GREE

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FY2025 Second Quarter Financial Results

GREE Group achieved strong second-quarter results for fiscal year 2025, recording consolidated net sales of ¥15.6 billion and an operating profit of ¥2.2 billion. This performance was primarily fueled by successful anniversary events within the Game and Anime segment and substantial dividends from the Investment Business. While the core operational segments—Game and Anime, Metaverse, and DX—generated ¥13.7 billion in sales, the company issued a conservative downward revision for the full-year forecast. This adjustment reflects anticipated year-over-year declines in sales and profit due to delayed new title releases and rising development costs for console games. The Game and Anime business remains a cornerstone of the group's portfolio, surpassing internal expectations in the second quarter with an operating profit of ¥1.21 billion. Simultaneously, the Metaverse segment demonstrated robust growth, particularly through its VTuber business, which saw a 211% year-over-year sales increase. The DX Business is currently in a transitional investment phase, shifting from project-based work to a recurring-earnings SaaS model. Although these investments are expected to temporarily suppress short-term margins, the group maintains an aggressive medium-term target of a 41% profit CAGR through fiscal year 2027. The Investment Business provided significant volatility and upside, contributing to a major quarterly surge in profit through fund dividends. With ¥49.6 billion in assets under management, this segment is increasingly focused on third-party capital management while maintaining a portfolio that consistently outperforms venture capital benchmarks. Geographically centered on the Japanese market but expanding its digital reach, the group is balancing long-term stability in its legacy segments with high-growth trajectories in its emerging Metaverse and DX operations, underpinned by a commitment to sustainability and internet safety.

investment market-analysis japan+1

GREEFeb 2025

Financial

GREE Holdings FY2025 Q2 Financial Results Briefing (Transcript)

GREE Holdings reported strong financial results for the second quarter of fiscal year 2025, characterized by growth in both revenue and profitability. Consolidated net sales reached ¥15.6 billion with an operating profit of ¥2.2 billion. To provide clearer insight into core operations, the company has transitioned to a "three segments" disclosure model—comprising Game and Anime, Metaverse, and DX—separating them from the more volatile Investment Business. On this three-segment basis, net sales were ¥13.7 billion and operating profit was ¥1.2 billion, exceeding previous forecasts. The Game and Anime Business remains a primary driver, benefiting from anniversary events for "That Time I Got Reincarnated as a Slime: ISEKAI Memories" and increased investment returns from new anime broadcasts. While the company noted a delay in a new title release, it raised its full-year operating profit forecast for the segment due to operational efficiencies. The Metaverse Business achieved record quarterly sales of ¥2.1 billion, fueled by a high-performing VTuber subsegment and resilient platform earnings. Meanwhile, the DX Business is undergoing a structural shift toward a recurring-earnings SaaS model, with a major subsidiary integration into GREE X, Inc. to streamline operations. The Investment Business saw a significant recovery, posting strong gains from fund dividends and increasing its total investment valuation to ¥36.3 billion. Strategically, GREE is shifting toward managing third-party capital to generate GP investment earnings, targeting a first close for new Japanese and U.S. funds in mid-2025. Despite anticipated short-term profit declines in the third quarter due to promotional costs for upcoming titles, the company maintains its medium-term outlook for substantial growth by FY2027, supported by a robust development pipeline and expansion into console gaming.

investment market-analysis japan

GREEFeb 2025

Financial

Summary of Main Supplementary Explanations Questions and Answers at the FY2025 Second Quarter GREE Results Briefing Held on February 6, 2025

