Geechs Inc. · TSE:7060
Geechs — Q3 FY3/2023 Earnings Presentation
45 slides from Geechs's earnings presentation, Feb 14, 2023
Slide 1: Financial Results Briefing for 3rd Quarter FY ending March 2023
Fiscal Year Ending March 31, 2023 3rd Quarter Financial Results Briefing February 14, 2023 GEECHS Inc. TSE Prime Market: 7060 0 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 2: Contents
Financial Results 1．Corporate Profile 02 Briefing 2．Revision of Revenue Recognition 07 3．Financial Results 10 4．About New Services 19 5．M&A 24 6．Shareholder Returns 27 7．Appendix 29 Contents Contents 1 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEEC
Slide 3: Corporate Profile
Financial Results Briefing Corporate Profile 1 2 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©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 Financial Results Briefing for the 3rd Quarter of the Fi
Slide 5: Grand Vision
Grand Vision Make the biggest impression in the 21st century With our grand vision to make the biggest impression in the 21st century, the Group will create numerous impressions within society by repeating the cycle of always taking on the challenge to face difficult issues, enjoying the process, an
Slide 6: Group Corporate Profile
Group Corporate Profile Group companies Company name GEECHS Inc. (TSE Prime Market: 7060) IT Freelance Matching Business CEO Naruhito Sonehara x-Tech Business Established August, 2007 Game Business Seed Tech Business Head office Shibuya-ku, Tokyo, Japan Capital Stock 1,104 (in JPY MM) Segment compos
Slide 7: GEECHS Group Strengths
GEECHS Group Strengths Portfolio management that enhances growth, stability and profitability Improving management stability to bring business synergies IT Freelance Matching Business Delivering further growth as a pillar of earnings while driving the market forward as our main business Game Busines
Slide 8: Revision of Revenue Recognition
Financial Results Briefing Revision of Revenue Recognition 2 7 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 9: Revision of Revenue Recognition
Revision of Revenue Recognition The main content of the IT Freelance Matching Business sales provided by the Group is a service in which client companies entrust systems development and other projects as quasi-contracts to GEECHS where they are outsourced to the best IT freelancers registered on our
Slide 10: Revision of full-year earnings forecast (consolidated)
Revision of full-year earnings forecast (consolidated) ◼ Upward revision on sales only for current fiscal year results forecast owing to revisions on IT Freelance segment sales subject to the revision of revenue recognition ◼ Group sales revised upward by about three times Before Revised full-year e
Slide 11: Financial Results
Financial Results Briefing Financial Results 3 10 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 12: Executive Summary Q3 FY3/23
Executive Summary Q3 FY3/23 Sales to exceed 10 billion yen owing to revision of revenue recognition Temporary drop in income due to expenses recorded in connection with M&A Sales Operating Income Ordinary Income Net Income Q3 ¥4,153 m ¥126 m ¥96 m ¥13 m (YoY) (+14.2%) (-40.6%) (-53.9%) (-88.0%) Q3 C
Slide 13: Sales and Operating Income
Sales and Operating Income ◼ Record quarterly sales thanks to strong performance in mainstay IT Freelance Matching Business ◼ Maintained positive operating income despite expenses associated with M&A and increased investment in strategic advertising in IT Freelance Matching Business Revenue recognit
Slide 14: Segment Information Q3 FY3/23
Segment Information Q3 FY3/23 ■IT Freelance Matching Business : Sales continued to reach record highs. Profit dropped slightly from the previous quarter due to accelerated strategic investment, including in transport advertising, but grew steadily year-on-year. ■Game Business : Recurring sales incre
Slide 15: IT Freelance Matching Business (1/3)
IT Freelance Matching Business (1/3) ◼ Cumulative Q3 sales exceeded 9 billion yen, a record high. Growth approaching 13 billion yen for the full year. ◼ Advertising expense ratio increased to 2.8% in Q3 due to impact from greater transport-related advertising such as in cabs and Tokyo Metro. Q3 ( Yo
Slide 16: IT Freelance Matching Business (2/3)
IT Freelance Matching Business (2/3) ◼ The number of freelancers under contract exceeded 4,200 in Q3, continuing to reach record highs! ◼ In particular, cross-matching with rural areas increased significantly up 149% from the previous quarter with the percentage of users overall doubling from the pr
Slide 17: IT Freelance Matching Business (3/3)
IT Freelance Matching Business (3/3) ◼ Steady growth in the number of new business partners, partly due to the effect of public transport advertisements and an increase in inquiries from major non-IT companies. ◼ The number of new IT freelance registrants increased significantly year-on-year, despit
Slide 18: Game Business
Game Business Q3 ( YoY ) ◼ Recurring sales increased significantly due to the contribution of two titles released this quarter, moving into the black for the Q3 cumulative period. ◼ The recurring sales ratio grew to 65.5% with a further increase expected in Q4. Sales ¥819 m ◼ Received orders for one
Slide 19: Other Business
Other Business Seed Tech Business Topics Q3 ( YoY ) x-Tech Business Seed Tech Business ◼ Offshore development sales grew steadily due to orders for new projects in Sales ¥48 m Q3 ( YoY ) addition to upselling of existing projects. ( +99.9%) ◼ sodatech service for individuals now available! Range of
Slide 20: About New Services
Financial Results Briefing About New Services 4 19 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 21: About GEECHS DIRECT
About “GEECHS DIRECT” ◼ Growth of direct recruiting in the recruitment market as a whole has led to a similar increase in demand for IT freelance matching. ◼ Business expansion is expected through greater matching options for client companies as well as more business efficiencies for GEECHS. ◼ Servi
Slide 22: Service Comparison
Service Comparison ◼ Clients can actively search for IT freelancers, achieving speedy and inexpensive matching according to their needs. ◼ Greater matching opportunities for IT freelancers, resulting in a steady stream of projects. ◼ For GEECHS, it is an addition to our existing services that will f
Slide 23: sodatech: Online Programming Course for Individuals
sodatech: Online Programming Course for Individuals ◼ sodatech, a SaaS-type DX/IT human resource development service for corporations, launched as a service for individuals in February 2023. ◼ Over 400 materials and 400 hours of total study time, plus extensive support for less experienced students!
