Supplementary Explanatory Materials for the First Half of the Fiscal Year Ending September 2026 | CRI Middleware Co.,Ltd. (3698) timely disclosure

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Contents of this document

Supplementary materials to the earnings reportFirst half of the fiscal year ending September 20269 items taken from the company’s own explanation

Financial Results Figures (The key points of this material are explained below)

Net Sales¥1,849 million-0.4%

Operating profit¥301 million-22.3%

Ordinary income¥321 million-17.8%

Net income¥222 million-18.1%

Selling, general and administrative expenses¥880 million

Gross Profit Margin

Rate63.9

Year-on-year change (points)2.6

Operating profit margin

Rate16.3

Year-on-year change (points)-4.6

Results for the three months of the current quarterSecond-quarter standalone revenue of ¥929 million and operating profit of ¥179 million

Full-year earnings forecast

Net Sales

¥3,910 million

Operating profit

¥600 million

Ordinary income

¥616 million

Profit attributable to owners of the parent

¥462 million

Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。

Net Sales47.3%

Operating profit50.2%

Ordinary income52.2%

Interim net income attributable to owners of the parent48.1%

What the company explained in this material

Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.

Game – Middleware/Tools-¥23 million
Game – Overseas-¥17 million
Game – Audio production+¥12 million
Game business segment profit-¥42 million
Mobility+¥179 million
Embedded systems-¥137 million
Cloud Solutions-¥36 million
Enterprise business segment profit-¥44 million

New initiatives

Launch of next-generation LipSync
Launch of CRI DietCoder Bridge
Expansion into the Indian two-wheeler market through Glassco's collaboration with Hagiwara Electronics
Development of next-generation products, including D-Amp Driver × GaN
Plan to complete development and launch new cloud solutions products in the second half
Begin paying interim dividends from the fiscal year ending September 2026

Key KPIsA metric the company considers important as a management benchmark.

Number of licenses using CRIWARE10,581 Licensing
Number of licenses using ADXAT1,945 10,000 licenses
Number of licenses using Glassco430 10,000 licenses
Domestic CRIWARE adoption rate (smartphone games)38 %
Domestic CRIWARE adoption rate (console games)30 %

Segment results

Gaming Business
Net Sales¥937 million
Year on year against the same period last year-1.2%
Segment profit¥86 million
Year-on-year change in profit-32.6%
Enterprise Business
Net Sales¥911 million
Year on year against the same period last year+0.5%
Segment profit¥214 million
Year-on-year change in profit-17.1%
Middleware/Tools
Net Sales¥684 million
Year on year against the same period last year-3.4%
Audio production
Net Sales¥252 million
Year on year against the same period last year+5.1%
Embedded systems
Net Sales¥296 million
Year on year against the same period last year-31.7%
Mobility
Net Sales¥493 million
Year on year against the same period last year+57.0%
Cloud Solutions
Net Sales¥121 million
Year on year against the same period last year-23.2%

Medium-term management plan targets

Target fiscal yearFY2030 (fiscal year ending September 2030)

Net Sales¥10 billion

Operating profit margin20%

Comparison with actual resultsFY2025 revenue of ¥3.4 billion and operating margin of 16%

Market Size / Share

2024 global game content market
Scale¥31.0 trillion
Top 5 Indian two-wheeler manufacturers by production volume
Scale20.31 million units
Share of Japanese manufacturers in the Indian two-wheeler market
Scale26%
Share of Indian manufacturers in the Indian two-wheeler market
Scale64%

Number of employees

Number of Employees172 people

Change during the periodUp 1 from 171 people in the same period of the previous year

Annual Dividend

Fiscal year ending September 2026 forecast¥27 per share

Interim Dividend¥13 per share

Year-end dividend¥14 per share

Payout ratio

30.5% (with a consolidated payout ratio of 30% as a guideline)

