Crypto asset income supports ordinary profitability, while the operating loss is the key issue for FY2026

For the nine months from 1 September 2025 to 31 May 2026, representing the cumulative 3Q of FY2026 ending August, revenue was ¥1.726 billion while the operating loss was ¥1.884 billion. By contrast, ordinary income was ¥657 million and net income attributable to owners of the parent was ¥934 million, with non-operating income and expenses and other items offsetting the operating loss. Accordingly, it is difficult to conclude that the profitability of the core business has improved based solely on the headline ordinary profit and net profit.

The most recent interim period also showed a significant divergence, with revenue of ¥1.172 billion and an operating loss of ¥1.053 billion compared with ordinary income of ¥3.111 billion and interim net income attributable to owners of the parent of ¥2.567 billion. The interim presentation stated that cumulative crypto asset disposal gains were ¥6.293 billion, including ¥1.680 billion in Q2 alone, while crypto asset valuation losses were ¥1.962 billion. Because disposal gains and valuation losses are being recorded at the same time, the quality of earnings cannot be assessed unless the annual results separately show realized gains on disposals, gains and losses from period-end valuations, gains on donated assets and other items.

FY2025 ending August, the previous fiscal year, covered five months and recorded an operating loss of ¥922 million, ordinary income of ¥781 million and net income attributable to owners of the parent of ¥526 million. As the operating loss has continued in the current cumulative 3Q, it is still too early to say that operating earning power excluding the effects of crypto asset transactions and valuations has been established, even if ordinary income has increased. In particular, it will be important to see whether crypto asset disposal gains will recur at a similar scale in the next fiscal year and how continued disposals will affect the holdings balance and future sources of earnings.

At the next annual results for FY2026 ending August, the first items to check will be whether operating income exceeded ¥0 and what level of core-business profit or loss remained after excluding non-operating income and extraordinary gains and losses. In addition, whether the company can disclose annual crypto asset disposal gains, valuation losses, gains on donated assets and gains and losses on investment securities, and explain the contributions to ordinary income of ¥657 million and net income of ¥934 million by separating recurring from non-recurring income, will influence the assessment for the following fiscal year.