Consolidated Financial Results for the 1st Quarter of FY 2026: Supplementary Material

GungHo Online Entertainment’s financial results for the first quarter of fiscal year 2026 demonstrate a strong recovery and growth trajectory, characterized by significant quarter-on-quarter and year-on-year increases in both net sales and operating profit. The company reported net sales of 26,594 million yen for the quarter, representing a 6,948 million yen increase over the previous quarter. Operating profit reached 3,693 million yen, yielding an operating profit margin of 13.9%, a notable improvement following the negative margins observed in the final quarter of the previous fiscal year.

The primary drivers of this performance include the sustained value of the flagship title Puzzle & Dragons, which celebrated its 14th anniversary during the period, and the successful expansion of the Ragnarok franchise managed by subsidiary Gravity Co., Ltd. Global service rollouts, such as the launch of Ragnarok: The New World in Taiwan, Hong Kong, and Macau, and the release of Ragnarok Origin Classic across multiple Asian markets, contributed significantly to consolidated revenue. These strategic initiatives were supported by consistent event implementation and collaborations, which helped maintain user engagement and brand strength.

Operational efficiency also played a role in the quarter’s profitability. Selling, general, and administrative expenses decreased to 8,195 million yen, largely due to the absence of bonus payments and a reduction in advertising expenditures compared to the prior quarter. The company maintains a stable workforce, with 1,609 consolidated employees as of the end of the first quarter. These results reflect a successful execution of the company’s strategy to maximize the lifecycle of existing intellectual property while simultaneously expanding the reach of its partner-published titles across international markets.