GREE Group’s fiscal 2025 second-quarter performance reflects a strategic pivot toward stabilizing mainstay gaming titles while aggressively scaling its VTuber business. The Game and Anime segment is currently anchored by the upcoming release of Puella Magi Madoka Magica Magia Exedra, which has surpassed 500,000 pre-registrations as of late January 2025. This performance exceeds internal expectations and historical benchmarks for the company’s past hits, suggesting strong market anticipation despite a generally tightening smartphone game environment. Management maintains a development cadence of at least one major release per year, emphasizing that individual project timelines are independent and that delays in one title do not impact the broader pipeline. Performance trends for existing titles, including Heaven Burns Red and That Time I Got Reincarnated as a Slime: ISEKAI Memories, indicate a slowing rate of decline as these games mature beyond their third year of operation. This stabilization provides a foundation for the company to absorb the costs associated with newer ventures. In the VTuber segment, revenue growth is driven by talent merchandise, live music events, and seasonal participation in major industry events like Winter Comiket. While the business currently reports losses, these are attributed to one-time investments in 3D model production and character designs for new talent debuts. The VTuber business is expected to reach a turning point in profitability as the initial phase of talent acquisition and asset creation concludes. Management targets approximately ¥3.0 billion in annual sales for this segment, with a goal of achieving monthly profitability within fiscal year 2026. By diversifying income across a broad roster of talent rather than relying on a single performer, the company aims to build a sustainable, high-growth vertical that complements its traditional gaming operations. Overall, the strategy focuses on leveraging established intellectual properties and expanding digital talent platforms to drive long-term financial recovery.

market-analysis game-publishing monetization+1

GREEFeb 2025

Financial

GREE Holdings FY2025 Q1 Financial Results Briefing (Transcript)

GREE, Inc.’s financial results for the first quarter of fiscal year 2025 reflect a period of mixed performance characterized by operational growth in core segments offset by significant volatility in the investment portfolio. The company reported net sales of ¥12.9 billion and a consolidated operating loss of ¥0.1 billion. While the Game and Anime, Metaverse, and DX businesses exceeded internal forecasts, the overall bottom line was pulled down by an ¥0.8 billion operating loss in the Investment Business and a ¥1.4 billion foreign exchange loss resulting from yen appreciation. The Game and Anime segment remains a long-term investment focus, seeing success with the Chinese launch of Heaven Burns Red despite seasonal weakness and high development costs for the pipeline. The Metaverse segment showed resilience, with the VTuber business growing sales by 71% year-over-year and the platform business benefiting from new livestreaming features. The DX Business maintained steady profit levels while investing in a new social DX product slated for release in the third quarter. Conversely, the Investment Business suffered from a lack of dividend distributions and ¥0.6 billion in valuation losses and write-downs, particularly from crypto assets and funds nearing their settlement periods. Geographically, the results cover GREE’s global operations, including domestic Japanese services and overseas expansions in China and the US. Management maintains a positive outlook for the remainder of FY2025, projecting a recovery in the second quarter driven by anniversary events in mainstay game titles. The long-term strategy focuses on achieving a 120–140% CAGR in the Metaverse and DX segments, with the VTuber business expected to reach profitability by FY2026. Despite recent volatility, the company emphasizes that its investment portfolio retains high unrealized value and continues to outperform industry benchmarks.

investment market-analysis japan

GREENov 2024

Financial

Summary of Main Supplementary Explanations Q&A at FY2025 First Quarter GREE Results Briefing

The first quarter results briefing for fiscal year 2025 highlights a strategic focus on international expansion within the gaming sector and risk management within the investment portfolio. A primary driver for near-term growth is the upcoming English release of Heaven Burns Red. Advance registration figures for the title are currently strong, and the partnership with Yostar Games is intended to leverage their expertise in community building within English-speaking markets. This collaboration aims to cultivate a robust fan base prior to launch to ensure sustained engagement and market penetration. Regarding the investment business, the financial outlook is characterized by a period of transition as several large fund investments approach the end of their operating cycles. While this phase contributed to valuation losses in the first quarter, the risk of further significant impacts on earnings is expected to stabilize over the next year. Because the portfolio is diversified and the number of funds reaching maturity is limited, the potential for valuation losses that could materially disrupt overall earnings is considered low in the long term. The broader strategy for the investment segment emphasizes medium-to-long-term stability despite inherent short-term volatility. While precise forecasting remains challenging due to the nature of limited partner investments, these maturing funds are expected to generate dividends and gains from asset sales alongside the identified valuation risks. Moving forward, the focus remains on maintaining a balanced investment approach through group-managed funds to secure steady returns as the current cycle of fund expirations concludes.

