Slide 1: Q2 FY2018/5 Financial Results
Q2 FY2018/5 Financial Results (Three months ended November 30, 2017) Gunosy Inc. January 15, 2018
Slide 2: 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. Please note that actual results may differ materially from the forecasts due to v
Slide 3: Agenda
1. Quarterly Results 2. Forecast 3. Strategy and Actions 4. Company Profile ©Gunosy Inc. 3
Slide 4: Summary of Quarterly Results
1. Summary of Quarterly Results Sales and operating income marked 2,707 million yen and 508 million yen, respectively Sales rose for the nine consecutive quarter. Both sales and operating income hit a new record high Sales rose for the nine consecutive quarter to a new record high Gunosy Ads:
Slide 5: Results: Sales and Operating Income
1. Quarterly Results: Sales and Operating Income Sales marked 2,707 million yen (up 12% QoQ), reaching a new record high Operating income marked 508 million yen (up 22% QoQ), Operating income (excluding advertising expenses) recorded 1,071 million yen, reaching a new record high (Million yen) Sa
Slide 6: Results: Breakdown of Sales
1. Quarterly Results: Breakdown of Sales Sales in Gunosy Ads rose 5% QoQ due to a steady increase in the number of active users Sales in ADNW increased 20% QoQ due to the increase in ad inventories of major media (Million yen) Gunosy Ads* 157 ADNW 92 Others 81 974 65 74 815 625 39 610 606 52 466
Slide 7: Results: Cost Structure
1. Quarterly Results: Cost Structure Variable costs (ADNW costs, costs of revenue sharing for KDDI) increased as sales has grown Advertising expenses increased as LUCRA accelerated its marketing campaigns (Million yen) 2,198 1,997 693 ADNW costs 1,686 574 1,582 1,517 1,435 439 60 Server expenses
Slide 8: Results: Number of Downloads
1. Quarterly Results: Number of Downloads In addition to Gunosy and Newspass, started to acquire users of LUCRA The total number of DLs increased 2.84 million QoQ The cumulative number of DLs marked 27.99 million （10,000 DLs） 600 (yen) Gunosy Newspass LUCRA CPA (yen) 2,799 +1.34 MM DLs 2,515*
Slide 9: Results: Active Users
1. Quarterly Results: Active Users The number of active users* increased 41% YoY and 7% QoQ FY2013～ FY2017 Q1～ FY2017 Q4～ Up 41％ YoY Up 7％ QoQ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY2015/5 FY2016/5 FY2017/5 FY2018/5 * The quarterly average DAUs (daily active users) of Gunosy, Newspass and LUC
Slide 10: Results: Demographics of Users
1. Quarterly Results: Demographics of Users The overlapped part* of MAUs of Gunosy and Newspass was about 6% Female Male Female Male 44% 56% 42% 58% Female Male Female Male 10s 10s 20s 1％ 20s 1％ 10s Over 50s 10s 11％ 8％ 20％ 20％ Over 50s 15％ 30s Over 50s 30s 29％ Over 50s 16％ 20s 39％ 18％ 40s 22％ 45％
Slide 11: Results: Advertisers
1. Quarterly Results: Advertisers While the number of active advertisers increased, the number of major advertisers* slightly declined The share of Health and Apps (non-gaming) increased Number of Active Advertisers Segment of Advertisers （Clients） 1,600 100% Major Advertisers* Q2 FY2018/5 1,388
Slide 12: Agenda
1. Quarterly Results 2. Forecast 3. Strategy and Actions 4. Company Profile ©Gunosy Inc. 12
Slide 13: Forecast: Comparison with First-Half Forecast
2. Forecast: Comparison with First-Half Forecast Sales reached 5,120 million yen, 106% of the forecast. Operating profits marked 925 million yen, 110% of the forecast. Net profits was 596 million yen, 107% of the forecast Consolidated Results Comparison with Forecast for the forecast the first-hal
Slide 14: Forecast: Progress Compared with Full-Year Forecast
2. Forecast: Progress Compared with Full-Year Forecast The progress to the full-year forecast performed as planned. The full-year forecast has unchanged Consolidated Results (announced on 14/July/17) Forecast for the full-year First-half outcome Progress (FY2018/5) Sales 5,120 million yen 48% 10,7
Slide 15: Agenda
1. Quarterly Results 2. Forecast 3. Strategy and Actions 4. Company Profile ©Gunosy Inc. 15
Slide 16: Strategy and Actions
3. Strategy and Actions Changed the strategy: “a single function on multi apps” from “ multi functions Strategy on a single app” Products User Experiences Actions Expected Effects Higher DAU TV Creating live videos Higher ARPU Higher DAU Newspaper Adding new functions Higher ARPU Actions of Accele
Slide 17: Actions: Gunosy app
3. Strategy and Actions : Gunosy app Planning to create and broadcast “user-participating live videos” based on the solid relationship with video production companies, aiming at improvement of DAU in existing users and acquisition of new users For the first co-production, Gunosy and every, Inc.
