Koei Tecmo Holdings Co.

Koei Tecmo Holdings Co., Ltd. reported strong financial growth for the first quarter of the fiscal year ending March 31, 2027, covering the period from April 1, 2026, to June 30, 2026. The company demonstrated significant year-on-year improvements across all primary profitability metrics, driven by robust net sales and substantial non-operating income.

Net sales for the quarter reached 17,368 million yen, representing a 17.4% increase compared to the same period in the previous year. Operating profit rose by 51.3% to 5,407 million yen, while ordinary profit saw a marked increase of 79.2%, totaling 15,719 million yen. Profit attributable to owners of the parent surged by 86.9% to 11,348 million yen. This performance was bolstered by non-operating income, which included gains from the sale and redemption of investment securities, as well as interest income. Comprehensive income for the period reached 29,438 million yen, a 78.5% increase over the prior year.

As of June 30, 2026, the company maintained a solid financial position with total assets of 333,923 million yen and an equity-to-asset ratio of 83.6%. The company has not revised its previously announced full-year forecasts, which project net sales of 90,000 million yen and an operating profit of 32,000 million yen for the fiscal year ending March 31, 2027. These results were prepared in accordance with Japanese GAAP, and no significant changes in accounting policies or the scope of consolidation were reported during this quarter.

Koei Tecmo Holdings’ financial results for the first quarter of the fiscal year ending March 2027 demonstrate strong growth, characterized by a 17.4% year-on-year increase in sales to 17.368 billion yen. Operating profit rose significantly by 51.3% to 5.407 billion yen, while net profit grew by 86.9% to 11.348 billion yen. This performance was primarily driven by the entertainment segment, which benefited from robust sales of console, PC, and mobile titles, alongside steady contributions from the amusement and real estate sectors.

The company’s entertainment business remains the core growth driver, with sales reaching 15.930 billion yen. While the quarter lacked major new releases, the firm successfully leveraged its back catalog and existing mobile titles to maintain momentum. The console and PC sector saw a notable increase in digital download sales, while the mobile sector continued to provide stable revenue through existing titles and licensing royalties. Total headcount reached 3,015 employees by the end of June 2026, reflecting a strategic commitment to expanding development capacity.

Management maintains its full-year earnings forecast, projecting 90 billion yen in sales and 32 billion yen in operating profit. The company’s long-term strategy, outlined in its 4th Medium-Term Management Plan, focuses on creating a foundation for growth through a balanced portfolio of major and mid-range titles. Key strategic pillars include aggressive investment in human capital—with personnel costs expected to rise by approximately 10% annually—and the integration of generative AI to enhance operational efficiency and game quality. The company remains committed to a 50% total payout ratio, prioritizing sustainable shareholder returns alongside its goal of entering the top ten global entertainment companies by 2033.

KoEI Tecmo Holdings achieved record‑high financial performance in fiscal year 2025, reporting sales of ¥88.4 billion, operating profit of ¥37.2 billion and net profit of ¥42.8 billion. Growth was driven by 16 new in‑house and collaborative titles across console, PC and mobile platforms, alongside robust royalty income. The Entertainment unit was the primary growth engine, while Amusement and Real Estate contributed modest gains; the Other segment incurred a loss due to venture‑capital expenditures. Management projects FY2026 sales of ¥90 billion and operating profit of ¥32 billion, a slight decline from FY2025, yet maintains a target of cumulative operating profit exceeding ¥100 billion over the fourth medium‑term management period and a dividend of ¥48 per share.

Projected FY2026 earnings anticipate a 29 % drop in Japan sales and a 27 % decline overseas, with unit volumes falling from 14.1 million to 10 million and a three‑point increase in the digital‑download ratio. Cost pressures are expected to rise, with labor costs up 10 % annually and outsourcing/advertising aligned with sales growth. The company will preserve a 50 % payout ratio, aiming for ¥50 per share dividends and a cumulative operating profit above ¥100 billion across the medium‑term period. Strategic priorities include expanding the development pipeline, enhancing global marketing and IP utilization to achieve a FY2026 operating profit of ¥40 billion.

FY2026 also marks significant organizational restructuring, with the global marketing and IP divisions rebranded as Global Marketing Division and Global IP Division to reinforce worldwide business development. Human‑capital investment accelerated, adding 151 employees in FY2025 and 193 new hires in FY2026, complemented by a new Yokohama office. Labor costs reached ¥72.5 billion, while over ¥110 billion is earmarked for future growth initiatives. AI‑driven process innovations have cut multilingual translation and support tasks by more than 50 %, boosting operational efficiency and expanding development capacity.

The nine‑month period from April 1 to December 31, 2021 shows a strong rebound for Koei Tecmo Holdings. Net sales rose to ¥55,327 million from ¥43,949 million in the same period a year earlier, reflecting a 25.9 % increase and an absolute lift of ¥11,378 million. Operating profit climbed to ¥27,127 million, up 40.1 % from ¥19,367 million, while ordinary profit reached ¥38,761 million, a 29.7 % rise. Profit attributable to the parent grew to ¥28,293 million, a 27.4 % increase, and earnings per share rose to ¥170.20 (diluted ¥168.95) versus ¥134.35 (¥133.62) in 2020.

Total assets expanded to ¥252,563 million from ¥190,671 million, driven largely by a jump in current assets and investment securities. Net assets increased to ¥178,079 million, with the equity ratio improving from 86.4 % to 70.4 %. The company’s liquidity strengthened, as cash and deposits grew from ¥11,995 million to ¥31,489 million. Non‑current liabilities surged due to a significant increase in convertible bonds and other long‑term obligations, raising total liabilities from ¥25,541 million to ¥74,484 million.

The forecast for the full fiscal year ending March 31, 2022 projects net sales of ¥71,000 million (up 17.6 %) and operating profit of ¥31,500 million (up 29.1 %). The company expects a dividend of ¥98 per share for the year, reflecting confidence in continued profitability. No changes in significant subsidiaries or accounting policies were reported during the period, and the company maintained a stable share structure with 168 million issued shares.