ギークス（7060） – [Delayed] Financial Results Briefing for FY2022

Fiscal Year Ended March 31, 2022 Full yearFinancialResultsBriefingMay 13, 2022T S E P r i m e M a r k e t : 7 0 6 00©2022 geechs inc.FinancialResultsBriefing1 Corporate Profile2 Financial Results for FY3 / 20223 Forecast for FY3 / 20234 Medium-Term Management Plan5 Appendix0207212531Contents1©2022 geechs inc.FinancialResultsBriefingCorporateProfile12©2022 geechs inc.geechs Group[ geek tech ]Having technical groups as partners who haveoutstanding and deep knowledgein the IT and Internet fields.Supporting the work styles of all those involved andproviding values through our technologies.3©2022 geechs inc.Grand VisionOur Grand Vision is “Make the biggest impression in the 21st century”.Regardless of changes in the business environment, always “challenge” difficult issues and “enjoy” the process, link it to “growth”,and by repeating these processes, we will create a lot of “impressions” to the world.We will further accelerate the growth of our IT Freelance Matching Business, which is one of the Group’s strengths,Through the creation and evolution of our services, we will develop a portfolio management centered on the IT and Internet fields.and leverage our ability to respond to changes.We are aiming to continuously increase our corporate value.4©2022 geechs inc.Group Corporate ProfileOur Group CompaniesNamegeechs inc. (TSE Prime Market : 7060)ManagementPresident & CEO Naruhito SoneharaIT Freelance Matching Business x-Tech BusinessCapital Stock1,101 (in JPY MM)SegmentationSeed Tech BusinessFoundationAugust, 2007LocationShibuya-ku, Tokyo, JapanBusiness ActivitiesIT Freelance Matching Business Game Business x-Tech Business Seed Tech BusinessEmployee384(As of March, 2022)BasesTokyo Head OfficeOsaka BranchFukuoka Branch Nagoya Satellite OfficeGame BusinessIT Freelance Matching Business Game BusinessIT Freelance Matching Business 58% 34 %37 %62 %FY3 / 22N e t S a l e s5,388m i l l i o n y e nO p e r a t i n g I n c o m eFY3 / 221,133m i l l i o n y e nSeed Tech Business2 % x-TechB u s i n e s sx-TechB u s i n e s s6 %1 %5©2022 geechs inc.geechs Group AdvantageA Portfolio Management that Enhances Growth, Stability, and ProfitabilityEnhancing Management Stability and Maximizing Business SynergiesIT Freelance Matching BusinessFurther growth for mainstay earnings while driving the marketas a main businessGame BusinessStock-type products combining potential growth and stabilitySeed Tech BusinessExpectations for Growth Through IT Human Resource Development and Offshore Development Centered on “sodatech” x-Tech BusinessFocus on DX Support in the Sports FieldNew BusinessChallenge to create new revenue sources through M&A and investment6©2022 geechs inc.FinancialResultsBriefingFinancialResults for FY3/202227©2022 geechs inc.Gross Sales and Operating Profit◼ Both sales and profits achieved record highs, with significant increases. Achieved operating income of ◼ Despite a temporary drop in 3rd Quarter, the Group as a whole recovered in 4th Quarter and achieved a full-year over 1 billion yen for the first timeoperating income margin of 21.0%◼ Net sales were 99.8%, operating income was 94.5%, and net income was 95.1%, slightly below the full-year forecast; the Game Business fell short of the forecast for profits from 3rd Quarter onward.(Millions of yen)1,800Net SalesOperating incomeOperating margin1,5001,200900600300081Q2Q3Q4Q1Q2Q3Q4QFY3/21FY3/224QNet Sales 1,373 million yen( YoY )( -8.1% )Operating income 272 million yen( -22.3 % )Ordinary income 273 million yenNet income( -21.3% )171 million yen( -27.6% )Full year( YoY )Net Sales 5,388 million yen( +57.2% )Operating income1,133 million yen( +53.5% )Ordinary income 1,135 million yenNet income( +59.1% )705 million yen( +54.1% )©2022 geechs inc.40.0%30.0%20.0%10.0%0.0%Segment Information FY3 / 2022◼ IT Freelance Matching Business Achieved all-time high sales, profits, and growth rates. Also substantially higher than the upwardly revised full-year forecast◼ Game Business Despite significant increases in sales and profits from FY3/21, both sales and profits fell short of the upwardly revised full-year plan◼ x-Tech Business◼ Seed Tech Business Achieved a 12% YoY increase due to growth in offshore development and other factors, while also focusing on the development of the new product In addition to marketing support for golf-related companies, sales of the amateur golf tournament “GridgeCup” also grew significantly, achieving a full-year profit◼ Common ExpensesIncreased year-on-year due to the impact of information security investment and relocation-related expenses, but fell below plan due to unused expenses such “sodatech” from the second half of the year.as other selling, general and administrative expenses among othersPrevious fiscal yearFull-yearResultsYoYFull-year PlanFull-year4QFull-yearPlan valueProgress Rate(Millions of yen)By SegmentIT Freelance MatchingSalesGamex-TechSeed TechCommon expenseConsolidatedProfitSalesProfitSalesProfitSalesProfitNet SalesOperating income1,4448231,616270266-12103-15-3273,4277381,8149963,15358430415116-26-4355,3881,13349028180111160320-19-1061,373272+25.6%+21.0%+95.1%+116.2%+14.3%+12.2%—+57.2%+53.5%1,7559353,2157903000130-50-4755,4001,200103.4%106.6%98.1%73.9%101.4%89.4%—99.8%94.5%9©2022 geechs inc.Cost Structure◼ Labor and outsourcing expenses increased significantly due to the impact of adopting the new revenue recognition standard from FY3/22.