Slide 1: FY2024 Fourth Quarter Financial Results
GREE, Inc. FY2024 Fourth Quarter Financial Results August 1, 2024 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary ◼ Net sales ¥61.3 billion, operating profit ¥6.0 billion, EBITDA ¥6.3 billion ⁃ Made progress on efforts to increase groupwide stable earnings and achieve medium-to- long-term growth and posted results in line with expectations ▪ Secured solid profit in the Game and Anime Business
Slide 3: Changes to Reportable Segments
Changes to Reportable Segments ⁃ Based on the positioning and quantitative importance of each business segment withing the GREE Group as a whole, starting in FY2025, we will integrate the business operations of the DX Business and the Commerce Business under the DX Business, thereby clarifying the p
Slide 4: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 5: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 6: FY24 Financial Results Overview
1. Financial Results Overview (Consolidated) FY24 Financial Results Overview Net sales ¥61.3 billion, operating profit ¥6.0 billion, EBITDA ¥6.3 billion Billions of yen FY24 full-year FY24 4Q FY23 FY24 3Q YoY QoQ full-year Net sales 61.31 -14.13 -19% 14.11 -3.06 -18% 75.44 17.17 Operating profit 5.9
Slide 7: 4Q Operating Profit Analysis
1. Financial Results Overview (Consolidated) 4Q Operating Profit Analysis Profit down QoQ, operating profit was ¥1.4 billion Billions of yen ¥1.09bn decrease 2.52 -3.06 ＋0.44 1.43 ＋1.52 Decrease in Operating fixed costs Operating profit profit FY24 3Q FY24 4Q Decrease in Decrease in sales variable c
Slide 8: 4Q Cost Structure
1. Financial Results Overview (Consolidated) 4Q Cost Structure Total costs declined by ¥2.0 billion to ¥12.7 billion Billions of yen FY24 FY24 FY23 Factors in change（QoQ） 4Q QoQ YoY 3Q 4Q Advertising 0.80 -0.70 -0.56 Decrease on winding down of promotions for Heaven Burns Red 1.50 1.36 Commission fe
Slide 9: Year-end Dividend
1. Financial Results Overview (Consolidated) Year-end Dividend Planned dividend of ¥16.5 per share in line with our dividend distribution policy Dividend Distribution Policy Maintain DOE of around 3%, consolidated dividend payout ratio of 30% or higher (However, we set a maximum consolidated dividen
Slide 10: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: Progress Toward Achievement of Management Plan Targets
Progress Toward Achievement of Management Plan Targets Senior Vice President, Chief Strategy Officer Sanku Shino Copyright © GREE, Inc. All Rights Reserved.
Slide 12: Vision for long-term growth
2. Progress Toward Achievement of Management Plan Targets Vision for long-term growth We target steady growth in core earnings from continuous growth businesses and long-term growth, taking advantage of profit upswings, from long-term investment businesses Long-term Aiming for a business structure t
Slide 13: Sales and Operating Profit (excluding Investment Business)
2. Progress Toward Achievement of Management Plan Targets Sales and Operating Profit (excluding Investment Business) Sales Operating Profit QoQ -19% YoY -17% QoQ -49% YoY -18% Billions of yen Billions of yen 22.2 20.820.9 20.1 5.0 19.5 17.2 4.2 16.4 16.516.2 16.616.6 15.8 15.415.015.7 15.8 3.8 14.7
Slide 14: Sales and Operating Profit (Continuous growth business)
2. Progress Toward Achievement of Management Plan Targets Sales and Operating Profit (Continuous growth business) Sales Operating Profit QoQ +6% YoY +9% QoQ -8% YoY +¥0.42bn Billions of yen Billions of yen 3.3 3.4 3.3 3.4 3.6 3.5 3.43.6 2.3 2.4 2.1 2.0 2.0 2.4 2.2 2.5 2.6 3.0 2.8 3.1 0.4 0.3 0.4 0.3
Slide 15: Business conditions
2. Progress Toward Achievement of Management Plan Targets Business conditions Sales and Operating Profit Focus Points Sales: QoQ -19% YoY -17% / Operating Profit: QoQ -49% YoY -18% Billions of yen ◼ Sales and profit declined QoQ on a 20.12 reactive decline from anniversary 17.17 events held by the G
Slide 16: Earnings Estimates (1Q FY25, excluding Investment Business)
2. Progress Toward Achievement of Management Plan Targets Earnings Estimates (1Q FY25, excluding Investment Business) Sales and Operating Profit Focus Points Sales: QoQ -3% YoY -15% / Operating Profit: QoQ -93% YoY -93% Billions of yen ◼ We expect sales to decline slightly due to a reactive decline