investment market-analysis japan

GREENov 2024

Financial

FY2025 First Quarter Financial Results

The first quarter of FY2025 reflects a transitional period characterized by a strategic shift toward recurring revenue models and significant investments in future growth. Net sales reached ¥12.9 billion, though the period saw a slight operating loss of ¥0.1 billion. This performance was primarily influenced by valuation losses within the investment business and increased promotional spending. While the game and anime segment faced short-term headwinds due to the natural decline of existing live-service titles, the metaverse and digital transformation segments demonstrated resilient growth, exceeding internal expectations and providing a counterbalance to volatility in other areas. The game and anime business remains the primary revenue driver despite a 27% year-over-year sales decline in the first quarter. Management anticipates a recovery in the second quarter fueled by major anniversary events and the successful international expansion of key titles like Heaven Burns Red. Looking ahead, the pipeline includes four new titles slated for FY2026 and beyond, including a first-party console IP. Simultaneously, the metaverse segment is emerging as a high-growth pillar, with the VTuber business reporting a 71% year-over-year increase in sales. Although aggressive investment in talent and platform features will temporarily suppress quarterly profits, the segment is positioned for a significant profit contribution by FY2027. Financial stability remains a core strength, supported by total assets of ¥120.7 billion and a net cash position of ¥22.8 billion. Although the full-year forecast for FY2025 has been revised downward to ¥58.0 billion in sales and ¥4.2 billion in operating profit, the long-term outlook remains ambitious. The company is targeting a 41% profit compound annual growth rate through FY2027. This trajectory is predicated on completing the transition to recurring-earnings models in the digital transformation business and leveraging a staggered return phase from a robust investment portfolio that currently maintains ¥81.1 billion in assets under management.

investment market-analysis japan+1

GREENov 2024

Financial

GREE Holdings FY2024 Q4 Financial Results Briefing (Transcript)

GREE, Inc. reported its financial results for the fourth quarter and full fiscal year ending June 2024, detailing a period of strategic transition and investment. For FY2024, the company achieved net sales of ¥61.3 billion and an operating profit of ¥6.0 billion. While quarterly results met internal expectations, both sales and profit saw year-over-year declines, primarily due to a reactive drop following major anniversary events for the flagship title Heaven Burns Red and increased development costs for upcoming projects. The company’s strategy centers on bifurcating its portfolio into continuous growth businesses and long-term investment businesses. The Metaverse segment emerged as a highlight, with the platform business reaching full-year profitability and gifting sales driving a 25% operating margin. This profit is being reinvested into the VTuber business, which saw a 190% year-over-year increase in sales. Conversely, the Game and Anime Business is undergoing a structural transformation; GREE has adjusted its medium-term targets for FY2026 downward as it pushes back release schedules to focus on high-quality multiplatform development and a full-scale entry into the console market. Looking ahead to FY2025, GREE forecasts sales of ¥60.2 billion and an operating profit of ¥3.8 billion. This outlook reflects aggressive spending on new game titles and SaaS product development within the newly restructured DX Business, which now integrates the former Commerce segment. The company also significantly increased its shareholder returns, raising its dividend to ¥16.5 per share in line with a revised policy targeting a 30% payout ratio. Management expects these investments to yield substantial growth by FY2027 as the new product pipeline matures.

