Geechs Inc. · TSE:7060
Geechs — FY3/2023 Earnings Presentation
44 slides from Geechs's earnings presentation, May 12, 2023
Slide 1: Full-year Financial Results Briefing FY3/2023
Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing May 12, 2023 GEECHS Inc. TSE Prime Market: 7060 ©2023 GEECHS Inc.
Slide 2: Contents
Financial Results Briefing 1．Corporate Profile 02 2．Financial Results for FY3/2023 06 3．Forecast for FY3/2024 19 4．Medium-Term Management Plan 23 5．About Market Changes 26 6．Appendix 28 Contents 1 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 3: Corporate Profile
Financial Results Briefing Corporate Profile 1 2 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 4: GEECHS Group [geek × tech]
GEECHS Group [ geek × tech ] Partnering with technological groups with a wealth of eminent expertise in the IT and Internet fields, GEECHS supports the work styles of all those involved to provide all sorts of value through our technologies. 3 Fiscal Year Ending March 31, 2023 Full-year Financial Re
Slide 5: Solving the Shortage of IT Human Resources in Japan
About GEECHS Solving the Shortage of IT Human Resources in Japan IT Resource Crisis Is Our Business GEECHS supports the work styles of IT freelancers, sharing their skills and experiences with companies that face a shortage of IT human resources. GEECHS continues to provide globally-oriented busines
Slide 6: Group Corporate Profile
Group Corporate Profile Group Companies Company name GEECHS Inc. (TSE Prime Market: 7060) IT Freelance Matching Business x-Tech Business CEO Naruhito Sonehara Established August 23, 2007 IT Freelance Matching Seed Tech Business Game Business Business (Overseas) Shibuya Scramble Square, 2-24-12 Shibu
Slide 7: Financial Results for FY3/2023
Financial Results Briefing Financial Results for FY3/2023 2 6 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 8: Gross Sales and Operating Profit
Gross Sales and Operating Profit Q4 (YoY) Sales exceeded a record high of 15 billion yen, while operating income fell due to strategic upfront investment ■ and expenses related to M&A. Sales ¥4,194 m ( +12.2%) ■ Q4 sales increased by 450 million yen year-on-year due to an increase in the number of w
Slide 9: Segment Information FY3/2023
Segment Information FY3/2023 ■ IT Freelance Matching Business : Sales increased by about 2 billion yen, and profit exceeded 1 billion yen, reaching a record high. ■ Game Business : Although sales and profit achieved target, they were down significantly on the previous fiscal year. ■ Seed Tech Busine
Slide 10: Cost Structure
Cost Structure ■ Cost of sales : Significant increase in outsourcing expenses, mainly due to increased sales in the IT freelance matching business. ■ SG&A expenses: In addition to an increase in personnel expenses and recruitment for mid-career hires in line with strengthening of the organizational
Slide 11: IT Freelance Matching Business (1/3)
IT Freelance Matching Business (1/3) ■ Full-year sales approach 13 billion yen, and segment profit exceeds 1 billion yen for the first time. Q4 (YoY) ■ In Q4, sales increased by more than 500 million yen from the previous year due to an increase in the number of freelancers under contract and a rise
Slide 12: IT Freelance Matching Business (2/3)
IT Freelance Matching Business (2/3) ■ The number of freelancers under contract exceeded 16,500 for the year due to high demand for engineers and an increase in cross-matching with local areas. ■ The ratio of projects, which indicates the supply-demand balance in the IT freelancers market, remained
Slide 13: IT Freelance Matching Business (3/3)
IT Freelance Matching Business (3/3) ■ The number of new business partners has been strong, partly due to the effects of investment in brand advertising, with significant growth in Q4. Q4 (YoY) ■ The number of new IT freelance registrants increased by 430, a record high in Q4 thanks to the effects o
Slide 14: Profitability of IT Freelance Matching Business
Profitability of IT Freelance Matching Business ■ Unit economics decreased due to increased CAC from strategic investment in brand advertising. ■ Meanwhile, LTV was up due to an increase in average duration of IT freelance work and a higher ARPU. KPI Definition FY3/22 FY3/23 Return on IT freelancer
