DeNA : FY2023Q1 Consolidated Financial Results

The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.

Consolidated Financial Results

for the Three Months Ended June 30, 2023

[IFRS]

August 9, 2023

Company name: DeNA Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Code number: 2432

URL: https://dena.com/intl/

Representative: Shingo Okamura, President & CEO

Contact: Takaaki Otani, Head of the Corporate Unit

Phone: [phone]

Scheduled date of filing quarterly securities report: August 10, 2023

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes (for institutional investors, analysts and the press)

(Amounts are rounded to the nearest million yen.)

1. Consolidated Financial Results for the Three Months Ended June 30, 2023 (from April 1, 2023 to June 30, 2023)

(1) Consolidated Operating Results			(% changes from the previous corresponding period)
	Revenue		Operating profit	Profit before tax	Profit for the period
Three months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
36,150	4.0	1,735	(56.2)	5,971	(44.2)	4,559	(39.2)
June 30, 2023
Three months ended	34,773	2.1	3,964	(27.5)	10,697	(39.3)	7,505	(48.7)
June 30, 2022
	Profit for the period	Total comprehensive	Basic earnings	Diluted earnings
	attributable to
		income for the period	per share		per share
	owners of the parent

Three months ended June 30, 2023 Three months ended June 30, 2022

Millions of yen	%	Millions of yen	%
4,639	(35.1)	13,509	357.9
7,144	(50.6)	2,950	(83.7)

YenYen

41.6641.62

60.2760.21

(2) Consolidated Financial Position

Total assets

	Millions of yen
As of June 30, 2023	347,586

As of March 31,	348,942
2023

Total equity	Total equity	Ratio of equity
attributable to	attributable to
	owners of the parent	owners of the parent
Millions of yen	Millions of yen	%
245,260	232,964	67.0
233,993	221,626	63.5

2. Dividends
			Dividends per share
	End of 1st	End of 2nd	End of 3rd	End of	Total
	quarter	quarter	quarter	year
Fiscal year ended	Yen	Yen	Yen	Yen	Yen
―	0.00	―	20.00	20.00
March 31, 2023
Fiscal year ending	―
March 31, 2024
Fiscal year ending
March 31, 2024		―	―	―	―
(Forecast)

(Notes) 1. Revisions to recently announced dividend forecast: No

2. The dividend forecast for the fiscal year ending March 31, 2024 has not been determined at this time.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

The consolidated financial results forecast for the fiscal year ending March 31, 2024 cannot be provided due to the difficulty of reasonably and accurately estimating the figures. However, the Company aims to achieve a year-on-year increase in revenue and operating profit with the exception of one-off gains and losses. For the major factors related to performance that are expected to impact the trends of each business, please refer to "1. Overview of Operating Results and Financial Position (1) Overview of Operating Results for Fiscal 2022 (Outlook for Fiscal 2023)," in the "Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 [IFRS]," announced on May 10, 2023.

* Notes

1. Changes in Significant Subsidiaries during the Period under Review (changes in specified subsidiaries accompanying changes in scope of consolidation): No
2. Changes in Accounting Policies and Changes in Accounting Estimates
3. 1. Changes in accounting policies required by IFRS: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
4. Number of Shares Issued (common stock)
5. 1. Total number of shares issued at the end of the period (including treasury stock):

As of June 30, 2023	122,145,545 shares
As of March 31, 2023	122,145,545 shares

1. Total number of shares of treasury stock at the end of the period:

As of June 30, 2023	10,801,216 shares
As of March 31, 2023	10,805,997 shares

1. Average number of shares during the period:

Three months ended June 30, 2023	111,341,939 shares
Three months ended June 30, 2022	118,538,321 shares

(Note) The 174,090 shares of the Company's stock owned by the Stock Grant ESOP Trust account are included in the "Total number of shares of treasury stock at the end of the period" as of June 30, 2023, and the 178,871 shares of the Company's stock owned by the same trust account are included in the "Total number of shares of treasury stock at the end of the period" as of March 31, 2023.

• This report of quarterly consolidated financial results is outside the scope of quarterly review by a certified public accountant or accounting auditor.

• Explanation of the Proper Use of Financial Results Forecast and Other Notes
  (1) Consolidated Financial Results Forecast
  The forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable as of the date of publication of this document. They are not intended as the Company's commitment to achieve such forecasts, and actual results may differ significantly from these forecasts due to a wide range of factors.

