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Earnings presentation materials3793Drecom Co.,Ltd.Information and Communications, Services and Others

Financial Results Presentation for the Second Quarter of the Fiscal Year Ending March 2027

In the first half of the fiscal year ending March 2027, operating profit, ordinary profit and net profit turned positive, supported by the solid performance of the 2 major titles and a reduction in losses from unprofitable titles. For the full-year forecast, revenue was revised downward, but profit forecasts including operating profit were revised upward on the expectation of improved profitability.

Worth reading
84Important
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
300
¥ million (increase in full-year operating profit forecast)
Wording
Conditional
How definitive the wording is.

Contents of this document

Earnings presentation materialsSecond quarter of the fiscal year ending March 20279 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥8,328 million+1.1%
Operating profit¥659 million
Ordinary income¥595 million
Net income¥502 million
Operating profit margin7.9 %
Results for the three months of the current quarter
Net Sales
¥3,973 million
Operating profit
¥136 million
Ordinary income
¥83 million
Net income
¥179 million
Operating profit margin
3.4 %
Full-year earnings forecast
Net Sales
¥17,500 million
Operating profit
¥1,300 million
Ordinary income
¥1,150 million
Net income
¥900 million
EBITDA
¥2,200 million
Annual Dividend
5 Yen
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 Sales47.6
Variable costs44.9
Fixed Costs48.4
Advertising expenses40.9
R&D Expenses28.7
Depreciation and amortization62.3
Game development costs capitalized37.3
Operating profit50.7
EBITDA55.5
Ordinary income51.8
Net income55.8
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
First-half operating profit exceeded expectations
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Quarter-on-quarter variance in operating profit
Impact of lower revenue-285
Increase in variable costs due to product mix changes-52
Labor Costs-7
Outsourcing expenses-33
Advertising expenses-146
Communication expenses8
Depreciation and amortization-32
Game development costs capitalized171
R&D Expenses7
Other expenses16
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
In 3Q, profit will be built up through second-anniversary initiatives; in 4Q, seasonal factors and increased investment for growth in the next fiscal year are expected
New initiatives
  • Conducted the first collaboration with third-party IP on Wizardry Variants Daphne
  • Announced 3 titles to be published through DRECOM CREATORS STUDIO
  • Announced the port and release of the SFC version of Wizardry VI: The Forbidden Magic Pen
  • Launched the new online lottery service Kuru Kuji
  • Plans to transition to an organisation built around the use of AI, reduce fixed costs and strengthen talent recruitment
Key KPIsA metric the company considers important as a management benchmark.
  • Wizardry Variants Daphne cumulative downloads worldwide400 10,000 downloads
  • Wizardry Variants Daphne first-half revenue year-on-year12.9 %
  • Number of published titles25 items
    Year on year against the same period last year0.0%
  • Number of games in operation9 Title
  • Number of Steam wish-list registrants10 10,000 people
Unit price and quantity metricsThese figures show sales broken down by price and volume.
Wizardry Variants Daphne
Number of new installsNew installations: acquisition efficiency from advertising investment remained an issue
Active usersIncreased due to retention of existing users and the return of dormant users
ARPUFavorable year on year, but did not reach the high level targeted
Segment results
Gaming Business
Net Sales
¥7,890 million-0.6%
Operating profit
¥1,159 million
Content business
Net Sales
¥438 million+35.2%
Operating profit
¥-500 million
Medium-term management plan targets
By the fiscal year ending March 2031Expand the scale of revenue from proprietary IP while building a system for continuously creating and developing IP
Sales GrowthCAGR of 20% or more
Operating profit margin15% or higher
Annual Dividend
Annual dividend per share
5 Yen
Contents of this document
ItemDetails
Document typeEarnings presentation materials
Fiscal Period CoveredSecond quarter of the fiscal year ending March 2027
Net Sales¥8,328 million (YoY +1.1%)
Operating profit¥659 million
Ordinary income¥595 million
Net income¥502 million
Operating profit margin7.9 %
Results for the three months of the current quarterNet Sales ¥3,973 million / Operating profit ¥136 million / Ordinary income ¥83 million / Net income ¥179 million / Operating profit margin 3.4 %
Full-year earnings forecastNet Sales ¥17,500 million / Operating profit ¥1,300 million / Ordinary income ¥1,150 million / Net income ¥900 million / EBITDA ¥2,200 million / Annual Dividend 5 Yen
Progress against full-year forecastNet Sales 47.6 / Variable costs 44.9 / Fixed Costs 48.4 / Advertising expenses 40.9 / R&D Expenses 28.7 / Depreciation and amortization 62.3 / Game development costs capitalized 37.3 / Operating profit 50.7 / EBITDA 55.5 / Ordinary income 51.8 / Net income 55.8
Self-assessment against the planFirst-half operating profit exceeded expectations
Segment resultsGaming Business Net Sales ¥7,890 million (YoY -0.6%) / Operating profit ¥1,159 million / Content business Net Sales ¥438 million (YoY +35.2%) / Operating profit ¥-500 million
Breakdown of Factors Affecting the ChangeQuarter-on-quarter variance in operating profit Impact of lower revenue -285 / Increase in variable costs due to product mix changes -52 / Labor Costs -7 / Outsourcing expenses -33 / Advertising expenses -146 / Communication expenses 8 / Depreciation and amortization -32 / Game development costs capitalized 171 / R&D Expenses 7 / Other expenses 16
Key KPIsWizardry Variants Daphne cumulative downloads worldwide 400 10,000 downloads, Wizardry Variants Daphne first-half revenue year-on-year 12.9 %, Number of published titles 25 items, Number of games in operation 9 Title, Number of Steam wish-list registrants 10 10,000 people
Unit price and quantity metricsWizardry Variants Daphne Number of new installs New installations: acquisition efficiency from advertising investment remained an issue / Active users Increased due to retention of existing users and the return of dormant users / ARPU Favorable year on year, but did not reach the high level targeted
Assumptions Underlying the Business OutlookIn 3Q, profit will be built up through second-anniversary initiatives; in 4Q, seasonal factors and increased investment for growth in the next fiscal year are expected
Medium-term management plan targetsBy the fiscal year ending March 2031 Expand the scale of revenue from proprietary IP while building a system for continuously creating and developing IP / Sales Growth CAGR of 20% or more / Operating profit margin 15% or higher
Annual DividendAnnual dividend per share 5 Yen / Interim and Year-End Breakdown Not disclosed
New initiativesConducted the first collaboration with third-party IP on Wizardry Variants Daphne, Announced 3 titles to be published through DRECOM CREATORS STUDIO, Announced the port and release of the SFC version of Wizardry VI: The Forbidden Magic Pen, Launched the new online lottery service Kuru Kuji, Plans to transition to an organisation built around the use of AI, reduce fixed costs and strengthen talent recruitment
Items this document does not state (12)
Gross Profit MarginSelling, general and administrative expensesNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookFinancial targetsPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogMarket Size / ShareKey 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.

In the first half, operating profit exceeded expectations due to contributions from the 2 major titles, a lower payment processing fee rate and more efficient use of advertising expenses. The main factors behind the upward revision to the full-year profit forecast are improved profitability resulting from changes in the sales mix and lower payment processing fees, together with more efficient use of advertising expenses.

How to read this page

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Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Financial Results Presentation for the Second Quarter of the Fiscal Year Ending March 2027 | Drecom Co.,Ltd. (3793) timely disclosure | Komori