investment market-analysis japan

GREEAug 2024

Financial

FY2024 Fourth Quarter Financial Results

GREE Group concluded fiscal year 2024 with net sales of ¥61.3 billion and an operating profit of ¥6.0 billion, representing year-over-year declines of 19% and 52% respectively. This downturn was primarily driven by a 24% sales contraction in the Game and Anime segment, which suffered from reactive declines following major prior-year anniversary events for titles like Heaven Burns Red. Despite these headwinds, the company maintained profitability through rigorous cost controls and a strategic pivot toward emerging business lines. The Metaverse segment emerged as a key growth driver, with the REALITY platform achieving full-year profitability for the first time. This success was bolstered by a 190% surge in VTuber business sales, supported by an expanded roster of 59 performers. Conversely, the DX and Commerce segments faced structural challenges, leading to a strategic reorganization aimed at transitioning from labor-intensive services to a recurring-revenue SaaS model. While the Investment Business remained a stable pillar of strength—managing ¥84.4 billion in assets with an internal rate of return exceeding 16%—the broader corporate outlook remains cautious. Forecasts for fiscal year 2025 project a further 37% decline in operating profit to ¥3.8 billion as the company prioritizes medium-to-long-term investments. These expenditures are directed toward aggressive VTuber talent acquisition, B2B solution integration, and an expanded game development pipeline that includes a planned entry into the console market. Consequently, medium-term targets for fiscal year 2026 have been revised downward to ¥66.4 billion in sales and ¥3.1 billion in operating profit to account for adjusted release schedules and rising development costs across the Japanese and international markets.

investment market-analysis japan

GREEAug 2024

Financial

FY2024 Third Quarter Financial Results

The third quarter of fiscal year 2024 was characterized by significant financial growth, with consolidated net sales reaching ¥17.2 billion and operating profit surging 211% quarter-over-quarter to ¥2.5 billion. This performance was primarily anchored by the Game and Anime segment, which generated ¥13.0 billion in sales. The success of major live service events, specifically the second anniversary of Heaven Burns Red, served as the primary catalyst for this expansion. Based on these results, the company revised its dividend policy upward to a 3% Dividend on Equity and a 30% payout ratio, signaling confidence in reaching the upper end of its full-year operating profit forecast of ¥4.0 to ¥6.0 billion. Strategic shifts are evident across the Metaverse and DX segments as the organization streamlines its operations. The Metaverse business reported an operating profit of ¥0.08 billion despite a slight sales decline following the transfer of B2B operations to the DX unit. While the Commerce segment faced headwinds due to search algorithm updates affecting media traffic, the DX business grew 14% quarter-over-quarter, supported by a robust backlog of support projects and the expansion of the jobda recruiting platform. Looking toward fiscal year 2026, the pipeline includes 18 scheduled titles and medium-term operating profit targets of ¥1.9 billion for Metaverse and ¥3.3 billion for Commerce. The financial foundation remains stable, supported by a net cash position of ¥32.2 billion and a high-performing investment portfolio valued at ¥33.0 billion. With an internal rate of return of 18%, the investment business continues to outperform domestic venture capital benchmarks through its stakes in U.S. funds and various startups. Although a reactive decline in gaming revenue is anticipated for the fourth quarter, the combination of a stabilized headcount of 1,610 employees and a diversified revenue stream across digital transformation and entertainment sectors positions the group for sustained long-term growth.

market-analysis investment japan+1

GREEMay 2024

Financial

Summary of Main Supplementary Explanations Questions and Answers at the FY2024 Third Quarter GREE Results Briefing

GREE’s financial performance for the third quarter of fiscal year 2024 reflects a strategic shift toward operational efficiency and platform diversification. Earnings improvements in the Game and Anime Business were primarily driven by the optimization of promotional spending, particularly for the title Heaven Burns Red following its second anniversary, and a comprehensive reorganization of human resources. By reviewing all active projects and reassigning development and management personnel to more profitable ventures, the company successfully streamlined its cost structure. Future growth strategies emphasize multiplatformization as a core pillar for the gaming segment. Recognizing the evolving market landscape, preparations are currently underway to expand beyond mobile into console game development. Simultaneously, the VTuber Business is receiving targeted investments focused on two areas: increasing management personnel to support a growing talent pool and enhancing live event production and merchandise marketing. While these investments aim for near-term sales growth, long-term success is being measured through fan engagement metrics, such as simultaneous connections during live streams, rather than immediate financial returns alone. Financial projections for the remainder of the fiscal year indicate a stable outlook. Excluding the Investment Business, consolidated operating income is expected to reach approximately 1.5 billion yen for the fourth quarter. This brings the projected full-year consolidated operating income to a range of 5 to 6 billion yen. These figures underscore a period of stabilization and disciplined investment as the company transitions toward a broader multiplatform presence and scales its emerging digital talent initiatives.