Slide 18: Actions: Newspass
3. Strategy and Actions : Newspass Added a new function providing timely information on typhoon and earthquake Improving existing algorithms to enhance personalization of news delivery Awarded Top 5 apps in Users’ choice on “Google Play BEST OF 2017” New Function Achievement in Q2 Sending in
Slide 19: Actions: LUCRA
3. Strategy and Actions : LUCRA Started a campaign to acquire users from September and tested TV commercials Monetization left one month behind the schedule but still able to catch up in the second-half Started airing TV commercials from Nov, 2017 ©Gunosy Inc. 19
Slide 20: Actions: Game8
3. Strategy and Actions : Game8 Realized synergy effects with Gunosy by providing data analysis and ad technology Sales increased by 200% YoY due to the huge increase in PVs of hit games Business Model Sales and PVs 160,000 700,000,0 140,000 PVs： Up 111％ YoY* 600,000,0 Sales：Up 200％ YoY* Ad Spac
Slide 21: Research & Development: Cryptocurrency/Blockchain
3. Research & Development: Cryptocurrency/Blockchain Started R&D on fundamentals and applications of blockchain technology From the second-half, starting R&D on cryptocurrency mining R&D: Cryptocurrency Mining Blockchain Events Gunosy holds events about blockchain technology ©Gunosy Inc. 21
Slide 22: Actions: Medium- to Long-Term Picture
3. Strategy and Actions: Medium- to Long-Term Picture Aim to achieve continued growth in existing businesses by enhancing personalization, algorithms and ad delivery logic Aim to achieve further growth by expanding business into the non-news domain (Profits) New business / Global expansion Growt
Slide 23: Agenda
1. Quarterly Results 2. Forecast 3. Strategy and Actions 4. Company Profile ©Gunosy Inc. 23
Slide 24: Company Profile
Company Profile Company name: Gunosy Inc. Business: Development and operation of information curation service and other media Corporate philosophy: “Optimally deliver information to people around the world” Established: November 14, 2012 Head office: Roppongi Hills Mori Tower, 6-10-1 Roppongi, Minat
Slide 25: Directors
Directors Representative Director and CEO Representative Director and COO Director and CFO Director and CRO Yoshinori Fukushima Yuya Taketani Mitsushige Ito Tetsuya Nagashima Graduated from the Graduate School of Graduated from the Department of Graduated from the Graduate School of Graduated from t
Slide 26: Algorithm for Content Distribution
Algorithm for Content Distribution Thousands of articles per day Choosing articles by using an algorithm Creating a list To users Publisher A Publisher B ● Classification ● Determining the same Publisher C ● Gathering articles events (crawling) ● Considering user attributes ● Real time articles (Col
Slide 27: Business Model: Gunosy Ads
Business Model: Gunosy Ads Revenue Targeting ads delivery by interest clusters Pricing methods − Click-guaranteed (CPC: Cost per Click) − Impression-guaranteed (CPM: Cost per Mille) Features In-feed advertisements (ads inserted into articles) attract more user’s attention Highly frequent acc
Slide 28: Business Model: Ad Network (ADNW)
Business Model: Ad Network (ADNW) Users Advertiser A Media A Displaying ads Delivery ads Advertiser B Media B Gunosy Advertiser C Ad Network Media C Server Advertiser D Media D Advertiser E Media E In addition to Gunosy Ads, Gunosy provides Ad Network (ADNW), which delivers ads to external media Cur