| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥265.9B | ¥237.8B | +11.9% |
| Operating Income / Operating Profit | ¥36.9B | ¥28.3B | +30.5% |
| Ordinary Income | ¥45.8B | ¥32.2B | +41.9% |
| Net Income / Net Profit | ¥29.9B | ¥25.4B | +17.4% |
| ROE | 2.1% | 1.7% | - |
For FY2026 Q1 (Jan–Mar 2026), revenue was ¥265.9B (YoY +¥28.1B +11.9%), operating income was ¥36.9B (YoY +¥8.6B +30.5%), ordinary income was ¥45.8B (YoY +¥13.5B +41.9%), and net income attributable to owners of the parent was ¥17.0B (YoY +¥0.9B +5.6%). While double-digit top-line growth and improvement in operating-stage profitability were notable, the limited growth in parent-company attributable profit was highlighted. Operating margin improved to 13.9% from 11.9% in the prior-year period, approximately +1.9 percentage points, reflecting operating leverage from SG&A efficiency. At the ordinary-income level, non-operating income—interest income of ¥5.1B and foreign exchange gains of ¥3.6B—contributed, expanding the ordinary income margin to 17.2%. However, net income attributable to owners of the parent decreased slightly in margin to 6.4% (prior 6.8%), and non-controlling interests attributable of ¥12.9B continued to compress profit allocation to the parent.
[Revenue] Revenue of ¥265.9B rose +11.9% YoY, achieving double-digit growth driven by steady performance in the game operation business and successful event initiatives. As a single-segment company, segmental breakdowns are not disclosed, but accounts receivable increased to ¥126.5B from ¥101.3B a year earlier (+24.9%), suggesting expanded monetization of existing titles and collection delays from new events. Cost of sales was ¥147.1B, held at 55.3% of sales, producing gross profit of ¥118.9B (gross margin 44.7%), slightly compressed from ¥114.6B (gross margin 48.2%) in the prior year but remaining at a high level.
[Profit & Loss] Operating income of ¥36.9B represented a substantial YoY increase of +30.5%, with SG&A reduced to ¥82.0B from ¥86.2B (−4.9%), allowing operating leverage to operate effectively. SG&A ratio improved to 30.8% from 36.3% a year earlier, an improvement of roughly 5.5 percentage points, indicating notable improvement in core profitability. Non-operating income totaled ¥9.0B, led by interest income of ¥5.1B (prior ¥4.2B) and foreign exchange gains of ¥3.6B, driving ordinary income to ¥45.8B (+41.9%). Meanwhile, corporate taxes and other of ¥15.8B (effective tax rate 34.5%) and non-controlling interests attributable of ¥12.9B (prior ¥9.3B) together deducted ¥28.7B before profit allocation, limiting net income attributable to owners of the parent to ¥17.0B (+5.6%). The ratio of parent-company attributable profit to pre-tax profit of ¥45.7B was 37.2%, low, with the consolidated subsidiaries’ non-controlling structure constraining owner-attributable profits. Exceptional items were minor, consisting only of impairment losses of ¥0.06B. Comprehensive income was ¥14.7B, including a −¥15.2B loss in the foreign currency translation adjustment. In conclusion, while results showed revenue and profit growth, the increase in parent-company net income did not fully reflect operating improvements, and the rise in non-controlling interests represents a structural issue in profit allocation.
[Profitability] Operating margin improved to 13.9% from 11.9% a year earlier, approximately +1.9 percentage points, with compressions in SG&A ratio enhancing operating-stage profitability. Ordinary income margin expanded to 17.2% from 13.6% (+3.6 percentage points), but reliance on non-operating income (interest and FX gains) is high and sustainability should be monitored. Net income margin attributable to owners of the parent was 6.4%, down from 6.8% (−0.4 percentage points), with increased non-controlling interests reducing parent-company attribution. ROE remained low at 2.1% (calculation: net income attributable to owners of the parent ¥17.0B ÷ average parent equity during the period ¥1144B). [Cash Quality] Non-operating income ratio was 3.4% (non-operating income ¥9.0B ÷ revenue ¥265.9B), indicating a meaningful contribution sensitive to interest and FX market movements. Days sales outstanding for accounts receivable extended to approximately 174 days (accounts receivable ¥126.5B ÷ revenue ¥265.9B × 365 days × 3/12), suggesting collection delays. [Investment Efficiency] Total asset turnover was low at 0.16x (revenue ¥265.9B ÷ total assets ¥1696.5B × annualization factor), attributable to abundant cash holdings. [Financial Soundness] Equity ratio was 85.4%, slightly down from 89.3% a year earlier, but the capital structure remains highly conservative. Current ratio was 686% (current assets ¥1518.3B ÷ current liabilities ¥221.3B), indicating extremely strong short-term liquidity, with cash and deposits of ¥1233.8B far exceeding current liabilities. Debt-to-equity multiple was 0.17x, placing the company in a top-tier position for financial stability.