Slide 17: Earnings Forecast (Full-Year FY25, excluding Investment Business)
2. Progress Toward Achievement of Management Plan Targets Earnings Forecast (Full-Year FY25, excluding Investment Business) Sales and Operating Profit Focus Points Billions of yen Sales: YoY +3% Operating Profit: YoY -37% ◼ We expect sales growth on strong growth in the Metaverse Business ◼ We expec
Slide 18: Medium-term Targets (excluding Investment Business)
2. Progress Toward Achievement of Management Plan Targets Medium-term Targets (excluding Investment Business) Sales and Operating Profit Focus Points Sales:-¥13.9bn (-17%) / Operating Profit: -¥4.1bn (-57%) / Profit CAGR(24-26)：-28% Billions of yen ◼ We have lowered our medium-term FY2026 targets ow
Slide 19: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 20: Sales and Operating Income by Segment
3. Progress Made in Each Business Segment Sales and Operating Income by Segment Billions of yen FY23 FY24 QoQ YoY 4Q 1Q 2Q 3Q 4Q Game and Sales 12.77 11.72 10.44 12.95 9.74 -3.22 -25% -3.03 -24% Anime Operating 2.06 1.56 1.35 2.60 1.42 -1.18 -45% -0.64 -31% profit Sales 1.82 1.96 1.79 1.61 1.88 0.27
Slide 21: Progress Made Toward FY2024 Full-year Targets
3. Progress Made in Each Business Segment Progress Made Toward FY2024 Full-year Targets 25％ 50％ 75％ Sales 109% ¥44.8bn ¥41.0-45.0bn Game and Anime Operating profit 139% ¥6.9bn ¥5.0-6.0bn Sales 89% ¥7.2bn ¥8.1bn Metaverse Operating profit ¥0.2bn ¥0.2bn -¥0.2bn Sales 95% ¥6.8bn ¥7.2bn DX Operating pro
Slide 22: Earnings Estimates and Forecast by Segment
3. Progress Made in Each Business Segment Earnings Estimates and Forecast by Segment Billions of yen FY24 FY25 1Q FY25 Full-year FY24 4Q Full-year Estimates QoQ Forecast YoY Result Result Sales 9.30 -0.43 -4% 43.3 -1.5 -3% 9.74 44.8 Game and Anime Operating profit 0.45 -0.97 -69% 3.8 -3.1 -45% 1.42
Slide 23: Game and Anime Business
Game and Anime Business Senior Vice President Yuta Maeda Copyright © GREE, Inc. All Rights Reserved.
Slide 24: Sales and Operating Profit
3. Progress Made in Each Business Segment: Game and Anime Business Sales and Operating Profit Sales Operating Profit QoQ -25% YoY -24% QoQ -45% YoY -31% Billions of yen Billions of yen 17.316.9 3.6 16.3 15.8 3.3 13.013.2 13.1 12.9 12.8 13.0 2.8 12.512.6 11.9 12.2 2.6 2.6 11.4 11.7 2.5 11.3 10.4 2.3
Slide 25: Summary of the Game and Anime Business
3. Progress Made in Each Business Segment: Game and Anime Business Summary of the Game and Anime Business Sales and Operating Profit Focus Points Sales: QoQ -25% YoY -24% / Operating Profit: QoQ -45% YoY -31% Billions of yen ◼ Results were generally in line with 12.95 our forecast despite sales and
Slide 26: Live Service Game Business
3. Progress Made in Each Business Segment: Game and Anime Business Live Service Game Business Sales and Operating Profit Focus Points Sales: QoQ -30% YoY -29% / Operating Profit: QoQ -62% YoY -53% Billions of yen ◼ Results were generally in line with 9.70 9.84 our forecast despite sales and profit 8
Slide 27: Licensed Game Business
3. Progress Made in Each Business Segment: Game and Anime Business Licensed Game Business Sales and Operating Profit Focus Points Sales: QoQ -43% YoY -18% / Operating Profit: QoQ -55% YoY +¥0.25bn Billions of yen ◼ Results were generally in line with 0.54 our forecast despite sales and profit 0.50 d
Slide 28: Pipeline
3. Progress Made in Each Business Segment: Game and Anime Business Pipeline Make progress on strengthening and rebuilding our pipeline in order to constantly release new titles In-house Regional Joint Licensing to other development expansion development companies 4 8 2 2 Notes: ● Number of titles sc
Slide 29: Future Business Plan
3. Progress Made in Each Business Segment: Game and Anime Business Future Business Plan Progress and results in FY2024 Plan for FY2025 ◼ Further expansion overseas ◼ Make progress in development of new titles Release of simplified Chinese ✓ Make progress toward successive release of version in July
Slide 30: Earnings Estimates (1Q FY25)
