Gree Holdings.inc. · TSE:3632
Gree Holdings.inc — Q2 FY2025 Earnings Presentation
67 slides from Gree Holdings.inc's earnings presentation, Feb 6, 2025
Slide 1: FY2025 Second Quarter Financial Results
GREE Holdings, Inc. FY2025 Second Quarter Financial Results February 6, 2025 Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 2: Changes to disclosure methods in results briefing materials
Changes to disclosure methods in results briefing materials ⁃ The Investment Business is different from the GREE Group’s other three business segments in terms of its key characteristics and its positioning in the group in that it is easily impacted by market conditions and subject to near- term vol
Slide 3: FY25 2Q Executive Summary
FY25 2Q Executive Summary ◼ Strong performance in the Game and Anime Business, QoQ growth Overview in sales and profit (Three segments) ⁃ Net sales ¥13.7 billion (QoQ +¥1.0 billion), operating profit ¥1.2 billion (QoQ +¥0.5 billion) Game and ◼ Events related to mainstay titles were successful, sales
Slide 4: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 5: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 6: FY25 2Q Financial Results Overview (Consolidated)
1. Financial Results Overview FY25 2Q Financial Results Overview (Consolidated) Net sales ¥15.6 billion, operating profit ¥2.2 billion, EBITDA ¥2.3 billion Ordinary profit and net income rose QoQ on the posting of foreign exchange gains Billions of yen FY25 FY25 FY24 2Q QoQ YoY 1Q 2Q Net sales 15.58
Slide 7: FY25 2Q Financial Results Overview (Three Segments)
1. Financial Results Overview FY25 2Q Financial Results Overview (Three Segments) Net sales ¥13.7 billion, operating profit ¥1.2 billion, EBITDA ¥1.3 billion Sales and operating profit both surpassed expectations Billions of yen FY25 FY25 FY24 2Q QoQ YoY 1Q 2Q Net sales 13.73 1.03 +8% -0.07 -1% 12.7
Slide 8: 2Q Operating Profit Analysis (Three Segments)
1. Financial Results Overview 2Q Operating Profit Analysis (Three Segments) Contribution from sales growth in the Game and Anime Business, profit up QoQ, operating profit of ¥1.2 billion Billions of yen ¥0.53bn increase +1.03 -0.46 -0.04 1.21 Increase in Increase in variable costs fixed costs 0.68 I
Slide 9: 2Q Cost Structure (Three Segments)
1. Financial Results Overview 2Q Cost Structure (Three Segments) Total costs up ¥0.5 billion QoQ, to ¥12.5 billion Billions of yen FY25 FY25 FY24 Factors in change (QoQ) 2Q QoQ YoY 1Q 2Q Decrease on winding down of ramped up promotions for Heaven Burns Red Advertising 0.89 -0.20 -0.29 in the previou
Slide 10: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 11: Progress Toward Achievement of Management Plan Targets
Progress Toward Achievement of Management Plan Targets Senior Vice President, Chief Strategy Officer Sanku Shino Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 12: Sales and Operating Profit (Three Segments)
2. Progress Toward Achievement of Management Plan Targets Sales and Operating Profit (Three Segments) Sales Operating Profit QoQ +8% YoY -1% QoQ +78% YoY +33% Billions of yen Billions of yen 3.6 20.120.3 19.1 19.0 3.1 16.4 16.1 16.3 15.8 16.0 15.4 15.5 15.015.2 15.2 13.713.913.9 13.8 13.3 13.7 2.5 2
Slide 13: Vision for Long-term Growth
2. Progress Toward Achievement of Management Plan Targets Vision for Long-term Growth We target steady growth in core earnings from continuous growth businesses and long-term growth, taking advantage of profit upswings, from long-term investment businesses Long-term Aiming for a business structure t
Slide 14: Sales and Operating Profit (Continuous growth business)
2. Progress Toward Achievement of Management Plan Targets Sales and Operating Profit (Continuous growth business) Sales Operating Profit QoQ +2% YoY +17% QoQ +9% YoY +163% Billions of yen Billions of yen 3.0 2.8 3.1 3.3 3.4 3.3 3.4 3.6 3.5 3.4 3.6 4.0 3.9 2.3 2.4 2.1 2.0 2.0 2.4 2.2 2.5 2.6 -0.6 -0.
