FY2026-H1 returned to operating profitability, but achieving the full-year plan remains heavily dependent on H2.

FY2026-H1 revenue was ¥4,969.244 million, up 57.2% from ¥3,161.458 million in the same period of the previous fiscal year. Operating results turned from a loss of ¥648.046 million in the same period of the previous fiscal year to a profit of ¥39.582 million, while the operating margin also improved from approximately negative 20.5% to 0.8%. However, ordinary results were a loss of ¥95.422 million and interim net income attributable to owners of the parent was a loss of ¥125.675 million, meaning that the return to operating profitability has not translated directly into bottom-line profitability.

The company’s FY2026 full-year forecasts are revenue of ¥17,000 million and operating profit of ¥1,000 million. Progress calculated from H1 results was 29.2% for revenue and 4.0% for operating profit, with operating profit particularly low for the point at which half the fiscal year has ended. On a simple calculation, H2 must add revenue of ¥12,030.756 million and operating profit of ¥960.418 million. This implies average monthly H2 revenue of approximately ¥2,005 million, compared with approximately ¥828 million in H1, and an H2 operating margin of approximately 8.0%, compared with 0.8% in H1. As details of seasonality and the contribution from new releases have not been sufficiently disclosed, Q3 results need to be reviewed by separating the standalone quarter’s revenue and operating profit.

Operating profit returned to positive territory, while H1 included foreign exchange gains of ¥61.257 million and an ¥192.417 million loss on the valuation of crypto assets, recorded as non-operating expenses. These non-operating factors may have weighed on ordinary results, but as of Q2 the company had not disclosed the profit impact by factor or its underlying earnings power excluding crypto-asset valuations from Q3 onward. In Q3, the focus should be not only on whether operating profit remains positive, but also on the degree of improvement in ordinary results and net income, including non-operating results.

The games business accounted for 91.6% of H1 revenue, and the recovery in revenue depends on contributions from new titles. In Q3, key items to monitor will be whether the full-year forecast is revised, whether the required H2 revenue and operating profit are achievable, and whether full-year forecasts for ordinary profit and net income are newly disclosed. In particular, standalone quarterly results and the company’s explanations will need to clarify whether the return to operating profitability reflects a temporary boost from a new release or a sustainable recovery capable of absorbing the organic decline in existing titles.