financial results for the 3rd quarter of fiscal year …...investors 18% strategic partners 10% vcs...

Financial Results for the 3rd Quarter of

Fiscal Year Ending November 30, 2019

Money Forward, Inc.

October 15, 2019

1Contents

Money Forward Business P.18

Overview P.11

Money Forward X P.33

Money Forward Home P.26

FY11/19 Q3 Financial Highlights and Topics P.10

Highlights P.7

Other Strategic Initiatives P.40

Appendix P.45

Money Forward Finance P.37

Our Business P.2

Our Business

3Mission / Vision / Value / Culture

4Our Services

Cloud-based Bookkeeping Service

Cloud-based Business Analysis Tool

Practical Economic Media

Automated PFM Service

Platform for Comparing and Applying for Financial Services

Automated Savings App

Personal Finance Consulting Outlet*

Coupon App

for ○○

Customized Money Forward ME for Financial Institutions and its Clients

Cloud-based Services for Financial Institutions and its Clients

Passbook Apps

Passbook Apps for Financial Institutions and its Clients

MF Unit

Offering PFM Tools within Financial Institutions Apps

BPO and Factoring ServiceSaaS Platform for Back Office Operations

Cloud My Number

Cloud Invoice

Cloud Payroll

Cloud Expense

Cloud Tax Return

Cloud Accounting

Cloud Finance

Cloud Attendance

Cloud for ○○

Make everyone’s life convenient and prosperous.

Accelerate business growth.Create new financial services

with partners.Circulate money

towards right direction.

Money Forward. Move your life forward.

※ The outlet of mirai talk in Tokyo will be closed by the end of 2019.

Online Lending Service

BFMFinancial management service for financial institutions’ corporate clients

Cloud Series

Financial advisory service for growing companies

5Our Business Model 5

Securities

Banks

ConnectedServices

Services

for 〇〇 seriesPassbook Apps

BFM

CreditCards

ElectronicMoney

E-Commerce

etc.

Technology

etc.

Connection with 3,500+ services

Account aggregation/API connection

Wide-ranging service lineup with strengths in UI/UX

Nationwide customer base

Da

ta

Infra

stru

ctu

re

Cloud

Accountants / Corporates /Sole Proprietors

• Streamlines back office operations

• Improves productivity

• Visualizes cash flow / financial wealth

• Improves financial literacy

• Supports asset building

• Visualizes cash flow / financial wealth of individual and corporate customers

• Optimizes cash flow• Helps financial strategy /

management

Individuals

Financial Institutions

Corporates

Customers & Service Values

6Nationwide Partnership

Certified members: 197CCI: 13FI: 5Branch: Hokkaido and Tohoku

Certified members: 655CCI: 8FI: 2Branch: Kyoto and Kansai

Certified members: 400CCI: 18FI: 7Branch: Tokai/Hokuriku

Certified members: 2,154CCI: 17FI: 12

Certified members:117CCI: 16FI: 3Branch: Hiroshima

Certified members: 35CCI: 5

Certified members: 282CCI: 17FI: 3Branch: Kyushu/Okinawa

No. of Certified Members:

3,800+(Accounting firms andcertified social insurance and labor consultant offices)

No. of Chambers of Commerce and Industry (CCI) that We Partner with:

94

No. of Financial Institutions (FI)Served with Our Products:

32

Established offices in 8 cities across Japan through which we help reinvigorate regional economies leveraging on our technology and real-world community.

Hokkaido & Tohoku

Chubu

Kanto

Chugoku

Kinki

Shikoku

Kyushu & Okinawa

Highlights

8Financial Highlights in FY11/19 Q3

• Q3 consolidated net sales achieved accelerated growth, increasing by 67％ YoY to ¥1.88 billion. Q3 YTD consolidated net sales increased by 58％ YoY to reach ¥4.94 billion.

• In Business domain, Q3 recurring sales increased by 70% YoY,largely exceeding the 2H forecast of 60%-65% presented at the time of announcing Q2 financial results.

• Number of Money Forward ME users reached 8.5 million, with thenumber of premium paying users exceeding 200,000.

• X domain achieved record-high Q3 recurring and non-recurring sales.

• Consolidated gross profit margin for Q3 improved to 65%. Consolidated EBITDA decreased to negative ¥270 million, while consolidated EBITDA excluding advertising expenses decreased to negative ¥30 million.

9Key Topics in and after FY11/19 Q3

• Launched“ ¥1 Billion Support Campaign” for Money Forward Cloud ahead of the consumption tax reform and application of the reduced tax rate.

• Plans to release Money Forward Cloud Accounting for IPO* targeting pre-IPO and listed companies in FY11/20.

• Made new API connections with 250 shinkin banks across Japan.

• Established Money Forward Synca, Inc. which provides financial advisory service and management consulting for growing companies.

• Makes steady progress toward achieving full-year financial forecasts, and expects full-year net sales growth to exceed the initial forecast of 55%.

※ Tentative service name.

FY11/19 Q3 Financial Highlights and Topics

11Q3 Consolidated Net Sales (YoY Comparison)

Q3 YTD consolidated net sales achieved accelerated growth, increasing by 58% YoY.

11

（ ¥ mn ）

+58%

YoY

999

1,935

3,126

4,940

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

FY11/16

Q3 YTD

FY11/17

Q3 YTD

FY11/18

Q3 YTD

FY11/19

Q3 YTD

(Stand-alone) (Consolidated) (Consolidated) (Consolidated)

12

272 354 401 477 533 599 715

833 853 919

1,159

172 211

212

311 265 304

299

397 370 403

378

65

126 117

173 102

178 97

197 125

263

250

2 3

7 17

36 48

74

93

510

693 732

965 906

1,091 1,130

1,469 1,398

1,661

1,881

0

300

600

900

1,200

1,500

1,800

Consolidated Net Sales (Quarterly Trend)

Q3 consolidated net sales grew at an accelerating speed, achieving a growth of 67% YoY.

