V-shaped recovery from the next fiscal year onward through group reorganization and cost reductions

「“Notice Regarding the Revision of Consolidated Earnings Forecasts and Withdrawal of the Medium-Term Management Plan” dated 14 February 2025」

「In the second quarter from July to September 2024, 株式会社ライブドア (“livedoor”) returned to profitability as planned, recording operating profit of ¥31.977 million, its first profitable quarter since the acquisition. In the second half, we will continue to diversify earnings through further progress in PMI (Post-Merger Integration) for the livedoor business, reduce costs through greater efficiency and rationalisation of operations, and steadily advance the contribution of new businesses.」

「During the consolidated fiscal year, the Group achieved record-high sales through synergies between 株式会社ライブドア and the Company’s existing business assets, as well as contributions from 株式会社フロムワン. 株式会社フロムワン was created when CWS Brains株式会社, which became a wholly owned subsidiary effective 31 March 2023, was absorbed in a merger effective 1 November 2023 and changed its corporate name to 株式会社シーソーゲーム. However, amid the impact of advertising market conditions and delays in the timing of certain solutions-business wins, the Company made proactive upfront investments, primarily to accelerate measures to diversify earnings and reduce its dependence on advertising revenue, which had been a core element of its medium-term plan. As a result, it recorded its first consolidated operating loss since listing and a net loss attributable to owners of the parent.」

「In the media business, a substantial decline in internet advertising rates that became pronounced from the beginning of the year began to affect results from the start of the fiscal year. Although the decline in rates bottomed out in the second quarter and a sustained recovery trend has been confirmed, the pace of recovery through the third quarter has remained below the Company’s expectations.」

「Although conditions are improving, the pace of profit recovery to date fell below initial expectations due to the delayed recovery in the advertising market. To improve margins from the second half onward, the company is actively pursuing further cost reductions through greater operating efficiency as PMI progresses, measures to increase advertising revenue, development of new functions and services, and the acquisition of new revenue sources by leveraging its existing management assets, a central pillar of its medium-term plan.」

「However, during the cumulative consolidated first quarter, the Company was still in the process of recovering earnings toward a V-shaped recovery from the short-term factors that had pressured profit in the previous consolidated fiscal year. Since the earnings outlook was weighted toward the second half, progress was broadly in line with the plan.」

「Measures to improve profitability from the fiscal year ending March 2024 onward will be based on substantial increases in sales and profit resulting from 株式会社ライブドア’s full-year contribution, recovery in affiliate-site earnings through measures to eliminate cannibalisation, full-year contributions from major information-solution service contracts and progress in systems-solution services against the backdrop of a persistent DX trend. In line with the Group’s basic policy for organisational reorganisation described above, we will also significantly reduce costs and contain them over the long term by reallocating human resources across the Group and implementing various optimisation measures.」

「Measures to improve profitability from the next fiscal year onward will include substantial increases in sales and profit in the media business from 株式会社ライブドア’s full-year contribution, improved profitability at affiliate sites through measures to eliminate cannibalisation, full-year contributions from major information-solution service contracts won during the second quarter consolidated accounting period, and progress in systems-solution services against the backdrop of a persistent DX trend. Based on these factors, we will significantly reduce costs by reallocating human resources across the Group and implementing various optimisation measures in line with the Group’s basic policy for organisational reorganisation described above. Through this series of measures, we will ensure a V-shaped recovery from the next fiscal year onward.」