Slide 15: Game Business
Game Business ■ Decrease in sales and profit due to the impact of losses in the first half owing to fall in the number of new titles delivered Q4 (YoY) and delays in development, as well as increased costs such as other labor costs and development tools. ■ With the delivery of two new titles from Q3
Slide 16: Other Business
Other Business Topics Seed Tech Business Seed Tech Business Q4 (YoY) ◼ Achieved a significant increase in sales for the full-year despite posting x-Tech Business a full-year loss due to upfront investment in strategic content Sales ¥53 m Q4 (YoY) development, but continued to be profitable from Q2 o
Slide 17: Financial Performance
Financial Performance ■ The balance sheet saw a significant increase in goodwill and borrowings due to the acquisition of Launch, resulting in an increase in total assets ■ Operating cash flow was positive year-on-year due to drop in corporate tax, investing cash flow was significantly negative year
Slide 18: Changes in the Number of Employees
Changes in the Number of Employees ■ The number of employees in the whole Group has increased significantly to 60 due to an increase in the number of employees in each business from FY3/22. ■ In the IT Freelance Matching Business, the number of new graduates and mid-career employees increased by 16
Slide 19: Shareholder Composition
Shareholder Composition ■ The number of institutional investors fell from 25.5% to 22.3% (-3.2% YoY), but domestic institutional investors were up by 0.6%. ■ Individual and other investors were up from 11.8% to 13.6%. Overseas institutional investors Overseas institutional investors 9.3% 5.5% Domest
Slide 20: Forecast for FY3/2024
Financial Results Briefing Forecast for FY3/2024 3 19 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 21: Executive Summary FY3/2024
Executive Summary FY3/2024 ■ The Group as a whole plans to significantly increase sales by 12 billion yen (+75%) year-on-year due to sales growth in the IT freelance matching business and the amalgamation of Launch’s (acquired in January 2023) profit-loss figures. ■ With the acquisition, EBITDA was
Slide 22: Segment Information FY3/2024
Segment Information FY3/2024 Continue aggressive investment in anticipation of further growth in IT Freelance and Seed Tech Continue to source more M&A (million yen) FY3/23 FY3/24 Change YoY Policy and formulation assumptions • The IT freelance matching business will grow into a segment with sales e
Slide 23: Dividend Policy
Dividend Policy Plans to increase dividend by 5 yen per share from previous fiscal year thanks to expected rise in profits in FY3/24 Stable and continued dividend while prioritizing investment in business growth Dividend Trend FY3/23 FY3/24 Dividend ¥10 ¥15 Total dividends ¥103 m ¥154 m Payout ratio
Slide 24: Medium-Term Management Plan
Financial Results Briefing Medium-Term Management Plan 4 23 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 25: Medium-Term Management Plan
Medium-Term Management Plan G100 sales on track with FY3/24 projections Replace profit target with EBITDA of 2.5 billion yen and aim to achieve this goal (million yen) Sales (million yen) EBITDA 40,000 2,500 35,000 Profit target ￥2.5 bn Sales target ￥26 bn 2,000 (Medium-term sales target 30,000 afte
Slide 26: Medium-Term Management Plan of IT Freelance Matching Business (National)
Medium-Term Management Plan of IT Freelance Matching Business (National) ■ We expect to achieve the G100 plan by FY3/25 through sustained growth, aiming for further upside from current growth rate. Results Trend & Projection Major Initiatives and Progress (million yen) ■ Former sales* • Strengthen o
Slide 27: About Market Changes
Financial Results Briefing About market changes 5 26 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 28: About Market Changes
About Market Changes We have chosen to move to the Standard Market in line with our Notice of Compliance with Listing Criteria as announced on May 12. By continuing to work to improve corporate value, we aim to be a company that is highly trusted by shareholders and investors and that greatly contri
Slide 29: Appendix
Financial Results Briefing Appendix 6 28 Fiscal Year Ending March 31, 2023 Full-year Financial Results Briefing ©2023 GEECHS Inc.
