Financial

FY2026 1Q Financial Results Briefing: GREE Holdings

Published by GREE

Summary

The briefing presents FY2026 1Q financial results for GREE Holdings, emphasizing a re‑segmentation of the former Metaverse Business into distinct Platform and Production units under the VTuber umbrella. Net sales reached ¥12.0 billion with operating profit of ¥1.1 billion, surpassing FY2025 full‑year expectations; consolidated figures including the Investment Business were ¥12.8 billion in sales and ¥1.1 billion in operating profit, buoyed by foreign‑exchange gains from yen depreciation and investment security sales. Variable costs fell due to lower advertising spend and commission fees, while fixed costs remained stable. Segment‑level analysis shows the Game Business experiencing a temporary sales dip from declining momentum of recent titles, yet operating profit rose thanks to overseas development contracts and a live‑service game pipeline. The VTuber Business recorded a 9 % YoY sales increase and a 142 % jump in operating profit, driven by cost controls on payment processing and gradual profitability of the Production arm. The IP Business saw modest sales decline and sharper profit erosion, with Anime and Entertainment Solution units posting delayed revenue but expected to normalize in the second half. The DX Business maintained a gradual uptrend, with consulting projects offsetting outsourcing declines. Forecasts for 2Q FY2026 anticipate sales growth but a profit decline due to console‑game development expenses. Full‑year FY2026 projections expect profits to exceed initial targets, with medium‑term goals unchanged: a profit trough in FY2026 followed by rebound in FY2027–FY2028, and a focus on recurring revenue models and M&A to drive long‑term growth.

From the report

Toshiki Oya, Senior Vice President, CFO: Greetings to everyone. I am CFO Toshiki Oya. Thank you for joining the first quarter FY2026 financial results briefing of GREE Holdings. First, I would like to explain the changes to segment names as shown on page 2. Until the end of FY2025, we had the Metaverse Business which consisted of the Platform Business built around REALITY and the VTuber Business. Starting this quarter, we have renamed it the VTuber Business and reorganized it into the Platform Business and the Production Business. We are forming alliances between REALITY and VTuber talent agencies run by other companies and continue to broaden our user base via our app that allows anyone to easily become a VTuber. We changed the segment name from Metaverse Business to VTuber Business this quarter to more accurately reflect our current business activities. This is a change in name only and does not involve any changes to the structure or content of our reportable segments. On page 3, we provide an executive summary for 1Q of FY2026. On a four segments basis, we achieved solid results in all businesses, with profit coming in above the levels announced in our FY25 full-year results. Net sales were ¥12.0 billion and operating profit was ¥1.1 billion. Consolidated results for GREE Holdings, which include the Investment Business, followed a trend similar to results on a four segments basis.

sinesses, with profit coming in above the levels announced in our FY25 full-year results. Net sales were ¥12.0 billion and operating profit was ¥1.1 billion. Consolidated results for GREE Holdings, which include the Investment Business, followed a trend similar to results on a four segments basis. On page 6, we provide an overview of 1Q FY2026 consolidated results for GREE Holdings. Net sales were ¥12.8 billion and operating profit was ¥1.1 billion. Ordinary profit and net profit increased on a QoQ and YoY basis as we posted foreign exchange gains from the revaluation of foreign currency–denominated assets resulting from yen depreciation, as well as gains on the sale of investment securities. On page 7, we have an overview of four segments results in 1Q. On page 8, we provide an operating profit analysis for 4Q on a four segments basis. Compared with operating profit of ¥1.7 billion in FY2025 4Q, four-segment operating profit ¥1.1bn in 1Q, reflecting lower sales and a corresponding decrease in variable costs. Page 1 of 7

On page 9, we break down our cost structure for 4Q on a four segments basis. Fixed costs remained largely unchanged, while variable costs decreased due to lower advertising expenses and a decline in commission fees resulting from lower sales. Sanku Shino, Senior Vice President, CSO: Now, Sanku Shino will provide an explanation of the progress we have made toward achieving our management plan targets. Page 12 shows sales and operating profit on a four segments basis. Sales were ¥12.0 billion and operating profit was ¥1.1 billion. Page 14 shows sales and operating profit of continuous growth business. We achieved QoQ growth in sales and profit as sales were ¥4.4 billion and operating profit reached ¥0.5 billion. Page 15 shows business conditions in four segments. Sales fell slightly on a slowdown in the Game Business, which accounts for a high proportion of total sales. However, profit came in above expectations as profit controls were executed effectively across all businesses. Page 16 shows our four segments forecast for 2Q of FY2026. We expect sales to rise and profit to decline. We expect sales to rise on contribution from steady growth in the VTuber Business. However, we expect profit to decline QoQ owing to higher expenses associated with the full-scale development of console titles in the Game Business. Page 17 shows our full-year forecast for FY2025 on a four segments basis. We now expect profit to surpass our initial projections. In the Game Business, sales are expected to come in below our initial expectations owing to a slowdown in existing titles, but we now expect profit to exceed expectations on solid profitability across all businesses.

n a four segments basis. We now expect profit to surpass our initial projections. In the Game Business, sales are expected to come in below our initial expectations owing to a slowdown in existing titles, but we now expect profit to exceed expectations on solid profitability across all businesses. Page 18 shows our four segments medium-term targets. We have made no major changes to our medium-term targets. We target a bottom in profit in FY2026 followed by a return to a growth in FY2027 and FY2028. On page 20, we have sales and operating profit by segment. Sales and profit declined QoQ in the Game Business, mainly on a reactive decline resulting from the tapering off of initial Page 2 of 7

launch momentum of new titles and weaker performance from existing titles. For more details, please wait for the parts of this presentation covering each individual segment. Page 21 shows progress made toward our full-year FY2026 forecast. We will also provide details as we discuss each individual segment. Yota Yanagihara, Senior Vice President: Next, Yota Yanagihara will explain the Game Business. Page 24 shows long-term trends in sales and operating profit in the Game Business. Segment-wide quarterly sales were ¥7.5 billion and operating profit was ¥0.8 billion. On page 25, we present an overview of the Game Business. Sales declined temporarily on a tapering off of initial momentum for Puella Magi Madoka Magica Magia Exedra, which was released on 3Q FY2025, but this was in line with expectations. On a positive note, operating profit came in higher than projections as overseas contract development projects exceeded expectations. We also made progress on development of a major live service game title. We hope to be able to share more information about this with everyone at the appropriate time. Page 26 shows the live service game business. Sales were ¥5.9 billion and operating profit was ¥0.5 billion. Page 27 shows our development pipeline. We plan to release one console game based on our own IP in FY2026. We are also making steady progress in preparing for the launch of multiple large-scale live service games and console titles based on proprietary IP.

n and operating profit was ¥0.5 billion. Page 27 shows our development pipeline. We plan to release one console game based on our own IP in FY2026. We are also making steady progress in preparing for the launch of multiple large-scale live service games and console titles based on proprietary IP. Page 28 shows our 2Q FY2026 earnings estimates. While we expect sales to hold steady, we project that profit will decline on an increase in expenses associated with the ramping up of development of a console game scheduled for release in FY2026. Page 29 shows our forecast for FY2026. Based on recent trends in existing titles, we factor in somewhat conservative sales estimates. However, we expect to meet our initial profit forecast by implementing profitability control initiatives even as we continue to make aggressive investments. Page 3 of 7

Pages: 7
Words: 2,565
Format: PDF
Type: Financial

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