◼ The cost of attracting engineers has increased significantly compared to the previous term, which was suppressed due to the i nfluence of corona.◼ SG&A expenses increased due to an increase in mid-career recruitment expenses and personnel expenses associated with the strengthening of organizational structures in each business, as well as the impact of investment in information security.(Millions of yen)Net SalesExpensesCost of SalesLabor costsOutsourcing expensesEngineer Attraction Expenses*OtherSG&A expensePersonnel expenses OtherFY3/21FY3/22ResultsNet Sales RatioResultsNet Sales RatioRate of Change3,4272,6891,388788302912067815197381,300-78.5%40.5%23.0%8.8%2.7%6.0%37.9%22.8%15.1%21.5%5,3884,2542,6051,1939361643101,6499756741,13379.0%48.3%22.1%17.4%3.1%5.8%30.6%18.1%12.5%21.0%-+58.2%+87.6%+51.4%+209.8%+80.0%+50.4%+26.8%+24.8%+29.9%+53.5%Operating incomeExpenses for attracting engineers: IT Freelance Customer Attraction Expenses10©2022 geechs inc.IT Freelance Matching Business (1/3)◼ Full-year transaction value exceeded 10 billion yen for the first time!◼ Achieve record-high growth rates of over 20% in both net sales and segment income for the full fiscal year◼ In 4th Quarter, segment income will reach a record high due to an increase in business matching, approaching 1 billion yen for the full year(Millions of yen)Net SalesSegment income(Millions of yen)Gross SalesTake rate500400300200100FY3/22Segment ProfitMarginMargi54.92,9002,7002,5002,3002,10016.316.93Q4QFY3/211Q2Q4Q3QFY3/223Q4QFY3/211Q2Q3QFY3/224Q※ Take rate: Figures calculated by discounting net sales by transaction amount Advertising expense ratio: Ratio of advertising expenses to transaction amount (Gross Sales)114Q( YoY )Gross Sales 2,841 million yenNet Sales ( +20.7%)490 million yen( +28.0%)Segment income 281 million yen( +26.8%)Advertising Expense Ratio 1.5 %16.5%Full year( YoY )Gross Sales10,724 million yenNet Sales 1,814 million yenSegment income 996 million yenAdvertising Expense Ratio 1.6 %( +20.7%)( +25.6%)( +21.0%)©2022 geechs inc.YoY17.5%17.0%16.0%15.5%15.0%IT Freelance Matching Business (2/3)◼ The number of IT Freelancers Under Contract rose 19.9% YoY, reaching a record high, reflecting strong demand and an increase in matching between the Tokyo metropolitan area and regional areas.◼ The transaction ratio, which represents the supply and demand in the IT Freelance Market, has trended at a high level of 10.65, and the unit price of orders continues to rise.(person-months)Number of Freelancers Under Contract(thousand yen)Unit price of order3,805764,000758,000Year-on-yearchange6593,1464,0003,7003,4003,1002,8002,500770760750740Growth from the previous year0.74Q( YoY )Number of Freelancers Under Contract3,805 person-months( +20.9%)Unit price of order765,000 yen( +0.3%)( YoY )Full yearNumber of Freelancers Under Contract14,398 person-months( +19.9%)Unit price of order764,000 yen( +0.7%)3Q4QFY3/211Q2Q3QFY3/224Q3Q4QFY3/211Q2Q3QFY3/224Q※ The ratio of projects: A numerical value calculated from how many corporate projects there are for one IT freelancer who searches for projects on the project search website ” geechs job” operated by geechs. 12©2022 geechs inc.IT Freelance Matching Business (3/3)◼ The number of new clients grew significantly for the full fiscal year, partly due to the effects of investment ◼ The number of new IT Freelance registrants rose 15.6% YoY, a significant increase in 4th Quarter due to in corporate advertising.measures such as referral system.4Q( YoY )Number of New Clients(Company)1,350Number of Existing ClientsNumber of New ClientsNumber of ClientsYear-on-Year growth rate14.9Growth from the previous year49.8(People)360New IT Freelance Registrants1,269328Number of New Registrants1,1042191,3001,2501,2001,1501,1001,0501,000950133303002702402101801501203Q4QFY3/211Q2Q3QFY3/224Q3Q1Q2Q4QFY3/213QFY3/224Q※ Number of existing clients: Number of enterprises that began doing business in or after FY3/1729 companies( -19.4%)328 person( +49.8%)( YoY )165 companies( +13.0%)Full yearNumber of New ClientsNumber of New Registrants1,081 person( +15.6%)Cumulative number of registrants19,000+ person©2022 geechs inc.Profitability of IT Freelance Matching Business◼ Unit Economics is a highly profitable business with a high return on investment of 4.5 (+9.8% YoY).