CyberAgent, Inc. (TYO:4751)
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May 29, 2026, 3:30 PM JST
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Earnings Call: Q3 2021

Jul 28, 2021

Operator

It's time, we'd like to begin the FY 2021 third quarter results presentation for CyberAgent. This session is being live-streamed. Our CEO. Please note the disclaimer about the forward-looking statements. Our CEO, Fujita, will take you through the results.

Susumu Fujita
CEO, CyberAgent

This is Fujita, the CEO. This is the third quarter, April to June. I would like to take you through the results for the third quarter. As earlier, we did announce a significant upward revision of our forecast.

The game and ad business overall performed much better than our expectations, so we have made an upward revision of the forecast. The media business year-on-year, the sales expanded by 1.5 x. The ad business usually is lower in the third quarter, but we did set a new record high. With the game business, Umamusume: Pretty Derby, became a huge hit.

This has contributed to the results for the full quarter. These are some of the key reasons why we have made the upward revisions this quarter. This is the quarterly results. We actually went public in March of 2000, and of course, we have continued to increase our sales and profitability. As you can see, we've actually significantly accelerated our growth. In terms of the quarterly OP, so the 25.8% was the record high, which was in the second quarter, and we did even better than that, 44.5% this quarter.

However, the SG&A actually remained around the same. As an internet business, our performance has been quite ideal, and this is why we have been able to improve our profitability significantly. Every year in April, we do welcome many new graduates, so we do increase the headcount increases this quarter.

For the following couple quarters, it will be around the same level. This is the P&L. This is the balance sheet. We did make an upward revision 2021, September. We are going to plan to do JPY 650 billion in sales, JPY 100 billion in OP. This is the upward revision we have just announced. As we started to wrap about JPY 30 billion in OP, of course, ABEMA, we have been making upfront investment in ABEMA, and Umamusume has significantly contributed to our favorable performance.

That is why we have made a significant revision in forecast. three months ago, we did make an upward revision as well. From about OP was around JPY 30 billion to around JPY 60 billion. In three months' time, we have made another upward revision to a JPY 100 billion in OP. If you look at the achievement rate up to the end of the third quarter, we've done more than three quarters. We believe that the upward revision is within reach.

Going into the specific businesses, starting with the internet ad business. As I mentioned earlier, usually January to March, especially March, when many of our customers' fiscal year ends, we tend to grow significantly during that period. The third quarter, we usually see a drop in our sales. The fact that we actually were able to do higher in the third quarter proves that it was a very favorable quarter for us. With COVID and the state of emergency announcement, many companies, clients, decided not to advertise so much. This is on the recovery path now.

The OP, however, has come down a little bit, and if you have covered us for a long time, you know that this doesn't really change. It hasn't changed over the years, so it's just temporary. The reason why our internet ad business is doing so well is that the Kiwami Prediction AI, as well as other innovative technologies and products.

80% of our advertisers have implemented these technologies. So Kiwami Prediction AI and Kiwami Prediction TD, they're using these technologies to improve their advertising effectiveness. We have released new services as well. In this field, we believe that other companies will find it quite difficult to catch up to us. Moving on to the game business. Umamusume: Pretty Derby was released previous quarter, and our growth has changed significantly since then.

We did JPY 92.3 billion in sales in the last quarter. The OP also was nearly around half, 44.24. With respect to Umamusume: Pretty Derby, I would like to have Mr. Chikaishi talk about the game in more detail. Thank you. He's from Cygames.

Aisaku Chikaishi
Director, Cygames

My name is Chikaishi, Director of Cygames, and let me tell you a little bit about the Umamusume: Pretty Derby. First of all, since we released the game on February 24, 2021, numerous keywords related to the game have ranked high, and many people have shown great interest for the game. We have fans that we cultivate by promoting the content in various media, as well as new users from among horse racing fans, and we recorded, in approximately five months, over 9 million downloads.

We have continued to promote the game on various media platforms, including anime and manga, and in June and July, we have streamed the TV anime series for the Umamusume: Pretty Derby on ABEMA, and Blu-ray Disc of the 2nd series of the TV anime ranked 3rd in the Oricon rankings. As of the end of June, we have sold 170,000 copies.

