Financial Results for the 2nd Quarter of Fiscal Year Ending November - - PowerPoint PPT Presentation

Financial Results for the 2nd Quarter of Fiscal Year Ending November 30, 2019

Money Forward, Inc. July 16, 2019

1 Contents

Money Forward Business P.17 Overview P.11 Money Forward X P.33 Money Forward Home P.27 FY11/19 Q2 Financial Highlights and Topics P.10 Highlights P.7 Other Strategic Initiatives P.42 Appendix P.45 Money Forward Finance P.37 Our Business P.2

Our Business

3 Mission / Vision / Value / Culture

4 Our 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

• r ○○

Customized Money Forward ME for Financial Institutions and its Clients Cloud-based Services for Financial Institutions and its Clients

Passb ssbook

• ok Apps

Passbook Apps for Financial Institutions and its Clients

MF MF Unit it

Offering PFM Tools within Financial Institutions Apps BPO and Factoring Service SaaS Platform for Back Office Operations

Cloud My My Nu Number Cloud Invoic ice Cloud Payroll ll Cloud Expense se Cloud Ta Tax Return Cloud Accou ccountin ing Cloud Finance Cloud Attendance Cloud for

• r ○○

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

BF BFM

Financial management service for financial institutions’ corporate clients

Cloud Se Serie ies

5 Our Business Model 5

Securities Banks

Con Connected Se Services Se Services

for 〇〇 series Passbook Apps BFM

Credit Cards Electronic Money E- Commerce

Corporates Individuals Financial institutions Corporates Sole proprietors Accountants

Cus ustomers

etc. etc.

Te Technology

etc.

Connection with 3,500+ services Account aggregation /API connection Wide-ranging service lineup with strengths in UI/UX Nationwide customer base

D a t a I n f r a s t r u c t u r e

Cl Clou

• ud

6 Nationwide Partnership

Certified members: 187 CCI: 11 FI: 5 Branch: Hokkaido and Tohoku Certified members: 650 CCI: 8 FI: 2 Branch: Kyoto and Kansai Certified members: 392 CCI: 17 FI: 7 Branch: Tokai/Hokuriku Certified members: 2,071 CCI: 15 FI: 12 Certified members:114 CCI: 15 FI: 3 Branch: Hiroshima Certified members: 35 CCI: 5 Certified members: 280 CCI: 16 FI: 1 Branch: Kyushu/Okinawa

• No. of Certified Members:

3,700+

(Accounting firms and certified social insurance and labor consultant offices)

• No. of Financial Institutions (FI)

Served with Our Products:

30

• No. of Chambers of Commerce and

Industry (CCI) that We Partner with:

87

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

8 Financial Highlights in FY11/19 Q2

• Consolidated net sales for Q2 YTD in

increased by 53% YoY to ¥3.06 billion. Achieved re record-hig igh net sale les in all ll of

• f ou
• ur do

domains.

• In Business domain, consolidated net sales for Q2 YTD increased

by 56% YoY.

• Number of Money Forward ME users reached 8 mill

llio ion, , with the number of premium paying users exceeding 190,000. Annual subscription plan increased to 11% of total paying users.

• X domain achieved re

record-hig igh stock and flow sales.

• Consolidated gross profit margin was 62% while consolidated EBITDA

was negative ¥0.53 billion in Q2, improvin ing from Q1.

9 Key Topics in and after FY11/19 Q2

• Completed transition to the new pricing plan for the Money Fo

Forward Clo loud series. Associated churn was within the expected range. Stock sales in Business domain is expected to grow at a rate of 60% 60%-65% YoY in 2H.

• Making steady progress in measures for tax reforms including the

reduced tax rate.

• Plans to launch BFM

FM, financial management service targeting financial institutions’ corporate customers.

• Expects full-year growth rate in net sales to exceed our initial forecast
• f 55%, and steadily making progress toward achieving our full-year net

sales forecast.

FY11/19 Q2 Financial Highlights and Topics

11 11

1,997 3,059

500 1,000 1,500 2,000 2,500 3,000 18/11期 2Q累計 19/11期 2Q累計

Consolidated Net Sales (YoY Comparison)

Consolidated net sales continued to grow in Q2 YTD, increasing by 53% YoY.

