Financial Results for the Second Quarter of FY2019

The second‑quarter fiscal 2019 results show net sales of ¥17.7 billion, operating income of ¥1.0 billion and EBITDA of ¥1.2 billion, aligning closely with forecasts after adjusting for a ¥160 million variable‑cost revision that had been misrecorded in the prior quarter. Operating margin stands at 5.4 %. Variable costs fell to ¥7.27 billion, aided by a ¥400 million reduction in advertising spend and declining commission fees; fixed costs rose by ¥430 million due to increased outsourcing for full‑scale development investment, bringing total costs to ¥16.76 billion.

Geographically, the company expanded overseas distribution of its flagship titles—DanMachi and SINoALICE—to Hong Kong, Taiwan, and North America, with another first‑party IP, Another Eden, slated for global self‑distribution. Multi‑platform releases included Fishing Star on Nintendo Switch and a new VTuber livestreaming app, REALITY Avatar. The company’s strategy emphasizes nurturing first‑party IPs to improve long‑term profitability, while maintaining third‑party titles and leveraging self‑distribution where possible.

For the third quarter, net sales are projected between ¥16.5 and ¥17.5 billion with operating income ranging from ¥300 to ¥800 million, reflecting continued investment in new titles and the expected impact of overseas expansion. The balance sheet remains solid, with fixed assets at ¥17 billion and investment securities valued at approximately ¥25 billion, including venture‑capital holdings. Overall, the company maintains confidence in its financial base while pursuing aggressive international growth and IP development.