marketing investment monetization+1

GREEMay 2024

Financial

GREE Holdings FY2024 Q3 Financial Results Briefing (Transcript)

GREE, Inc. reported its financial results for the third quarter of fiscal year 2024, highlighting a period of significant sequential growth driven primarily by the Game and Anime Business. The company achieved quarterly net sales of ¥17.2 billion and an operating profit of ¥2.5 billion. A central driver of this performance was the successful second-anniversary event for the title Heaven Burns Red, which led to a 93% quarter-over-quarter increase in operating profit for the gaming segment. Additionally, the company announced a revised dividend policy, increasing the dividend on equity target from 2% to 3% and the consolidated payout ratio from 20% to a 30% minimum. The scope of the report covers GREE’s diversified portfolio, including Game and Anime, Metaverse, DX (Digital Transformation), Commerce, and Investment businesses. While the gaming sector exceeded expectations, the Metaverse Business reached a significant milestone by entering positive operating profit territory at ¥0.08 billion. The DX Business remained firm with a growing project backlog, though the Commerce Business faced headwinds due to Google algorithm updates affecting its media operations. The Investment Business, which manages approximately ¥80 billion in assets under management, broke even for the quarter following distributions from various funds. Looking ahead to the fourth quarter and full-year 2024, the company maintains a companywide operating profit forecast between ¥5 billion and ¥6 billion, excluding the investment segment. While a reactive decline in gaming sales is expected following the anniversary peak, the company is focused on its development pipeline, including the highly anticipated Puella Magi Madoka Magica Magia Exedra. Medium-term targets for 2026 remain unchanged, emphasizing aggressive investment in VTuber talent and social marketing collaborations to sustain long-term growth.

market-analysis investment market-forecast+1

GREEMay 2024

Financial

Summary of Main Supplementary Explanations Questions and Answers at the FY2024 Second Quarter GREE Results Briefing Held on February 7, 2024

GREE’s financial performance and strategic outlook for the second quarter of fiscal year 2024 reflect a period of portfolio optimization and aggressive expansion into emerging digital entertainment sectors. The primary driver of recent operational success is the strong performance of Heaven Burns Red, which saw significant engagement following its second-anniversary events. This success is balanced against the strategic discontinuation of SINoALICE, a decision made to align the Game and Anime Business with long-term development goals. While several titles remain in the development pipeline, specific release schedules remain undisclosed as the company prioritizes smooth internal progress over immediate market entry. The VTuber Business represents a core pillar of future growth, with plans to invest aggressively in talent acquisition and agency support. Earnings in this segment are primarily driven by the talent pool, leading to a rigorous audition process that evaluates past streaming performance, character compatibility, and audience communication skills. Simultaneously, the Investment Business is entering a more favorable phase as global valuations, particularly in the United States, begin to stabilize after a period of excess. GREE intends to leverage its established network in the game and metaverse domains to accumulate new investment assets during this market correction. Financial projections for the remainder of the fiscal year indicate steady profitability. Excluding the volatile Investment Business, consolidated operating income is forecasted at approximately 1.5 billion yen for the third quarter and 5.0 billion yen for the full fiscal year 2024. These figures suggest a stable baseline for the company’s core operations as it navigates the transition between legacy titles and new growth initiatives in the virtual talent and investment sectors.

market-analysis monetization game-development+2

GREEFeb 2024