Kadokawa Financial Results Briefing for the Fiscal Year Ended March 31, 2025

The fiscal year ended March 31, 2025, represented a period of operational resilience for Kadokawa, as the company navigated the significant financial and systemic impacts of a large-scale cyberattack. Despite these challenges, the organization largely met its initial earnings guidance. Consolidated net sales grew by 7.7%, though operating profit and net profit declined by 9.8% and 35.1%, respectively. When excluding the estimated negative impact of the cyberattack—which accounted for 8.3 billion yen in lost sales and 4.7 billion yen in operating profit—the company estimates it would have achieved 11% growth in sales and 16% growth in operating profit.

Performance varied across business segments. The Gaming segment, bolstered by the success of Elden Ring and its downloadable content, achieved high growth in both sales and profit. The Animation and Film segment recorded its second consecutive year of record-high results, driven by strong streaming and rights licensing. Conversely, the Web Services segment suffered direct losses from the cyberattack, and the Publication/IP Creation segment faced domestic market contraction and security-related disruptions, though these were partially offset by growth in e-books and international licensing. The Education/EdTech segment emerged as a strong performer, with a 37.9% increase in operating profit fueled by rising student enrollment.

Looking ahead to the fiscal year ending March 31, 2026, the company projects a 5.0% increase in sales and a 0.3% rise in operating profit. Management remains committed to its mid-term strategy of accelerating a global media mix, focusing on IP creation, and strengthening governance. Following a warning from the Japan Fair Trade Commission regarding the Subcontracting Act, the company has implemented corrective measures, including retroactive payments and enhanced compliance training, to ensure future operational integrity.