◼ Control acquisition costs per IT Freelance through appropriate marketing measuresKPIDefinitionFY3/21FY3/22Unit EconomicsReturn on IT Freelance Acquisition Cost(= LTV divided by CAC)LTV (thousand yen)Average Gross MarginGenerated by One IT Freelance Under Contract(= ARPU Average Contract Period)ARPU (thousand yen)Average Monthly Price (Gross Margin) per IT FreelanceAverage Contract Period(months)Average IT Freelance Contract Period per IT FreelanceCAC (thousand yen)Average acquisition cost per IT Freelance(Advertising expenses + Personnel expenses)* Average of the total operating period including project changes4.11,94811916.45104.52,01712316.447314©2022 geechs inc.Game Businessexisting titles.(Millions of yen)Recurring SalesOne-Time SalesRecurring Sales Ratio◼ Significant increases in both sales and profits for the full fiscal year due to an increase in the number of titles under management, partly from the delivery of three new titles◼ Recurring sales recovered in 4th Quarter, partly from to the contribution of the launch of overseas versions of ◼ Continue to appropriately control development line resources by utilizing freelance, etc.1,2001,1001,0009008007006005004003002001000(People)100%350Full-time EmployeesOutsourcing, etc.80%60%40%20%0%300250200150100500Outsourcing Ratio 21.1FY3/2125.7FY3/22Adoption of New Revenue Recognition Standard4QNet Sales( YoY )801 million yen( -22.1%)Segment income 111 million yen( -50.7%)( YoY )Full yearNet Sales 3,153 million yen( +95.1%)Segment income 584 million yen( +116.2%)Operating Game Titles 6 TitlesUnder development 3 Titles3Q4QFY3/213QFY3/221Q2Q4Q3QRecurring Sales : Contract Game Operation and Revenue Share SalesOne-time Sales : Contract Sales for New Game Development, Contract Sales for the Development of Additional Functions for Existing Game Operation, and Other Contract Development Sales2Q1Q4QFY3/21Subsequent to adoption of the new revenue recognition standard in FY3/22, the ratio of recurring revenue to net sales is presented for purposes of comparison.3QFY3/224QEmployee296(220 full-time , 76 outsourcing)15©2022 geechs inc.Other BusinessTopicsx-Tech Business◼ Full-year sales grew by +14.3% YoY, with segment profit also turning positive◼ Continuous increase in investment projects due to new transactions by golf-related companies◼ Growth mainly in YouTube Production and Agent BusinessSeed Tech Business◼ Segment loss was recorded as planned due to upfront investment in “sodatech”, however costs were reduced by 25 million yen compared to the plan.◼ “sodatech” has made steady progress in development and was launched on April 18◼ Full-year sales increased due to growth in offshore developmentx-Tech Business Seed Tech Business 4QNet Sales ( YoY )4Q60 million yen( +2.9 % )Net Sales ( YoY )20 million yen( -11.5% )Segment income3 million yenSegment income -19 million yenFull year( YoY )Full year( YoY )Net Sales Net Sales 304 million yen( +14.3 % )116 million yen( +12.2% )Segment income 15 million yenSegment income -26 million yen16©2022 geechs inc.x-Tech BusinessFrom FY3/23, part of the x-Tech Business was transferred to the Game BusinessRestructuring of x-Tech BusinessBackground and Objectives~ FY3/22FY3/23~Game BusinessGame Businessx-Tech Businessx-Tech Business◼ In the Game Business, the need for CG and Video Production is increasing as the pipeline expands, and game genre expands to 3D, among others◼ Be in line with technological innovations such as metaverse and the further improvement of required game quality andstrengthen the R&D structure in new technological domains◼ Strengthen our organizational structure by integrating into the Game Business divisions that possesses both R&D capabilities for xR technology, and a track record in visual production in a wide range of fields.◼ x-Tech is strengthening its marketing support in the sports field based on its experience in the golf field17©2022 geechs inc.Financial Performance◼ The equity ratio (+16.6%) and ROE (+4.3%) also improved due to the increase in net income.◼ In BS, total assets (work in process and contractual liabilities) decreased due to a change in accounting standards. In addition, investment securities increased due to an increase in the number of companies investing in venture investment programs◼ In terms of cash flow, operating CF was negative year-on-year due to an increase in corporate tax and consumption tax payments. Investment CF was negative year-on-year due to the fulfillment of asset retirement obligations. Financial CF was negative year-on-year due to dividend payments. Cash and deposits balance increased YoYFY3/21FY3/22ChangeFY3/21FY3/22ChangeBalance SheetCurrent assetsCash and depositsAccounts Receivable and Contract AssetsWork in processFixed assetsProperty, plant