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Revision of earnings forecasts3676DIGITAL HEARTS HOLDINGS Co.,Ltd.Information and Communications, Services and Others

Notice Regarding the Recognition of Extraordinary Losses (Consolidated and Non-Consolidated) and Differences Between Non-Consolidated Results and Previous-Year Results

In connection with the DHX business, the Company recognized a ¥238 million goodwill impairment loss on a consolidated basis and a ¥172 million loss on valuation of shares in affiliates on a non-consolidated basis. In addition, non-consolidated results for the fiscal year ending March 2026 fell substantially below the previous-period results, and net income was negative.

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Revised forecast

Fiscal year ending March 2026 · Full year
Net Sales—→—million
-42.8%
Operating profit—→—million
-94.3%
Ordinary income—→—million
-91.5%
Profit attributable to owners of the parent—→—million
-215.3%

The bar length represents the relative magnitude of change, based on the item that changed the most in this document.

Reason for the revision

The business environment changed, including a downward trend in marketing costs among the Company's major customer, a Chinese game developer, increasing uncertainty regarding the acquisition of new projects and incentive revenue. As a result, the Company reviewed the business plan for the DHX business. Non-consolidated results fell below the previous year due to a decrease in dividend income from subsidiaries and management advisory fees, among other factors.

Details and amount of extraordinary loss

Goodwill impairment loss (consolidated): ¥238 million; loss on valuation of shares in affiliates (non-consolidated): ¥172 million

Previous-period resultsOperating revenue: ¥2,756 million; operating income: ¥1,262 million; ordinary income: ¥1,316 million; net income: ¥304 million; basic earnings per share: ¥13.67
Consolidated / non-consolidatedConsolidated/non-consolidated
Revised forecast
ItemDetails
Net Sales-1,179
Operating profit-1,191
Ordinary income-1,205
Profit attributable to owners of the parent-655
Fiscal Period CoveredFiscal year ending March 2026
Period CoveredFull year
Previous-period resultsOperating revenue: ¥2,756 million; operating income: ¥1,262 million; ordinary income: ¥1,316 million; net income: ¥304 million; basic earnings per share: ¥13.67
Reason for the revisionThe business environment changed, including a downward trend in marketing costs among the Company's major customer, a Chinese game developer, increasing uncertainty regarding the acquisition of new projects and incentive revenue. As a result, the Company reviewed the business plan for the DHX business. Non-consolidated results fell below the previous year due to a decrease in dividend income from subsidiaries and management advisory fees, among other factors.
Details and amount of extraordinary lossGoodwill impairment loss (consolidated): ¥238 million; loss on valuation of shares in affiliates (non-consolidated): ¥172 million
Consolidated / non-consolidatedConsolidated/non-consolidated
Items this document does not state (3)
Net income per sharePublication date of previous forecastDividend forecast revision

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The business environment changed, including a downward trend in marketing costs among the Company's major customer, a Chinese game developer, increasing uncertainty regarding the acquisition of new projects and incentive revenue. As a result, the Company reviewed the future plans for the DHX business. In addition, non-consolidated results fell below the previous year due to a decrease in dividend income from subsidiaries and management advisory fees, among other factors.

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Notice Regarding the Recognition of Extraordinary Losses (Consolidated and Non-Consolidated) and Differences Between Non-Consolidated Results and Previous-Year Results | DIGITAL HEARTS HOLDINGS Co.,Ltd. (3676) timely disclosure | Komori