GREE Holdings Inc (3632) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 were JPY 12.94 billion, with an operating loss of JPY 0.13 billion and negative EBITDA of JPY 0.07 billion, mainly due to valuation losses in the Investment Business, while Game and Anime, Metaverse, and DX businesses outperformed internal forecasts.

• Heaven Burns Red launched strongly in China, but overall Game and Anime segment sales declined quarter-on-quarter and year-over-year.

• Foreign exchange losses of JPY 1.4 billion from yen appreciation impacted ordinary and net profit quarter-on-quarter.

• Aggressive investments continued in Game and Anime, Metaverse, DX, and Investment Businesses.

Financial highlights

• Net sales decreased 8% QoQ and 18% YoY to JPY 12.94 billion.

• Operating profit was -JPY 0.13 billion, down JPY 1.56 billion QoQ and JPY 1.36 billion YoY.

• Net income was -JPY 1.64 billion, a decline of JPY 3.07 billion QoQ and JPY 2.83 billion YoY, impacted by foreign exchange losses.

• EBITDA was -JPY 0.07 billion, down JPY 1.57 billion QoQ and JPY 1.41 billion YoY.

• Net loss per share was JPY 9.61, compared to earnings per share of JPY 6.93 in the prior year.

Outlook and guidance

• Q2 FY2025 is expected to see sales and profit growth in the Game and Anime business due to anniversary events for main titles.

• Full-year FY2025 estimates remain in line with previous forecasts, with slightly lower Game and Anime sales but higher overall operating profit; however, consolidated earnings forecast was suspended due to rapid changes in the business environment, especially impacting the Investment Business.

• Medium-term targets focus on steady growth in continuous growth businesses and long-term investment in Game and Anime, with profit CAGR of 41% from FY25–27 (excluding Investment Business).

• Dividend for the fiscal year ending June 30, 2025, has not yet been determined.