Financial

Consolidated Financial Results for the First Quarter of the Fiscal Year Ending December 31, 2019

1 May 20198 pages2,560 words

Summary

KLab Inc. reported a significant decline in financial performance for the first quarter of the fiscal year ending December 31, 2019, covering the period from January 1 to March 31, 2019. Consolidated revenue fell 18.4% year-over-year to 6.47 billion yen, primarily driven by declining revenue from the title Love Live! School Idol Festival. This contraction in the top line led to sharper decreases in profitability: operating income dropped 70.9% to 391 million yen, and profit attributable to owners of the parent fell 63.2% to 296 million yen. The company’s cost of sales and selling, general, and administrative expenses also decreased by 8.3% and 5.2% respectively, largely due to lower royalties, commissions, and reduced advertising spend. Despite the drop in quarterly earnings, total assets increased by 2.3 billion yen to 21.5 billion yen, fueled by higher operating investment securities and software in progress. Net assets rose to 16.0 billion yen, influenced by the inclusion of non-controlling interests from a newly consolidated subsidiary. Geographically focused on the Japanese market with global reach through its mobile titles, KLab’s operations are divided between its core Game Business and Other Businesses, which now includes a venture capital segment following the consolidation of KVP Inc. and its associated funds. Looking ahead, the company maintains a range-based forecast for the full fiscal year 2019, projecting revenue between 32 billion and 40 billion yen. Management noted that while financial forecasting has become more accurate, the inherent volatility of new game success remains a critical factor in achieving these targets.

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Summary of Financial Results for First Quarter of Fiscal Year Ending December 31, 2018

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Consolidated Financial Results for the First Quarter of the Fiscal Year Ending December 31, 2019

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