Kadokawa Dwango Financial Results for the 3rd Quarter Ended December 31, 2015

Key insights

6 takeaways

01
Kadokawa Dwango achieved record-high quarterly revenue of 52.1 billion yen and operating income of 2.78 billion yen for the period ended December 31, 2015.See it on page 7
02
The Books and IP business was the primary growth driver, generating 21.1 billion yen in revenue and 2.97 billion yen in operating income, fueled by improved return rates and strong media mix performance.See it on page 3
03
The company is on track to meet its full-year fiscal 2016 targets, with 72.8% of projected revenue (146 billion of 200.5 billion yen) and 89.9% of projected operating income (6.29 billion of 7 billion yen) realized through December 31, 2015.See it on page 16
04
The niconico portal business maintained steady profitability with 5.17 billion yen in revenue and 747 million yen in operating income, supported by 2.54 million premium members.See it on page 11
05
The Game business saw revenue rise to 3.7 billion yen for the quarter ended December 31, 2015, but operating income fell to 157 million yen due to the underperformance of certain titles.See it on page 3
06
Information Media business reduced its quarterly operating deficit to 96 million yen, down from a 437 million yen deficit in the same period the previous year, through structural reforms and increased advertising revenue.See it on page 8

Summary

Kadokawa Dwango’s financial results for the third quarter ended December 31, 2015, demonstrate a period of robust growth, characterized by record-high sales and operating income following the company’s management integration. For the three-month period ending December 31, 2015, the company reported revenue of 52.1 billion yen and an operating income of 2.78 billion yen. These figures reflect a strong performance across core segments, particularly within the Books and IP business, which served as a primary driver of profitability through improved return rates and successful media mix strategies.

The company’s diverse portfolio showed varying levels of performance. The Books and IP segment achieved significant revenue growth of 21.1 billion yen, bolstered by strong e-book sales and reduced return rates for physical publications. Conversely, the Video and IP business faced challenges, posting an operating loss due to underperforming movie releases, while the Live business also recorded a deficit as planned event expenses were realized. The Portal business, anchored by the niconico platform, maintained steady growth, supported by an increase in premium memberships and effective cost rationalization.

Geographically focused on the Japanese market, the company maintained its full-year forecasts for the fiscal year ending March 31, 2016, projecting total revenue of 200.5 billion yen and an operating income of 7 billion yen. As of the end of the third quarter, the company had achieved 72.8% of its revenue target and 89.9% of its operating income target. The results underscore a strategic emphasis on leveraging intellectual property across multiple media formats while managing operational costs to sustain profitability amidst fluctuating segment performance.