Slide 15: Business Conditions (Three Segments)
2. Progress Toward Achievement of Management Plan Targets Business Conditions (Three Segments) Sales and Operating Profit Focus Points Sales: QoQ +8% YoY -1% / Operating Profit: QoQ +78% YoY +33% Billions of yen ◼ Strong performance in all 16.33 businesses, especially the Game 13.80 13.73 and Anime
Slide 16: Earnings Estimates (3Q FY25, Three Segments)
2. Progress Toward Achievement of Management Plan Targets Earnings Estimates (3Q FY25, Three Segments) Sales and Operating Profit Focus Points Sales: QoQ +3% YoY -14% / Operating Profit: QoQ -39% YoY -70% Billions of yen ◼ We expect sales to rise and profit to 16.33 decline QoQ on increases in 13.73
Slide 17: Earnings Forecast and Estimates (Full-Year FY25, Three Segments)
2. Progress Toward Achievement of Management Plan Targets Earnings Forecast and Estimates (Full-Year FY25, Three Segments) Sales and Operating Profit Focus Points Billions of yen Sales: YoY -4% Operating Profit: YoY -30% ◼ We expect sales to decline YoY 66.7 owing to delayed release of new 60.2 titl
Slide 18: Medium-term Targets (Three Segments)
2. Progress Toward Achievement of Management Plan Targets Medium-term Targets (Three Segments) Sales and Operating Profit Focus Points Profit CAGR(25-27)：41% Billions of yen ◼ We target steady growth in the 75.6 Metaverse Business and the DX 66.7 66.4 Business and growth in the Game 58.7 60.2 and An
Slide 19: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 20: Sales and Operating Income by Segment
3. Progress Made in Each Business Segment Sales and Operating Income by Segment Billions of yen FY24 FY25 QoQ YoY 2Q 3Q 4Q 1Q 2Q Game and Sales 10.44 12.95 9.74 9.06 9.93 0.87 +10% -0.50 -5% Anime Operating 1.35 2.60 1.42 0.75 1.23 0.48 +64% -0.12 -9% profit Sales 1.79 1.61 1.88 1.96 2.08 0.12 +6% 0
Slide 21: Earnings Estimates and Forecast by Segment
3. Progress Made in Each Business Segment Earnings Estimates and Forecast by Segment Billions of yen FY24 FY25 3Q FY25 Full-year FY25 2Q Full-year Estimates QoQ Forecast YoY Result Result Sales 10.13 0.20 +2% 43.3 -1.5 -3% 9.93 44.8 Game and Anime Operating profit 0.71 -0.52 -42% 3.8 -3.1 -45% 1.23
Slide 22: FY25 Full-Year Earnings Forecast Progress (as of 2Q FY25)
3. Progress Made in Each Business Segment FY25 Full-Year Earnings Forecast Progress (as of 2Q FY25) 25％ 50％ 75％ Sales 44% ¥19.0bn ¥43.3bn Game and Anime Operating profit 52% ¥2.0bn ¥3.8bn Sales 44% ¥4.0bn ¥9.1bn Metaverse Operating profit 49% ¥0.2bn ¥0.5bn Sales 47% ¥3.5bn ¥7.5bn DX Operating profit
Slide 23: Game and Anime Business
Game and Anime Business Senior Vice President Yuta Maeda Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 24: Sales and Operating Profit
3. Progress Made in Each Business Segment: Game and Anime Business Sales and Operating Profit Sales Operating Profit QoQ +10% YoY -5% QoQ +64% YoY -9% Billions of yen Billions of yen 17.3 16.9 3.6 16.3 15.8 3.3 13.013.2 13.1 12.9 12.8 13.0 2.8 12.512.6 11.9 12.2 2.6 2.6 11.7 2.5 11.3 11.4 2.3 9.8 10
Slide 25: Summary of the Game and Anime Business