3. Progress Made in Each Business Segment: Game and Anime Business Earnings Estimates (1Q FY25) Sales and Operating Profit Focus Points Sales: QoQ -4% YoY -21% / Operating Profit: QoQ -69% YoY -72% Billions of yen 12.95 ◼ We expect sales to decline slightly 11.72 due to a reactive decline from a mai
Slide 31: Earnings Forecast (Full-Year FY25)
3. Progress Made in Each Business Segment: Game and Anime Business Earnings Forecast (Full-Year FY25) Sales and Operating Profit Focus Points Billions of yen Sales: YoY -3% Operating Profit: YoY -45% 53.7 ◼ We factor in contribution from new titles conservatively and expect 44.8 43.3 sales and opera
Slide 32: Medium-term Targets
3. Progress Made in Each Business Segment: Game and Anime Business Medium-term Targets Sales and Operating Profit Focus Points Sales:-¥10.6bn (-20%) / Operating Profit: -¥2.4bn (-51%) / Profit CAGR(24-26)：-43% Billions of yen ◼ We have lowered our medium-term 53.7 53.8 FY2026 sales and operating pro
Slide 33: Metaverse Business
Metaverse Business Senior Vice President Eiji Araki Copyright © GREE, Inc. All Rights Reserved.
Slide 34: Sales and Operating Profit
3. Progress Made in Each Business Segment: Metaverse Business Sales and Operating Profit Sales Operating Profit QoQ +17% YoY +4% QoQ +59% YoY +¥0.37bn Billions of yen Billions of yen 2.0 1.9 0.1 0.1 0.1 0.1 1.8 1.8 0.1 1.7 0.1 1.6 1.6 0.1 1.5 1.5 0.0 1.3 1.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 35: Summary of the Metaverse Business
3. Progress Made in Each Business Segment: Metaverse Business Summary of the Metaverse Business Sales and Operating Profit Focus Points Sales: QoQ +17% YoY +4% / Operating Profit: QoQ +59% YoY +¥0.37bn Billions of yen ◼ Strong results in the Platform 1.96 Business and the VTuber Business 1.82 1.88 1
Slide 36: Platform Business (REALITY, Inc.)
3. Progress Made in Each Business Segment: Metaverse Business Platform Business (REALITY, Inc.) Sales and Operating Profit Focus Points Sales: QoQ +11% YoY +5% / Operating Profit: QoQ +54% YoY +¥4.2bn Billions of yen ◼ Gifting was strong as we 1.79 strengthened alliances with 1.65 livestreaming tale
Slide 37: VTuber Business (REALITY Studios, inc.)
3. Progress Made in Each Business Segment: Metaverse Business VTuber Business (REALITY Studios, inc.) Sales and Operating Profit Focus Points Sales: QoQ +70% YoY +190% / Operating Profit: QoQ -¥0.09bn YoY -¥0.07bn Billions of yen ◼ Continued growth on a steady 0.16 increase in the size of our talent
Slide 38: Future Business Plan (1)
3. Progress Made in Each Business Segment: Metaverse Business Future Business Plan (1) Full-year results in the Platform Business Focus Points Sales: YoY +15% / Operating Profit: YoY +¥1.3bn Billions of yen ◼ Viewed independently, the Platform 6.5 Business entered the black in 5.6 FY2024 3.1 1.9 1.3
Slide 39: Future Business Plan (2)
3. Progress Made in Each Business Segment: Metaverse Business Future Business Plan (2) Progress and results in FY2024 Plan for FY2025 ◼ Platform Business ◼ Platform Business ✓ REALITY downloads totaled over 15 million and ✓ Gain market share in the domestic livestream market the Platform Business en
Slide 40: Earnings Estimates (1Q FY25)
3. Progress Made in Each Business Segment: Metaverse Business Earnings Estimates (1Q FY25) Sales and Operating Profit Focus Points Sales: QoQ -2% YoY -6% / Operating Profit: QoQ -147% YoY -150% Billions of yen ◼ We expect to post an operating loss 1.96 due to continued aggressive 1.88 1.84 1.79 inve
Slide 41: Earnings Forecast (Full-Year FY25)
3. Progress Made in Each Business Segment: Metaverse Business Earnings Forecast (Full-Year FY25) Sales and Operating Profit Focus Points Billions of yen Sales: YoY +26% Operating Profit: YoY +128% ◼ Maintain structure wherein profit 9.1 from the Platform Business is invested in the VTuber Business 7
Slide 42: Medium-term Targets
3. Progress Made in Each Business Segment: Metaverse Business Medium-term Targets Sales and Operating Profit Focus Points Sales:-¥2.4bn (-16%) / Operating Profit: -¥0.4bn (-22%) / Profit CAGR(24-26)：137% Billions of yen 17.9 ◼ Lowered FY2026 targets on transfer of part of the B2B Metaverse 15.2 Busi
Slide 43: DX Business
DX Business Vice President Kazuhisa Adachi Copyright © GREE, Inc. All Rights Reserved.