11 11

（¥ mn）

+53

53%

YoY YoY

FY11/18 Q2 YTD FY11/19 Q2 YTD

12 12

272 354 401 477 533 599 715 833 853 919 172 211 212 311 265 304 299 397 370 403 65 126 117 173 102 178 97 197 125 263 2 3 7 17 36 48 74

510 693 732 965 906 1,091 1,130 1,469 1,398

1,661

200 400 600 800 1,000 1,200 1,400 1,600

Consolidated Net Sales (Quarterly Trend)

Achieved re record-high net sale les in all ll do domain ins.

（¥ mn） ■Business ■Home ■X □ Finance ■ Other ※ Exclude labelling for Other net sales from above graph. (YoY) FY11/17 (Consolidated) 1Q 2Q 3Q 4Q FY11/18 (Consolidated) 1Q 2Q 3Q 4Q FY11/19 (Consolidated) 1Q 2Q

+52

52%

YoY YoY +53% +32% +48% +¥67mn

13 13 Gross Profit / EBITDA (Quarterly Trend)

Gross profit reached a re record rd high, while gross profit margin improved to 62%. EBIT ITDA lo loss de decreased owing to an increase in net sales and decrease in marketing expenses.

Gro Gross Prof rofit it EB EBIT ITDA

※ EBITDA = Operating profit/loss + depreciation + amortization (¥mn) □Gross profit ■Gross profit margin (¥mn) □EBITDA □ EBITDA (excl. advertising expenses)

610 709 672 792 746 1,022 67% 65% 59% 54% 53% 62%

0% 20% 40% 60% 80%

200 400 600 800 1,000 FY11/18 Q1 FY11/18 Q2 FY11/18 Q3 FY11/18 Q4 FY11/19 Q1 FY11/19 Q2

△94 △67 △247 △246 △941 △525 53 47 △141 △162 △374 △246

△1,050 △650 △250 150 FY11/18 Q1 FY11/18 Q2 FY11/18 Q3 FY11/18 Q4 FY11/19 Q1 FY11/19 Q2

14 14

468 534 588 723 844 979 109 143 160 313 308 291 75 98 103 153 125 110 34 64 115 113 113 123 41 46 63 78 101 133 154 189 282 293 324 320 147 114 106 84 567 279

1,029 1,188 1,416 1,757 2,382

2,235

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

Breakdown of Expenses (Cost of Sales & SGA)

Total expenses decreased due to the end of TV advertisement during the previous quarter. Continued active investments in marketing.

（¥ mn） ※ Other expenses for FY11/19 Q2 include recruiting/training expenses (¥66mn) and traveling and transportation expenses (¥31mn).

Advertising Expenses Business domain:

Captured demand for tax

• returns. Also focused on

promoting Money Forward Cloud Attendance, a new addition to the platform.

Home domain:

Continued active web

• marketing. Saw an

accelerated increase in the number of Money Forward ME users.

15 15

120 177 244 32 44 64 15 23 31 10 52 47 29 43 78 35 55 66

241 394

530

100 200 300 400 500 11/17 End (Consolidated) 11/18 End (Consolidated) 5/19 End (Consolidated) Business Home X Finance Other Engineer / Designer Corporate

Full-time Employees

Made firm progress in recruiting, with the number of full-time employees increasing to 530 (+136 from the end of FY11/18 and +81 QoQ). Transfer of all Money Forward Financial employees was determined by June 30.

※ 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）

• tock pop, SiraTama etc. were

transferred to Home domain

• Enhanced

infrastructure/security

• Vietnam expansion
• Enhanced respective

features

◼

Engineers

◼

Designers

◼

Sales

◼

Marketing

◼

Customer Success

◼

Customer Support

Other Engi Engineer / Designer

16 16

4,952 10,095

2,000 4,000 6,000 8,000 10,000 12,000 FY11/18 Q4 End FY11/19 Q2 End

1,462 5,972

FY11/18 Q4 End FY11/19 Q2 End

3,383 8,598

FY11/18 Q4 End FY11/19 Q2 End

Maintain Balance Sheet for Further Investments

While continuing to invest actively in FY11/19, we maintain stable balance

• sheet. Equity offering was carried out in December 2018.

Cas Cash Net et Cas Cash* To Tota tal Net et As Assets ts

（¥ mn） ※ Deducted amount of debt from cash amount.