3. Progress Made in Each Business Segment: Game and Anime Business Summary of the Game and Anime Business Sales and Operating Profit Focus Points Sales: QoQ +10% YoY -5% / Operating Profit: QoQ +64% YoY -9% Billions of yen ◼ Results surpassed expectations as 12.95 sales and profit rose QoQ on the 20
Slide 26: Live Service Game Business
3. Progress Made in Each Business Segment: Game and Anime Business Live Service Game Business Sales and Operating Profit Focus Points Sales: QoQ +12% YoY -4% / Operating Profit: QoQ +¥0.51bn YoY -1% Billions of yen ◼ Results surpassed expectations as 9.84 sales and profit rose QoQ on the success of
Slide 27: Licensed Game Business
3. Progress Made in Each Business Segment: Game and Anime Business Licensed Game Business Sales and Operating Profit Focus Points Sales: QoQ +34% YoY +5% / Operating Profit: QoQ +4% YoY +29% Billions of yen ◼ Sales rose QoQ due to an increase 0.54 in investment returns related to the 0.49 start of n
Slide 28: Pipeline
3. Progress Made in Each Business Segment: Game and Anime Business Pipeline 4 titles (including console games) in planning and development stages We are also making progress on titles based on major IP that do not yet have release dates ～FY24 (Released) FY25 FY26 FY27～ Confidential Heaven Burns Red
Slide 29: Earnings Estimates (3Q FY25)
3. Progress Made in Each Business Segment: Game and Anime Business Earnings Estimates (3Q FY25) Sales and Operating Profit Focus Points Sales: QoQ +2% YoY -22% / Operating Profit: QoQ -42% YoY -73% Billions of yen 12.95 ◼ We expect profit to decline QoQ on a reactive decline from anniversary promoti
Slide 30: Earnings Forecast and Estimates (Full-Year FY25)
3. Progress Made in Each Business Segment: Game and Anime Business Earnings Forecast and Estimates (Full-Year FY25) Sales and Operating Profit Focus Points Billions of yen Sales: YoY -10% Operating Profit: YoY -38% 53.7 ◼ We have conservatively factored in contribution from new titles taking 44.8 43
Slide 31: Medium-term Targets
3. Progress Made in Each Business Segment: Game and Anime Business Medium-term Targets Sales and Operating Profit Focus Points Profit CAGR(25-27)：9% Billions of yen ◼ We position the Game and Anime 53.7 Business as a long-term investment business, targeting long-term 44.8 43.2 44.7 43.3 growth; unti
Slide 32: Metaverse Business
Metaverse Business Senior Vice President Eiji Araki Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 33: Sales and Operating Profit
3. Progress Made in Each Business Segment: Metaverse Business Sales and Operating Profit Sales Operating Profit QoQ +6% YoY +16% QoQ -32% YoY +¥2.2bn Billions of yen Billions of yen 0.1 2.1 0.1 0.1 0.1 0.1 2.0 2.0 0.1 0.1 1.9 1.8 0.1 1.8 0.1 1.7 1.6 1.6 1.5 0.0 1.5 1.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 34: Summary of the Metaverse Business
3. Progress Made in Each Business Segment: Metaverse Business Summary of the Metaverse Business Sales and Operating Profit Focus Points Sales: QoQ +6% YoY +16% / Operating Profit: QoQ -32% YoY +¥0.22bn Billions of yen ◼ Profit in the platform business was 2.08 firm despite a reactive decline in 1.88
Slide 35: Platform Business (REALITY, Inc.)
