Good afternoon. Thank you all so much for taking the time out of your busy schedule to watch fiscal year 2023 full year earnings announcement of GMO Internet Group. Please allow me to introduce today's presenters. We have Chairman and Group CEO, Masatoshi Kumagai, and Executive Vice President and Group CFO, Masashi Yasuda. These are the two presenters. The earnings presentation will be followed by a Q&A session today. The presentation materials are available on our website. After the announcement, a link to a questionnaire will appear. We appreciate it if you could fill out the questionnaire. Thank you in advance for your cooperation. Kumagai is going to start the presentation.
Good afternoon. I am Masatoshi Kumagai, Chairman and Group CEO of GMO Internet Group. Thank you all so much for watching the presentation despite your busy schedule today. Today's agenda is shown on the slide. Here you can see the full year result. Net sales on the left have increased for 15 consecutive years. As for operating profit on the right, although profits in crypto assets business in green and incubation business in gold were weak, record high performance was renewed in existing infrastructure business and financial business, leading to a result almost on par with previous years.
If you look at this graph, financial business in pale blue portion grew from JPY 10.7 billion, JPY 8.5 billion, JPY 10.6 billion, JPY 11.7 billion, JPY 9.2 billion to a record high number. Infrastructure at the bottom in dark blue grew from JPY 11.4 billion, JPY 14 billion, JPY 16.2 billion, JPY 19.2 billion, JPY 21.9 billion- JPY 28.7 billion, resulting in the total operating profit of JPY 42.4 billion. Breakdown of previous year's totals of JPY 43.7 billion and JPY 41 billion have JPY 10 billion and JPY 9 billion each, which is gone this time, but with organic growth alone, similar profit was generated.
That is the biggest highlight of this year for me personally. Net sales are JPY 258.6 billion. About two years ago, you can see a dotted line between FY 2021 and 2022 that indicates a change in accounting rules, but we still recorded 15 year consecutive increase in net sales. On the next page, I would like to report on my personal qualitative assessment of our performance. My assessment as of previous fiscal year is shown on far right. They are shown in double circles, triangles, and crosses. After I shared my assessment, what happened in the previous fiscal year? First on infrastructure, net sales were JPY 171.5 billion, operating profit JPY 28.7 billion. If you remember the graph from earlier, collection of overwhelmingly number one services and large deals in offline payment, along with expansion of security area with large deals in particular contributed, driving net sales.
All of them are circles. As a result of all of that, my assessment now is double circle. As for advertising and media, our in-house media trended well both in existing and new businesses. But for advertising, there were reactionary decline in some industries. As a result, my assessment for last fiscal year is triangle. As for financial, as we have reported in the securities business in Thailand, we recorded an additional allowance for doubtful accounts of JPY 3.1 billion, which is cross, but profitability in securities and FX improved significantly, resulting in record high performance. As a result, my assessment is circle. As for crypto asset, the market has been recovering recently, but for all of last year, the market environment was still weak. The exchange business has been recovering, but mining and stablecoin are rated as a cross. So in total it is rated triangle. Now on incubation.
Two years ago, as you saw in the graph earlier, we recorded revenue of JPY 10 billion in investment business. Last fiscal year, although there were some small exits, we did not have any large-scale exit, so we are putting a dash here. These are my quite qualitative ratings that I wanted to share with you. This is an analysis of changes in sales and profit by segment. Sales are on the left, and operating profit is on the right. As explained, infrastructure and financial businesses, our core businesses, generated sales profit. Due to the impact of incubation business, the result was a JPY 12.9 billion increase in net sales and a JPY 1.2 billion decrease in profit on a consolidated basis. Next, I'd like to discuss shareholders' return. Basic policy, as reported, is a total return ratio of 50%, which is unchanged.
Of this amount, 33% will be used for dividends, and the remaining 17% will be used for share repurchases and cancellation or acquisition and retirement. The chart shows the trend of dividend per share. We did not disclose earnings and dividend forecasts for the fiscal year as well. For this reason, dividend announcement is made on a quarterly basis. Our year-end dividend is JPY 14.2, resulting in a full-year dividend of JPY 44.1. Next is on treasury stock acquired and retired. Nine years ago, on July 30, 2015, we released notice of revision to shareholders' returns policy with long-term share buyback plan. I would like to recap this plan once again and report on the progress of this policy. Let's look at the context of why we revised the policy.
