Nippon Ichi Software Q1 2014 Financial Results

Key insights

6 takeaways

01
Nippon Ichi Software reported a net loss of 15.9 million yen for Q1 2014, a significant downturn from the 27.2 million yen profit recorded in the same period the previous year.See it on page 1
02
Net sales grew by 39.4% year-over-year to 767.6 million yen, yet operating profit plummeted by 93.0% to just 1.2 million yen.See it on page 10
03
The Package segment, which released six titles, generated 544.6 million yen in sales but suffered an operating loss of 43.4 million yen.See it on page 3
04
The Online segment was the company's most profitable division, contributing 170.5 million yen in sales and 86.1 million yen in operating profit through social games and mobile applications.See it on page 4
05
The License segment maintained high efficiency, generating 26.8 million yen in sales with a 25.0 million yen operating profit.See it on page 13
06
As of June 30, 2014, the company held total assets of 2.54 billion yen and maintained a stable equity ratio of 81.3%.See it on page 9

Summary

Nippon Ichi Software’s financial results for the first quarter of the fiscal year ending March 31, 2015 (covering April 1, 2014, to June 30, 2014), reflect a period of significant revenue growth coupled with a decline in profitability. The company reported net sales of 767.6 million yen, representing a 39.4% increase compared to the same period in the previous year. Despite this top-line growth, the company recorded an operating profit of 1.2 million yen—a 93.0% decrease year-over-year—and a quarterly net loss of 15.9 million yen, contrasting with the 27.2 million yen profit reported in the prior year's first quarter.

The company’s operations are divided into four primary segments: Package, Online, License, and Other businesses. The Package segment, which released six titles across domestic and international markets, generated 544.6 million yen in sales but incurred an operating loss of 43.4 million yen. Conversely, the Online segment performed strongly, contributing 170.5 million yen in sales and 86.1 million yen in operating profit through the distribution of social games and mobile applications. The License and Other segments provided smaller contributions, with the License business yielding 26.8 million yen in sales and 25.0 million yen in profit, while the Other segment reported 25.5 million yen in sales and a minor operating loss.

The financial position at the end of the quarter showed total assets of 2.54 billion yen, a slight decrease from the 2.63 billion yen reported at the end of the previous fiscal year. Total liabilities also decreased to 476.5 million yen. The company maintains a stable equity ratio of 81.3%. These results were reviewed by an independent auditor, and the company noted no significant changes in its business risks or management strategies during this reporting period.