and equipmentInvestment securitiesTotal assetsLiabilitiesAccounts PayableContract Liabilities*Net assetsTotal liabilities and net assets5,9153,1491,5181,117570821096,4862,6558581,1253,8306,4865,5243,3572,0275349241295,8741,4031,03394,4705,874391+207+5081,11122058+196121,252+1751,115+640612Cash FlowOperating CFIncrease (decrease) in accrued consumption taxesIncome taxes paidCF from Investing ActivitiesAcquisition of Investment SecuritiesFulfillment of asset retirement obligationsFCFCF from Financing ActivitiesDividendCash and depositsKey Financial IndicatorsEquity RatioROEROA661105-176-48-79-10612-2203,14959.1%12.7%8.2%*Same as Advance Received and Unearned revenue Upto the Previous Fiscal Year18369-90-534-68-49-39300-91-1043,35729219635819+292931268104+20775.7%17.0%11.4%+16.6%+4.3%+3.2%©2022 geechs inc.Changes in the Number of Employees◼ The number of employees in the Group as a whole increased by 27 from FY3/21. The main reason is an increase in new graduates and mid-career employees due to the strengthening of the IT Freelance Matching Business structure.(People)500450400350300250200150100500CorporateSeed Techx-TechGameIT Freelance Matching26312 63 21 12047FY3/1830815 77 20 14749FY3/1939116 82 17 21335718 38 22 21338419 40 20 220856366FY3/20FY3/21FY3/2219©2022 geechs inc.Shareholder Composition◼ Aggressive IR Activities Increased Institutional Investors From 24.9% to 25.5% (Year-on-Year Increase of 0.6%)◼ In particular, while the ratio of domestic institutional investors increased, the ratio of foreign shareholders decreased from 10.4% to 9.3% (down 1.1%).Overseas Institutional Investors10.4Domestic Institutional Investors14.5Overseas Institutional Investors9.3Domestic Institutional Investors16.2FY3/21FY3/22Entrepreneur’s equity63.0Individuals and Others12.1Entrepreneur’s equity62.7Individuals and Others11.820©2022 geechs inc.FinancialResultsBriefingForecastfor FY3/2023 321©2022 geechs inc.Executive Summary FY3 / 2023◼ For the Group as a whole, sales are expected to increase 7.6% YoY. However, the Group also expects a temporary decline in income due to strategic investments in the IT Freelance Matching Business and Seed Tech Business, as well as preparations for the Game Business, including the development of new titles, R&D, and strengthening of the organizational structure.(Million of yen)FY3/22ResultsFY3/23PlanChangeYoYPerformance Trends & Plan(Million of yen)7,000Net SalesOperating incomeNet Sales5,3885,800411+7.6%5,800 5,388 Operating income1,133800-333-29.4%3,050 3,0002,582 3,544 3,427 Ordinary income1,135800-335-29.6%375 574 684 738 1,133 800 Net income705480-225-31.9%FY3/18FY3/19FY3/20FY3/21FY3/22FY3/236,0005,0004,0002,0001,000022©2022 geechs inc.Segment Information FY3 / 2023In FY3/23, we will actively invest in human resources and development in view of achieving further growth for the G100.SalesProfitProfitProfitProfitx-TechSales(Millions of yen)IT Freelance MatchingFY3/22ResultsFY3/23Plan1,8142,200ChangeYoYPolicies and Formulation Assumptions996900-96-9.7%advertising to improve branding385+21.2% • Aggressively invest in human resources to further strengthen the organizational structure, to result in an increase in personnel and recruitment expenses• Segment profit margin is expected to temporarily decline due to investment in strategic GameSales3,1533,20046+1.5%management.• For this fiscal year, we expect to deliver one title and close some of the titles under Seed TechSales33+29.1%584116-2630415400150-8025050-184-31.5%development, positioning the preparatory period for achieving the Mid-Term Management Plan.• We expect to receive orders for multiple new titles in addition to existing titles under -53• Losses are expected due to continued upfront investment for early launch and profitability of “sodatech” In offshore development, an increase in orders for new projects is expected in addition to the recurring revenue from existing projects, • Although there is a possibility of resumption of offline Study Abroad in the School Business, this has not been factored into the plan.-54-17.8%34+232.1%• Sales are expected to decrease due to the impact of the transfer of the xR division to the Game Business in conjunction with the realignment of the x-Tech Business.In the Sports Business, the Company expects to see further growth in orders for digital marketing support from golf-related companies, and from FY3/22, significant increase in profits is expected• Expected to increase due to enhancement of information system and security among ••–• Projected to have an increase in personnel expenses accompanying an increase in the number of personnel to further strengthen the organizationCommon expense-435-470-34others23©2022 geechs inc.Dividend PolicyPlan to pay the same dividend as the previous fiscal year in FY3/23Provide stable and continuous dividends while prioritizing business and growth investmentsDividend TrendFY3/22FY3/23DividendTotal Dividend1010510105Dividend payout ratio14.921.924©2022 geechs inc.FinancialResultsBriefingMedium-Term Management Plan425©2022 geechs inc.Medium-Term Management Plan◼ Aiming to achieve the G100 target, progress was made in FY3/22 as planned. Aiming for accelerated growth from FY3/24, in FY3/23 we will actively invest in IT human resources and Seed Tech businesses, and further promote M&As.