Money Forward Business

Outlook for Japan’s Software Market Size

The software market size is expanding on the back of workstyle reforms and promotion of cloud. In particular, the Saas market is forecasted to expand rapidly to ¥641.2 billion (an increase of ¥254.1 billion).

18 18

※ Fuji Chimera Research Institute, Inc., 2018 New Software Business Market.

Sof

• ftware

¥1.3 tn

tn SaaS

¥387.1 bn

bn

20 2017 20 2022

Sof

• ftware

¥1.7tn

tn (+ (+¥445.9 bn) SaaS

¥641.2 bn

bn (+ (+¥254.1 bn)

Providing a Paradigm Shift - Integrated Back Office

Plans to facilitate a shift from a world filled with cumbersome manual back

• ffice operations to one which automatically connects back office functions

through cloud.

19 19

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 Accounting Software

My Number

New Pricing Plan for Optimizing Back Office Operations 20 20

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

Cloud ud Ac Acco coun untin ting Cloud ud Tax Tax Retur urn Cloud ud Invoice ice Cl Cloud Expen ense se Cloud ud Pay Payroll ll Cloud ud My My Nu Number er

Corporates Sole proprietors

Us Using 5 5 ser ervices at at at attra tractiv ive pr pric ice

Money Forw rward Cloud

Minim imum ¥3, 3,980/month Minim imum ¥1, 1,280/month

Customer Feedback on New Pricing Plan 21 21

• 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.

• Imp

mproved oper

• perati

tional eff fficiency ena nables the he acc ccou

• unti

ting indu ndustry to

• pr

provide a wider rang nge of

• f se

services. Tomoaki Sato Tax Accountant Office (Hokkaido)

• We have been using another invoice service but want

t to

• take thi

his op

• pportun

tunity to

• shi

shift ft to

• Mon

Money For

• rward Cloud Invo

nvoice.

• We currently use Excel to calculate payrolls and were wondering what

advantages Money Forward Cloud Payroll offers. We We pl plan to

• use

use the se service as s it see seems conv conveni nient. t. Private company (Kanagawa)

Tax Accountant Corporate Chamber of Commerce and Industry

• Saving labor in the back office becomes effective by connecting managerial
• perations not only within the accounting division but also among various
• division. We

We the herefore expect tha hat the he bun bundled se service will pr produc uce even n larger eff ffects.

• Thi

his will open

• pen a ne

new pat path for

• r improved eff

fficienc ncy to businesses that were content with simply promoting the use of cloud in accounting operations. The Mastuura Chamber of Commerce and Industry (Nagasaki)

Supporting Sole Proprietors, Pre-IPO and Listed Companies

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

22 22

Sole Proprietors SMEs Pre-IPO and Listed Companies

Aims to enhance functions targeting pre-IPO and listed companies

(in Accounting this winter and Attendance this autumn)

Tax Re Retu turn Invoi nvoice Ex Expense Payroll My My Num Number ST STREAMED Acco Accounti ting Invoi nvoice Ex Expense Payroll My My Num Number Atte Attendance Ma Manageboard ST STREAMED Cloud Acc Accoun unting ng Cloud Att Attendance Acco Accounti ting Invoi nvoice Ex Expense Payroll My My Num Number Atte Attendance Ma Manageboard ST STREAMED

※ 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) ※ Flow 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 23 23

Stock sales continued to increase. Inc Increase in ARPU due to shifts to the new bundled service would be reflected from 3Q, and 2H stock sales is expected to grow at a rate of 60 60-65% YoY.

（¥ mn）■ Stock Sales □ Flow Sales FY11/17 (Consolidated) 1Q 2Q 3Q 4Q FY11/18 (Consolidated) 1Q 2Q 3Q 4Q FY11/19 (Consolidated) 1Q 2Q

Klavis Inc. which providing STREAMED joined the Group

+53

53%

YoY YoY 255 314 371 416 518 584 641 693 782 856 17 40 30 60 16 15 74 140 71 63 272 354 401 477 533 599 715 833 853 919

200 400 600 800

Measures for Consumption Tax Reform / Reduced Tax Rate 24

24

Customers can adapt to the consumption tax reform and reduced tax rate without purchasing new services or paying additional fees.

