Kadokawa Dwango Financial Results for the First Quarter Ended December 31, 2014

Key insights

7 takeaways

01
Kadokawa Dwango reported a net income of 26.078 billion yen for the quarter ending December 31, 2014, driven largely by 22.3 billion yen in extraordinary income from negative goodwill.See it on page 14
02
Total quarterly revenue reached 49.715 billion yen, with the Books and IP business serving as the largest segment at 19.418 billion yen in revenue.See it on page 2
03
The niconico portal business grew its premium membership base to 2.41 million users, an increase of 240,000 year-over-year, contributing to segment operating income of 731 million yen.See it on page 11
04
The Game business generated 4.021 billion yen in revenue and 240 million yen in operating income, aided by titles such as 'Attack on Titan' and 'Derby Stallion GOLD' despite the absence of major hit titles.See it on page 14
05
The Information Media business posted an operating loss of 437 million yen as declining magazine sales and advertising revenue offset improvements in return rates.See it on page 2
06
The Live business segment struggled during the quarter, recording an operating loss of 269 million yen due to rising costs.See it on page 2
07
As of December 31, 2014, the company maintained a strong balance sheet with 189.655 billion yen in total assets and 115.538 billion yen in total equity.See it on page 15

Summary

Kadokawa Dwango’s financial results for the first quarter ended December 31, 2014, reflect a period of diversified performance across its various business segments. The company reported total revenue of 49.7 billion yen and an operating income of 1.85 billion yen. A significant highlight for the quarter was the recognition of 22.3 billion yen in negative goodwill, which substantially bolstered net income.

The company’s operations are segmented into Books and IP, Information Media, Video and IP, Portal, Live, Mobile, and Game businesses. The Books and IP segment served as a primary revenue driver, generating 19.4 billion yen, supported by strong e-book sales and improved return rates. Conversely, the Information Media segment faced challenges, posting an operating loss of 437 million yen due to declining magazine sales and advertising revenue. The Portal business maintained steady growth, with premium niconico memberships reaching 2.41 million, an increase of 240,000 year-over-year, though this was partially offset by rising labor costs associated with engineering staff.

The Video and IP business contributed 817 million yen in operating income, aided by DVD sales for titles such as "Yo-kai Watch" and the film "Fury." The Game business generated 4.0 billion yen in revenue, yielding 240 million yen in operating income despite the absence of major hit titles. Meanwhile, the Live business reported an operating loss of 269 million yen, attributed to increased costs from event-related initiatives like "niconico KUNIKAIGI" and the renovation of "niconico Honsha."

As of December 31, 2014, the company held total assets of 189.7 billion yen, with a strong equity ratio of approximately 72%. The results underscore a strategic focus on digital expansion, particularly within the e-book and portal segments, while navigating the cyclical volatility inherent in traditional publishing and the competitive landscape of the gaming and live event industries.