Slide 30: IT Freelance Matching Business
IT Freelance Matching Business Technology Resource Sharing Platform Growth companies in IT field Internet companies Project information website Approx. ■ Ad Tech ■ Med Tech ■ Fin Tech ■ Real Estate Tech with constantly over 1,500 projects Matching 3,460 ■ HR Tech ■ EC ■ Ed Tech ■ Game client compani
Slide 31: Source of Growth
Source of Growth Financial Figures Business KPIs Key Success Factor Platform Value Monthly orders Trust from Sales Monthly unit price of orders Matching capabilities IT freelancers and customers Order period Net sales (source of growth) Retention rate Support capabilities / Engagement Gross profit A
Slide 32: GEECHS Strengths
GEECHS Strengths Support team structure of 3 people per IT freelancer Quick and relevant matching Support ■ Generous support as a project mentor ■ Speedy matching with the whole process done online Capabilities ■ Generous support from career advisors ■ Utilizing big data to take factors other than s
Slide 33: Connect with IT Freelancers
Connect with IT Freelancers Improve engagement by having effective contact with IT freelancers over the long term Registration Boost exposure Lead acquisition Matching Negotiations Contract Start interview Marketing Automation Lead Generation Lead Nurturing Customer Success ■ Online marketing ■ One-
Slide 34: Differences from Similar Businesses
Differences from Similar Businesses Developing a platform specifically for mid- to high-spec professional IT freelancers GEECHS Crowdsourcing IT Technician Dispatch Registrant IT freelancers (main job) Freelancers (side/main job), and others Dispatched workers Major system integration Main clients G
Slide 35: Engagement
Engagement Strengthening ongoing partnerships to maximize business by increasing engagement with IT freelancers 50 services provided for IT freelancers so they can work for Benefits program extended periods without the extra stress for IT freelancers ■ Seminars on how to file a tax return ■ Discount
Slide 36: IT Freelance Matching Business (Global)
IT Freelance Matching Business (Global) IT Freelance Matching Business (Overseas) Company name Launch Group Holdings Pty Ltd 1. Australian IT freelance service pioneer Established in 2006, Launch has earned trust and a track record CEO Rebecca Jane Wallace as a venture company in the IT staffing ser
Slide 37: SeedTech Business
SeedTech Business 1. Providing sodatech, a DX/IT freelancer development Development business - Offshore development business Education business - sodatech for developing global, IT freelancers; and IT study abroad service for companies Funds Providing a SaaS-type DX/IT human resource development pla
Slide 38: Game Business
Game Business 1. Specializes in Partner Strategy With solid technical capabilities centered on Unity / PHP, we have stabilized our revenue base through contract development and operations, winning revenue share from successful titles. We have also increased orders for globally distributed titles. ©W
Slide 39: Differences between Developer and Publisher
Differences between Developer and Publisher The future strategy of the Game Business is to become a developer of globally distributed titles Developer (GEECHS) Publisher Main role Planning, development, and operation of titles Planning, distribution and promotion of titles ● Planning and development
Slide 40: Game Business: Business and Revenue Image
Game Business: Business and Revenue Image Business Model Revenue Image ◼ GEECHS is a developer specifically contracted by major game companies ◼ Since stable revenue recognition has become possible during the planning and (publishers) for the planning, development and operation of games development
Slide 41: GEECHS Social Impact Flow
GEECHS Social Impact Flow Value Creation Cycle Input Group synergies through business Output Outcome Evolution of the IT freelance sharing business Creating a new “normal” way Make the biggest impression Financial capital through the integration of know-how and resources • Growth investment of worki
Slide 42: Performance Highlights
Performance Highlights Fiscal Year-End FY3/20 FY3/21 FY3/22 FY3/23 3,544,309 3,427,816 14,340,774 15,997,838 Sales (Former sales*) (Thousand yen) (5,388,647) (5,464,835) Ordinary income (Thousand yen) 675,446 713,942 1,135,706 567,920 Profit attributable to owners of parent (Thousand yen) 390,651 45
Slide 43: Financial Highlights - IT Freelance Matching Business
Financial Highlights - IT Freelance Matching Business- FY3/22 FY3/23 Fiscal Year-End Q1 Q2 Q3 Q4 Full-year Q1 Q2 Q3 Q4 Full-year After revision (Thousand yen) 2,525,969 2,626,672 2,757,352 2,856,575 10,766,569 3,014,968 3,117,730 3,236,528 3,393,625 12,762,853 Sales*1 Before revision (Thousand yen)
Slide 44: Notes regarding Forward-Looking Statements
Notes regarding Forward-Looking Statements The information contained in this presentation is based www.geechs.com on a number of assumptions. These statements are not intended to assure or guarantee the achievement of future numerical targets or measures. Please note that actual results may differ d