Slide 44: Sales and Operating Profit
3. Progress Made in Each Business Segment: DX Business Sales and Operating Profit Sales Operating Profit QoQ -4% YoY +14% QoQ -26% YoY +29% Billions of yen Billions of yen 1.8 0.3 1.8 1.8 1.8 1.7 1.7 1.7 0.3 1.6 1.6 0.3 1.6 1.6 1.5 1.5 1.5 1.5 1.5 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 -0.0
Slide 45: Summary of the DX Business
3. Progress Made in Each Business Segment: DX Business Summary of the DX Business Sales and Operating Profit Focus Points Sales: QoQ -4% YoY +14% / Operating Profit: QoQ -26% YoY +29% Billions of yen ◼ Integrated with the Commerce 1.83 Business via restructuring 1.75 1.66 1.54 1.59 ◼ With intersegme
Slide 46: Marketing DX Business
3. Progress Made in Each Business Segment: DX Business Marketing DX Business Sales and Operating Profit Focus Points Sales: QoQ -5% YoY +50% / Operating Profit: QoQ -2% YoY +111% Billions of yen ◼ Earnings were basically steady QoQ 0.89 0.84 ◼ Began efforts to expand the DX 0.70 Consulting Business
Slide 47: Social DX Business
3. Progress Made in Each Business Segment: DX Business Social DX Business Sales and Operating Profit Focus Points Sales: QoQ +7% YoY +1% / Operating Profit: QoQ -4% YoY +3% Billions of yen ◼ Integrated social marketing 0.44 company GREE Lifestyle, Inc. and 0.40 0.41 influencer marketing company 0.37
Slide 48: aumo, Inc.
3. Progress Made in Each Business Segment: DX Business aumo, Inc. Sales and Operating Profit Focus Points Sales: QoQ -10% YoY -7% / Operating Profit: QoQ -233% YoY -477% Billions of yen ◼ Sales and operating profit remained 0.30 weak on the impact from the Media 0.28 0.27 0.26 Business 9.7% 0.24 7.1
Slide 49: Future Business Plan (1)
3. Progress Made in Each Business Segment: DX Business Future Business Plan (1) Earnings in the former Commerce Business Focus Points Sales: QoQ -13% YoY -3% / Operating Profit: QoQ -373% YoY -¥0.03bn Billions of yen ◼ In response to prolonged weakness 0.34 in the Media Business, we began 0.32 0.31
Slide 50: Future Business Plan (2)
3. Progress Made in Each Business Segment: DX Business Future Business Plan (2) Progress and results in FY2024 Plan for FY2025 Per-customer transaction value and DX Business sales Billions of yen 1.54 1.48 1.30 1.35 1.25 ✓ Promote development and provision of SaaS 4Q 1Q 2Q 3Q 4Q solutions in all bus
Slide 51: Earnings Estimates (1Q FY25)
3. Progress Made in Each Business Segment: DX Business Earnings Estimates (1Q FY25) Sales and Operating Profit Focus Points Sales: QoQ -2% YoY +8% / Operating Profit: QoQ -37% YoY -27% Billions of yen 1.83 ◼ We expect operating profit margin to 1.75 1.72 decline as we invest in development 1.66 1.59
Slide 52: Earnings Forecast (Full-Year FY25)
3. Progress Made in Each Business Segment: DX Business Earnings Forecast (Full-Year FY25) Sales and Operating Profit Focus Points Sales: YoY +10% Billions of yen Operating Profit: YoY -23% 7.5 ◼ We have designated FY2025 as a 6.8 period of investment aimed at 6.7 reigniting growth 1.0 0.9 0.7 Full-y
Slide 53: Medium-term Targets
3. Progress Made in Each Business Segment: DX Business Medium-term Targets Sales and Operating Profit Focus Points Sales:-¥2.3bn (-21%) / Operating Profit: -¥0.9bn (-53%) / Profit CAGR(24-26)：-11% Billions of yen ◼ Invest in development aimed at transforming low-growth 11.2 11.0 businesses such as t
Slide 54: Investment Business
Investment Business Senior Vice President, Chief Financial Officer Toshiki Oya Copyright © GREE, Inc. All Rights Reserved.