(2) Dividend Forecast

The Company plans to set the cash dividend forecast for the fiscal year ending March 31, 2024 considering the overall progress in performance and other factors, and promptly announce said expected dividend amount.

(3) Method of Obtaining Supplementary Briefing Material on Financial Results

The Company is planning to hold a briefing session for institutional investors, analysts and the press on August 9, 2023. The briefing materials for this session are scheduled to be posted on the Company's website after the timely disclosure of the Consolidated Financial Results for the Three Months Ended June 30, 2023. In addition, videos and primary Q&A of the briefing session are scheduled to be posted on the Company's website at a later date shortly thereafter.

Appendix
1. Overview of Operating Results and Financial Position	2
(1)	Overview of Operating Results	2
(2)	Overview of Financial Position and Cash Flows	3
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information	4
2. Condensed Consolidated Financial Statements and Principal Notes	5
(1)	Condensed Consolidated Statement of Financial Position	5
(2)	Condensed Consolidated Income Statement	7
(3)	Condensed Consolidated Statement of Comprehensive Income	8
(4)	Condensed Consolidated Statement of Changes in Equity	9
(5)	Condensed Consolidated Statement of Cash Flows	10
(6)	Notes on Going Concern Assumption	11
(7)	Notes to Condensed Consolidated Financial Statements	11
	1. Segment information	11
	2. Earnings per share	14
	3. Investments accounted for using the equity method	14
	4. Significant subsequent events	14

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1. Overview of Operating Results and Financial Position

(1) Overview of Operating Results

The Group has made efforts to enhance corporate value over the mid to long term by working to form an earnings base on the two approaches of working to entertain and to serve and by evolving into a new kind of tech company, including encouraging synergy between the two approaches. The Group has also been working to establish an even stronger business portfolio.

During the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023), revenue was ¥36,150 million, up 4.0% year-on-year. While revenue decreased year-on-year in the Game Business, revenue in all other business divisions increased.

Cost of sales was ¥19,022 million, up 9.2% year-on-year. Expenses associated with the growth of the Sports Business increased, while outsourcing and personnel expenses also increased due to new consolidations conducted primarily in the Healthcare & Medical Business during the fiscal year ended March 31, 2023.

Selling, general and administrative expenses were ¥15,370 million, up 11.2% year-on-year. There was an increase in personnel expenses due to new consolidation in the Healthcare & Medical Business, and sales promotion expenses and advertising expenses increased primarily for the Game Business and Live Streaming Business, while commission fees declined, reflecting the performance of the Game Business.

Finance income was ¥2,912 million, down 58.6% year-on-year.

Share of profit of associates accounted for using the equity method was ¥1,366 million, compared to a loss of ¥189 million for the same period of the previous fiscal year. The main factors of the year-on-year fluctuation included the recording of a one-time gain from the capital increase of GO Inc., a major associate accounted for using the equity method, through a third-party allotment, as well as the performance trends of Cygames, Inc.

As a result, revenue of the DeNA Group was ¥36,150 million, up 4.0% year-on-year, operating profit was ¥1,735 million, down 56.2% year-on-year, profit before tax was ¥5,971 million, down 44.2% year-on-year, and profit for the period attributable to owners of the parent was ¥4,639 million, down 35.1% year-on-year.

Business performance by segment is as follows.

1. Game Business
   Revenue of the Game Business was ¥12,462 million, down 21.0% year-on-year, and segment profit was ¥213 million, down 87.6% year-on-year.
   During the three months ended June 30, 2023, despite the release of a new title on June 28, 2023, both revenue and profit decreased as operations were centered on existing titles and virtual currency consumption decreased year-on-year. The Company is making continuous effort to make the cost structure more robust and optimize fixed costs to strengthen the earnings base, in addition to the creation and release of new titles.
2. Live Streaming Business

Revenue of the Live Streaming Business was ¥10,809 million, up 12.1% year-on-year, and segment loss was ¥182 million, compared with segment loss of ¥188 million for the same period of the previous fiscal year.

During the three months ended June 30, 2023, Pococha continued to perform solidly in Japan. In the Live Streaming Business, the Company made growth investments while exerting appropriate control in services including the global Pococha service and the anime character live streaming service IRIAM.

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