Mone ney For Forward Cloud ena enable les auto automated jour urnal ent entries ba based ed on

• n the

the re redu duced ta tax ra rate*

*We will disclose new measures on an ongoing basis. Accounting personnel/sole proprietor e.g., Invoice e.g., Receipt sales Exp- ense Clo Cloud d Invoice Clou

• ud

d Accounting Clo Cloud d Ac Accounting Automated journal entry Issue/book invoices or book sales from cash registers by linking Money Forward Cloud Accounting and Money Forward Cloud Invoice. Avoid cumbersome booking of payment requests and receipts with STREAMED and Money Forward Clout Accounting.

Redesigning of Tax Return App by the End of 2019 25 25

Customers will be able to complete journal entries on the app based on statements or direct manual entries. Interface will be user friendly even for sole proprietors without tax return experience.

Select credit card statement Enter details without deliberating journal entry Confirm journal entry after entering details

※ Interface is still under development.

Partnership Spanning the Nation

Held an event with 300+ accounting and tax professionals by connecting five locations across Japan. Realizing corporate support and regional reinvigoration leveraging on technology and the real-world community.

26 26

Money Forward Home

28 28 Net Sales from Premium Charges (Trend in Net Sales)

Number of paying users exceeded 190,000*. Approximately 20% of the new premium users selected the annual subscription plan. The churn rate is expected to decline further.

※ As of end of May 2019 FY11/17 (Consolidated) 1Q 2Q 3Q 4Q FY11/18 (Consolidated) 1Q 2Q 3Q 4Q FY11/19 (Consolidated) 1Q 2Q

Launched annual subscription plan

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

110 128 139 158 174 199 213 226 244 263

50 100 150 50 100 150 200 250

+32

32%

YoY YoY

29 29

62 83 73 153 92 105 86 172 126 140

50 100 150

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

Sales from events and seminars, including Real Estate 1 Day School, continued to be solid in Q2.

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. FY11/17 (Consolidated) 1Q 2Q 3Q 4Q FY11/18 (Consolidated) 1Q 2Q 3Q 4Q FY11/19 (Consolidated) 1Q 2Q

+33

33%

YoY YoY

30 30 Accelerated Increase in Money Forward ME Users

Number of Money Forward ME users exceeded 8 mill llio ion. The effect of TV advertising campaigns among other factors contributed to the accelerated increase in number of users.

• No. of
• f Us

Users Exc Exceeded 8 8 Mi Millio ion Ac Accelerated In Increase in n Use sers

650 50mn

mn

May-18 18

700 00mn

mn

Oct Oct-18 18

750 50mn

mn

Feb-19 19

800 00mn

mn

May-19 19

Dec.2017 May.2019

6 months 5 months 4 months

▲ TV ad

31 31

2014-01 2015-01 2016-01 2017-01 2018-01 2019-01

Money Forward ME - New Accounts Aggregated

TV advertising campaigns implemented during the year-end and new-year holidays contributed to sustaining large numbers of additional accounts and services aggregated by users.

FY11/14 FY11/15 FY11/16 FY11/17 FY11/19 FY11/18 ※ Total number of accounts that users aggregated into Money Forward ME, per quarter. Examples of accounts and services include bank accounts, securities accounts, credit card, pension plan, mileage and reward points.

TV ad

▼

TV ad

▼

TV ad

▼

32 32 Launch of SiraTama for Prepaid Cards

In collaboration with Credit Saison, the new app enables automatic saving for those who find it difficult to save. Savings are added to prepaid cards and can be spent on online shopping. How

• w Sira

raTama fo for r Pre repaid id Cards Wor

• rks

Save Spend 1. . Credit Card Linking with a credit card enables users to start saving spare change. 2. . Si SiraTama for

• r Prepaid Cards

Spare change is added to Siratama for Prepaid Cards. 3.

• 3. Onli

Online Sho Shop Added money can be used to shop online.

Money Forward X

34 34 Net Sales from Money Forward X

Stock sales rose steadily owing to increased provision of services to new business partners. Both stock and flow sales reached re record-hig igh le levels ls on

• n a

qu quarterly ly basis is.