Slide 55: Summary of the Investment Business
3. Progress Made in Each Business Segment: Investment Business Summary of the Investment Business Sales and Operating Profit Focus Points Sales: QoQ -4% YoY -80% / Operating Profit: QoQ +659% YoY -96% Billions of yen ◼ Posted ¥0.15bn in profit in 4Q 4.09 owing to dividends received from investment f
Slide 56: Fund Investment Management Business
3. Progress Made in Each Business Segment: Investment Business Fund Investment Management Business Sales and Operating Profit Focus Points Sales: QoQ -8% YoY -11% / Operating Profit: QoQ +35% YoY -37% Billions of yen ◼ Secured stable management fee 0.33 revenue through continuous 0.30 formation of i
Slide 57: Overview of Total Assets Under Management (AUM)
3. Progress Made in Each Business Segment: Investment Business Overview of Total Assets Under Management (AUM) Total AUM: 84.4 billion, up ¥3.5 billion QoQ on revaluation etc. Total AUM of Fund Investment Total AUM Management Business Billions of yen Billions of yen Based on investee valuation Based
Slide 58: Rise in unrealized value
3. Progress Made in Each Business Segment: Investment Business Strengthening Investment Operational investment securities investment valuation of ¥35.3 billion, unrealized value remains high Quarterly change in operational investment securities investment valuation Investment status in 4Q Billions o
Slide 59: Status of Investment Results
3. Progress Made in Each Business Segment: Investment Business Status of Investment Results Achieved high long-term returns on fund investments and startup investments Valuation of investments by investment period Net multiples, IRR Billions of yen Investment Results of GREE Performance Benchmarking
Slide 60: Future Business Plan
3. Progress Made in Each Business Segment: Investment Business Future Business Plan Progress and results in FY2024 Plan for FY2025 YoY comparison of Number of investments ✓ Continue to invest in major Japanese and overseas VC investee valuation made in FY2024 funds that specialize in the Internet an
Slide 61: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 62: 4Q FY24 Cost Structure
4. Appendix 4Q FY24 Cost Structure Billions of yen FY24 FY24 FY23 4Q QoQ YoY 3Q 4Q Rental charges 0.51 -0.03 -0.06 0.54 0.57 Labor costs 2.32 -0.03 0.08 2.35 2.25 Others 3.66 -0.43 -0.37 4.09 4.03 Cost of sales 6.50 -0.49 -0.35 6.99 6.84 Advertising 0.80 -0.70 -0.56 1.50 1.36 Commission fees 2.44 -0
Slide 63: 4Q FY24 Balance Sheet
4. Appendix 4Q FY24 Balance Sheet Billions of yen FY24 FY24 FY23 4Q QoQ YoY 3Q 4Q Current assets 112.3 1.7 4.9 110.6 107.4 Non-current assets 16.5 0.0 -0.9 16.5 17.4 Total assets 128.8 1.7 4.0 127.1 124.8 Current liabilities 15.0 0.2 -5.4 14.8 20.4 Non-current liabilities 18.2 0.1 6.4 18.2 11.9 Tota
Slide 64: Group Headcount
4. Appendix Group Headcount Number of employees 1,670 1,667 1,640 1,641 1,610 804 806 784 787 771 174 176 176 145 161 416 412 413 429 428 13 15 17 18 17 154 157 154 154 157 109 101 96 93 91 4Q 1Q 2Q 3Q 4Q FY23 FY24 Game and Anime Metaverse DX Investment Common Others Notes: ● Figures for the DX Busi
Slide 65: Sustainability
4. Appendix Sustainability GREE Group is continuously working to develop the Internet industry and solve various social issues. Please see our corporate website for more information. Solving social Helping to create Building a safe issues through a diverse society and secure the Internet Internet so
Slide 66: Additional Information Regarding Business Segment Classifications
4. Appendix Additional Information Regarding Business Segment Classifications Segment classification Subsegment names Main subsidiaries and details Browser games GREE, Inc. Long-term Live Service Game Business WFS, Inc., Pokelabo, Inc., parts of GREE Entertainment, Inc. Game and Excluding investment
Slide 67: This document includes forecasts, which are based on currently available information. Actual performance may
◼ This document includes forecasts, which are based on currently available information. Actual performance may differ due to various factors. ◼ When producing this document, we were careful to avoid errors or omissions, but the accuracy and completeness of the provided information is not guaranteed.