（¥ mn） ■Business ■Home ■X □ Finance ■ Other

※ Figures for “Other” domain net sales are omitted from the graph.

FY11/17(Consolidated)

Q1 Q2 Q3 Q4


Q1 Q2 Q3 Q4


Q1 Q2 Q3

（YoY）

+62%

+26%

+157%

+448%

+67%

YoY

+52%

YoY

13Gross Profit / EBITDA (Quarterly Trend)

Gross profit reached a record high, while gross profit margin improved to 65%. EBITDA loss decreased.

(¥mn) □Gross profit ■Gross profit margin

Gross Profit EBITDA

(¥mn) □EBITDA □ EBITDA (excl. advertising expenses)

※ EBITDA = Operating profit/loss + depreciation + amortization

610 709 672

792 746

1,022

1,220

67%65%

59%

54% 53%

62%65%

0%

20%

40%

60%

80%

0

200

400

600

800

1,000

1,200

FY11/18

Q1

FY11/18

Q2

FY11/18

Q3

FY11/18

Q4

FY11/19

Q1

FY11/19

Q2

FY11/19

Q3

△94△67

△247 △246

△941

△525

△271

53 47

△141 △162

△374

△246

△28

△1,050

△650

△250

150

FY11/18

Q1

FY11/18

Q2

FY11/18

Q3

FY11/18

Q4

FY11/19

Q1

FY11/19

Q2

FY11/19

Q3

14

468 534 588 723

844 979 999 109

143 160

313 308

291 262

75 98

103

153 125

110 101

34

64 115

113 113

123 126

41

46

63

78 101

133 121

154

189

282

293

324

320 338

147

114

106

84

567 279 243

1,029

1,188

1,416

1,757

2,382 2,235 2,191

0

400

800

1,200

1,600

2,000

2,400

FY11/18

Q1

FY11/18

Q2

FY11/18

Q3

FY11/18

Q4

FY11/19

Q1

FY11/19

Q2

FY11/19

Q3

Personnel Expenses Subcontract Expenses Comission Fee Rents Communication Expenses Other Advertising Expenses

Breakdown of Expenses (Cost of Sales & SGA)

Total expenses decreased slightly from the previous quarter.

（¥ mn ）

※ Other expenses for FY11/19 Q3 include traveling and transportation expenses (¥77mn), recruiting/training expenses (¥40mn) and fee expenses (¥39mn).

Advertising ExpensesMostly derives from Business domain; e.g., promotional expenses for the “¥1 Billion Support Campaign.”

Subcontract ExpensesSubcontract expenses decreased for Money Forward Financial, Inc. from Q2 to Q3.

15Full-time Employees

Made firm progress in recruiting, with the number of full-time employees increasing to 562 (+168 from the end of FY11/18 and +32 from the end of Q2).

※ 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., Fintech Research Office, etc.

（# of people）

▲ Enhanced infrastructure/security▲ Expanded team in Vietnam

▲ Enhanced respective functions◼ Engineer◼ Designer◼ Sales◼ Marketing◼ Customer Success◼ Customer Support

Other Engineer/Designer

▲ Transferred New Business Development Team from Corporate to Home domain.

▲ Expanded MF KESSAI▼ Completed transfer of Money

Forward Financial employees

120177

27732

44

66

15

23

34

10

52

37

29

43

81

35

55

67

241

394

562

0

100

200

300

400

500

11/17 End

(Consolidated)

11/18 End

(Consolidated)

8/19 End

(Consolidated)

Business Home X Finance Other Engineer / Designer Corporate

16Financial Highlights

In addition to investing actively in businesses and increasing MF KESSAI transaction volume*1, made strategic investments*2 targeting rapidly growing SaaS and Fintech companies both in Japan and abroad.

Cash Net Cash*3 Total Net Assets

（¥mn）

※1 Purchased receivables for MF KESSAI increased by ¥140 million QoQ.※2 In July 2019, made additional investments (equivalent to approx. ¥400 million) in Indonesia-based Mekari Group which provides cloud-based HR and accounting services.※3 Deducted amount of debt from cash amount.

4,952

9,143

0

2,000

4,000

6,000

8,000

10,000

12,000

FY11/18

Q4 End

FY11/19

Q3 End

1,462

5,053

FY11/18

Q4 End

FY11/19

Q3 End

3,383

8,326

FY11/18

Q4 End

FY11/19

Q3 End

17

Foreign

Institutional

Investors

31%

Domestic

Institutional

Investors

15%

Retail

Investors

18%

Strategic

Partners

10%

VCs

1%

Founding and

Executive

Members

25%

High Ratio of Foreign Institutional Investors

The ratio of foreign institutional investors increased to 31%*.

As of November 30, 2018 As of May 31, 2019

※ As of May 31, 2019

Foreign

Institutional

Investors

20%Domestic

Institutional

Investors

14%Retail

Investors

24%

Strategic

Partners

12%

VCs

2%

Founding and

Executive

Members

28%

Money Forward Business

255 314

371 416 518

584 641

693 782

856

1,090

17 40

30 60

16 15

74

140 71

63

69

272

354 401

477

533 599

715

833 853

919

1,159

0

200

400

600

800

1,000

（¥ mn）■ Recurring Sales □ Non-recurring Sales

※ Consolidated with net sales from Knowledge Labo, Inc. and Wakufuri, Inc. which joined the Group in Jul. 2018 and Aug. 2018, respectively (from FY11/18 Q4)※ Non-recurring sales include: 1) fees for implementation of services, 2) development fees from Money Forward Cloud Series for corporates, 3) seminar ticket sales

(e.g. MF Cloud Expo), 4) consulting fees from Knowledge Labo, Inc. , 5) net sales of Wakufuri, Inc., etc. ※ In past disclosure, development and maintenance charges from Money Forward Cloud Series for financial institutions were categorized in “Alliance Businesses” of

“Money Forward Cloud Services”. From FY11/19 and onwards, the sales are excluded from Money Forward Business, but included in Money Forward X.