Cash flow statement data is undisclosed, but balance-sheet movements suggest cash trends: cash and deposits were ¥1233.8B, down ¥70.9B from ¥1304.7B a year earlier, but still plentiful. Current liabilities rose sharply to ¥221.3B from ¥153.7B (+¥67.6B, +44.0%), of which accounts payable increased to ¥73.0B (prior ¥58.2B) (+¥14.8B) and other current liabilities increased to ¥131.5B (prior ¥89.3B) (+¥42.1B). This may reflect extended payment terms for event operating costs and subcontracting fees, or accumulation of advance-payment liabilities. Accounts receivable rose to ¥126.5B from ¥101.3B (+¥25.2B), implying collection delays accompanying revenue expansion. While working capital bottlenecks may have temporarily reduced on-hand funds, operating-stage margin improvements support a view of resilient underlying cash generation. A −¥15.2B comprehensive income reduction from foreign currency translation adjustments occurred, and FX translation valuation adjustments to net assets may also have impacted cash balances.
Core recurring earnings stem from game operation sales and associated operating income, and operating profitability derived from the core business is stable. One-off items were negligible (impairment losses ¥0.06B) and had limited impact on core operations. Non-operating income of ¥9.0B represented 3.4% of sales, below the 5% threshold, but was driven by interest income of ¥5.1B and FX gains of ¥3.6B, which are sensitive to market conditions, interest rates, and FX volatility—raising sustainability considerations. Comparing ordinary income of ¥45.8B with net income attributable to owners of the parent of ¥17.0B reveals an approximate −62.9% gap, primarily due to increased non-controlling interests attributable of ¥12.9B (prior ¥9.3B) and corporate taxes of ¥15.8B. From an accrual perspective, accounts receivable grew +24.9%, outpacing revenue growth of +11.9%, suggesting collection delays or timing shifts in event-related billing, and warranting attention to cash collection quality. Comprehensive income totaling ¥14.7B was only slightly different from parent-company net income of ¥17.0B, mainly impacted by other comprehensive income fluctuations from foreign currency translation adjustments.
DPS for the period was ¥0 (prior ¥0). Payout ratio was 0%, and the policy of prioritizing internal reserves continues. With abundant cash of ¥1233.8B and a light debt profile, the company has substantial financial capacity to initiate dividends or share buybacks in the future; however, the dividend amount for the fiscal year ending Dec 2026 remains undecided, and clarification of shareholder return policy is a key point of interest going forward.
Profit allocation risk due to non-controlling interests: Non-controlling interests attributable of ¥12.9B represent 43.1% of this period’s net income of ¥29.9B, and the parent-company attribution ratio remains at 37.2%. The high non-controlling ownership in consolidated subsidiaries structurally constrains growth in net income attributable to owners of the parent, limiting potential improvements in ROE and EPS.
Accounts receivable collection delay risk: Accounts receivable of ¥126.5B increased +24.9% YoY and DSO lengthened to approximately 174 days. This suggests delayed timing of event-related billing collections or extended platform payment terms, raising concerns about cash flow quality. If working capital normalization does not progress, operating cash flow may not match operating income improvements.
Ordinary-income volatility from dependence on non-operating income: Of the ¥9.0B non-operating income (3.4% of revenue), interest income ¥5.1B and FX gains ¥3.6B are dominant and sensitive to market conditions. Adverse changes in interest rates or currency movements could reduce non-operating income, lowering ordinary income margin down to operating-stage levels and increasing profit volatility.
Profitability & Return
| Metric | Our Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.9% | 6.2% (4.2%–17.2%) | +7.7pt |
| Net Margin | 11.2% | 2.8% (0.6%–11.9%) | Delta |
Operating margin exceeds the industry median by +7.7pt, placing profitability in the upper range. Net margin is 11.2% (6.4% on a parent-company attributable net income basis) and is high versus the industry, but considering the non-controlling ratio, parent-company attribution is limited.
Growth & Capital Efficiency
| Metric | Our Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 11.9% | 20.9% (12.5%–25.8%) | -9.0pt |
Revenue growth of +11.9% is below the industry median of +20.9%, placing the company at a somewhat moderate growth pace within the IT & communications sector.
※Source: Company compilation
Whether operating-stage profitability improvement is sustainable: Operating margin improved to 13.9% (≈+1.9pt) driven by SG&A compression and operating leverage. Key monitoring items are whether SG&A efficiency can be maintained to keep operating margin in double digits, and whether increases in event operating costs or gross margin fluctuations could reverse the gains.
Non-controlling interest structure and growth in parent-company net income: Non-controlling interests increased to ¥12.9B from ¥9.3B (+38.7%), maintaining a structure where operating improvements are not fully reflected in parent-company net income. Improving the parent-company attribution ratio from 37.2% or reviewing the consolidation scope could be pivotal for shareholder value enhancement.
Normalization of working capital and dependence on non-operating income: Extended DSO of approximately 174 days and reliance on non-operating income (3.4% of sales) affect earnings quality. Normalization of working capital and the stability of ordinary income if FX/interest contributions decline are key observation points for upcoming quarters.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.