First-quarter progress indicates full-year upside, but repeatability must be tested in the first half

In the first quarter from April to June 2026, revenue was ¥129,524 million, up 33.6% year on year; operating profit was ¥45,285 million, up 63.3%; and profit for the quarter attributable to owners of the parent was ¥32,574 million, up 64.2%. The operating margin rose 6.4 percentage points from approximately 28.6% in the year-earlier period to approximately 35.0%, showing that margin improvement as well as higher revenue drove performance.

Progress against the full-year forecast was 25.6% for revenue and 31.7% for operating profit. Compared with the simple 25% time-elapsed benchmark at the end of the first quarter, revenue was broadly on plan, while operating profit was 6.7 percentage points ahead. The full-year forecasts are ¥505,000 million in revenue, ¥143,000 million in operating profit and ¥101,000 million in net profit, making the simple half-year benchmarks ¥252,500 million, ¥71,500 million and ¥50,500 million, respectively.

However, FY2026 actual revenue was ¥493,677 million and operating profit was ¥135,891 million, meaning the company plan calls for only 2.3% revenue growth and 5.2% operating profit growth year on year. First-quarter growth of 33.6% in revenue and 63.3% in operating profit was well above the growth rates in the full-year plan. The interim results will therefore need to distinguish between continued high growth and temporary concentration caused by the timing of content launches.

The first-quarter explanation of results was limited mainly to a qualitative statement that flagship content in the digital entertainment business performed well. The company did not disclose contribution amounts by title for revenue, downloads, active users or average spending per paying user. At the interim results announcement, we will check not only the half-year benchmarks of ¥252,500 million in revenue and ¥71,500 million in operating profit, but also whether the operating margin can maintain the 28.3% implied by the full-year forecast and whether the full-year forecasts are changed from ¥505,000 million and ¥143,000 million.