（¥ mn） ■ Stock Sales □ Flow Sales ※ Flow sales from initial development charges are to be recorded at the acceptance by partner financial institution, not at service launch time. FY11/17 (Consolidated) 1Q 2Q 3Q 4Q FY11/18 (Consolidated) 1Q 2Q 3Q 4Q FY11/19 (Consolidated) 1Q 2Q

49 55 64 71 79 84 82 79 84 93 17 71 54 103 23 94 15 118 42 170 65 126 117 173 102 178 97 197 125 263

50 100 150 200 250

+48

48%

YoY YoY

35 35 BFM (Business Financial Management) to Be Released

Plans to release a financial management service targeting financial institutions’ corporate clients. The service visualizes SMEs’ finances by consolidating balances and banking statements of multiple bank accounts.

Uses regularly Online connection Corporate client Financial institution Attracts client to service

銀行と中小企業を繋ぐオンラインの場を作ります。 Con

• nsolidates ba

bank ac account in info fo by y con connecting with with mul ultiple fin inancial inst instit itutions Pro Provid ides rea real-tim ime fin inancial sta status of

• f cor

corporate As a first step, the Okazaki Shinkin Bank plans to start providing BFM to corporate clients from autumn of 2019.

36 36 Strategic Direction Pursued by BFM

In addition to visualizing corporates’ cash flow, the service will implement functions with an aim to improve efficiency. With our business partners, we aim to resolve issues regarding corporates’ finances.

Function provided by BFM at time of launch Vis Visualize Cu Current t Cas Cash Flo Flow Vi Visualize Futu Future Cas Cash Flo Flow

Connect with bank’s accounts/Connect with other banks’ accounts/ (Connect with other services)

Direction 1: 1: Evolution of financial management operations Direction 2: 2: Additional functions and services required by corporate clients (active collaboration with

• ther companies)

Simulate te Futu Future Cas Cash Flo Flow Sec ecure fun funds, , Aut Automatic Len Lending

Manage future deposits and withdrawals/ Create cash management graphs/Raise alerts Forecast based on past behavior/ Forecast based on other factors Apply for loans/Obtain automatic lending within credit line

• Connect with other services
• Automatic lending
• AI banker
• Business Matching

Money Forward Finance

38 38 Aiming to Support Corporates’ Cashflow

Step1 Step2 Step3

Streamline Operations Enhance Added Value and Profitability Working Capital Support

Clo Cloud

39 39

2 3 7 17 36 48 74

10 20 30 40 50 60 70

Net Sales from Money Forward Finance

MF KESSAI, business process outsourcing and factoring service, continues to drive growth in net sales.

（¥ mn） FY11/17 (Consolidated) 4Q FY11/18 (Consolidated) 1Q 2Q 3Q 4Q FY11/19 (Consolidated) 1Q 2Q

Over r 10 10x

YoY YoY

40 40 MF KESSAI Connected with CAINZ-DASH PRO

01

Enables shipping products immediately after orders are made regardless of the payment method.

02

Prevents failed orders due to unsuitable payment methods or deposit deadlines.

03

Ensures deposits using MF KESSAI.

04

Handles invoice payment (deferred payment) which is common among inter-company transactions.

Adva dvantages of

• f CAINZ

Formed partnership with a product ordering service which targets construction workers and is operated by CAINZ CORPORTION. Started offering a deferred payment function. Completes credit screening within a few seconds at shortest.

41 41

Fo Four r Fe Features of

• f

Release of New Online Lending Service

Released Money Forward BizAccel *1, an online lending service which utilizes cloud accounting data and other data with an aim to support SMEs’ cash

• management. We plan to collaborate with financial institutions.

※1 The service is offered by Money Forward Fine, Inc., a subsidiary of Money Forward, Inc. ※2 Payment will be made on the date of customers’ choice, 3 - 10 business days after the contract date.

2

No financial statement is necessary Screening is conducted based on accounting data Enables speedy payment *2 No guarantor or collateral is necessary No need to submit copy of company register Com Company Reg Register Clou

• ud

d Accounting

3 3 busin usiness s day ays

Other Strategic Initiatives

43 43

Participation in Promotion of Unified QR Code, JPQR, Led by the Government

Was certified as a “provider of interface for unified management of retail store sales.” Is committed to promoting the widespread use of unified QR code with an aim to help create a cashless society.

Fu Future In Investment St Strategy 2018

“Promoting the Shift toward a Cashless Society” Perio iod August 1, 2019 to January 31, 2020 Pre refecture Iwate, Nagano, Wakayama and Fukuoka “Promoting the widespread use of unified QR code, JPQR ”

44 44

Money Forw

• rward. Move your life

life fo forw rward.

