Can the sharp decline in MAU be offset by higher ARPPU?

The main issue for the interim period of the fiscal year ending December 2026 is the sharp decline in users of the company’s core service. According to the earnings presentation, Manga Kingdom’s MAU fell 29.5% year on year, while paying-user ARPPU rose 13.2% and consumption ARPPU rose 9.4%. Spending per user has improved, but the impact of the decline in user numbers is outweighing the increase in average spending. Whether this trend continues into the third quarter will therefore be important.

Interim revenue in the Platform segment was ¥5,088.8 million, down 2.7% year on year. Since the decline in revenue was smaller than the decline in MAU, a higher proportion of heavy users and improved ARPPU appear to have provided some support. However, the company does not disclose the absolute number of MAU or the number of paying users. In the next results announcement, it will be important to check whether additional information is provided that separates average spending from user volume, including absolute MAU, the number of paying users, and the retention of heavy users.

On the cost side, advertising and promotion expenses fell by approximately ¥281 million year on year, and Platform operating profit improved from an operating loss of ¥50.3 million in the same period of the previous year to operating profit of ¥265.1 million. However, this improvement was driven more by lower advertising investment and greater operating efficiency than by revenue growth. The sustainability of earnings will depend on whether MAU can recover while advertising spending remains controlled, and whether cost-effectiveness can be maintained if advertising investment is increased again.

In the third quarter, it will be important to check whether the MAU decline has narrowed from 29.5%, whether ARPPU growth has been sustained, and whether platform revenue has returned to year-on-year growth. It will also be worth watching whether specific metrics, such as the number of users acquired and retention rates, are disclosed for social media marketing using TikTok and Instagram and advertising aimed at heavy users.