FAN Communications sharply cuts full-year outlook and withdraws medium-term management plan as AI-driven changes in search weigh on results

FAN Communications, Inc. announced a significant downward revision to its full-year forecast for the fiscal year ending December 2026, lowering projected revenue to ¥7.33 billion and operating profit to ¥120.1 million. First-half results were revenue of ¥3.434 billion and operating profit of ¥489 million, representing a substantial divergence from the previous forecast. The dividend forecast remains unchanged. The information can be confirmed in the earnings summary and the notice regarding the revision of the earnings forecast. The results were announced on 10 August 2026.

The core CPA Solutions business was affected by sluggish transaction volumes and reduced advertising budgets among major advertisers. The growing use of generative AI-powered search functions also reduced organic traffic to SEO-dependent sites, putting downward pressure on revenue and profit. The company regards the shift away from conventional search driven by AI as a turning point for the digital marketing market as a whole.

The strategic businesses posted higher revenue, but their segment loss widened. Influencer marketing transaction volumes increased due to a rise in large-scale projects. In LINE marketing, the company plans to shift strategy in the second half in response to advances in AI tools. In game publishing, higher revenue was offset by the challenge of a rising cost ratio.

The targets for the fiscal year ending December 2027, the final year of the medium-term management plan, have been withdrawn, but the basic policies and direction of the growth strategy remain unchanged. The company explained that some elements were removed because it judged that continuing to disclose the plan would not contribute to investment decisions, while noting that assessing the likelihood of achieving the targets would be difficult.