When we withdrew from the loan credit business in 2006 to 2007, we apologized to our shareholders for causing trouble due to dilution as a result of issuing new shares to increase our capital. We believed that repurchasing and canceling the 38.35 million shares we issued at that time, no matter how long it takes, is an appropriate way to return profits and we set the targets nine years ago. We have been keeping the promise and making progress steadily. The number of shares of treasury stock that are being acquired and canceled is shown in the table. When we set the target, we assumed that it will be a decades-long initiative. Thanks to your support, I believe it has been progressing well ahead of our original expectations. The chart shows the number of shares acquired and retired. The dark blue portion represents acquired and retired amount.
The pale blue portions inside dotted line boxes have been acquired but have yet to be retired. Once we generate enough profit, we will have to retire those portions. Furthermore, we passed a resolution to use 17% of the final profit of the previous year to fund the repurchase at the board of directors meeting earlier. This is what the board of directors approved earlier. Based on the basic policy, we will use JPY 2.41 billion or 17% of the final profit of previous fiscal year to fund repurchases. We will start acquiring shares tomorrow. We will continue to steadily return profits to shareholders while maintaining a balance with shareholders' equity. We are committed to keeping our long-term promise. Thank you for your understanding. Before I go into the details of our business performance, I'd like to explain again our group's strength. There are two major strengths in our group.
The first of our strengths is our strong commitment to operation and development of our own technology. Instead of outsourcing operation, we develop our own products ourselves. In order to survive in a fast-changing market of the internet world, we are committed to providing the number one service. With our strong belief that we must provide the best service to satisfy our customers, we have high aspirations to develop the best goods possible. To this end, we put great importance on the ratio of makers or engineers, creators, and directors who use their hands and heads to create goods. One of our indicators that we track is the ratio of such members involved in production in all our partners, as we, GMO, call our employees partners. As you can see, as of the end of last fiscal year 50.1% of our partners were engineers and creators.
As of the end of fiscal year, we had 7,400 partners. As GMO Aozora Net Bank is consolidated in Aozora Bank's result, when we include the bank, the number of partners in the whole group is 7,700. A little over half of them are those involved in production, and we are planning to raise this rate by 10% to 60% in the near future. This is the first of our strength. The second strength is solid recurring revenues. This is a term we, GMO, coined. Some people call this subscription model. It is a buzzword. But we believe that our solid recurring revenue is clearly different from what many people call subscription model. As long as the internet industry exists, our solid recurring revenues are generated by indispensable products that will never go away in a continuously charged or subscription model.
That is what we, GMO, call solid recurring revenue. Our second strength is that the solid recurring revenue accounts for a great percentage of our sales. This graph shows a trend since the founding. We started operation in 1995, and so the period from 1995 to 2000 is omitted here. There were some dents in the trend, but all in all, we have enjoyed steady growth. It is because our product generating solid recurring revenue comprise a large portion of our sales. In total sales, 56.4% come from solid recurring revenue, meaning more than half of our sales come from solid recurring revenue or stock revenue. Total sales consists of the solid recurring revenue in blue, and a little over JPY 100 billion in transaction sales, shown in gray.
If we resolve the solid recurring revenue in blue into factors, it is unit price multiplied by the number of contracts. Unit price is about JPY 800 per month, times 12 months is JPY 9,600. So it's around JPY 10,000. Since we have 15 million contracts, the result is sales of JPY 145 billion. Looking at the contracts, you may not be able to believe this, but even today, we are receiving at least 10,000 new applications per day, even on Saturdays, Sundays, and holidays. It's been 28 years since founding. We are now in the 29th year, but even today, we are concluding more than 10,000 contracts on different products every day. So you may think it amounts to 3.65 million contracts. Yes, that's right, but we have customers terminating contracts at the same time. So in terms of net increase, it is not 3.65 million.
However, we actually recorded a net increase of 1.12 million customers. Looking at the last five years, on average, customers increased by 1.12 million every year. In other words, it is an increase by over JPY 10 billion. When we put unit price at JPY 10,000, it becomes JPY 11.2 billion, but assuming it is JPY 9,500 or JPY 9,600, our sales are increased by JPY 10 billion as a stock. That is the strength of our GMO revenue. We have two strengths.