Appendix

About Us

47 47 CEO Profile 47 47 Yosuke Tsuji

Rep epresentativ ive Dir Directo tor, Pre resident t and and CEO 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

48 48 Executive Profiles

Tak Takashi i Ic Ichikawa

Di Director

• r, Executiv

ive Of Office icer 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 Kan anesaka

Di Director

• r, Executiv

ive Of Office icer, Cor

• rporate De

Develop

• pment

・Joined Money Forward, Inc. in 2014. Appointed as director in 2017. ・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.

To Toshio io Tak Taki

Di Director

• r and Executiv

ive Of Offic icer He Head of

• f Mon

Money For

• rwa

ward Fintech Inst stit itute ・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

• f 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.

Hi Hirokazu Ban an

Di Director

• r, Executiv

ive Of Office icer and Admin inis istratio ion Di Divisio ision Ma Manager ・Joined Money Forward, Inc. in 2016. Appointed as director in 2018. ・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.

Tak Takuya Nakade

Director, Executiv ive Offic icer and d 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.

Mas asanobu Tak akeda

Di Director

• r, Executiv

ive Of Office icer and Mon Money For

• rwa

ward Clou loud Sa Sale les s & & Ma Marke keting g Di Divis isio ion Ma Manager 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 lead 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.

49 49 Executive Profiles

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

Makoto Har Haruta ta

Advis iser Representativ ive Di Director and CEO, betaCataly lyst st 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

• f the Yokohama DeNA BayStars.

Nobuaki Kur urumata tani

External l Di Director

• r

Di Director

• r, Representativ

ive Executiv ive Of Offic icer Chair irman and CEO, Tos Toshib iba Cor

• rporatio

ion Former Representative Director, Deputy president and Executive Officer of Sumitomo Mitsui Banking

• Corporation. Former President of Japan, CVC Capital

Partners.

Tak Takashi i Mi Mitachi

Advis iser (Former External l Director) The Boston Consu sultin lting g Group Se Senio ior Adviso isor 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.

Ak Akir ira Kur urabayashi

External l Di Director

• r

Ma Managin ing Di Director, DNX 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.

Mas asaaki Tan Tanaka

External l Di Director

• r

Executiv ive Chair irman of

• f the Boa

Board, Ni Nippon

• n Pain

int Hol Holdin ings gs 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.

Et Etsu suko Okajim ima

External Director CEO, ProN

• Nov
• va Inc.

c. 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.

50 50 Money Forward Group Structure 50 50

*Knowledge Labo, Inc., Wakufuri, Inc. and MONEY FORWARD VIETNAM CO., LTD. were consolidated at the end of FY11/18 Q3.

Money Forward, Inc. Ownership Ma Main in Ser Service MF KESSAI, Inc.

100％

MF HOSHO, Inc.

100％

BPO and factoring service: MF KESSAI Obligation guarantee and credit inquiry for MF KESSAI mirai talk, Inc.

90％

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％

AI-based loan screening model 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

51 51

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 1000 2000 3000 4000 5000 6000

Share Price and Trading Volume since IPO

※ As of July 12, 2019 July 12, 2019 Close ¥3,430 （¥） ━ Share Price(LHS) ■Trading Volume(RHS) (‘000 Shares)

52 52 Promotion 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 APIs

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

Double the cashless payment ratio

Aims 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 2022

Aims to increase the ratio of SMEs that utilize IT and cloud services etc. to improve productivity of back

• ffice 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

53 53 Disciplined Investment Execution 53 53

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.

54 54 Unit 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.

54 54

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-
• r 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.