Net Sales from Money Forward Business 19

Growth in Q3 recurring sales accelerated, increasing by 70% YoY.Net sales per user increased owing to conversions to new plans.

Klavis Inc. which providesSTREAMED joined the Group


Q1 Q2 Q3 Q4


Q1 Q2 Q3 Q4


Q1 Q2 Q3

Recurring sales growth

+70％

(YoY)

“¥1 Billion Support Campaign” for Cloud Conversion 20

Supporting SMEs' new installment of our cloud-based products as they seek for switching from other products at the time of consumption tax reform.

Accounting firms

Corporations

Offering ¥100,000 per client that subscribes to the business plan (annual)

Offering ¥50,000 worth of Amazon gift cards for companies that subscribe to the business plan (annual)

¥1 billion to drastically reform work style across Japan

Cloud Conversion

¥1 Billion

Support Campaign

Cloud

Full-scale Sales of Money Forward Cloud Attendance 21

Starting to charge fee and launches full scale sales from November 2019.Added new functions including for paid leave management and flextime working hours.

Attendance management system which supports work-style reforms

Cloud Attendance

Enhanced Support for Pre-IPO and Listed Companies

Received the “SOC1 Type 1 Report,” enabling more effective evaluation of internal control.Currently developing more services for pre-IPO and listed companies, including functions for journal entry approval and journal entry update histories, to be released in February 2020.

22

※ The “SOC1 Type 1 Report” is an assurance report for internal control of the outsourcing party’s financial reports within operations outsourced to a third-party. Service scope includes Money Forward Cloud Accounting, Tax Return, Invoice, Expense, Payroll and Attendance.

※ Money Forward, Inc. aims to receive the “SOC1 Type 2 Report” in spring of 2020.

Enhanced support for pre-IPO and listed companiesMoney Forward Cloud Accounting supports all businesses from the startup stage to IPO

Startup

Growth

Pre-IPO

IPO

Cloud

Continual Functional Updates

Responded to legislative changes including the consumption tax reform and “Related Acts to Promote Work-Style Reform.” Reinforced development across the platform and raised efficiency and productivity of back office operations.

23

消費税改正・軽減税率に対応

ICカードリーダーiOS版アプリ提供開始

働き方改革関連法対応機能を拡充

消費税改正・軽減税率に完全対応

企業向けプランの提供を開

Conformed to the consumption tax reform and reduced tax rate system

Released an iOS version IC card reader app

Extended functions in response to the “Related Acts to Promote Work-Style Reform”

Fully conformed to the consumption tax reform and reduced tax rate system

Started providing plans for corporates(previously, the main target was accounting firms)

Cloud

Cloud Expense

Cloud Attendance

Supporting Sole Proprietors, Pre-IPO and Listed Companies

Enhanced product functions have enabled us to support a wider range of companies.

24

Sole ProprietorsSMEs

Pre-IPO andListed Companies

Aims to enhance functions targeting pre-IPO and listed companies

Tax Return Invoice Expense

Payroll My Number

STREAMED

Accounting Invoice Expense

Payroll My NumberAttendance

ManageboardSTREAMED

Cloud Accounting

Cloud Attendance

Accounting Invoice Expense

Payroll My NumberAttendance

ManageboardSTREAMED

Expansion of Customer Base 25

Our platform is used by more than 40% of the top 100 private companiesranked by amount of funds raised*. Supports many growing and listed companies while cooperating with accounting firms across Japan.

※ 100 companies that procured the largest amount of funds among private companies that raised funds between Jan. 1, 2018 and Aug. 1, 2019, based on research by Money Forward, Inc.

Accounting Firm Growing Companies Listed Companies

Money Forward Home

27

110 128 139

158 174

199 213

226 244

263 274

0

50

100

150

200

0

50

100

150

200

250



Q1 Q2 Q3 Q4


Q1 Q2 Q3 Q4 Q1 Q2 Q3

Net Sales from Premium Charges (Trend in Net Sales)

Number of paying users increased firmly, exceeding 200,000*.

※ As of end of August 2019

（¥ mn） □ Net Sales from Premium Charges ■ Number of Paying User（’000 people）

+29%

YoY

Launched annual subscription plan

▼

28

62

83 73

153

92 105

86

172

126 140

103

0

50

100

150

Net Sales from Media/Advertising (Trend in Net Sales)

Achieved a growth of 20% YoY. Plans to hold “Money EXPO2019” in November of Q4.

Money EXPO2017▼

（¥ mn） Money EXPO2018▼

※ Net sales from media/advertising include: 1) advertising sales from MONEY PLUS - practical economic media, 2) sales from events (Money EXPO) and seminars (e.g., on real estate and DC plan), and 3) sales from other PFM services including mirai talk.

+20%

YoY


Q1 Q2 Q3 Q4


Q1 Q2 Q3 Q4


Q1 Q2 Q3

29

5 months

Accelerated Increase in Money Forward ME Users

Number of Money Forward ME users exceeded 8.5 million.TV advertising campaigns implemented in early FY11/19 among other initiatives contributed to the accelerated increase in number of users.

