CyberAgent, Inc. (TYO:4751)
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May 7, 2026, 3:30 PM JST
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Earnings Call: Q1 2023

Jan 25, 2023

Operator

It is time. We would like to begin the financial results briefing for CyberAgent for FY2023 Q1. Please refer to the disclaimer included within the briefing material with respect to the online financial briefing results we will be sharing with you today. Our CEO, Fujita, will now introduce this quarter's results.

Susumu Fujita
CEO, CyberAgent

I will take you through the FY2023 Q1 financial results. For us, Q1 has ended. It's been a while, I don't know how long it's been since we have marked operating loss for the quarter. This is due to the large investments in the FIFA World Cup, Qatar 2022 that we incurred this quarter. We are on track in terms of our company's plans. Excuse me. This is just a one-off transient loss.

Second quarter onwards, we should be back to our usual levels, so we hope that you will be patient and not panic. With respect to media, ABEMA, due to the FIFA World Cup, has grown significantly. Excuse me. This is also due to Japan national team's great performance, but the users have praised our service, and the content holder has become quite interested in ABEMA, and the advertisers as well has become quite interested as well. They are quite happy. Although this has not been reflected in the results, however, the intrinsic value of ABEMA has significantly increased and enhanced. Next, moving on to the ad business. This has, for the most part, tracked well. Moving on to the game business. This was actually bad timing because it was at the same time as the FIFA World Cup.

Because we didn't have any anniversaries happening this quarter, we saw a decrease in sales in OP. I will explain this in the next few pages. The next quarter onwards, this should be improving significantly. Consolidated sales for the quarter. The achievement rate against the forecast is about 23%. We've finished one-fourth of the year, and we're at 23%. For us, we're on track. The top line. People may think that if the top line is not doing well and if we're recording a loss, it might be dangerous, our top line is doing well, we're on track. As I mentioned earlier, this is just a one-off transient cost. Just because we recorded a loss, we hope that our long-term supporters will not panic and abandon us.

We, next quarter onwards, we will be back on track. In terms of SG&A, it's at, as usual, it's on the same levels. In terms of the number of employees, we have not seen any major changes. It's as usual as well. This is the PL. No major changes with respect to the balance sheet either. In terms of the forecast, we have announced that the OP will be around 40 billion JPY-50 billion JPY. The 1st quarter performance is as we had expected, and we will be celebrating our 25th year, and we continue to increase our operating profits. We believe that we are progressing as we initially expected. Moving on to the individual businesses. First, the internet ad business, for the most part, is doing well.

The economy has fluctuated. There are some sensitive advertisers who've reacted to the economic conditions. For the most part, we are doing well, especially in terms of the sales environment, it's not that bad. We are increasing the number of employees to prepare for the future. As you can see, we are working on digital transformation with large companies. Of course, we will start to bear fruit later on. We believe that this will contribute to the enhancement or increase of our sales for the internet ad business.

With respect to the game business, Q1, if you look at Q1 and FY2021 and 2022, every year, if Q1 tends to be lower, the performance seems to be smaller because, and this is OP as well, because our game releases, as you can see in the red flags, we're going to be celebrating anniversaries in January and in March. Basically, we don't release titles from October to December. We usually release them from January to March. We will be celebrating many title anniversaries in the second quarter. We believe that we will be recouping significantly in the next quarter, and we should be back on track at the normal levels. Going forward, Tokyo Revengers we released last month, and this is marking a great start. Other than that, we have Jujutsu Kaisen and Final Fantasy.

Interesting titles are on the horizon, and these will be released in the future. The media business. The sales is growing strongly. World Cup, many people may think that a successful World Cup means that this will be reflected into the sales immediately, but we're, we broadcasted the World Cup. Actually, we offered it for free, and we sold the advertising from before the World Cup began. The environment surrounding this business is quite good. The World Cup, after this is the reason why we booked operating losses, but we can't tell you how much the investments for our costs were, because there are confidentiality obligations. The number of downloads has continued to increase steadily. With the World Cup, this has jumped significantly.

