Financial

Summary of Financial Results for Third Quarter of Fiscal Year Ended December 31, 2023

1 November 20239 pages2,328 words

Summary

This financial summary details the consolidated operating performance of KLab Inc. for the first nine months of the fiscal year ended December 31, 2023. The data reflects a significant downturn in financial performance compared to the same period in 2022. Revenue fell by 33.2% to 8,355 million yen, while the company reported an operating loss of 731 million yen and a net loss attributable to owners of the parent of 591 million yen. These results represent a deepening of losses from the previous year, where the company recorded an operating loss of 570 million yen and a net loss of 307 million yen. The scope of the report covers the company’s primary Game Business and its "Other" segment, which transitioned from research and consulting in 2022 to blockchain-related ventures in 2023. The Game Business remains the primary revenue driver but saw a sharp decline in income from paid users, dropping from 10.8 billion yen in 2022 to 6.4 billion yen in 2023. Despite the overall revenue decline, the "Other" segment showed growth, with revenue increasing from 316 million yen to 583 million yen and shifting from a segment loss to a profit of 291 million yen. Financial stability remains relatively steady with an equity ratio of 65.2%, up from 62.9% at the end of 2022, though total assets decreased from 20.8 billion yen to 19.3 billion yen. Notable balance sheet changes include a significant increase in software and software in progress, totaling over 6 billion yen, suggesting ongoing development investments. Due to the volatility of the mobile gaming market, the company has declined to provide a consolidated operating performance forecast for the remainder of the fiscal year, citing the difficulty of making reasonable calculations. The methodology follows Japanese GAAP consolidated standards.

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Summary of Financial Results for Third Quarter of Fiscal Year Ended December 31, 2022

The financial results for KLab Inc. during the first nine months of the fiscal year ended December 31, 2022, reveal a period of significant contraction in revenue alongside narrowing operational losses. Total revenue reached 12.5 billion yen, representing a 33.1% decrease compared to the 18.7 billion yen reported during the same period in 2021. Despite this decline, the company managed to reduce its operating loss from 729 million yen in the previous year to 570 million yen. Notably, the company achieved a positive ordinary income of 195 million yen, a recovery from an 850 million yen loss in 2021, largely bolstered by 628 million yen in foreign exchange gains. The scope of these results covers the consolidated performance of the Japanese entity and its subsidiaries from January 1 to September 30, 2022. The primary industry segment is the Game Business, which accounted for 12.1 billion yen of total revenue, while the Research & Consulting and other businesses contributed approximately 316 million yen. Geographically, the report focuses on the Japanese market under Japanese GAAP. A significant methodology change occurred during this period with the adoption of the Accounting Standard for Revenue Recognition. This shift altered how the company recognizes income from in-game currency and licenses, resulting in a 65 million yen decrease in reported revenue for the period compared to previous accounting methods. The consolidated financial status shows total assets increasing to 20.4 billion yen, up from 18.7 billion yen at the end of 2021, supported by a rise in cash and deposits. However, the company reported a net loss attributable to owners of the parent of 307 million yen, though this was a substantial improvement over the 1.7 billion yen loss recorded in the prior year. Due to the inherent volatility of the mobile gaming market, the company has declined to provide specific consolidated performance forecasts for the remainder of the fiscal year.

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Summary of Financial Results for Third Quarter of Fiscal Year Ended December 31, 2023

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