3. Progress Made in Each Business Segment: Metaverse Business Platform Business (REALITY, Inc.) Sales and Operating Profit Focus Points Sales: QoQ -1% YoY +15% / Operating Profit: QoQ -1% YoY +93% Billions of yen ◼ Achieved strong earnings from 1.81 1.78 avatars and room features 1.65 1.55 1.49 25.3
Slide 36: VTuber Business (REALITY Studios, inc.)
3. Progress Made in Each Business Segment: Metaverse Business VTuber Business (REALITY Studios, inc.) Sales and Operating Profit Focus Points Sales: QoQ +103% YoY +211% / Operating Profit: QoQ -¥0.07bn YoY -¥0.03bn Billions of yen ◼ Sales rose sharply QoQ on strong 0.29 performance from multiple tal
Slide 37: Earnings Estimates (3Q FY25)
3. Progress Made in Each Business Segment: Metaverse Business Earnings Estimates (3Q FY25) Sales and Operating Profit Focus Points Sales: QoQ +3% YoY +33% / Operating Profit: QoQ +23% YoY +56% Billions of yen ◼ We target continued strong growth 2.08 2.14 in each business, even as we 1.96 1.88 contin
Slide 38: Earnings Forecast and Estimates (Full-Year FY25)
3. Progress Made in Each Business Segment: Metaverse Business Earnings Forecast and Estimates (Full-Year FY25) Sales and Operating Profit Focus Points Billions of yen Sales: YoY +20% Operating Profit: YoY +180% ◼ While sales growth in the platform business is trending below our 9.1 8.7 original fore
Slide 39: Medium-term Targets
3. Progress Made in Each Business Segment: Metaverse Business Medium-term Targets Sales and Operating Profit Focus Points Profit CAGR(25-27)：158% Billions of yen 17.9 ◼ We forecast continued steady growth in the Platform Business and the VTuber Business 12.8 ◼ Expect operating profit of ¥3.3bn in FY
Slide 40: DX Business
DX Business Vice President Kazuhisa Adachi Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 41: Sales and Operating Profit
3. Progress Made in Each Business Segment: DX Business Sales and Operating Profit Sales Operating Profit QoQ +0% YoY +5% QoQ +9% YoY -4% Billions of yen Billions of yen 1.8 0.3 1.8 1.8 1.8 1.7 1.8 1.7 0.3 1.7 1.6 1.7 0.3 1.6 1.6 1.6 1.5 1.5 1.5 1.5 0.3 1.5 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1
Slide 42: Summary of the DX Business
3. Progress Made in Each Business Segment: DX Business Summary of the DX Business Sales and Operating Profit Focus Points Sales: QoQ +0% YoY +5% / Operating Profit: QoQ +9% YoY -4% Billions of yen ◼ In the DX Business as a whole, 1.83 continuing to invest in the 1.75 1.75 1.75 1.66 transition to a r
Slide 43: DX Solutions Business
3. Progress Made in Each Business Segment: DX Business DX Solutions Business Sales and Operating Profit Focus Points Sales: QoQ -2% YoY -12% / Operating Profit: QoQ +51% YoY -31% Billions of yen ◼ Provides SaaS to support the 0.84 marketing efforts of a wide range of 0.78 0.79 0.75 0.73 companies in
Slide 44: DX Consulting Business
3. Progress Made in Each Business Segment: DX Business DX Consulting Business Sales and Operating Profit Focus Points Sales: QoQ +1% YoY +44% / Operating Profit: QoQ +5% YoY +9% Billions of yen ◼ Leveraging the know-how we 0.77 0.75 0.76 have cultivated through the 0.71 planning and development of n
Slide 45: Earnings Estimates (3Q FY25)
3. Progress Made in Each Business Segment: DX Business Earnings Estimates (3Q FY25) Sales and Operating Profit Focus Points Sales: QoQ +1% YoY -3% / Operating Profit: QoQ -13% YoY -33% Billions of yen 1.83 ◼ Expect operating profit to decline 1.75 1.75 1.75 1.77 QoQ on increases in development 16.1%
