Visional : FY22 3Q Financial Release

FY2022/7 3Q

Financial Results

June 2022

Visional, Inc.

FY2022/7 3Q Financial Results and FY Financial Forecast Highlights

Consolidated

Financials

BizReach

HRMOS

• Strong rebound trend from COVID-19 continued in the professional hiring market in addition to an increased momentum by employers to actively start hiring mid-careers. Net sales for 3Q recorded JPY 12.21Bn (44.8% YoY growth). For 9 months ended April, net sales were JPY 31.88Bn (54.8% YoY growth)
• Strong net sales drove 3Q operating profit of JPY 3.11Bn (94.6% YoY growth). Operating profit for 9 months ended April exceeded our initial expectation and landed at JPY 7.21Bn (131.9% YoY growth)
• 3Q is the biggest quarter for BizReach due to seasonality of the hiring market. Net sales for 3Q recorded JPY 10.48Bn (59.1% YoY growth). Net sales for 9 months ended April were JPY 27.39Bn (63.9% YoY growth)
• JPY 5.66Bn adjusted operating profit before corporate expense allocation for 3Q post marketing investments including TV commercials. JPY 14.00Bn for 9 months ended April (87.4% YoY growth)
• JPY 1.53Bn ARR (27.7% YoY growth), 1,127 unique paying customers (25.6% YoY growth) as of 3Q end. HRMOS ATS drove net sales growth
• We will continue product development while aiming to increase customers through cross-selling to BizReach customers and through partner channels. In 3Q, we have launched a new function "Individual Condition Survey" as part of HRMOS Talent Management

Consolidated

Financial

Forecast

• As of now, professional hiring is not impacted from the uncertain global macroeconomy, increasing raw material prices and fluctuations in the financial capital markets. Our full year FY2022/7 financial forecast of net sales is raised by JPY 2.60Bn to JPY 43.60Bn (51.9% YoY growth)
• Investment for business growth will continue with discipline. Following higher than expected net sales growth, we will reinvest profit back into BizReach. As a result, our full year FY2022/7 financial forecast for operating profit is raised by JPY 2.00Bn to JPY 8.00Bn (237.8% YoY growth)

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Visional Group Consolidated Financial Results

Consolidated net sales for 3Q were driven by increased sales of BizReach on the back of seasonality of the hiring market. Based on current business performance, the full year financial forecast is raised

Consolidated Net Sales(1)

YoY Growth

JPY MM

Rate

3Q actuals

51.9%

YoY Growth

43,600

Rate

54.8%

28,698

31,884

25,879

3Q

21,492

12,214

15,700

2Q

10,099

1Q

9,570

FY18/7

FY19/7

FY20/7

FY21/7

FY22/7

FY22/7

FY

FY

FY

FY

3Q

FY Est

BizReach, Inc.

Visional, Inc.

(Consolidated)

(Consolidated)

Consolidated Operating Profit(1)

JPY MM

Profit reinvested

3Q actualsback into the business

7,218

8,000

3Q

3,114

2Q

2,186

2,368

1,566

1Q

629

514

2,536

FY18/7

FY19/7

FY20/7

FY21/7

FY22/7

FY22/7

FY

FY

FY

FY

3Q

FY Est

BizReach, Inc.

Visional, Inc.

(Consolidated)

(Consolidated)

Note: (1) Based on FY20 financials prepared by Visional, Inc. continued from the financials of BizReach, Inc. Visional, Inc. was established through a share transfer, and BizReach, Inc. became a
wholly-owned subsidiary of Visional, Inc. in February 2020. Therefore, FY18 to FY19 annual financial results are based on the consolidated financial results of BizReach, Inc. (All FYs end in July and
prepared in accordance with J-GAAP)	3

FY2022/7 3Q Financial Results Summary

Net sales for 9 months ended April grew 54.8% YoY. Driven by the seasonality of the hiring market, operating profit greatly increased despite marketing investments

