FinancialGREE
FY2026 Second Quarter Financial Results
5 Feb 202678 pages~42 min full read
The company reported a 63% quarter-over-quarter decline in operating profit to ¥0.4 billion and a 12% year-over-year sales decrease to ¥12.7 billion, citing core game underperformance and lower investment dividends.
See it on page 25Management has lowered the full-year sales forecast to ¥52.4 billion but maintains a ¥4.4 billion operating profit target by prioritizing cost controls and high-margin recurring revenue in DX and platform sectors.
See it on page 16The VTuber production business is a primary growth driver, achieving record-high quarterly sales and a 105% year-over-year increase in operating profit.
See it on page 33Despite current earnings pressure, the company projects a 48% compound annual growth rate for profit through fiscal year 2028, positioning the current period as an earnings floor.
See it on page 56The core game business experienced a 24% sales decline, though operational efficiencies allowed profits to exceed internal expectations.
See it on page 25The company maintains a strong balance sheet with an equity ratio of 70% and total net assets of ¥64.6 billion, supported by an investment portfolio with ¥22.4 billion in unrealized value.
See it on page 73Future growth strategy centers on a diversified pipeline, including a first-party console RPG, a major third-party IP title, and expanded investments in anime production and merchandising.
See it on page 48Financial performance for the second quarter of fiscal year 2026 reflects a transitional period characterized by a 63% quarter-over-quarter decline in operating profit to ¥0.4 billion and a 12% year-over-year decrease in total sales to ¥12.7 billion. This downturn is primarily attributed to the absence of large-scale dividend distributions in the investment segment and underperformance within the core game business. Despite these challenges, the company maintains a robust financial position with an equity ratio of 70% and total net assets of ¥64.6 billion. Management identifies the current fiscal year as an earnings floor, projecting a significant recovery driven by a 48% profit compound annual growth rate through fiscal year 2028.
The VTuber and DX segments have emerged as resilient growth drivers, with the VTuber production business achieving record-high quarterly sales and a 105% year-over-year increase in operating profit. While the game business faced a 24% decline in sales, operational efficiencies allowed profits to exceed internal expectations. The company has revised its full-year sales forecast downward to ¥52.4 billion but remains committed to its ¥4.4 billion operating profit target through rigorous cost controls and a strategic shift toward high-margin recurring revenue in the DX and platform sectors.
Future growth is anchored in a diversified pipeline and strategic expansion into intellectual property. Key initiatives include the upcoming launch of a first-party console RPG and a major third-party IP title, alongside investments in anime production and merchandising capabilities. Although the investment business experienced a quarterly loss due to valuation adjustments, the underlying portfolio remains strong with an unrealized value of ¥22.4 billion and a 14% internal rate of return. By balancing stable management fees from its investment funds with the scaling of its digital production studios, the organization aims to transition toward a more sustainable, growth-oriented earnings structure.
