC CO., Ltd, which operates the Hanreihisho database of legal precedents, etc., joined the Group Released Business Lawyers Lib
Slide 43: Bengoshi.com
BENGOSHI.COM Bengoshi means lawyer 42
Slide 44: Social background of legal consulting services in Japan
Social background of legal consulting services in Japan 16.16 Million people had troubles / disputes over legal matters in a year Only 26.7% of these people sought Lawyer’s advices Reasons why they hesitated to ask professional’s help were: Concerns over professional fees 38.9%;／It’s a too minor pro
Slide 45: Background of lawyer's business in Japan
Background of lawyer’s business in Japan Environments of lawyer’s business has been changing rapidly since the judicial system reform in 2000, such as lifting of ban on advertisements, liberalization of fees, and new bar examination, which was meant to increase number of lawyers in Japan. Number of
Slide 46: Market Environment of the Legal Services Industry in Japan
Market Environment of the Legal Services Industry in Japan The legal services industry has been growing since 2000 due to progress in the development of new customers, as marketing needs for lawyers grow together with the increase in the actual number of lawyers. Legal services market size 25.6 mill
Slide 47: Value proposition of Bengoshi.com
Value proposition of Bengoshi.com An web-based platform for consumers and lawyers, to realize “familiar legal service” Provides information and services about free legal consulting and detailed information about lawyers for consumers. Consumers Lawyers Hesitate to seek Want to reach out to Support f
Slide 48: Why Bengoshi.com?
Why Bengoshi.com? The largest free legal consultation portal in Japan which has 10.91M visitors/month* 1. Because the lawyer offers user legal advice for free on the internet service • The outstanding database which has over 1,318k records of consulting cases* 2. Because it has a substantial databas
Slide 49: Services of Bengoshi.com provides
Services of Bengoshi.com provides Provides each kind of contents according to seriousness of issues users have Targets Contents provided Benefit for users Consumers who have urgent Users can search for the most appropriate “List of lawyers” matters and are willing to seek lawyer for free thanks to p
Slide 50: Marketing support service for lawyers
Overview of “marketing support service for lawyers” A marketing support service for lawyers, which helps them acquire clients • The number of visitors to the site has exceeded 10 million. • Acquiring potential clients efficiently based on the focus area of each lawyer Price 20,000 yen or more per mo
Slide 51: Research support service for lawyers
Overview of “research support service for lawyers” Making lawyer book research more comfortable. • Monthly subscription service for law books • "Book browsing" "research service" functions can be used while working from home Price 9,000yen per month Number of books Over 2,000 books Participating pub
Slide 52: Business support service for lawyers
Overview of “Business support service for lawyers” All case can be planed. • Visualize case status and support planned progress • Supporting the digital shift of legal services in anticipation of the adoption of IT in trials Video about the service https://youtu.be/O0mDUdE5SMY 51
Slide 53: Paid services for individual
Overview of “paid services for individual” Paying users can read all answers posted by lawyers about topics on the consulting board for 300 yen per month (excluding tax). What paid users can see Trend of the number of paid users users 200,000 Answers by lawyers 100,000 are available only for paid us
Slide 54: Growth Cycle of Bengoshi.com
Growth Cycle of — Bengoshi.com Increased DB draws more visitors, which stimulates new registration of lawyers who seek to reach out expanded number of users Lawyer’s action Databases grow Advice for consumers Counselling Register to the website Lawyer list Lawyers Consumers Consumer’s action Visit t
Slide 55: Advertisement on the websites
Advertisement on the websites Advertising sales on the "Bengoshi.com" and "Zeirishi.com" websites, as well as advertising sales associated with the Business Lawyers conference Website Conference Advetisements 54
Slide 56: CloudSign
CLOUDSIGN 55
Slide 57: Overview of CloudSign
Overview of CloudSign Cloud-based e-contracting service from contract conclusion to contract management. Upload a completed contract that has been negotiated and approved by the other party, and the contract is concluded. The recipient of the document does not need to be registered with CloudSign. U
Slide 58: Usage Image
Usage Image Sender Upload PDF documents Enter Destination Document preparation Send Receiver Sender Receiver Receive by mail Contract confirmation Final step after conclusion of agreement and agreement The signed documents will be automatically e-mailed to the sender and receiver. (It is automatical
Slide 59: Documents used for CloudSign (examples)
Documents used for CloudSign (examples) Human Resources Sales Leases Employment contract Sales Contract Building Lease Agreement Working conditions notice Land purchase agreement Land Lease Agreement Offer of employment Building Sales Contract Parking Lot Rental Agreement Employment agreement Real e
Slide 60: Benefits of CloudSign
Benefits of CloudSign Speed up process Reduce cost Strengthening of compliance With CloudSign, contract signing Shipping cost, paper cost,printer No more losing/missing paper or process will be shorten by 1-2 ink cost, and stamp tax will no altering of contract. weeks, which boosts up upside of long
Slide 61: Price of CloudSign
Price of CloudSign Free Light Corporate Enterprise Fixed fee 0 JPY/Month Fixed fee 10,000 JPY/Month Fixed fee 28,000 JPY/Month Fixed fee To be inquired Pay- per-use 0 JPY/Month Pay- per-use 200 JPY/Sending Pay- per-use 200 JPY/Sending Pay- per-use 200 JPY/Sending Plan contents Plan contents Plan con
Slide 62: Why CloudSign?