	JPY MM
		9 months ended	9 months ended	3 months ended	3 months ended	3 months ended
		April 30, 2022	April 30, 2021	April 30, 2022	January 31,	October 31,
					2022	2021
	Net Sales	31,884	20,601	12,214	10,099	9,570
	YoY Growth (%)	54.8%	N.A.	44.8%	N.A.	N.A.
	HR Tech Segment(1)	30,320	19,439	11,614	9,589	9,116
	YoY Growth (%)	56.0%	N.A.	44.7%	N.A.	N.A.
	Incubation Segment(1)	1,442	1,040	559	469	413
	YoY Growth (%)	38.6%	N.A.	53.3%	N.A.	N.A.
	Cost of Sales	4,244	3,030	1,538	1,401	1,304
	Gross Profit	27,639	17,571	10,675	8,697	8,266
	Margin (%)	86.7%	85.3%	87.4%	86.1%	86.4%
	Selling, General & Administrative Expenses	20,421	14,458	7,560	7,131	5,729
	Operating Profit	7,218	3,112	3,114	1,566	2,536
	Margin (%)	22.6%	15.1%	25.5%	15.5%	26.5%
	YoY Growth (%)	131.9%	N.A	94.6%	N.A.	N.A.
	HR Tech Segment(2)	8,929	4,207	3,660	2,161	3,107
	Incubation Segment(2)	(1,206)	(564)	(385)	(416)	(405)
	Pre-tax Profit	7,515	2,933	3,234	1,658	2,621
	Profit attributable to owners of parent	4,880	1,885	2,038	1,061	1,780
	Margin (%)	15.3%	9.2%	16.7%	10.5%	18.6%
	YoY Growth (%)	158.9%	N.A	155.3%	N.A.	N.A.
Notes: (1) Difference between the consolidated figure and the total of HR Tech and Incubation Segments is mainly due to office rental fees from an associated company accounted for by the equity method (2)		4
Difference between the consolidated figure and the total of HR Tech and Incubation Segments is due to general and administrative expenses that are not allocatable to the reportable segments

FY2022/7 Financial Forecast Revision

The financial forecast is revised in consideration of the continued rebound trend from COVID-19 in addition to increased momentum by employers to actively start hiring mid-careers

			JPY MM
	FY22/7	FY22/7
	Financial Forecast	Financial Forecast
	Released on	Released on
	Jun. 13, 2022	Dec. 9, 2021	Difference
Net Sales	43,600	41,000	+2,600
Growth (%)	51.9%	42.9%	--
HR Tech Segment	41,430	38,870	+2,560
BizReach	37,500	35,300	+2,200
HRMOS	1,420	1,420	0
Incubation Segment	2,010	2,010	0
Others	160	120	+40
Operating Profit	8,000	6,000	+2,000
Growth (%)	237.8%	153.3%	--
Margin (%)	18.3%	14.6%	--
Ordinary Profit	8,320	6,320	+2,000
Growth (%)	265.8%	177.9%	--
Margin (%)	19.1%	15.4%	--
Profit Attributable to	5,400	4,100	+1,300
Owners of Parent
Growth (%)	280.1%	188.6%	--
Margin (%)	12.4%	10.0%	--

• Based on the current growth trend of BizReach in view of post COVID-19 recovery and employers' increased momentum towards hiring professionals, FY2022/7 full year forecast for BizReach net sales is revised upwards to 59.2% growth YoY from 49.8% YoY
• HRMOS continues to prioritize product development and is trending strongly (no change to net sales forecast)
• Business development continues in the Incubation segment (no change to net sales forecast). As they are early businesses, net sales fluctuation risk exists, although impact to consolidated financial performance is negligible and profitability will be maintained by controlling expenses
• Marketing investments are higher in 2H as in previous years, and driven by stronger-than-expected sales growth, profits will be further reinvested back into BizReach in 4Q to drive growth

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