Financial Results for the 2nd Quarter of Fiscal Year Ending November 30, 2019 Money Forward, Inc. July 16, 2019
Contents 1 Our Business P.2 Highlights P.7 FY11/19 Q2 Financial Highlights and Topics P.10 Overview P.11 Money Forward Business P.17 Money Forward Home P.27 Money Forward X P.33 Money Forward Finance P.37 Other Strategic Initiatives P.42 Appendix P.45
Our Business
Mission / Vision / Value / Culture 3
Our Services 4 Money Forward. Move your life forward. Make everyone’s life Create new financial services Circulate money Accelerate business growth. convenient and prosperous. with partners. towards right direction. Cloud Se Serie ies for or ○○ SaaS Platform for Automated PFM Service BPO and Factoring Service Customized Money Forward ME for Back Office Operations Financial Institutions and its Clients Cloud Accou ccountin ing Cloud Ta Tax Return Passb ssbook ook Apps Platform for Comparing and Online Lending Service Passbook Apps for Financial Cloud Expense se Applying for Financial Services Institutions and its Clients Cloud Payroll ll MF MF Unit it Cloud Invoic ice Practical Economic Media Offering PFM Tools within Financial Institutions Apps Cloud My My Nu Number Cloud Finance BF BFM Automated Savings App Cloud Attendance Financial management service for financial institutions’ corporate clients Cloud for or ○○ Personal Finance Consulting Outlet * Cloud-based Bookkeeping Service Cloud-based Services for Financial Institutions and its Clients Coupon App Cloud-based Business Analysis Tool ※ The outlet of mirai talk in Tokyo will be closed by the end of 2019.
Our Business Model 5 5 Con Connected Te Technology Services Se Cus ustomers Se Services Connection with Account aggregation Wide-ranging service lineup Nationwide customer base 3,500+ services /API connection with strengths in UI/UX Corporates Banks Cl Clou oud Sole proprietors Accountants D a t a I n f r a s t r u c t u r e Securities Individuals Credit etc. etc. Cards Financial institutions for 〇〇 series Electronic Passbook Apps Money BFM etc. E- Corporates Commerce
Nationwide Partnership 6 Established offices in 8 cities across Japan through which we help reinvigorate regional economies leveraging on our technology and real- world community. No. of Certified Members: 3,700+ (Accounting firms and certified social insurance and labor consultant offices) No. of Financial Institutions (FI) Hokkaido & Tohoku Certified members: 187 Served with Our Products: CCI: 11 Chubu FI: 5 30 Certified members: 392 Branch: Hokkaido and Tohoku CCI: 17 FI: 7 Chugoku Branch: Tokai/Hokuriku Certified members:114 Kanto CCI: 15 No. of Chambers of Commerce and FI: 3 Certified members: 2,071 Branch: Hiroshima CCI: 15 Industry (CCI) that We Partner with: FI: 12 87 Kinki Kyushu & Okinawa Certified members: 650 Certified members: 280 CCI: 8 CCI: 16 FI: 2 Shikoku FI: 1 Branch: Kyoto and Kansai Certified members: 35 Branch: Kyushu/Okinawa CCI: 5
Highlights
8 Financial Highlights in FY11/19 Q2 • Consolidated net sales for Q2 YTD in increased by 53% YoY to ¥ 3.06 billion. Achieved re record-hig igh net sale les in all ll of of ou our do domains. • In Business domain, consolidated net sales for Q2 YTD increased by 56% YoY. • Number of Money Forward ME users reached 8 mill llio ion, , with the number of premium paying users exceeding 190,000. Annual subscription plan increased to 11% of total paying users. • X domain achieved re record-hig igh stock and flow sales. • Consolidated gross profit margin was 62% while consolidated EBITDA was negative ¥ 0.53 billion in Q2, improvin ing from Q1.
Key Topics in and after FY11/19 Q2 9 • Completed transition to the new pricing plan for the Money Fo Forward Clo loud series. Associated churn was within the expected range. Stock sales in Business domain is expected to grow at a rate of 60% 60%-65% YoY in 2H. • Making steady progress in measures for tax reforms including the reduced tax rate. • Plans to launch BFM FM, financial management service targeting financial institutions’ corporate customers. • Expects full-year growth rate in net sales to exceed our initial forecast of 55%, and steadily making progress toward achieving our full-year net sales forecast.
FY11/19 Q2 Financial Highlights and Topics
Consolidated Net Sales (YoY Comparison) 11 11 11 11 Consolidated net sales continued to grow in Q2 YTD, increasing by 53% YoY. + 53 53 % （¥ mn ） YoY YoY 3,000 2,500 2,000 3,059 1,500 1,997 1,000 500 0 18/11 期 19/11 期 FY11/18 FY11/19 Q2 YTD Q2 YTD 2Q 累計 2Q 累計
Consolidated Net Sales (Quarterly Trend) 12 12 Achieved re record-high net sale les in all ll do domain ins. + 52 52 % YoY YoY （¥ mn ） ■ Business ■ Home ■ X □ Finance ■ Other 1,661 (YoY) + ¥ 67 mn 74 1,600 1,469 1,398 + 48 % 263 36 1,400 48 197 125 1,130 1,200 1,091 + 32 % 403 17 965 7 97 370 397 906 1,000 178 2 3 173 299 102 732 800 693 304 117 265 311 126 510 600 212 + 53 % 65 211 919 853 833 400 172 715 599 533 477 401 200 354 272 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY11/17 FY11/18 FY11/19 (Consolidated) (Consolidated) (Consolidated) ※ Exclude labelling for Other net sales from above graph.