One is that we are developing and operating our own technologies, and second is that our revenue mainly comes from such solid recurring revenue, and that we are receiving more than 10,000 applications on a daily basis even today. As you can see from this graph, the trend is accelerating. These are our major strengths. With that, I would like to hand over to Yasuda, Group CFO, to talk about group overview in detail. After his part, I will share with you what I am focusing on today in the topic section.
Hello, I am Yasuda. I am going to take over from this part. The diagram shows our business segments. The size of the area indicates the sales composition ratio. The number of infrastructure contracts as the solid recurring revenue base was just explained by Kumagai. Along with that, FX securities and crypto asset accounts altogether represent a total customer base of 18.19 million. This is the market capitalization of the 10 listed companies in the group and our equity ownership share. Here are the quarterly sales by segment. The growth trend continues centered on the infrastructure shown on the bottom with dark blue. Here is the quarterly operating profit trend by segment.
Our view of sustainable growth through highly profitable finance businesses based on solid recurring revenues for infrastructure has not changed at all. Now, I will explain the infrastructure business. Here is the business description. Domains, cloud hosting, e-commerce platforms, SSL service certificates, digital seals, cybersecurity payments, and access are all a collection of number one services that will never disappear and are indispensable to the Internet society. Now, here is a six-year trend of infrastructure business full-year results. Building upon the strength of our solid recurring revenue model, we have renewed record-high performance for eight consecutive years. This is the trend of quarterly net sales and their breakdown. Leveraging our strength in providing a collection of overwhelmingly number one services, we have grown each segment in a well-balanced manner. In particular, security business in green grew significantly in the last quarter.
It is due to contribution of large deals in brand security business as well as favorable trend in cybersecurity business toward the end of the fiscal year in March. On the other hand, in EC support, the net sales appear to be lower because the impact of applying the net accounting treatment was all captured in this quarter. Year-on-year sales growth for this entire segment is 9.3%. However, when we exclude this factor, the real growth rate is 14%. Now, quarterly operating income trend is shown here. With the accumulation of solid recurring revenue, profit is also on a growth trend. Each company has increased the number in a well-balanced manner, but in the fourth quarter, there was particularly great contribution from brand security business, as explained earlier. Now, I would like to give you an update on our group wide efforts in security business.
Safe and secure Internet for everyone. This is our slogan in security business. Our group is upholding this slogan in order to cater to the ever more accelerating needs in security measures. These are three areas of our security business. Encryption security such as SSL using authentication technology, cybersecurity driven by world's leading white hacker organization, brand security achieved by domain and trademark specialists. First, GMO Sign, our crypto security business. As we have presented before, we are number one in terms of the number of e-contract accounts, as well as the number of transmissions in Japan. This is the number of e-contract accounts. Since the group-wide Sayonara Inkan campaign efforts initiated in May 2020 during the COVID-19 pandemic, the customer base has continued to expand due to the so-called network effect and the synergistic effects of the group. Recently, two mega banks adopted our product.
As you can see, the adoption of our products by major companies is progressing steadily, and we believe that we are still in the market expansion phase. Next is the number of transmissions. We view the number of transmissions as a KPI that indicates the intensity of customer activities. We have seen steady expansion of utilization by high-activity customers, such as real estate businesses. We are also strengthening our efforts in digital government initiative and promoting adoption of electronic delivery of GMO Sign. By making a conventional paper-based notices into electronic format, we support customers' DX promotion and SDGs effort. It is already confirmed to be adopted by more than 72 public organizations, and we aim to be the number one in the local government market. The electronic delivery is a differentiated service made possible by our own certificate authority.
We aim to achieve the triple crown together with the number of contracts and the number of transmissions, leading to further growth. Next is cybersecurity business. I will give you an update on GMO Cybersecurity by Ierae, the most powerful white hacker group in the world. GMO Ierae SOC Yoga was established in January at GMO Internet TOWER in Yoga, Setagaya-ku, Tokyo. SOC, or S-O-C, stands for Security Operations Center, which is a centralized base for monitoring and defending against cyber attacks. In fact, it is not easy for companies and organizations to set up their own security monitoring teams. This time, we decided to start providing outsourcing type SOC service to address the security challenge, tapping into Ierae's defense technology.
