Square Enix Consolidated Financial Results: Fiscal Year Ended March 31, 2007

Key insights

7 takeaways

01
Square Enix achieved strong core growth in the fiscal year ending March 31, 2007, with net sales rising 31.3% to 163,472 million yen and operating income increasing 67.5% to 25,916 million yen.See it on page 1
02
Net income declined 32.0% to 11,619 million yen, primarily due to extraordinary losses related to business restructuring and goodwill amortization.See it on page 7
03
The amusement segment, led by the Taito group, generated the highest revenue at 75,610 million yen but recorded an operating loss, while the offline games segment remained highly profitable with 16,348 million yen in operating income.See it on page 10
04
International expansion accelerated, with overseas sales growing to 23.0% of total consolidated revenue, up from 16.1% in the previous year, driven largely by performance in Europe.See it on page 12
05
Cash flow from operating activities improved significantly to 32,809 million yen, compared to 9,174 million yen in the prior fiscal year.See it on page 8
06
The company maintains a stable financial position with total assets of 215,679 million yen and a shareholders' equity ratio of 60.0%.See it on page 1
07
For the fiscal year ending March 31, 2008, the company projects a slight decrease in performance, forecasting 162,500 million yen in net sales and 21,000 million yen in operating income.See it on page 2

Summary

The Square Enix consolidated financial results for the fiscal year ended March 31, 2007, demonstrate significant growth in net sales and operating profitability compared to the previous fiscal year. Net sales reached 163,472 million yen, representing a 31.3% increase over the 124,473 million yen reported in the prior period. Operating income rose by 67.5% to 25,916 million yen, while recurring income grew by 68.8% to 26,241 million yen. Despite these gains in core operations, net income decreased by 32.0% to 11,619 million yen, largely due to shifts in extraordinary gains and losses, including costs associated with business restructuring and the amortization of goodwill.

The company’s business segments, which include offline and online games, mobile content, publications, and amusement operations, showed varied performance. The amusement segment, driven by the Taito group, was the largest contributor to net sales at 75,610 million yen, though it faced operational challenges resulting in a segment loss. Conversely, the offline games segment remained a strong performer, generating 51,316 million yen in sales and 16,348 million yen in operating income. Geographically, the company expanded its international footprint, with overseas sales increasing to 23.0% of total consolidated sales, up from 16.1% in the previous year. Growth was particularly notable in the European market, where sales rose significantly.

The financial position remains stable, with total assets of 215,679 million yen and a shareholders' equity ratio of 60.0%. Cash flow from operating activities improved substantially to 32,809 million yen, compared to 9,174 million yen in the prior year. Looking ahead, the company projects full-year net sales of 162,500 million yen for the fiscal year ending March 31, 2008, with an anticipated operating income of 21,000 million yen.