FinancialGREE
FY2025 First Quarter Financial Results
1 Nov 202463 pages~31 min full read
The company reported a FY2025 Q1 net sales figure of ¥12.9 billion and a slight operating loss of ¥0.1 billion, driven by promotional spending and investment valuation losses.
The game and anime segment experienced a 27% year-over-year sales decline, though management expects a Q2 recovery supported by anniversary events and international expansion for titles like Heaven Burns Red.
The metaverse segment is a high-growth pillar, highlighted by a 71% year-over-year sales increase in the VTuber business.
The full-year FY2025 forecast has been revised downward to ¥58.0 billion in sales and ¥4.2 billion in operating profit.
The company maintains a strong financial position with ¥120.7 billion in total assets and ¥22.8 billion in net cash.
Long-term strategy targets a 41% profit compound annual growth rate through FY2027, supported by a pipeline of four new titles and an ¥81.1 billion investment portfolio.
The first quarter of FY2025 reflects a transitional period characterized by a strategic shift toward recurring revenue models and significant investments in future growth. Net sales reached ¥12.9 billion, though the period saw a slight operating loss of ¥0.1 billion. This performance was primarily influenced by valuation losses within the investment business and increased promotional spending. While the game and anime segment faced short-term headwinds due to the natural decline of existing live-service titles, the metaverse and digital transformation segments demonstrated resilient growth, exceeding internal expectations and providing a counterbalance to volatility in other areas.
The game and anime business remains the primary revenue driver despite a 27% year-over-year sales decline in the first quarter. Management anticipates a recovery in the second quarter fueled by major anniversary events and the successful international expansion of key titles like Heaven Burns Red. Looking ahead, the pipeline includes four new titles slated for FY2026 and beyond, including a first-party console IP. Simultaneously, the metaverse segment is emerging as a high-growth pillar, with the VTuber business reporting a 71% year-over-year increase in sales. Although aggressive investment in talent and platform features will temporarily suppress quarterly profits, the segment is positioned for a significant profit contribution by FY2027.
Financial stability remains a core strength, supported by total assets of ¥120.7 billion and a net cash position of ¥22.8 billion. Although the full-year forecast for FY2025 has been revised downward to ¥58.0 billion in sales and ¥4.2 billion in operating profit, the long-term outlook remains ambitious. The company is targeting a 41% profit compound annual growth rate through FY2027. This trajectory is predicated on completing the transition to recurring-earnings models in the digital transformation business and leveraging a staggered return phase from a robust investment portfolio that currently maintains ¥81.1 billion in assets under management.