No. of Users Exceeded 8.5 Million Accelerated Increase in Users

2017.12

6 months

4 months

TV ad 2019.082012.12 2019.08

3 months

6.5mn

May-18

7mn

Oct-18

7.5mn

Feb-19

8mn

May-19

8.5mn

Aug-19

30Ranked No.1 in Surveys

Money Forward ME ranked No.1 by a large margin in a research based on NPS®(Net Promotor Score) which represents customer loyalty. Also, rankedNo.1 for both utilization and satisfaction in a research targeting women.

※1 Bain & Company, Subscription Servicey Loyalty Survey; number of those subject to screening=30,000; number of those subject to this research=2,244 (June 2019).※2 Sankei Living Shimbun Inc., Women Research—Survey on PFM app—(September 9, 2019).

Most used PFM appamong women

Customer satisfaction of PFM app

No.1

NPS = Total ratio of respondents who recommend the service– Total ratio of critical respondents

Subscription NPS*1 Research Targeting Women*2

No.1

No. of respondents by advisability

■ Recommend strongly■ Neutral■ Somewhat critical■ Strongly critical

Money Forward

Okanereko

Video-on-Demand Service PFM App

31Released an “Insurance Visualization” Function

Money Forward ME made an API connection with an insurance company for the first time. Enables users to check insurance contract information such as insurance product names and maturity dates.

Tokio Marine & Nichido Fire Insurance Co., Ltd.Tokio Marine & Nichido Anshin Life Insurance Co., Ltd.

32Plans to Hold “Money EXPO2019”

The exposition invites participants to learn about PFM in keeping with the theme of “learn for a day; gain benefits for a lifetime.” 2,500 participants are expected to join this year.

Former professional track and field’s athlete

Minister of the Environment and Minister of State for Nuclear

Emergency Preparedness

Senior Advisor of Boston Consulting Group

Editor of “Dragon Zakura” and Representative Director of Cork, Inc.

SAKURAGI KENJI

Author of “Tensai wo Korosu Bonjin” and “Tenshoku no Shikōhō”

Director and Senior Managing Corporate Officer of

Yahoo Japan Corporation

Director and COO of LINE Pay Corporation

Money Forward X

34Net Sales from Money Forward X

Achieved record-high Q3 recurring and non-recurring sales. Recurring sales rose firmly owing to provision of services to new business partners.（¥ mn） ■ Recurring Sales □ Non-recurring Sales

※ Non-recurring sales from initial development charges are to be recorded at the acceptance by partner financial institution, not at service launch time.

+157%

YoY


Q1 Q2 Q3 Q4


Q1 Q2 Q3 Q4


Q1 Q2 Q3

49 55 64 71 79 84 82 79 84 93 99 17

71 54

103

23

94

15

118

42

170 150

65

126 117

173

102

178

97

197

125

263 250

0

50

100

150

200

250

35

MF Unit SeriesOffering PFM tools within financial institutions apps

Alliance with Financial Institutions (For Individuals)Money Forward for X SeriesDeveloping customized Money Forward ME for financial institutions and its clients.

Passbook AppsDeveloping passbook apps for financial institutions and its clients

Other Projects

Lending Manager*1

Advising loan amounts and repayment plans.

au WALLET app*2

Visualizing outstanding amount and detailed statement of 2,000+ financial

institutions

※1 Lending Manager is a trademark of NTT DOCOMO, INC. ※2 au WALLET app is a trademark of KDDI CORPORATION.

NEW

SBI Sumishin Net Bank

Yamaguchi FG

Shizuoka Bank

Tokai Tokyo Securities

Toho Bank

Gunma Bank

Shiga Bank

Fukui Bank

Okazaki Shinkin Bank

Michinoku Bank

Tsukuba Bank

Tokyo Star Bank

Sumitomo Mitsui Trust Bank

Sompo Japan Nipponkoa Himawari Life Insurance

Tochigi Bank

North Pacific Bank

Mizuho Bank

JA Bank

JAL Card

Taiko Bank

Sendai Bank

Akita Bank

Awa Bank

Asset Monitoring Unit PFM Unit

Gunma Bank

Toho Bank

Tochigi Bank

Taiko Bank

Tsukuba Bank

Michinoku Bank

Hokuriku Bank

Kyoto Shinkin Bank

North Pacific Bank

Chiba Bank

JA Bank

Shiga Bank

Daishi Bank

Chugoku Bank

Labour BankNEW

NEW

NEW

Alliance with Financial Institutions (For Corporates)

Money Forward Cloud Finance : Lending platform utilizing Money Forward Cloud data

Money Forward Cloud Accounting/Tax Return for BANK: Accounting and Tax return preparation service for financial institution clients

36

Business Financial Management (BFM)：Financial management service targeting financial institutions’ corporate clients

Okazaki Shinkin Bank (released in October 2019)NEW

GMO Epsilon Transaction Lending

GMO Epsilon

Fast Pass (Loan for SMEs)

The Bank of Fukuoka

Q-pit (Loan for SMEs)

The Fukui Bank

Money Forward Cloud Accounting/Tax Return for The Fukui Bank

Money Forward Finance

38

2 3 7 17

36

48

74

93

0

10

20

30

40

50

60

70

80

90


Q4


Q1 Q2 Q3 Q4


Q1 Q2 Q3

Net Sales from Money Forward Finance

Achieved a growth of 448％ YoY. The rapid growth was driven by business process outsourcing and factoring service, MF KESSAI.

（¥ mn）

+448%

YoY

39Installation of MF KESSAI to Wantedly Visit

Wantedly Visit outsourced credit, invoice, payment, demand for payment operations to MF KESSAI . Streamlined back office operations allow them to focus on their core businesses and provide high-quality customer experience.

Other Strategic Initiatives

41Alliance with Financial Institutions (APIs)

Japan’s top Fintech company in terms of number of referential and money transfer API connections※1. Made new API connections with 250 shinkin banks across Japan in July※2. 80+ banks are to adopt API by 2020 as part of the Japanese government’s “Future Investment Strategy 2018.”