Slide 46: Earnings Forecast and Estimates (Full-Year FY25)
3. Progress Made in Each Business Segment: DX Business Earnings Forecast and Estimates (Full-Year FY25) Sales and Operating Profit Focus Points Billions of yen Sales: YoY +6% Operating Profit: YoY -13% 7.5 ◼ We have designated FY25 as a 7.3 6.8 period wherein we will make 6.7 investments aimed at re
Slide 47: Medium-term Targets
3. Progress Made in Each Business Segment: DX Business Medium-term Targets Sales and Operating Profit Focus Points Profit CAGR(25-27)：31% Billions of yen 11.0 ◼ We will continue to invest in the transition from a project-based 8.9 business structure with slow growth to a recurring-earnings- 7.5 type
Slide 48: Investment Business
Investment Business Senior Vice President, Chief Financial Officer Toshiki Oya Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 49: Sales and Operating Profit
3. Progress Made in Each Business Segment: Investment Business Sales and Operating Profit Sales Operating Profit QoQ +675% YoY +324% QoQ +¥1.85bn YoY +¥1.14bn Billions of yen Billions of yen 4.1 3.4 2.8 3.1 2.9 2.4 2.3 1.8 1.8 1.3 1.1 1.0 1.0 0.8 0.8 0.8 0.8 0.5 0.6 0.5 0.5 0.5 0.4 0.4 0.3 0.4 0.2 0
Slide 50: Summary of the Investment Business
3. Progress Made in Each Business Segment: Investment Business Summary of the Investment Business Sales and Operating Profit Focus Points Sales: QoQ +675% YoY +324% / Operating Profit: QoQ +¥1.85bn YoY +¥1.14bn Billions of yen ◼ Sales and profit rose on sizable 1.85 dividend distributions from funds
Slide 51: Summary of the Investment Business
3. Progress Made in Each Business Segment: Investment Business Summary of the Investment Business Long-term profit contribution, albeit with some year-to-year volatility Valuation & translation adjustments, which are the source of earnings, remain stable Long-term profit trends in the Investment Bus
Slide 52: Rise in unrealized value
3. Progress Made in Each Business Segment: Investment Business Summary of the Investment Business Quarterly change in operational investment securities investment valuation Investment status in 2Q Billions of yen Book value Valuation of investments ◼ Investment in 4 VC funds in Japan 36.3 and the Un
Slide 53: Status of Investment Results
3. Progress Made in Each Business Segment: Investment Business Status of Investment Results Staggering investments over long periods of time results in staggered timing of investment return phases and high investment returns Valuation of investments by investment period Net multiples and IRR Billion
Slide 54: Fund Investment Management Business (GP)
3. Progress Made in Each Business Segment: Investment Business Fund Investment Management Business (GP) Sales and Operating Profit Focus Points Sales: QoQ +10% YoY -4% / Operating Profit: QoQ +136% YoY +138% Billions of yen ◼ Secured stable management fee 0.30 revenue through continuous 0.28 0.29 0.
Slide 55: Fund Investment Management Business (GP)
3. Progress Made in Each Business Segment: Investment Business Fund Investment Management Business (GP) Total AUM of Fund Investment Management Business Focus Points Based on total commitment Billions of yen ◼ Total commitment, on which 50.2 49.6 management fee income is based, 47.4 48.0 46.6 has re
Slide 56: Contents
Contents 1. Financial Results Overview 2. Progress Toward Achievement of Management Plan Targets 3. Progress Made in Each Business Segment 4. Appendix Copyright © GREE Holdings, Inc. All Rights Reserved.