The manga, Umamusume: Cinderella Gray, has also sold more than 1 million copies. The use of cross-media has produced a synergy effect, and the wide range of content has been very well received. On August 28th and 29th, we will have an online live event using ABEMA's PPV pay-per-view function. We will continue to focus our efforts on cross-media promotion, seeking ABEMA's appropriate synergy.

In the game, Umamusume: Pretty Derby, we have characters that are named after real racehorses, and we have faithfully reproduced the characteristics and history of each racehorse. We started with 25 characters. Now we have 36 characters that fans can raise and train. We will continue to add new characters so the users can continue to enjoy the game.

We will continue to add new functions. In June, we added a new rematch function, which allows players to go up against other players. This has been well received by our users as well. We will continue to add new training scenarios and update the game so that it will become a long-run hit. We will continue to provide content that we hope will be loved for a long time to come. We hope to have your continued support. Thank you.

Susumu Fujita
CEO, CyberAgent

We released Umamusume, and it became a big hit. Within our group, usually, we release about one or two new game titles that become very popular. As you can see here, group overall, we are utilizing our group knowhow and our resources, talent, and also our capital to invest sufficiently in the development, and we hope to continue to do so to create great titles going forward.

These are some of the titles that we are planning to release within the year or this fiscal year, and some have already been announced. This is a very popular global game. Final Fantasy smartphone game will also be released. Our group is going to be releasing that. This will be available globally, so we have high expectations for this title. After the Demon Slayer, there's another popular anime called Jujutsu Kaisen Phantom Parade.

We are going to develop a new game for that, and we have high expectations for this new title as well. We have some console games that we are developing at the moment. We have great top-class game creators, and so we hope to release very high-quality games in the near future. Moving on to the media business. It may seem like we haven't grown in the third quarter, but you will see the breakdown later.

Last year, we had a pay-per-view grew over one quarter, and that didn't happen this quarter. If you take that into consideration, we have grown considerably well. Now, the number of ABEMA downloads has exceeded 68 million, and so we have continued to increase the number of downloads. With respect to WAU, after we went over 10 million, it seemed like we didn't break through, but in July, we had a lot of programs, very good lineup.

For the recent period, we have seen very good WAU trends. One of the reasons why we're seeing such great WAU is the MLB games, 166 games that we're broadcasting live, especially with Shohei Ohtani. This is actually helping promote ABEMA. We also exclusively live streamed Copa América as well as The Open, British Open, together with TV Asahi, and also very important shogi games as well, Japanese chess games.

There's one more game left, I believe, but we basically live stream all of the Japanese chess major competitions. We're very good at a variety drama. We also have more drama that depicts the dark side of modern society as well.

The lineup of our drama is expanding as well. We are working with TV Asahi, collaborating our great content with their great content as well, and also working together with their popular news program as well. We're working even more closely with TV Asahi. I mentioned pay-per-view and how last year, many artists, we aired their live events and it was a trend, it was a boom, and it started to settle down.

In July, we have actually added more to the lineup. The state of emergency has been in place for a very long time. Many of the artists have started to have online live events. We're having many of the live events in July onwards. As you can see from this graph, we grew last year, last fiscal year, because of pay-per-view. You can see how pay-per-view contribution has decreased.

In the fourth quarter, we should see pay-per-view contributing once again more significantly and growing in the fourth quarter. WINTICKET is also doing well as well. This is for cycling. This is the resale of WINTICKET. We're actually the latest comer to this industry. We created our own service, acquired the rights, and worked with ABEMA to try to grow this business.

It's only been two years since we released this service, but we're actually already catching up to the industry's top class, top players. If we proceed at this pace, we'll probably take them over. Actually this is a very good match with ABEMA as well, and we've proven that. This is the mid to long-term sales pipeline or plan.

We have advertising here, subscription, and related business as well. These are areas that we will be monetizing ABEMA's business. A lot of these things are becoming more transparent and visible now. This hasn't changed, our midterm and long-term pillar. We want to make sure that ABEMA is not going to be volatile. We want to make sure that it becomes larger.

We can increase monetization. The app business has been our main business since we went public, since we were founded, so we will enhance increased sales and maximizing advertising effectiveness. Umamusume has been a very great hit, but we hope to steadily develop these hit titles. We already have the structure in place to do so. We hope to continue to release successful games. That is it from myself. Thank you very much for listening.

Operator

This concludes the FY 2021 third quarter results presentation. Should you have any questions, please contact our IR team. Thank you for joining us today.

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