Making API connections with 1,048 financial institutions

Banks Shinkin Banks Labor Banks

Agricultural and Fishery Cooperative Savings Insurance

Corporations

ReferentialMoney

TransferReferential

MoneyTransfer

ReferentialMoney

TransferReferential

MoneyTransfer

Individuals 38 1 251 ー 13 ー 744 ー

Corporates 15 8 251 ー 13 ーーー

※1 Based on research by Money Forward, Inc.※2 Among the 250 shinkin banks, three are scheduled to be connected in the near future.

42Established Money Forward Synca, Inc.

Money Forward Synca, Inc. will provide growing companies with end-to-end solutions and comprehensive know-how in addition to cloud services.

Cloud-based services for back office operations

Cloud-based business management system

Support for cloud conversion and business management

Financial advisory service

Early collection of accounts receivableand online lending service

Cloud

43Listing of Capital and Business Alliance Partners

Chatwork Co., Ltd., a capital and business alliance partner of Money Forward, Inc., was listed on TSE Mothers on September 24, and similarly, BASE, Inc. will be listed on October 24. Together, we will aim for further growth.

44

Money Forward. Move your life forward.

Appendix

About Us

47CEO Profile 47

Yosuke TsujiRepresentative Director, President and CEO

Yosuke Tsuji worked at Sony Corporation and Monex Securities before establishing Money Forward, Inc. in 2012. He currently serves as an Executive Officer of the Japan Association of New Economy (JANE) and committee member of the METI Fintech Review Conference. Kyoto University Faculty of Agriculture (BS), Wharton School, University of Pennsylvania(MBA).

Awards (including awards to Money Forward)

Jan. 2014 US Embassy’s Award at the Entrepreneur Awards Japan (TEAJ) 2014

Feb. 2014 JVA Chief Judge’s Award at the Japan Venture Awards (JVA) 2014

Mar. 2014 Grand Prize at the Financial Innovation Business Conference (FIBC) 2014

Nov. 2016 Ranked in Forbes Japan’s “Japan’s Top 10 Entrepreneurs” for two consecutive years

Dec. 2016 Selected by Nikkei Business magazine as one of “The 100 Most Influential People for

Japan 2017”

Feb. 2018 Judges Association’s Special Award at the Japan Venture Awards 2018

48Executive Profiles

Takashi IchikawaDirector, Executive Officer and CISO

・Joined Money Forward, Inc. in 2012. Appointed as director in 2017.

・2011-2012: Major financial systems development company. Led the infrastructure division and launched a new FX transactions site.

・2000-2011: Monex Group, Inc. Developed and operated securities trading systems and engaged in project management for subsidiary mergers, etc.

Naoya KanesakaDirector, Executive Officer, Corporate DevelopmentRepresentative Director, Money Forward Synca, Inc.


・2007-2014: Goldman Sachs (Tokyo and San Francisco offices). Engaged in advisory services for cross-border M&As and fund procurement mainly in the technology and financial industries, and in enhancing value of investee companies.

・Graduated The University of Tokyo (Faculty of Economics) in 2007.

Toshio TakiDirector and Executive OfficerHead of Money Forward Fintech Institute

・Appointed as director of Money Forward, Inc. in 2012.・Member of FSA panel of experts on FinTech start-ups.・2004-2012: Nomura Securities Co., Ltd./Nomura Institute

of Capital Markets Research. Engaged in research on household behaviour, the pension system, and financial institution business models etc.

・Graduated Keio University (Faculty of Economics) in 2004 and Stanford University (MBA) in 2011.

Hirokazu BanDirector, Executive Officer and Administration Division Manager


・2009-2015: SBI Securities Co., Ltd. Served in the Legal and Corporate Planning Departments. Launched SBI Money Plaza Co., Ltd. in 2012 and became director.

・Graduated Waseda University (Sociology) in 2001. After graduating Aoyama Gakuin University Law School, registered as an attorney in 2008.

Takuya NakadeDirector, Executive Officer and CTO

・Joined Money Forward, Inc. in 2015. Developed financial systems, and was appointed as CTO in 2016 and director in 2018.

・2007-2014: Simplex Inc. Developed stock trading systems catered to securities companies.

・2001-2007: Jupiter Shop Channel Co., Ltd. Led CRM system development as IT manager.

Our management team has in-depth expertise in finance and technology.

Masanobu TakedaDirector, Executive Officer and COO of Money Forward Business Company

Joined Money Forward in 2017 Inc after the acquisition of Klavis Inc., where he served as Director and CFO since 2016. Prior to joining Klavis, he served as Director at Macromill Group, in charge of corporate planning where he led the company’s corporate and HR strategic planning, M&As, and new business development, and as Director and Head of Corporate Planning at eole Inc.

49Executive Profiles

Highly experienced leaders in the Japanese economy are appointed as External directors and Advisors.

Makoto HarutaAdviserRepresentative Director and CEO, betaCatalyst Inc.

Established betaCatalyst Inc. in 2015. Former Director and Chairman of DeNA Co., Ltd. During his time with DeNA, Mr. Haruta led DeNA’s IPO as CFO, established JVs wth major corporations, and oversaw M&As, including the acquisition of the Yokohama DeNA BayStars.

Nobuaki KurumataniExternal DirectorDirector, Representative Executive Officer Chairman and CEO, Toshiba Corporation

Former Representative Director, Deputy president and Executive Officer of Sumitomo Mitsui Banking Corporation. Former President of Japan, CVC Capital Partners.

Takashi MitachiAdviser (Former External Director)The Boston Consulting GroupSenior Advisor

External Director of Rakuten, Inc., and visiting professor at the Graduate School of Management, Kyoto University. Earlier in his career he worked for Japan Airlines, then Boston Consulting Group where he served as a member of the Global Management Committee for more than 10 years.