Slide 24: Market Size and Positioning Map
Market Size and Positioning Map ◼ The information education market for working adults/career education is expected to expand further, supported by the Kishida administration's plan to invest 1 trillion yen in five years to support individual reskilling. ◼ In addition to our expertise cultivated in s
Slide 25: M&A: Share Acquisition of Launch Group Holdings Pty Ltd
Financial Results Briefing M&A Share Acquisition of Launch Group Holdings Pty Ltd 5 24 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 26: Consolidation Accounting Period by Company
Consolidation Accounting Period by Company ◼ Acquisition of Launch Group Holdings Pty Ltd completed on January 16, 2023 (deemed acquisition date January 1, 2023). ◼ Consolidation also expected to start as planned in FY3/2023 for balance sheet and in FY3/2024 for profit/loss statement. ◼ Launch's pro
Slide 27: Post-Acquisition Management Policy and Structure
Post-Acquisition Management Policy and Structure ◼ With regards to the management structure of Launch Group Holdings Pty Ltd, a management support and governance structure has been established with Rebecca Jane Wallace, GEECHS CEO Naruhito Sonehara, and Head of the Overseas Business Promotion Office
Slide 28: Shareholder Returns
Financial Results Briefing Shareholder Returns 6 27 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 29: Shareholder Return Policies
Shareholder Return Policies ◼ Based on the target of a return on equity (ROE) of 20% set out in the G100 medium-term management plan, in addition to the ordinary dividend (planned to be ¥10), we bought back treasury shares equivalent to 4% of outstanding shares and provided shareholder benefits (equ
Slide 30: Appendix
Financial Results Briefing Appendix 7 29 Financial Results Briefing for the 3rd Quarter of the Fiscal Year Ending March 31, 2023 ©2023 GEECHS Inc.
Slide 31: IT Freelance Matching Business
IT Freelance Matching Business Technology Resource Sharing Platform Growth companies in IT field Internet companies Project information website ◼ Ad Tech ◼ Med Tech with over 1,500 projects ◼ Fin Tech ◼ Real Estate Tech Matching Approx. 3,400 ◼ HR Tech ◼ EC ◼ Ed Tech ◼ Game client companies ◼ Health
Slide 32: Source of growth
Source of growth Financial Figures Business KPIs Key Success Factor Platform Value Monthly orders Trust from IT freelancers and Sales Monthly unit price of orders Matching Capabilities customers Order period Net sales (source of growth) Retention rate Support capabilities / Engagement Gross profit A
Slide 33: GEECHS Strengths
GEECHS Strengths Support team structure of 3 people per IT freelancer Quick and relevant matching Support ◼ Speedy matching with the whole process done online Capabilities ◼ Generous support as a project mentor ◼ Utilizing big data to take factors other than skills into account ◼ Generous support fr
Slide 34: 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 35: 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
Slide 36: Engagement: 49 services provided
Engagement Strengthening ongoing partnerships to maximize business by increasing engagement with IT freelancers 49 services provided for IT freelancers so they can work for extended periods Benefits program without the extra stress for IT freelancers ◼ Seminars on how to file a tax return ◼ Discount
Slide 37: Game Business
Game Business 1. Specialists 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. ©
Slide 38: 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 39: 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 development (publishers) for the planning, development and operation of games
Slide 40: SeedTech Business
SeedTech Business Seed Tech Inc. 1. Providing sodatech, a DX/IT freelancer development Development business - Offshore development business service for companies Education business - sodatech for developing global, IT freelancers; and IT study abroad Providing a SaaS-type DX/IT human resource develo
Slide 41: x-Tech Business
x-Tech Business 1. Digital marketing support for the golf industry Bringing IT to golf, providing digital marketing support from the development of owned media and building direct-to-consumer platforms, to managing social media channels. 2. Expansive production track record and management expertise
Slide 42: ESG Statement & Map
ESG Statement & Map Actively promoting initiatives based on the ESG Statement and ESG Map ESG Map Creating a society where people can work with peace of Pride in reducing our impact on the environment mind ◼ Establishment of work recovery system during ◼ Finding solutions to the shortage of corporat
Slide 43: Financial Highlights
Financial Highlights Fiscal Year-End FY3/20 FY3/21 FY3/22 FY3/23 Q3 14,340,774 11,802,927 Sales (former sales*) (Thousand yen) 3,544,309 3,427,816 (5,388,647) (4,049,163) Ordinary income (Thousand yen) 675,446 713,942 1,135,706 360,266 Profit attributable to owners of parent (Thousand yen) 390,651 4
Slide 44: Financial Highlights: IT Freelance Segment
Financial Highlights: IT Freelance Segment FY3/22 FY3/23 Fiscal Year-End Q1 Q2 Q3 Q4 Q1 Q2 Q3 After Sales* (Thousand yen) 2,525,969 2,626,672 2,757,352 2,856,575 3,014,968 3,117,730 3,236,528 revision Before (Thousand yen) 416,635 444,350 463,450 490,007 516,767 532,557 561,079 revision Segment prof
Slide 45: Notes regarding Forward-Looking Statements
Notes regarding Forward-Looking Statements The information contained in this presentation is www.geechs.com based 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