(Millions of yen)Net SalesOperating income3,427 305,800 5,388 738 1,133 800 G10010,000 2,500 FY3/21FY3/22FY3/23FY3/24ImageFY3/25Plan26©2022 geechs inc.Medium-Term Management Plan of IT Freelance Matching Business◼ In FY3/22, sales rose 25.6% YoY, far exceeding the previous 15-20% growth rate◼ Based on the current growth rate, aim for further upside from FY3/25 targetPerformance Trends & PlanMajor Initiatives and Progress(Millions of yen)Net SalesSegment incomeGross Sale10.7 bn yen18.22,200 Gross Sale7.1 bn yen1,101 570 18.11,329 1,444 1,814 719 823 996 900 Gross Sale19.0 bn yen3,000 Human Resource Strategy• Enhance organizational strength by boostingrecruitment (up 19 YoY) and successful sales enablement*• Gradual increase in remuneration for the entire divisionSales Strategy1,500 Marketing Strategy••In addition to strong demand, strengthened customer and engineer support led to an increase in the customer retention rateImplement measures such as cross-base project management to further enhance matching efficiency• The number of client companies increased partly due to investment in corporate advertising.• The number of new Freelance registrants is also making steady progress• Enhancing Engagement by Expanding Frinove ServicesFY3/19FY3/20FY3/21Y3/22FY3/23FY3/24FY3/25ImagePlan* A Human Resource Development Framework for Continuing to Create Salespersons That Generate Results Throughout the Organization27©2022 geechs inc.Medium-Term Management Plan of Game Business◼ Substantial growth in FY3/22, steady progress in acquiring development projects in line with the medium-term management plan◼ We will focus on developing new titles for about two years from FY3/23, and expect further rapid growth by launching multiple titles in FY3/25.Performance Trends & PlanMajor Initiatives and Progress(Millions of yen)Net SalesSegment income5,000 21.73,153 3,200 1,541 1,789 1,616 1,300 331 323 270 584 400 FY3/19FY3/20FY3/21FY3/22FY3/23FY3/24FY3/25ImagePlanHuman Resource StrategyPartner Strategy••Improve branding as a game production company and greatly increase the number of new graduate applications• Realizing quick response to the effects of practical training programsIn addition to strengthening relationships with existing partners, expand transactions with new partners to acquire new titles• Continue to control resources by utilizing freelance according to development status• Continuing to improve development by strengthening R&D Strategyits foundation.• Strengthening the R&D structure for the development of Metaverse and Other New Technologies28©2022 geechs inc.Medium-Term Management Plan of Other Business◼ In the seed tech business, we expect further growth by focusing on the SaaS-type DX/IT Human Resource Development Service for corporations “sodatech” ◼ The x-Tech Business provides comprehensive support for digital marketing, including D2C construction, SNS operations, and YouTube-related services. Expected to expand into other sport fields in the futureNew Service in the Seed Tech Business “sodatech”x-Tech BusinessSaaS-type services for corporations to resolve the social problem of IT personnel shortage DX and IT Human Resource Development Made In-House and Is an Optimal Tool for ReskillingExpand revenue by developing a diverse lineup of servicesSupport for owned mediaYouTube A g e n tsodatechIn an era when DX / IT human resources are nurtured in-houseService started in April 2022Human resources development service for corporations that develops DX / IT human resources from inexperienced.”sodatech” Develop + Technological Human ResourceDX ITSaaS-type, inexpensive pricing structureAll educational materials are easy to understandComprehensive Expansion of Key Languages and TechnologiesReliable customer supportVisualizing Learning with Administrator Reporting Features◼ Strong track record of production, especially for golf manufacturers◼ Market share is expanding due to ※increase in supportThe latest shaft for women improves driving distance.Has a track record of supporting YouTube collaboration with multiple clientsOperation of Gridge Cup, Japan’s largest amateur golf tournamentOperation of Golf Media GridgeEntry startTotal Number of Participants1,774(Held in 2021)MAU 930,000◼ Over 200 Golfers Disseminate Information◼ More than 50% of readers are in their 40s or under◼ More than 120,000 female readers29©2022 