KLab FY2022 3Q Financial Results Presentation

Key insights

6 takeaways

01
KLab narrowed its operating loss to 123 million yen in Q3 2022, supported by a 2.2% quarter-over-quarter revenue decline to 4,153 million yen and rigorous cost-reduction measures.See it on page 2
02
The company achieved a positive profit attributable to owners of the parent for the first time in two years, primarily driven by favorable foreign exchange gains.See it on page 4
03
Overseas markets remain a critical revenue pillar, accounting for 50% of total consolidated revenue.See it on page 8
04
BLEACH Brave Souls outperformed previous year figures during its anniversary event, while Captain Tsubasa: Dream Team and Utano☆Princesama Shining Live saw revenue cooling.See it on page 5
05
KLab is diversifying its portfolio through a co-development project with Electronic Arts and the acquisition of worldwide distribution rights for a My Hero Academia mobile game.See it on page 16
06
The company is expanding its blockchain gaming division through its subsidiary, BLOCKSMITH&Co., as part of a broader strategy to refine its mid-term management plan.See it on page 21

Summary

KLab’s financial results for the third quarter of 2022 reflect a strategic transition toward a leaner operating structure and a focus on long-term profitability. While consolidated revenue reached 4,153 million yen, representing a 2.2% decline from the previous quarter, the company successfully narrowed its operating loss to 123 million yen. This improvement in the bottom line is attributed to rigorous cost-reduction measures, including the streamlining of operations and a reorganization of its title portfolio. Notably, the company achieved a positive profit attributable to owners of the parent for the first time in two years, bolstered by favorable foreign exchange gains.

The company’s performance remains heavily influenced by the lifecycle of its core mobile titles. BLEACH Brave Souls served as a primary revenue driver during the quarter, benefiting from a successful anniversary event that outperformed previous year figures. Conversely, other established titles, such as Captain Tsubasa: Dream Team and Utano☆Princesama Shining Live, experienced revenue cooling following their respective anniversary periods. Overseas markets continue to be a vital component of the business, accounting for 50% of total revenue, largely driven by the global reach of its flagship intellectual properties.

Looking forward, the company is actively diversifying its portfolio through new development projects and strategic partnerships. Key initiatives include the acquisition of worldwide distribution rights for a My Hero Academia mobile game, a co-development project with Electronic Arts, and the expansion of its blockchain gaming division via BLOCKSMITH&Co. Furthermore, the company is refining its mid-term management plan to account for shifting market variables and the evolving status of its development pipeline. By prioritizing high-potential IP collaborations and maintaining strict control over fixed expenses, the company aims to solidify a sustainable, profitable business model.