Akira KurabayashiExternal DirectorManaging Director, DNX Ventures

Joined DNX Ventures (former Draper Nexus Venture Partners) in 2015 where he currently serves as Managing Director. Engaged in venture capital businesses targeting Japan and the U.S. at Fujitsu Limited and Mitsui & Co., Ltd. Oversaw investments in Japan at Globespan Capital Partners and Salesforce Ventures.

Masaaki TanakaExternal DirectorExecutive Chairman of the Board, Nippon Paint Holdings Co., Ltd.

Former Director and Deputy President at Mitsubishi UFJ Financial Group and former President and COO of INCJ, Ltd. Current member of the Financial Services Agency (FSA) panel of experts on Fintech startups and other government-related panels. Appointed adviser to the FSA in February 2017.

Etsuko OkajimaExternal DirectorCEO, ProNova Inc.

Etsuko Okajima founded ProNova Inc in 2007, and currently serves as CEO of the company. Earlier in her career, she worked at Mitsubishi Corporation, McKinsey & Company, and Globis Group, where she served as President of Globis Managment Bank Inc. Ms Okajima holds an MBA from Harvard University.

50Money Forward Group Structure

※ Money Forward Synca, Inc. will be consolidated from FY11/19 Q4.

Ownership Main Service

Money Forward, Inc.

MF KESSAI, Inc. 100％

MF HOSHO, Inc. 100％

BPO and factoring service: MF KESSAI

Obligation guarantee and credit inquiry forMF KESSAI

mirai talk, Inc. 100％ Personal finance consulting outlet: mirai talk

Klavis, Inc. 100％ Automated bookkeeping service: STREAMED

Money Forward Financial, Inc. 100％Blockchain / crypto currency-related research

Money Forward Fine, Inc. 100％ Online Lending Service

PFM service and Money forward Cloud service

Knowledge Labo, Inc. 51％ Manageboard and consulting service

Wakufuri, Inc. 56％ Assisting cloud software implementation

MONEY FORWARD VIETNAM CO., LTD. 100％ Product development center

Money Forward Synca, Inc. 100％ Financial advisory service and management consulting for growing companies

51FY11/19 Q3 Financial Summary

FY11/19 Q3 (2019/6-2019/8) FY11/19 Q3 YTD (2018/12-2019/8)

Actual

FY11/18 Q3 FY11/19 Q2

Actual

FY11/18 Q3 YTDFY11/19 Full-year

Forecast (lower end)

(¥ mn) Actual YoY% Actual QoQ% Actual YoY% Actual Progress

Net Sales1,881 1,130 +66.6% 1,661 +13.3% 4,940 3,126 +58.0% 7,122 69.4%

Business1,159 715 +62.1% 919 +26.1% 2,930 1,848 +58.6% 4,075 71.9%

Home378 299 +26.2% 403 -6.2% 1,150 869 +32.4% 1,848 62.2%

X250 97 +157.4% 263 -5.0% 638 376 +69.4% 860 74.1%

Finance93 17 +547.8% 74 +125.0% 214 27 +784.2% 339 63.2%

Other3 1 +94.2% 3 -13.0% 8 6 +30.3% - -

Gross Profit1,220 672 +81.5% 1,022 +19.3% 2,989 1,991 +50.1% - -

Gross Profit Margin+64.8% +59.5% +5.3pt +61.5% +3.3pt +60.5% +63.7% -3.2pt - -

EBITDA△271 △247 - △525 - △1,737 △408 - △2,420 71.8%

EBITDA (excl. advertising expenses)

△28 △141 - △246 - △649 △41 - △1,031 62.9%

52

0

1,000

2,000

3,000

4,000

5,000

Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19

1000

2000

3000

4000

5000

6000

Share Price and Trading Volume since IPO

(‘000 Shares)（¥） ━ Share Price(LHS) ■Trading Volume(RHS)

※ As of October 11, 2019

October 11, 2019Close ¥3,530

53Promotion of Fintech/SaaS by the Japanese Government

The Japanese government has set four KPIs to promote Fintech as part of its “Future Investment Strategy 2017.” It aims to raise the ratio of cloud-based back office operations to 40% by 2022.

Promote open banking APIsAims to promote the adoption of open banking APIs by 80+ banks within three years (by June 2020).

Double the cashless payment ratioAims to double the cashless payment ratio to some 40% of all payments within the next decade (by June 2027).

Migrate 40% of back office operations to cloud by 2022Aims to increase the ratio of SMEs that utilize IT and cloud services etc. to improve productivity of back office operations. Target at 40% within five years (by June 2022).

Improve cash conversion cycle by 5%Aims to improve Japan’s Supply Chain Cash Conversion Cycle (SCCC) by 5% until FY2020.

※ “Future Investment Strategy 2017 No.2-I-5 Promotion of FinTech,” June 2017

54Disciplined Investment Execution 54

Product Development/New Business Investments• Basic policy is to start with minimal investment to achieve product market fit, followed by the

decision to invest further.• Constant launch of add-ons and new businesses contribute to ARPPU increase, customer base

expansion and product competitiveness.• M&A is also considered as an effective means of entering new business, adding functions and/or

customers.

Investment in Sales, Marketing and Customer Success• Investment in sales, marketing and customer success to be accelerated as long as unit economics

metrics are reasonable and sound.• Investment decisions to be made based on the unit economics metrics described in next page.

Continuous Review and Revision of Product/Business• Businesses are assessed by growth, market opportunities/competition and profitability every quarter

to make appropriate decisions such as withdrawal.

55Unit Economics-Driven Investment

Unit economics per product and per customer channel are taken into account when making investment decisions, metrics which are commonly used by global SaaS companies.

