Q1 rebounded sharply, but with no full-year guidance, FY2027-H1 will focus on the sustainability of earnings

Consolidated revenue in FY2027-Q1 was ¥5,126 million, up 121.6% from ¥2,313 million in the same period of the previous year. Operating profit was ¥693 million, ordinary profit was ¥652 million, and net income attributable to owners of the parent was ¥787 million. All three profit measures turned profitable from the operating loss of ¥1,698 million, ordinary loss of ¥1,907 million and net loss of ¥1,167 million recorded in the same period of the previous year. In FY2027-H1, the first benchmarks for measuring the sustainability of the recovery will be whether operating profit remains positive in Q2 alone and whether first-half cumulative operating profit exceeds the ¥693 million recorded in Q1.

The increase in Q1 profit reflected contributions from multiple businesses, including revenue of ¥3,537 million and segment profit of ¥1,282 million in the Games and Comics business, revenue of ¥847 million and profit of ¥59 million in the Entertainment and Lifestyle business, and revenue of ¥733 million and a loss of ¥98 million in the AI and DX Solutions business. However, in Games and Comics, the contribution of new titles, strong performance by existing titles, cost reductions and lower research and development expenses all contributed at the same time. The Q1 summary does not break down the relative contributions of revenue growth and cost normalization by amount.

The company has not disclosed a full-year earnings forecast for the fiscal year ending March 2027, stating that appropriate and reasonable estimates are difficult because the short-term operating environment for Games and Comics is highly volatile and investment in other businesses will continue. As a result, progress against a conventional full-year forecast cannot be calculated. In FY2027-H1, it will be necessary to examine not only actual revenue and operating profit, but also title-by-title trends in Q2, the consolidated contribution from acquired companies, and the levels of advertising and research and development expenses. In addition, no quarterly cash flow statement was prepared for Q1, leaving the conversion of profit into cash as an issue to be verified through disclosures from H1 onward.