Gross Profit / EBITDA (Quarterly Trend) 13 13 Gross profit reached a re record rd high, while gross profit margin improved to 62%. EBIT ITDA lo loss de decreased owing to an increase in net sales and decrease in marketing expenses. Gro Gross Prof rofit it EB EBIT ITDA ( ¥ mn) □ EBITDA □ EBITDA (excl. advertising expenses) ( ¥ mn) □ Gross profit ■ Gross profit margin 80% FY11/18 FY11/18 FY11/18 FY11/18 FY11/19 FY11/19 67% Q1 Q2 Q3 Q4 Q1 Q2 1,000 65% 150 53 62% 47 59% 60% 54% 53% 800 △ 67 △ 94 △ 141 △ 162 600 △ 250 40% △ 246 △ 247 △ 246 1,022 △ 374 400 792 746 709 672 610 20% △ 525 △ 650 200 0 0% FY11/18 FY11/18 FY11/18 FY11/18 FY11/19 FY11/19 △ 941 Q1 Q2 Q3 Q4 Q1 Q2 △ 1,050 ※ EBITDA = Operating profit/loss + depreciation + amortization
Breakdown of Expenses (Cost of Sales & SGA) 14 14 Total expenses decreased due to the end of TV advertisement during the previous quarter. Continued active investments in marketing. Personnel Expenses Subcontract Expenses Comission Fee Rents （¥ mn ） Communication Expenses Other Advertising Expenses 2,382 2,235 2,400 Advertising Expenses 567 279 Business domain: 2,000 1,757 Captured demand for tax returns. Also focused on 320 84 promoting Money Forward 324 1,600 1,416 133 Cloud Attendance , a new 293 addition to the platform . 101 123 106 1,188 78 113 110 113 125 Home domain: 1,200 1,029 282 114 291 153 Continued active web 308 63 189 147 marketing. Saw an 115 313 46 accelerated increase in the 64 154 103 800 98 number of Money Forward 41 34 160 75 143 ME users. 109 979 844 400 723 588 534 468 0 FY11/18 FY11/18 FY11/18 FY11/18 FY11/19 FY11/19 Q1 Q2 Q3 Q4 Q1 Q2 ※ Other expenses for FY11/19 Q2 include recruiting/training expenses ( ¥ 66mn) and traveling and transportation expenses ( ¥ 31mn).
Full-time Employees 15 15 Made firm progress in recruiting, with the number of full-time employees increasing to 530 (+136 from the end of FY11/18 and +81 QoQ). Transfer of all Money Forward Financial employees was determined by June 30. Business Home X Finance Other Engineer / Designer Corporate （ # of people ） 530 Other Engi Engineer / Designer • Enhanced 500 66 infrastructure/security • Vietnam expansion 394 78 400 55 47 • tock pop , SiraTama etc. were transferred to Home domain 31 43 300 241 64 52 23 35 • Enhanced respective 44 200 29 features 10 Engineers 15 ◼ Designers 32 ◼ 244 Sales ◼ 100 177 Marketing ◼ 120 Customer Success ◼ Customer Support ◼ 0 11/17 End 11/18 End 5/19 End (Consolidated) (Consolidated) (Consolidated) ※ Other Engineer/Designer includes CISO Dept., CTO Dept., Account Aggregation Dept., MONEY FORWARD VIETNAM etc. Corporate includes CEO’s Office, Corporate Planning Dept., Finance Dept., Administrative Dept., Human Resource Dept., Fintec h Research Office, etc.
Maintain Balance Sheet for Further Investments 16 16 While continuing to invest actively in FY11/19, we maintain stable balance sheet. Equity offering was carried out in December 2018. Cas Cash Net et Cas Cash * Tota To tal Net et As Assets ts （¥ mn ） 12,000 10,000 8,000 6,000 10,095 8,598 4,000 5,972 4,952 2,000 3,383 1,462 0 FY11/18 FY11/19 FY11/18 FY11/19 FY11/18 FY11/19 Q4 End Q2 End Q4 End Q2 End Q4 End Q2 End ※ Deducted amount of debt from cash amount.
Money Forward Business
Outlook for Japan’s Software Market Size 18 18 The software market size is expanding on the back of workstyle reforms and promotion of cloud. In particular, the Saas market is forecasted to expand rapidly to ¥ 641.2 billion (an increase of ¥ 254.1 billion). 2022 20 Sof oftware 2017 20 ¥ 1.7 tn tn Sof oftware (+ (+ ¥ 445.9 bn) ¥ 1.3 tn tn SaaS ¥ 641.2 bn bn (+ (+ ¥ 254.1 bn) SaaS ¥ 387.1 bn bn ※ Fuji Chimera Research Institute, Inc., 2018 New Software Business Market.
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