55

Average Revenue per Paying User (ARPPU)

Marginal Costs per Paying User• Expenses required

to retain existing paying users

Customer Acquisition Cost (CAC)

MRR Churn Rate• MRR from existing user from previous month vs total

MRR in previous month• We have negative churn as the MRR gained from up-

or cross-selling is more than the MRR lost due to cancellation

Payback Period (month)• Period required for recovering the

cost of acquiring each new customer

Cumulative Earnings

※ For illustrative purpose only and not to size.

56Policy for Profitability 56

Aim at turning EBITDA positive in FY11/21 by strengthening the revenue base and boosting cash flow generation.1

After turning EBITDA positive, we plan to further improve the enterprise value by listing on the first section of the Tokyo Stock Exchange as soon as possible.

2

Products and Services

Outlook for Japan’s Software Market Size

The software market size is expanding on the back of work-style reforms and promotion of cloud. In particular, the SaaS market is forecasted to expand rapidly to ¥817.4 billion (an increase of ¥337.6 billion).

58

※ Fuji Chimera Research Institute, Inc., 2019 New Software Business Market.

Software

¥1.3 tn

SaaS

¥479.8bn

2018

2023

Software

¥1.8 tn

（+¥445.7 bn）

SaaS

¥817.4 bn

（+¥337.6 bn）

Conversion to Cloud-based Services 59

Until Now (Download-based) Going Forward (Cloud-based)

Maintenance

Install from CD-ROM

License management

Download and install

License management

Can only operate on certain PCs Share data among multiple users

Administrator

Software Data

Reasons Why Users Opt for Cloud-based Services

Services can be used regardless of time, place or device.

60

Can be used from any device

with an Internet connection

Data is automatically backed up,providing security in cases of damage or

loss of devices, or disasters

Can share data in real time Upgrades are free of charge

8%

10%

Providing a Paradigm Shift - Integrated Back Office

Plans to facilitate a shift from a world filled with cumbersome manual back office operations to one which automatically connects back office functions through cloud.

61

Invoice

Payroll Statement

Attendance Sheet

My Number

Expense Statement

Conventional Back Office- Manual entries based on paperwork - Integration of back office functions

Attendance

Payroll

Invoice

Accounting

Expense

Cloud

Manual Entry to AccountingSoftware My

Number

Fast and easy upgrades

Analysis leveraging on payroll and attendance data

Reduction of labor by service integration and automation

Increased productivity by streamlining operations

Legislative changes such as the consumption tax reform

Low labor productivity compared to the international community

Persistently long work hours

Decline in labor force due to an aging population and declining birthrate

Providing Timely Services, e.g., for “Work-Style Reform”

Aims to deliver services that resolve Japan’s social issues concerning work style.

62

Cloud

Money Forward Cloud Series - SaaS Platform 63

Money Forward Cloud Series is a SaaS platform for back office operations.

Tapping into the expanding cloud computing market, we provide products in the form of SaaS, reducing large initial investments that would otherwise be required.

We strive to provide the benefits of IT to businesses big and small.

Cloud Series

Cloud My NumberCloud InvoiceCloud Payroll

Cloud Tax ReturnCloud Accounting Cloud Expense

Cloud Finance Cloud Attendance

New Pricing Plan for Optimizing Back Office Operations 64

Released a new bundled service which enables sole proprietors and corporates with 30 or less employees to use five services at attractive pricein May 2019.

Cloud Accounting

Cloud Tax ReturnCloud Invoice Cloud Expense Cloud Payroll Cloud My Number

Corporates Sole proprietors

Using 5 services at attractive price

Money Forward Cloud

Minimum ¥3,980/month

Minimum ¥1,280/month

Customer Feedback on New Pricing Plan 65

• It is difficult to streamline operations and raise productivity using only an accounting software.

• We are grateful that Money Forward has taken steps to provide this bundled service instead of only providing stand-alone products.

• Improved operational efficiency enables the accounting industry to provide a wider range of services.

Tomoaki Sato Tax Accountant Office (Hokkaido)

• We have been using another invoice service but want to take this opportunity to shift to Money Forward Cloud Invoice.

• We currently use Excel to calculate payrolls and were wondering what advantages Money Forward Cloud Payroll offers. We plan to use the service as it seems convenient.

Private company (Kanagawa)

Tax Accountant

Corporate

Chamber of Commerce and Industry

• Saving labor in the back office becomes effective by connecting managerial operations not only within the accounting division but also among various division. We therefore expect that the bundled service will produce even larger effects.

• This will open a new path for improved efficiency to businesses that were content with simply promoting the use of cloud in accounting operations.

The Mastuura Chamber of Commerce and Industry (Nagasaki)

In Comparison to Conventional Accounting Software

Using Money Forward Cloud Accounting enables automated and streamlined management of bank account savings and transactions.

66

Cloud Accounting

Savings and Transactions management

Accounting

Bank account

Credit card

Invoice Accounting software

Passbook

Go to bank

Invoice

Cloud Accounting

BankCredit card

Cloud Invoice

Sales slip

Connect

Purchase slip

Sales book

Entry Entry Entry

EntryEntryEntry

Entry

Issue

Not only requires many manual entries, but also numerous records and forms

SalesPurchase/Expense

Banking statement

Sales, Purchase/Expense, Banking Statement

Cash book (sales/purchase)

Conventional Accounting Software Money Forward Cloud

Easy importAutomatic

entryAutomatic

entryAutomatic

entry

Automatic entries ensure accuracy of data while also enabling digitization of

various records and forms

STREAMED - Cloud-based Bookkeeping Service 67

STREAMED is a cloud bookkeeping service, where operators promptly digitalize receipt data scanned by users. The service is provided by Klavis Inc., which joined the Group in November 2017.