55 55 FY11/19 Q2 Financial Summary

FY11/19 Q2 (2019/3-2019/5) FY11/19 Q2 YTD (2018/12-2019/5) Actual FY11/18 Q2 FY11/19 Q1 Actual FY11/18 Q2 YTD FY11/19 Full-year Forecast (lower end) (¥ mn) Actual YoY% Actual QoQ% Actual YoY% Actual Progress Net Sales 1,661 1,091 +52.3% 1,398 +18.9% 3,059 1,997 +53.2% 7,122 42.9% Business 919 599 +53.3% 853 +7.8% 1,771 1,132 +56.4% 4,075 43.5% Home 403 304 +32.5% 370 +8.9% 772 570 +35.6% 1,848 41.8% X 263 178 +47.9% 125 +109.9% 388 279 +38.8% 860 45.1% Finance 74 7 10.1x 48 1.6x 122 10 11.7x 339 35.9% Other 3 2 +30.0% 2 +20.1% 5 5 +12.7%

• Gross Profit

1,022 709 +44.3% 746 +37.0% 1,769 1,319 +34.1%

• Gross Profit Margin

61.5% 65.0% △3.4pt 53.4% 8.1pt 57.8% 66.0% △8.2pt

• EBITDA

△525 △67

• △941
• △1,467

△161

• △2,420

60.6% EBITDA (excl. advertising expenses) △246 47

• △374
• △621

100

• △1,031

60.2%

Products and Services

Money Forward Cloud Series - SaaS Platform 57 57

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 ud Se Serie ies Cloud ud My Nu Number er

Cl Clou

• ud Invo

voice

Cloud ud Pay Payroll ll Cloud ud Ta Tax Retur urn Cloud ud Ac Acco coun untin ting Cloud ud Expens ense Cloud ud Finan nance ce Cloud ud At Attend endance nce

STREAMED - Cloud-based Bookkeeping Service 58 58

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 checks data User imports data to accounting software

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

59 59 Manageboard - Cloud-based Business Analysis Tool

Im Improvin ing oper eratio ional effic efficie iency Im Improvin ing prof rofit itabil ility ty

Accounting pro processes Dat ata en entry Managerial ac actions Bu Budget co 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.

Clo Cloud Ser erie ies

Sales Strategies Aligned with Customer Profiles 60 60

Ac Accountants & the heir cl clients Cor

• rporates

Sol Sole Pro Proprietors

(a) a) 31 31 or

• r mor
• re

emp emplo loyees (b) b) 30 30 or

• r less

ess emp emplo loyees

Prim rimary Pro roducts ts

Accounting/Payroll/ Attendance/STREAMED/ Manageboard Expense/Payroll/ Attendance Business Plan Personal Plan

Di Distributio ion

Field sales Field sales/ Inside sales Mostly online (Inbound marketing) Mostly online (Inbound marketing)

Pric rice (Ex Example)

(Monthly) Accounting ¥3,000 STREAMED ¥12,000~ MB ¥49,800~ Expense ¥500/employee Payroll ¥300/employee Small Business Monthly: ¥3,980~ Annual: ¥35,760~ (¥2,980/month) Business Monthly: ¥5,980~ Annual: ¥59,760~ (¥4,980/month) Personal Light Monthly: ¥1,280~ Annual:¥11,760~ (¥980/month) Personal Monthly: ¥2,480~ Annual: ¥23,760~ (¥1,980/month)

Marketin ing

Sales visits through field sales/ Events and seminars Sales visits through field sales/ Phone calls through inside sales/ Events and seminars Online ads/ SEO/ Organic marketing Online ads/ SEO/ Organic marketing

61 61 Money Forward ME - Automated PFM Service

Money Forward ME is the No.1 PFM app in Japan*1, reaching 8 million

• users. One in four PFM app users are using Money Forward.

61 61

No.1 cov coverage*2

*2: int

ntegrate tes 2, 2,600+ fi financial serv ervices/ Aut Automatic ically y cr creates s hou household ac accountin ing books by y agg aggregatin ing mult ultip iple ac accounts

Credit card Bank Electronic money Pension Mobile phone Online shopping Miles Securities

Connects Automatically classifies Visualizes

No. . of f use users an and mar arket t sha share*1

*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 May 31, 2019

62 62 MONEY PLUS - Practical Economic Media

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

62 62

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

63 63 Money Forward Mall

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

63 63

64 64 SiraTama - 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).

64 64

65 65 tock pop - Coupon App

tock pop is a coupon app which offers rewards and discount coupons for restaurants and retail stores, as well as fitness and leisure facilities.

65 65

Coupons available for the following stores and more!

66 66 66 66 MF KESSAI - Online Invoicing and Factoring Services

MF KESSAI is a business process outsourcing and factoring service.

2.

• 2. As

Assign signment of

• f

acc accounts re rece ceivable 5. 5.Guaranteed pay payment

Insurance Com Company

1.