Slide 57: 2Q Operating Profit Analysis (Consolidated)
4. Appendix: Financial Results Overview 2Q Operating Profit Analysis (Consolidated) Profit grew QoQ on sizable contribution from the Investment Business; operating profit of ¥2.3 billion Billions of yen ¥2.38bn increase +2.64 -0.11 -0.15 2.25 Increase in variable costs Increase in fixed costs Operat
Slide 58: 2Q FY25 Cost Structure (Consolidated, variable and fixed costs)
4. Appendix: Financial Results Overview 2Q FY25 Cost Structure (Consolidated, variable and fixed costs) Total costs up ¥0.3 billion QoQ, to ¥13.3 billion Billions of yen FY25 FY25 FY24 Factors in change (QoQ) 2Q QoQ YoY 1Q 2Q Decrease on winding down of ramped up promotions for Heaven Burns Red Adve
Slide 59: 2Q FY25 Cost Structure (Consolidated, cost of sales and SG&A)
4. Appendix: Financial Results Overview 2Q FY25 Cost Structure (Consolidated, cost of sales and SG&A) Billions of yen FY25 FY25 FY24 2Q QoQ YoY 1Q 2Q Rental charges 0.51 -0.03 -0.06 0.53 0.57 Labor costs 2.37 0.05 0.00 2.32 2.37 Others 4.18 0.34 0.56 3.84 3.62 Cost of sales 7.06 0.37 0.50 6.69 6.56
Slide 60: 2Q FY25 Balance Sheet (Consolidated)
4. Appendix: Financial Results Overview 2Q FY25 Balance Sheet (Consolidated) Billions of yen FY25 FY25 FY24 2Q QoQ YoY 1Q 2Q Current assets 110.1 5.7 1.1 104.4 109.0 Non-current assets 16.0 -0.2 -0.8 16.2 16.9 Total assets 126.1 5.4 0.3 120.7 125.8 Current liabilities 23.3 5.4 7.6 17.8 15.7 Non-curr
Slide 61: Business Structure and Basic Plan
4. Appendix: Investment Business Business Structure and Basic Plan Business Structure Basic plan for the Investment Business ◼ Continuous, staggered investment timing Fund investment ✓ Make continuous, steady investments regardless of management business market conditions and accumulate investment a
Slide 62: Earnings Structure
4. Appendix: Investment Business Earnings Structure Fund investment management business (GP) LP investment Stable medium-to-long- Achieved Contingency Earnings upside term earnings, albeit with upon exit fees some near-term volatility Achieved Dividends, Resulting from upon exit Gains on sales Valua
Slide 63: Overview of Total AUM (Based on Investee Valuation)
4. Appendix: Investment Business Overview of Total AUM (Based on Investee Valuation) Total AUM: 80.5 billion, down ¥0.6 billion QoQ on distributions Billions of yen 81.1 +1.4 -4.7 +2.7 80.5 Fund Increase by Decrease by capital call Revaluation, Investment distributions etc. Startup Investment Others
Slide 64: Group Headcount
4. Appendix Group Headcount Number of employees 1,640 1,610 1,641 1,597 1,553 784 771 787 836 824 176 145 161 156 161 413 429 428 354 329 17 18 17 16 16 154 154 157 145 133 96 93 91 90 90 2Q 3Q 4Q 1Q 2Q FY24 FY25 Game and Anime Metaverse DX Investment Common Others Notes: ● Figures for the DX Busine
Slide 65: Sustainability
4. Appendix Sustainability GREE Group is continuously working to develop the Internet industry and solve various social issues. Please see our corporate website for more information. Solving social issues Helping to create a Building a safe and through the Internet diverse society secure Internet so
Slide 66: Additional Information Regarding Business Segment Classifications
4. Appendix Additional Information Regarding Business Segment Classifications Segment classification Subsegment names Main subsidiaries and details Browser games Parts of GREE, Inc. Long-term Live Service Game Business WFS, Inc. Game and Excluding investment Anime browser Licensed Game Business GREE
Slide 67: Forward-looking statements notice
◼ This document includes forecasts, which are based on currently available information. Actual performance may differ due to various factors. ◼ When producing this document, we were careful to avoid errors or omissions, but the accuracy and completeness of the provided information is not guaranteed.