We will utilize this center so that our customers will say, when it comes to cybersecurity, we can count on GMO. Next is the progress on our SaaS type product, GMO Cyber Attack Net de Shindan, where such skills of top-level engineers are offered to even more customers. This GMO Cyber Attack Net de Shindan is a SaaS type product that automatically checks the security holes in the website when you enter the domain names and provides a scoring of the results. Anyone can easily check the safety of a site with a high level of security. In May last year, the Ministry of Economy, Trade and Industry issued ASM implementation guidance. ASM stands for Attack Surface Management, and it is gaining attention as a method to protect corporate IT assets from cyber attacks. Net de Shindan is a tool categorized under this ASM.
We recently completed API linkage with our six million domain customers. We consider the current stage as a marketing phase and focus on fine-tuning. We will work to make GMO Cyber Attack Net de Shindan an indispensable service. Finally, I'd like to introduce our new company that joined our cybersecurity business. Today, we announced that GMO welcomed Flatt Security in our group. We just disclosed this information earlier. Flatt Security is a group of product security professionals who have delivered cybersecurity services for product developers. They do not only provide professional services such as security diagnosis, but also develop and deliver security products.
They have been supporting companies in a variety of industries and sectors in developing their product security strategies and organizations. We expect strong synergies with our customer base, especially in the infrastructure segment. Our group has adopted a multi-brand strategy, and the same applies to cybersecurity. The market for cybersecurity is expected to grow further in the future. Through friendly competition between Ierae and Flatt Security, we will contribute to the development of cybersecurity and realize safe and secure internet in Japan and abroad. Please stay tuned.
Next is online advertising and media. This is the full year performance for the past six years. Although we renewed record high profits last fiscal year, sales increased but profits declined this fiscal year. We have four listed companies in the group in this segment, and there are differences in performance at each company. Media, shown in blue, is GMO Media's existing and new business, primarily owned media, performed well. On the other hand, light blue is online advertising. Although GMO TECH performed strongly, ad agency business of GMO AD Partners faced difficulty caused by a bigger decline in nesting demand than expected, and there were some shrinkage in advertising demand during the busy period. Cost control measures were put in place, but there was not enough to offset the decline. Next is quarterly sales and its breakdown.
The trend is similar to what I just explained for the full year performance. Especially online advertising, shown in blue, saw changes in demand trends and market deteriorated more than expected, especially in the second half. With the easing of the movement restrictions due to COVID-19, there were advertisers whose demand increased, but at the same time, there are industries whose advertisement budget decreased post the strong nesting demand during the pandemic. There are substantial fluctuations depending on the business features. Also, because of the advertising unit price decrease of Ad Tech products, the results were weak. This is the trend of quarterly operating profit. The loss in Q4 last fiscal year was due to strategic investments worth JPY 600 million plus.
In the current period, in order for the segment as a whole to grow, we will continue with the initiatives for the businesses performing well, and GMO AD Partners has integrated a group company this January. We will continue to strengthen our own products through integrated sales and manufacturing. Next is internet finance. This is the full year performance for the past six years. Thanks to increased market volatility and margin improvement measures, FX performed strongly. Due to the impact of the global situation, commodity prices became volatile, contributing to high level of trading volume of CFD. Although there was provisioning of allowance for doubtful accounts worth JPY 3.1 billion in the securities business in Thailand, it renewed its record high, reflecting an expansion in earnings. Quarterly trend is as shown here.
Because JPY 3.5 billion was posted as provision for allowance for doubtful accounts last fiscal year, we suffered from quarterly operating loss. In the fourth quarter this fiscal year, despite the provision of allowance for doubtful accounts of JPY 1.2 billion, both sales and profit increased year-on-year. The reasons are, as mentioned earlier, Forex market volatility increased, and we are generating results with our margin improvement initiatives we are continuing since the end of fiscal 2022. This is sales by product. Dark blue is FX. Market was a tailwind, but as progress is being made to improve profitability, it performed favorably. CFD is shown in light blue. Reflecting the increased volatility of commodity-related indicators, it maintained the high level and continued to perform strongly. This is a graph showing FX net sales and trading volume. Because the market was volatile this quarter, trading volume trended upward.