During the FIFA World Cup, we saw a WAU of 34.09 million. Remaining or the number of people who are continuing to watch has been very important. This has actually surpassed expectations. More people are continuing to watch our service. Many people who watched ABEMA for the first time had a great experience. The fact that we were able to welcome new users is actually significant for our business going forward, and we hope that many users will be returning. The FIFA World Cup for the CyberAgent Group was a huge event for us as a group as a whole. This is the ABEMA by numbers during FIFA World Cup. We saw young men, especially watching the FIFA World Cup, especially the N-1 tier.

In terms of the viewing style, real-time was 56, but on-demand was 44%. For sports broadcasting, this was, this is quite significant. Of course, because many of the games were in the middle of the night, but people were able to replay on-demand or Timeshift replay as well. Many advertisers, some advertisers came to us and said they wish that they had actually paid for a slot on on-demand, s o it was quite new for the sports broadcasting. In terms of breakdown by device, I actually watched on TV quite a lot. I thought that would be the case as well, but smartphone was 43%. S till a large proportion of users are still watching on mobile devices.

The reason why we acquired the FIFA World Cup broadcasting rights is because we wanted make to, people to experience the convenience and the high quality as well. People said that highlight replay or Timeshift replay was very convenient. These kind of features were offered before the FIFA World Cup, but finally, people start to realize. Being able to broadcast at the same resolution as the terrestrial TV is something that we worked on, the team members worked on before the World Cup. We prepared beforehand, but we were able to communicate the allure and the appeal of our service well during this period. Of course, just, this does not tie to or reflect the sales immediately, however. Many companies are offering content to us as well.

Our content portfolio is expanding as well. There are other celebrities coming to us wanting to take part in our advertising or on our programming, and there are more advertisers also approaching us as well. Those kind of aspects improved significantly. Especially variety and sports grew. These are content that have a high affinity with M.M. tier. In addition, we added a new boxing channel, sports channel. There are a lot of matches happening all day. It actually has a high affinity with a service like ours. Boxing is quite popular as well, we now know, so we would like to continue to focus and strengthen this area. Pay-per-view has become a standard or a part of our standard service for ABEMA. We did.

We thought that the pay-per-view card box, boxing card actually wasn't that strong, but it was actually, we saw a lot of viewers. Shogi, Japanese chess, we are broadcasting this pay-per-view, and the first match was broadcasted also on YouTube free. However, we can't tell you how many, but we saw many people purchasing our pay-per-view service who wants the Shogi match. As a watching format, pay-per-view is becoming routine for many of our users. This is how the ABEMA performance is tracking. This, of course, the FIFA World Cup success, we will see the results of that in the future. We believe that the positive influence is starting to show. The WINTICKET is one of the peripheral businesses, and it's continued to grow strongly as it has done before.

Of course, there's a high affinity between this and our broadcasting. Also, BABEL LABEL has become part of our group and has signed a five-year contract with Netflix, and they will be introducing our world-class content to the rest of the world. It's not really realistic to actually take ABEMA abroad and make it global like Netflix. Netflix will be an important partner for us to share our world-class content globally. In terms of our mid to long-term strategy, it has continued to remain the same, and we're focusing on this. ABEMA, we will continue to grow and enhance and increase monetization. In terms of ads, we are strong in digital and internet, so we would like to continue to increase market share by maximizing our strength.

With the games as well, we would like to continue to make successful long run hits. We haven't said anything new, but this, we hope to continue to progress, make progress. In terms of this graph, we tend to make large investments and recoup on these investments. Of course, we're not in the black yet, but we have made a shift towards starting to make profits and increase our sales. That's it for myself. Thank you very much.

Operator

This concludes CyberAgent's FY2023 Q1 financial results briefing. Please contact the IR office should you have any questions. Thank you for joining us today.

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