• 1. Sale

ale of

• f Goo
• ods

3.

• 3. Inv

nvoicing 4.

• 4. Col
• lle

lectio ion of

• f

fund funds

Insurance Fees Insurance Coverage

Sell eller Bu Buyer

Cr Credit Scr creening Rev evenue

67 67 Alliance with Financial Institutions (APIs)

We are the most API-connected platform in Japan, in both Referential APIs and Money Transfer APIs. The Japanese Government targets the adoption

• f open banking APIs by 80+ banks by 2020.

67 67

*Red indicates additions from the FY11/19 Q1 presentation. Financial Institution For consumers For business Referential Money transfer Referential Money transfer 1 SBI Sumishin Net Bank ✓ ✓ ✓ ✓ 2 Shizuoka Bank ✓ 3 Gunma Bank ✓ ✓ 4 Mizuho Bank ✓ ✓ 5 Seven Bank ✓ ✓ ✓ 6 Aichi Bank ✓ ✓ 7 Sumitomo Mitsui Banking Corporation ✓ ✓ ✓ 8 Minato Bank ✓ 9 Japan Net Bank ✓ ✓ 10 Michinoku Bank ✓ 11 MUFG Bank ✓ ✓ ✓ 12 Tochigi Bank ✓ 13 Chiba Bank ✓ ✓ 14 North Pacific Bank ✓ 15 Taiko Bank ✓ 16 Keiyo Bank ✓ ✓ 17 Iyo Bank ✓ 18 Daishi Bank ✓ 19 Kita Kyushu Bank ✓ 20 Momiji Bank ✓ Financial Institution For consumers For business Referential Money transfer Referential Money transfer 21 Yamaguchi Bank ✓ 22 Jibun Bank ✓ 23 Chugoku Bank ✓ 24 Toho Bank ✓ 25 Ashikaga Bank ✓ 26 Kumamoto Bank ✓ ✓ ✓ 27 Shinwa Bank ✓ ✓ ✓ 28 Bank of Fukuoka ✓ ✓ ✓ 29 Sendai Bank ✓ 30 Hokuriku Bank ✓ 31 Kyoto Shinkin Bank ✓ ✓ 32 Shiga Bank ✓ 33 JA Bank ✓ 34 Sony Bank ✓ 35 Daiwa Next Bank ✓ 36 Chikuho Bank ✓ ✓ 37 Akita Bank ✓ 38 Musashino Bank ✓ 39 Shizuoka Chuo Bank ✓ 40 Hiroshima Bank ✓

68 68

Money Fo Forward fo for r X X Ser eries Developing customized Money Forward ME for financial institutions and its clients.

Alliance with Financial Institutions (For Individuals) 68 68

Pass assbook Ap Apps Developing passbook apps for financial institutions and its clients MF F Unit nit Ser erie ies Offering PFM tools within financial institutions apps

As Asset Moni Monito toring ng Uni Unit 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 Gunma Bank Toho Bank Tochigi Bank Taiko Bank Tsukuba Bank JAL Card Taiko Bank Michinoku Bank Sendai Bank

Len Lending Man anager* Advising loan amounts and repayment plans.

*Lending Manager is a trademark of NTT Docomo

JA Bank Hokuriku Bank Kyoto Shinkin Bank North Pacific Bank Chiba Bank JA Bank Shiga Bank Daishi Bank Akita Bank Chugoku Bank

Alliance with Financial Institutions (For Corporates)

Money Fo Forward Clo Cloud Fin Finance : Len Lending platf latform uti utilizin ing Money Fo Forward Clo Cloud dat ata. Money Fo Forward Clo Cloud Ac Accountin ing/Tax Retu eturn fo for r BAN ANK: Accounting and Tax return preparation service for financial institution clients.

69 69

Money Forward Cloud Accounting/Tax Return for The Fukui Bank Money Forward Cloud Tax Return for North Pacific Bank

GM GMO Ep Epsi silon Tra ransactio ion Len Lending

GMO MO Epsil silon

• n

Fast Fast Pas ass s (Lo Loan fo for SMEs)

Th The Ba Bank k of

• f Fuku

kuok

• ka

Q-pit it (Lo Loan fo for SMEs)

Th The Fuku kui i Ba Bank

70 70

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.