Summary of Financial Results for Second Quarter of Fiscal Year Ended December 31, 2022

KLab Inc. reports consolidated financial results for the first half of fiscal year 2022, covering the period from January 1 to June 30, 2022. The primary purpose of the disclosure is to provide a comprehensive overview of the company’s financial health, operating performance, and strategic adjustments under Japanese GAAP. The scope focuses on the Japanese mobile gaming market and related research and consulting segments.

Financial data indicates a challenging period characterized by a significant decline in revenue, which fell 32.3% year-over-year to 8,357 million yen. Despite this contraction, the company narrowed its operating loss to 446 million yen compared to a loss of 842 million yen in the same period of the previous year. Ordinary income turned positive at 111 million yen, largely bolstered by 465 million yen in foreign exchange gains. However, the company recorded a net loss attributable to owners of the parent of 342 million yen, impacted by extraordinary losses including a 410 million yen impairment loss on software within the Game Business segment.

Methodologically, the results reflect the first-time application of the Accounting Standard for Revenue Recognition. This change shifted revenue recognition for in-game currency from the time of exchange to an estimated period of use, resulting in a 53 million yen decrease in reported revenue for the period. The consolidated balance sheet shows total assets of 19,296 million yen and a solid equity ratio of 64.1%.

Looking ahead, the company maintains a policy of non-disclosure regarding full-year forecasts due to the volatility of the mobile gaming industry. Significant subsequent events include the issuance of the 18th Stock Acquisition Rights to Morgan Stanley MUFG Securities to procure approximately 5.1 billion yen and the establishment of a 4 billion yen credit line with MUFG Bank to ensure future liquidity and financial stability.