Why CloudSign? 1. Cloud contracting service offered by Bengoshi.com • Our Company, which has a deep understanding and knowledge of Japanese law, provides legally reliable products under the supervision of a lawyer. 2. Product development in line with Japanese business practices • In order to expand
Slide 63: CloudSign services
CloudSign services Conclusion of Automatic a contract conversion to data AI Contract CloudSign scan Management It facilitates contract management operations with AI, It handles the process from scanning contract which automatically identifies the counterparty to documents to storing documents and th
Slide 64: Legal Brain Development Strategy
Legal Brain Development Strategy 63
Slide 65: The Legal Brain initiative
The Legal Brain initiative Innovation in AI Publication of Article Technologies 72 Guidelines ※ November 30, 2022: Arrival of ChatGPT August 1, 2023 Publication of Guidelines for Article 72 of the Lawyers Act Utilizing AI, providing innovative legal services to society. ※Article 72 of the Lawyers Ac
Slide 66: Legal Brain Development Strategy
Legal Brain Development Strategy Database of legal Lawyer precedents database Judge secret database Legal DB Public Leagal Prosecut consultati or on Q&A database Legal profession Contract book database database Strengthen development M&A also utilized capabilities by hiring engineers, to acquire leg
Slide 67: Legal Brain Implementation
Legal Brain Implementation 66
Slide 68: What we hope to accomplish through Legal Brain
What we hope to accomplish through Legal Brain Copilot for lawyers Practical services for lawyers LAWYER Copilot for legal Professional services for companies ENTERPRISE similar to lawyers LEGAL BRAIN Free consultation available to anyone, GENERAL 24 hours a day, 7 days a week Empowering Japanese So
Slide 69: Expanded legal tech market
Expanded legal tech market Research and due diligence support services Compliance checking services • Cross-sectional research • Act against Unjustifiable Premiums and • Due diligence support Misleading Representations • Act on Securing Quality, Efficacy and Ⅰ Ⅱ Safety of Products Including Pharmace
Slide 70: Product Roadmap
Product Roadmap Considering Prioritizing added value monetization September 2023 December 2023 March 2024 onward First product Second product Bengoshi.com LIBRARY Bengoshi.com LIBRARY BUSINESS LAWYERS Third product LIBRARY AI Assistant (α-version) AI Assistant (β-version) AI Assistant (β-version) Re
Slide 71: Why start in the research area?
Why start in the research area? 01 02 03 Research Wide target Information that is easy to as a percentage of operations systematize Increased lawyer Structuring the knowledge of the More users are targeted legal system and maintaining it as work productivity an internal database will greatly increas
Slide 72: Launched AI-powered book search service
Launched AI-powered book search service Launched for lawyers on September 28,2023 and for corporate legal services in December. URL of explainer video: https://youtu.be/wcronOSD048 *Screenshot shows service under development. 71
Slide 73: Hanreihisho joins Our Group
Hanreihisho joins Our Group, enabling cross-research of legal precedents, case commentaries, and legal books Expanding into areas where other companies cannot follow Q. Would you find it useful if there was a service that allowed you to search both legal precedents and law-related books at once? "fi
Slide 74: Warning
WARNING This document is meant for explaining the company’s business itself and doesn’t mean any inducement or persuasion for buying stocks or/and bonds of the company. This document include descriptions about prospects for future which are based on information available as of today, and actual situ