Nippon Ichi Software Q3 2019 Financial Results

Key insights

6 takeaways

01
Nippon Ichi Software reported Q3 net sales of 3.60 billion yen, a 4.6% year-over-year decrease, while operating profit grew 12.7% to 622 million yen.See it on page 4
02
Net income for the nine-month period ending December 31, 2018, remained stable at 431 million yen, representing a marginal 0.2% increase.See it on page 9
03
The company maintained its initial full-year earnings forecast, projecting annual sales of 4.57 billion yen and a net profit of 175 million yen.See it on page 8
04
Growth was driven by a portfolio of eight packaged software titles, including 'The Liar Princess and the Blind Prince' and 'Ys VIII: Lacrimosa of DANA' for Nintendo Switch and PlayStation 4.See it on page 4
05
The firm expanded its mobile presence with three new application releases and continued its 'Nippon Ichi Indie Spirits' initiative to diversify revenue streams.See it on page 4
06
As of December 31, 2018, the company held total assets of 5.05 billion yen with a solid capital adequacy ratio of 65.6%.See it on page 7

Summary

Nippon Ichi Software’s financial results for the third quarter of the fiscal year ending March 31, 2019, reflect a period of steady profitability despite a slight contraction in top-line revenue. The company reported consolidated net sales of 3.60 billion yen, representing a 4.6% decrease compared to the same period in the previous fiscal year. Conversely, operational efficiency improved, with operating profit rising 12.7% to 622 million yen and ordinary profit increasing 12.1% to 669 million yen. Net income attributable to owners of the parent remained stable at 431 million yen, a marginal 0.2% increase year-over-year.

The company’s performance was driven by a diverse portfolio of eight packaged software titles, including releases such as The Liar Princess and the Blind Prince, Ys VIII: Lacrimosa of DANA, and various titles for the Nintendo Switch and PlayStation 4 platforms. Beyond traditional console gaming, the firm expanded its mobile presence with three new application releases and continued to leverage its "Nippon Ichi Indie Spirits" initiative to publish both digital and physical indie titles. These efforts align with the company’s broader medium-term strategy, which emphasizes product and technical development, international expansion, and a reduction in dependency on the domestic console market.

As of December 31, 2018, the company maintained a solid financial position with total assets of 5.05 billion yen and a capital adequacy ratio of 65.6%. The increase in total assets was primarily attributed to growth in cash, deposits, and marketable securities. Given the inherent uncertainties regarding fourth-quarter sales performance, the company has maintained its initial full-year earnings forecast without revision, projecting annual sales of 4.57 billion yen and a net profit of 175 million yen. The report covers the consolidated operations of the group for the nine-month period ending December 31, 2018, and adheres to Japanese accounting standards.