geechs inc.Medium-Term Management Plan of M&A◼ Broadly expanding the scope to domestic and overseas companies that expect to maximize synergies by strengthening M&A promotion, aiming for organic growth plus something upside toward achieving the G100◼ The number of M&A considered was 108 in FY3/22, a significant increase of 145% from the previous year, and the IT Freelance Matching Field is on an uptrendResults of M&A ConsiderationsFY3/21FY3/22xR30 % Game11% Other3 % IT Freelance Matching25 % Number of M&A Considerations44 projectsIT Human Resource Development・Training29 % xR27 % Game 17% Other9 % Number of M&A Considerations108 projectsIT Freelance Matching29 % IT Human Resource Development・Training18 % 30©2022 geechs inc.FinancialResultsBriefingAppendix531©2022 geechs inc.IT Freelance Matching BusinessTechnology Resource Sharing PlatformPortfolio Information WebsiteContinuously owned1,500 or more propertiesIT FreelanceA p p r o x im a t e l y1,000N e w R e g i s t r a t i o n s P e r Y e a rBenefit ProgramFor IT FreelanceMatchingLegalBack officeMentorAdvisorROOTIn-house systemGrowing companies in IT fieldServicesApproximately3,300CompaniesInternet companies◼ Ad Tech◼ Fin Tech◼ HR Tech◼ Ed Tech◼ Health Tech◼ Med Tech◼ Real Estate Tech◼ EC◼ Game◼ Other SaaSIT companies◼ Various backbone systems◼ In-house Business SystemsServiceCustomer referralsPlatformClients33Companies(Excerpts)3231©2022 geechs inc.Source of growthFinancial FiguresBusiness KPIsKey Success FactorPlatform valueOutsourcingGross SalesGross Sales per orderMatching CapabilitiesTrust fromIT Freelance and ClientsMonthly OrdersContract periodNet Sales(Source of Growth)Gross profit marginRetention rateSupport Capabilities/EngagementAdvertising Expenses to Gross Sales RatioCustomer Attraction/Customer Attraction EfficiencyAdded Value toIT FreelanceNet SalesGross Sales: The difference between the total amount of orders received from clients and the total amount of orders placed with IT Freelan cers (Net sales for accounting purposes).: The total amount of outsourcing orders received from clients.33©2022 geechs inc.geechs StrengthSwift and optimal matching◼ Speedy matching by making all processes online◼ Taking into account preferences other than skills by ◼ Seamless matching linking Tokyo, Osaka, Fukuoka, utilizing big dataand NagoyaSupport CapabilitiesSupporting team structure of3 supporters for 1 IT Freelancer◼ Beneficial support as a project mentor◼ Beneficial support from career advisors◼ Engagement enhancement through “Frinove” services, etc.◼ Regular events in line with IT Freelancers needsMatching CapabilitiesgeechsStrengthAbility to attract ClientsAll in-house marketing◼ Efficient and effective web marketing using high-speed PDCA◼ Perform Lead Naturing with Marketing Automation◼ Enhanced content marketing that takes advantage of the voices of registered IT Freelance◼ Referral system from registered IT Freelancers34©2022 geechs inc.Relationships with IT FreelanceEngagement enhancement by maintainingeffective long-term contact with IT FreelancersIncreasing recognitionLead acquisitionMatchingContractRegistration interviewBusiness negotiationsStart of operationsLead generationLead Naturing◼ Web marketing(SEO, Listing, SNS, etc.)◼ Web UI/UX optimization◼ Referral system of friends andacquaintances from registrants◼ One-to-One Action / All Action◼ Content Marketing(Market Value Diagnosis, Collection of Career AdvancementCase Studies, Useful Content, etc.)◼ Implementation of various webinars◼ The operation of AI Human Resource Development SchoolsCustomer Success◼ Dedicated project mentor◼ Dedicated career advisors◼ Provision of Frinove Benefits◼ Implementation of various eventsMarketing AutomationROOTIn-house system35©2022 geechs inc.Differentiation from Similar BusinessesDeveloping a platform specializing in mid- to high-spec core IT FreelancegeechsCrowdsourcingIT technician dispatchRegistrantIT Freelance(Main Business)Freelancers(Side Business/Main Business)Major ClientsInternet Service companiesMid-tier and Major EnterprisesDispatched workerMajor SystemIntegrator CompaniesContract formSemi-Delegation ContractService ContractTemporary staffing contractsGranularity of operationsMonthly person-hoursDeliverablesTimeContract Term1.3.6 MonthsSingle timeFrom 1 MonthMajor Business (Projects)Internet service developmentDesign Production, etc.Wide variety of low-priced projects• Legacy system operations• Business system developmentEmployment RelationshipsNoneNoneJob relationship with dispatching agency36©2022 geechs inc.EngagementBy enhancing our engagement with IT Freelance,Strengthening Continuous Partnerships to Maximize BusinessBenefit Programfor IT FreelanceWe provide43 benefits for IT Freelanceto resolve the causes of uncertaintyand can work with peace of mind fora long time.