Contents of this document
Item	Details
Document type	Supplementary materials to the earnings report
Fiscal Period Covered	First half of the fiscal year ending September 2026
Net Sales	¥1,849 million (YoY -0.4%)
Operating profit	¥301 million (YoY -22.3%)
Ordinary income	¥321 million (YoY -17.8%)
Net income	¥222 million (YoY -18.1%)
Gross Profit Margin	Rate 63.9 / Year-on-year change (points) 2.6
Operating profit margin	Rate 16.3 / Year-on-year change (points) -4.6
Selling, general and administrative expenses	¥880 million
Results for the three months of the current quarter	Second-quarter standalone revenue of ¥929 million and operating profit of ¥179 million
Full-year earnings forecast	Net Sales ¥3,910 million / Operating profit ¥600 million / Ordinary income ¥616 million / Profit attributable to owners of the parent ¥462 million
Progress against full-year forecast	Net Sales 47.3% / Operating profit 50.2% / Ordinary income 52.2% / Interim net income attributable to owners of the parent 48.1%
Segment results	Segment Gaming Business / Net Sales ¥937 million / Year on year against the same period last year -1.2% / Segment profit ¥86 million / Year-on-year change in profit -32.6%, Segment Enterprise Business / Net Sales ¥911 million / Year on year against the same period last year +0.5% / Segment profit ¥214 million / Year-on-year change in profit -17.1%, Segment Middleware/Tools / Net Sales ¥684 million / Year on year against the same period last year -3.4%, Segment Audio production / Net Sales ¥252 million / Year on year against the same period last year +5.1%, Segment Embedded systems / Net Sales ¥296 million / Year on year against the same period last year -31.7%, Segment Mobility / Net Sales ¥493 million / Year on year against the same period last year +57.0%, Segment Cloud Solutions / Net Sales ¥121 million / Year on year against the same period last year -23.2%
Breakdown of Factors Affecting the Change	Factors Game – Middleware/Tools / Amount -¥23 million, Factors Game – Overseas / Amount -¥17 million, Factors Game – Audio production / Amount +¥12 million, Factors Game business segment profit / Amount -¥42 million, Factors Mobility / Amount +¥179 million, Factors Embedded systems / Amount -¥137 million, Factors Cloud Solutions / Amount -¥36 million, Factors Enterprise business segment profit / Amount -¥44 million
Key KPIs	Indicator name Number of licenses using CRIWARE / Value 10,581 Licensing / Year on year against the same period last year Not disclosed, Indicator name Number of licenses using ADXAT / Value 1,945 10,000 licenses / Year on year against the same period last year Not disclosed, Indicator name Number of licenses using Glassco / Value 430 10,000 licenses / Year on year against the same period last year Not disclosed, Indicator name Domestic CRIWARE adoption rate (smartphone games) / Value 38 % / Year on year against the same period last year Not disclosed, Indicator name Domestic CRIWARE adoption rate (console games) / Value 30 % / Year on year against the same period last year Not disclosed
Number of employees	Number of Employees 172 people / Change during the period Up 1 from 171 people in the same period of the previous year
Medium-term management plan targets	Target fiscal year FY2030 (fiscal year ending September 2030) / Net Sales ¥10 billion / Operating profit margin 20% / Comparison with actual results FY2025 revenue of ¥3.4 billion and operating margin of 16%
Annual Dividend	Fiscal year ending September 2026 forecast ¥27 per share / Interim Dividend ¥13 per share / Year-end dividend ¥14 per share
Payout ratio	30.5% (with a consolidated payout ratio of 30% as a guideline)
Market Size / Share	Market 2024 global game content market / Scale ¥31.0 trillion, Market Top 5 Indian two-wheeler manufacturers by production volume / Scale 20.31 million units, Market Share of Japanese manufacturers in the Indian two-wheeler market / Scale 26%, Market Share of Indian manufacturers in the Indian two-wheeler market / Scale 64%
New initiatives	Launch of next-generation LipSync, Launch of CRI DietCoder Bridge, Expansion into the Indian two-wheeler market through Glassco's collaboration with Hagiwara Electronics, Development of next-generation products, including D-Amp Driver × GaN, Plan to complete development and launch new cloud solutions products in the second half, Begin paying interim dividends from the fiscal year ending September 2026

Items this document does not state (10)

Self-assessment against the planUnit price and quantity metricsNumber of stores and locationsAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookFinancial targetsAcquisition of treasury sharesCapital expendituresOrders received and order backlogKey points of the Q&A

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.

Revenue and operating profit declined because the same period of the previous year benefited from special demand associated with the launch of new karaoke models. For operating profit, higher costs, including upfront investments and research and development expenses, in both the Game and Enterprise businesses contributed to the decline. At the same time, Glassco licensing revenue in the Mobility business, voice-recording projects for China, and the recovery of the domestic and Chinese Game businesses supported results.

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