By continuing with margin improvement initiatives, we achieved noticeable results. This is crypto assets. Crypto assets has three businesses as shown, mining, exchange, and payment. This is the full-year performance for the past six years. Since the booming crypto assets market in 2021, at its peak, market is continuing to be challenging up until today. This is quarterly sales and its breakdown. Although the market was weak in the first half for exchange business, the market started to show momentum from Q3 onwards. There were special factors such as changes in classification of posting sales in the last Q4, and it looks like a decrease in sales year-on-year. However, sales increased Q-on-Q. Even under this kind of an environment, number of accounts of GMO Coin are continuing to grow. This is quarterly operating profit.
Profit was generated last fiscal year due to a special factor, but as trading volume increased in Q4 this year, profit increased organically, and we enjoyed profit in Q4. While waiting for a continuous recovery of the market, we will steadily continue with our internal efforts and build a structure to be able to generate profits once the market recovers. That is all for the update of each business. The last part, which is topics, will be presented by Group CEO, Kumagai.
Hello, this is Kumagai again. Last of all, I would like to share with you a topic that is taking the biggest share of my brain right now. This means the business that the group is most focused on. At GMO Internet Group, around 10 years ago, since we hired our very first data scientist, we have been promoting research and development of financial data analytics, including AI, and made significant achievements. On November 30th, 2022, with the introduction of OpenAI ChatGPT by Sam Altman, we anticipated a bigger change would occur and started to utilize AI at a group level.
The slogan for this year at our group is 7,700 partners, including the bank. These 7,700 partners constantly keep the slogan in mind of becoming number one corporate group in creating the future with AI. To be specific, utilizing AI to save time and cost, improve the quality of existing services, provision of new services to AI industry. We are continuing with our initiatives focusing on these three points.
GMO Internet Group's history of AI and our initiatives towards generative AI, starting with GPT, is shown at the special site at the top page of gmo.jp. Please visit the site if you are interested. I would like to briefly explain about our initiative of becoming number one corporate group in creating the future with AI. This is from Bloomberg. This is the forecast of market growth of generative AI until 2032. There are various opinions. In the coming decade or two, not a mere double-digit growth, but depending on the report, some say 40% growth, while in another, continuous growth of 30% is expected. This is about industries related to AI. Investors believe that AI-related market will grow, but how much would the companies you invest in be able to reduce cost with AI?
In the U.S., companies have already started to dismiss workers because of AI, one after another. How much would they be able to reduce headcount? Microsoft announced very strong results thanks to AI, but how much growth can be expected of AI-related sales? I believe investors would be interested in these three points. I would like to report about these three points. As for the first point, how much would GMO Internet Group be able to cut costs with AI this year? In November, we hold the GMO Summit, which is a budget formulation meeting. Top management formulates the budget for this year by staying overnight. The budget, which we call it a target within our group, is JPY 1.8 billion of cost reduction by improving operational efficiency and productivity. We started to run this from January. We made a press release on this topic today.
Please take a look at it to find out the specifics of where we will be cutting costs. Next is how much can we reduce headcount? Headcounts are being reduced, especially at North American companies. Because of Labor Standards Act in Japan and also because we have employment responsibilities, we have no intention at all to cut headcounts. Because of Labor Standards Act, it is not possible to dismiss workers in Japan, and it is not because of that, but we will not reduce headcounts. We are not that cold-hearted to say goodbye to our partners who have been working with us until now and say goodbye just because AI appeared. The plan is to make all partners grow to become AI warriors and have them use AI all at once to improve productivity of the group.
However, if the number of partners keep increasing like in the past, and if the number of partners who cannot use AI increases in the group, there is a possibility that partners who are not capable of using AI could become liabilities. Last year, fiscal year, exactly a year ago, I made a statement asking for a suspension of hiring talents who do not or cannot use AI. We want talents who are able to utilize AI as if they are weapons. We are calling it hiring of advanced AI talent, and this has been in place for about a year. Number of partners are flattish or slight increase of a few dozens. The pace of growth has changed compared to before. Next page. We have 7,400 existing partners plus 300 partners at the bank, making up 7,700 headcounts.