◼ Conducting seminars on the Filing of Tax Returns◼ Offering discounts on accounting software◼ Support on various online learning services◼ Provision of discounts for partial and full medical checkups◼ Providing preferential treatment for English Study Abroad◼ Providing benefits for weddings and other life events◼ Provision of housing loan origination fee discounts◼ Providing Affiliated Credit Cards and Incentives◼ Providing AI Study Support Benefits etc37©2022 geechs inc.Game Business© We Work1. Specialize in Partner StrategyWith solid technical capabilities centered on Unity / PHP, we have stabilized our earnings base through contract development and operation, and won a revenue share for strong titles. Expanded orders for globally distributed titles.2. Game development achievements at the top of the sales rankingIn addition to the 2D / 3D game development know-how that we have accumulated so far, we have a wealth of experience in operating a wide range of game genres. In the future, we will also focus on research and development in the Metaverse field.3. Securing Development Lines through Collaboration with the IT Freelance Matching BusinessThrough intra-group collaboration, and while utilizing our own IT Freelance, we have flexibly created development lines for each project.© We WorkG2 Studios Inc.For smartphone-oriented ease apps planning, development, and operationsAsobi Creators.G2 Studios Inc., one of the companies of the Group specializing in the Game Business, plans, develops, and operates native app games for smartphones based on Unity in partnership withmajor licensors and game manufacturers.38©2022 geechs inc.Differences between Developer and PublisherAs for the future strategy of the Game BusinessAiming to be a developer of global distribution titlesDevelopers (Our company)PublisherMain Rolesplanning, development, and operation of titlesplanning, distribution and promotion of titles⚫ Planning and Development Sales from PublishersRevenue Model(One-Time Sales)⚫ Publisher Sales (Recurring Sales, Fixed)⚫ RS*1 Sales Based on Billing for Titles (Recurring Sales, Variable*2)⚫ In-app billing⚫ Advertising AppRisk/ReturnLow Risk, Middle to High ReturnHigh-risk, High-return⚫ Fixed and stable revenues, regardless of whether a title ⚫ If a title is a hit, there are high expectations for the Business Characteristicsis a hit or notUpside⚫ The Upside is limited, but the return on a hit is large⚫ Low-volatility recurring-fee business model⚫ If it doesn’t, a business model that is difficult to recover costs and risky and has high volatility*1 Revenue share *2 Determined according to the contract for each title39©2022 geechs inc.Game Business -Business and Revenue Image-Business ModelRevenue Image◼ We are a developer exclusively entrusted with the planning, ◼ In the planning and development period, from FY3/22, the same development, and operation of games from a major publisheramount of development costs were recorded as sales.Consignment of game planning and developmentProvision (distribution) of games, etc.Income◼ For the operating period, in addition to fixed-rate management sales, R/S sales are recorded based on the fee-based sales of titles*DeliveryFeesOur (lDeveopers)Payment of development costsGame operations consignmentPublisherOperationPayment of Operating ExpensesAppDe livery PFApp paymentsPromotionsCustomerR/S Sales(Changes)Development Sales(Development cost)Operating Sales(Fixed)DeliveryPlanning and Development PeriodOperating PeriodPeriod40©2022 geechs inc.x-Tech BusinessBy using You TubeLaunched sales promotionsupport services1. Digital Marketing Support for the Golf Industry Promote golf xIT, and provide digital marketing support for owned media development, D2C construction, SNS management agency, etc. 2. A wealth of production track record and operations know-how In addition to specialized golf agents utilizing YouTubers and Instagrammers, it has a wealth of track record in various types of video editing and production. Operates Gridge, Japan’s largest golf media.3. Operating Japan‘s Largest Amateur GolfEntry startG2 StTournaments “Gridge Cup“Golf websiteCommunity operationsProvides the point of contact between the various golf-related companies that are our customers and amateur golfers in person, providing OMO support fusioned with online.Technology Partners for Business Model TransformationLeveraging on cutting-edge technologies and methods to become a technology partner for business model transformation using [Technology x Data] and provide value by multiplying digital marketing and D2C support know-how in the sports field.41©2022 geechs inc.Seed Tech BusinessSeed Tech Inc.Development Business-Offshore Development BusinessEducation Business-IT and Global Human Resource Development-Offering “sodatech”Funds”Growing IT development team from seeds”Business Collaboration