Gathering evidence Importing data

User User

User scans receipts etc.

Operators digitalize the data within 1 business day*

User checksdata

User imports data to accounting software

*※ Data scanned during 10 am -7 pm of business day is digitalized within 1 business day.

68Manageboard - Cloud-based Business Analysis Tool

Improving operational efficiency Improving profitability

Accounting

processesData entry

Managerial

actionsBudget control

• AI-based audit (journal entries check)

• Automated data aggregation

• AI-based automated journal entries

• Visualization of financial data

• Budget control analysis

• Financial results forecast

• Cash flow forecast

• Budgeting and financing support

by Financial Strategy Advisers

Manageboard primarily offers functions which help SMEs improve their profitability.

Cloud Series

Service Connections - Financial Accounting

Connecting Money Forward Cloud Series with other services contributes to streamlining operations.

69

Salesforce

V-ONEクラウド

Sales Management

Accounting

Accounting Firms

Invoice Management

Credit Management

Managerial Accounting

Expense Management

Debt Management

Savings and Deposit/Withdrawal Management

Connect

Connect

Connect

Connect

Connect

ConnectConnect

Connect

Connect

Connect

Connect

Connect

Cloud Invoice

Cloud Invoice

Cloud Accounting

Cloud Accounting

Cloud Expense

Cloud AccountingCloud Accounting

Credit cardBank

account

Invo

ice

Sale

s

qu

ote

Cloud

Audit Corporations

Service Connections – HR and Labor

Connecting Money Forward Cloud Series with other services contributes to streamlining operations.

70

Attendance

Payroll

Cloud AttendanceCloud Payroll

Accurate work hour management

Other

Calculation of extra wage

Calculation of statutory deductions

Money Forward Attendance and other connected software enable accurate work hour management and creating attendance sheets.

Enables online application of labor processes.

(Roumu Station)

(Jobcan—Attendance Management)

Using Money Forward Cloud Attendance enables automated and accurate calculation of payrolls, social insurance premiums and year-end adjustments.

Year-end Adjustment

Social Insurance Premium

Ledger and Regulations Management

Formulation of regulations and purchase of adequate social insurance

Appointing Money Forward certified members as advisors enables formulating regulations that conform to laws and selecting adequate social insurance.

HR and Labor Operations

Sales Strategies Aligned with Customer Profiles 71

(a) Accountants (b) Web (c) Direct Sales

Accountants & their clients

Sole Proprietors SMEs Corporates

Primary Products

Accounting/Payroll/Attendance/STREAMED/

ManageboardPersonal Plan Business Plan

Expense/Payroll/Attendance

Distribution Field salesMostly online

(Inbound marketing)Field sales/Inside sales

Price(Example)

(Monthly)Accounting ¥2,980STREAMED ¥12,000~MB ¥49,800~

Personal LightMonthly: ¥1,280~Annual:¥11,760~(¥980/month)

PersonalMonthly: ¥2,480~Annual: ¥23,760~(¥1,980/month)

Small BusinessMonthly: ¥3,980~Annual: ¥35,760~(¥2,980/month)

BusinessMonthly: ¥5,980~Annual: ¥59,760~(¥4,980/month)

Expense¥500/employee

Payroll¥300/employee

Attendance¥300/employee

MarketingSales visits through

field sales/Events and seminars

Online ads/SEO/

Organic marketing

Sales visitsthrough field sales/ Phone calls through

inside sales/Events and seminars

72Money Forward ME - Automated PFM Service

Money Forward ME is the No.1 PFM app in Japan*1, reaching 8.5 million users. One in four PFM app users are using Money Forward.

72

No.1 coverage*2: integrates 2,600+ financial services/Automatically creates household accounting books by

aggregating multiple accounts

Credit card

Bank

Electronic money

PensionMobile phone

Online shopping

Miles

Securities

Connects Automatically classifies

Visualizes

No. of users and market share*1

No. of users

Market share

※1 Rakuten Insight, Inc., “PFM app currently used” (Mar. 23 to 27, 2017) Survey targets: 685 PFM app users in their 20s to 60s※2 Based on research by Money Forward, Inc. as of August 31, 2019

73High Customer Ratings for both iOS and Android

Customer satisfaction is high, with a rating of 4.3 or more for both iOS andAndroid versions.

4.4/5

No. of evaluations=69,000

4.3/5

No. of evaluations=32,000

iOS

Android

*※ Created based on data from App Store and Google Play (as of October 11, 2019).

74MONEY PLUS - Practical Economic Media

MONEY PLUS delivers information on how to use money wisely as a tool to enrich one’s life. Readers are encouraged to familiarize themselves with money and finance, a topic often considered complex.

74

A practical economic media that enriches readers’ lives now and in the future

75Money Forward Mall

Platform for comparing and applying for financial services such as credit cards and securities accounts.

75

76SiraTama - Savings App that Makes Life More Fun

SiraTama is an automatic savings app that enables users to effortlessly (“sira”zu) build their savings (“tama”ru).

76

7777MF KESSAI - Online Invoicing and Factoring Services

MF KESSAI is a business process outsourcing and factoring service.

2. Assignment of accounts receivable

5.Guaranteed payment

Insurance Company

1. Sale of Goods

3. Invoicing

4. Collection of funds

Insurance Fees

Insurance Coverage

Seller Buyer

Credit Screening

Revenue

78

Disclaimer

The forward-looking statements and other contents included in this material are determined based on information currently available, and may be subject to change due to macro economic trends, changes in the market environment or industry in which the Group operates, or for other internal/external factors. Money Forward, Inc. shall not represent or warrant the accuracy or completeness of the information contained in this material.

This material is an excerpt translation of the original Japanese material and is only for reference purposes. In the event of any discrepancy between this translated material and the original Japanese material, the latter shall prevail.

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