To enable current talent partners to be able to utilize AI, we are persistently making efforts. It is shown here. In February, targeting non-engineers, we launched Tora no Ana, which is a short-term AI talent development program, a reskilling measure. As you already know, since FY 2022, in new high school education guideline, subjects to learn about information such as programming and data utilization became compulsory. We need to become a company that will be chosen by the next generation who are AI native. From 2028, next-generation talents who had information classes as compulsory education will start to work at companies. They had the internet when they were born, always have a smartphone in hand, kept on learning the basics of information subjects in class, and now entering universities. We business persons are not the ones using AI the most.
It is the students who have time to spare. They learn the basics of IT, and they are trying to take full advantage of AI in order to graduate from universities easily. When they join a company, and if our 7,700 partners do not have enough knowledge about AI, then we would be like a company that orders new joiners with electric calculators in hand to use abacus. Then we have no future. Therefore, before these students join us, I strongly believe we need to gain more knowledge than them about AI. With all our effort, leaving no one behind, we as a group are promoting AI education to make our partners AI capable. In the very beginning, you saw the growth curve of the AI market in the future.
In AI, especially generative AI, deep learning of existing information on the internet will be done, and AI will come up with words based on these data and generates output after the thinking process. Existing information that is available on the internet, example, in Japanese language, you probably use Google Japan or Yahoo! Japan to search, and GMO is providing domains to 90% of these websites. For 50% or more of the websites, data is stored in our data centers. This means data that generative AI is learning from are data that GMO is associated with in one way or the other. Whether GMO Internet Group should put utmost efforts in AI sector or not is something I deeply thought about. This is more than a year ago. In the latter part of the internet revolution, AI is the hero. Shall we go there or not?
Of course, we need to be cautious in making decisions. As a result of thinking through this thoroughly, and after studying various information, what will grow in the AI market in the future is infrastructure. This is again from Bloomberg. In 2027, 2032, as you can see, device, software, infrastructure, which one will grow? I expect devices to grow, software, services to grow. But LLM, generative AI, needs data platform and infrastructure. Without them, data industry or AI industry cannot exist. If that is the case, we need to do our utmost for Japan and for AI industry to penetrate infrastructure. GMO is the one who has penetrated the infrastructure in Japan the most. Therefore, again, for generative AI, we need to make all-out effort, taking the risk to increase penetration. This is the conclusion I have reached.
Already, we are spreading .ai domain to enable various AI startups to be able to use. Also, we have a partnership agreement with NVIDIA to enable NVIDIA to use their high-performance server H100 on cloud. As such, we have already started to offer infrastructure. To give momentum to AI industry further, we already have started providing funding to Japanese startups through GMO AI & Web3, though our intention is not limited to Japan only. This is not all. We have resolved in the board meeting today that to expand AI industry further, we will accelerate collaboration with NVIDIA, and until summer, we have resolved to make investment of JPY 10 billion for additional servers. For NVIDIA's cutting-edge servers, we will make this much investment to promote expansion of the AI industry with our group's utmost efforts. This was an update to our investors.
Last of all, I'd briefly like to wrap up and close the meeting. We announced the full-year results. In a nutshell, the core business of infrastructure and finance both achieved record-breaking performance. Excluding discontinuous operations, profits increased 26.6%. We realized strong growth. I also explained our strength of solid revenue base. We aim to pursue sustainable growth based on our solid recurring revenues. As I just explained in the topics part, under our new policy to become number one corporate group in creating the future with AI, we will make it a year to quantify and visualize the outcomes of AI investment and utilization. For AI, we will start with infrastructure. At the same time, we are doing our best in security, and the security business would never go away no matter how much AI grows.
In the Bible 2,000 years ago, it says, thou shall not steal. There was an evil guy 2,000 years ago, so there should be such a person nowadays as well. Therefore, no matter how much AI evolves, security business will not disappear, but rather opportunity should expand. We offer AI infrastructure, provide funds to AI ventures, and the next step will be a multiplication of AI times security. This is my idea of how to expand the business domains. Thank you. That is all for the full-year financial briefing. Internet for everyone. Thank you very much for your attention.