LaboratoriesIdeasSkill”Growing IT services from seeds” Education BusinessIT/English Study Abroad(On-demand/camp style )Study Abroad(Ceb Island)Graduates: More than 2,300Number of entrepreneur: 31Work in 16 countries worldwide.HumanOnlineLeveraging Technology to Advance the WorldDevelop IT development teams and IT personnel from within the two business areas of development and education.1. Provision of SaaS-type DX/IT Human Resource Development Platform Providing DX/IT Human Resource Development Service “sodatech” for corporate customers supporting non-engineers reskilling with a wealth of curriculums that cover more than 300 video-based teaching materials and over 400 total learning hours.2. Worldwide Standard Business Collaboration Laboratory-Type Offshore Development Comprehensive support is provided for securing IT human resources, training and management for successful new business, DX and product development in the Philippines. It is ideal for forming a long-term successful development team. It is also involved in the development of the world’s largest EC platform [Shopify].3. Operating the Programming SchoolOverseas, we operate a camp-style programming and English school. The school is operated by a company that has a track record in offshore development which paved way in offering programming classes to learn practical and high-level technologies. Supporting job changes and sideline to developing engineers who can play an active role globally.42©2022 geechs inc.ESG Statement & MapUnder way based on the ESG Statement and the ESG MapESG MapPride in Reducing Environmental Impact◼ Establishment of a business recovery system in the event of climate change◼ Comprehensive paperless and electronic filing◼ Office premised on “Cool Biz” and “Warm Biz”◼ Control of Air Conditioning and Reduction of Electricity Consumption◼ Building a Corporate Culture for Zero Waste◼ Support for employees’ environmental conservation ◼ Corporate investment to reduce environmental activitiesimpactESG StatementUnder the Grand Vision of “Make the biggest impression in the 21st century”, the entire Group is united in contributing to society and continuing to grow as a company through business activities such as the promotion of new work styles such as freelance, human resource development, the promotion of DX that leverages our technological capabilities, and product development.The geechs Group will continue to engage in ESG management in order to realize a sustainable society while continuously increasing corporate value.Contribution to SocietyToward a society where employees can work with peace of mind◼ Solve the shortage of IT human resources in companies andpromote the enhancement of IT human resources◼ The Role of Infrastructure in the Fields of TechnologicalInnovation and Development◼ Promote diversity in working styles ◼ Freelancers Benefit Support◼ In-house system for employees’ life events, Development ofwelfare programs◼ Health management initiativesContribution to the EnvironmentESGmanagementStrengthening GovernanceStrengthening Corporate Governance◼ Reliable, safe, and fair trade◼ Strengthening Risk Management◼ Compliance with Security Policies◼ Compliance and Internal Control◼ Governance Structure of Group Companies◼ Promote executives regardless of gender or nationality43©2022 geechs inc.Performance HighlightsNet SalesOrdinary incomeComprehensive incomeCapital StockNet assetsTotal assetsNet income per shareEquity RatioReturn on EquityFiscal Year-EndFY3/19FY3/20FY3/21FY3/223,050,4133,544,3093,427,816Net income attributable to owners of parent(thousand yen)(thousand yen)(thousand yen)(thousand yen)(thousand yen)(thousand yen)(thousand yen)(Yen)532,117411,610410,322972,1522,737,3774,515,12747.9660.621.8191,429124,0851,058,6112,615,535308675,446390,651391,1021,086,0153,356,2324,700,30937.7871.412.839,949-77,131-20,049713,942457,755458,0201,094,2143,830,4966,486,30343.8359.112.7661,718-48,908-22,5885,388,6471,135,706705,194703,8431,101,5314,470,8605,874,29467.1875.717.0369,207-68,653-91,339Net cash provided by (used in) operating activities(thousand yen)Net cash provided by (used in) investing activities(thousand yen)Net cash provided by (used in) financing activities(thousand yen)Cash and cash equivalents at end of year(thousand yen)2,559,2683,149,6953,357,198Employee(people)39135738444©2022 geechs inc.Notes regarding Forward-Looking StatementsThe information contained in this presentation is based on a numberof assumptions. These statements are not intended to assure orguarantee the achievement of future numerical targets or measures.Please note that actual results may differ due to various factors.We do not have obligation to update or revise the forward-lookingstatements in this report even if there are new information orevents in the future.www.geechs.com45©2022 geechs inc.