Presenter: Shingo Okamura, President & CEO Tomoko Namba, Executive Chairman
Okamura:Today, in addition to the financial results, we have also disclosed the planned management structure following the General Meeting of Shareholders in June.
We have announced that I will become the Executive Chairman, and Tomoko Namba plans to become the President & CEO.
So, with me today, we have Namba-san, and we would like to have her say a few words later.
Now, I would like to begin by explaining the FY2025 results.
First, let us start with the overall results.
As disclosed, the FY2025 results are as follows: Revenue was 147.7 billion yen, Operating Profit (IFRS) was 18.7 billion yen, and Operating Profit (Non-GAAP) was 28.1 billion yen.
With business progress and agile action towards balance sheet management, we are on track to achieve commitments outlined in the mid term strategy period from FY2024-specifically, Non-GAAP Operating Profit 15.0 billion yen for FY2026-as well as the new ROE targets set during FY2025.
Updating, defining, and executing strategies regarding our business portfolio and business creation will be our top priority from FY2026 onwards.
Regarding this, details and progress will be continuously shared with the capital market.
Regarding the Financial Results Summary, there is nothing specific to highlight.
Regarding the segments, up to Q3 FY2025, we had the Sports Business and Smart City Related Businesses under New Businesses and Others. I would like to note the segment updates that we have combined into the Sports & Smart City Business from the FY2025 Full Year Earnings Report.
As for Revenue by Segment, I will explain each business in detail later in the business section.
However, as there have been segment updates, please check the comparison between the former and new segments on this page, as well as on the following page for Profit/Loss by Segment.
Also, there is nothing specific to mention regarding the Cost and Expense Breakdown.
Now, before moving on to the overview of each business, although we have already explained this on several occasions, I would like to go through Capital Allocation, including our initiatives so far.
First, in the mid term strategy starting from FY2024, we set a 3 Year Key Focus, including the increase of ROE.
As we explained on March 2 of this year, in the latter half of FY2025, we thoroughly reviewed the capital structure based on the progress of the mid term strategy, performance trends, and the voices and requests from the capital markets.
And, to achieve substantial and structural improvements in capital efficiency, we prioritized the actions to reinforce balance sheet management, as previously disclosed.
Please look at the left side.
Regarding these actions, specifically the reduction of policy shareholdings, we executed the sale of investment securities in March 2026. The policy shareholdings were significantly reduced to 24.5 billion yen from 88.9 billion yen, bringing it to about 10% of net assets.
For enhancing shareholder returns, we revised the basic dividend policy. We have changed the basic policy to target a DOE of approximately 3%.
Also, we plan to pay a regular cash dividend of 66 yen per share for FY2025. Furthermore, we have announced the repurchase and cancellation of own shares.
A repurchase of own shares up to 50.0 billion yen is underway, and 10.7 billion yen was executed in FY2025.
And all shares repurchased through this program will be cancelled.
Next, please look at the right side.
We aim for phased increase of the ROE target to establish a structure capable of consistently achieving an ROE of 8%.
For FY2025, we have achieved 8%.
Now, regarding the Basic Approach to Capital Allocation.
For more details, please refer to our disclosure released on February 27 of this year.
To deliver the ROE targets we have set, capital allocation follows the priorities to balance business growth and our responsibility to the capital market.
Especially, growth investments and strategic investments, including M&A, to achieve sustainable mid to long term growth is the highest priority in investments at this point. Regarding M&A in particular, we will proactively pursue M&A opportunities; top-tier focus areas include sports & smart cities, live entertainment, and IP & anime-related businesses, both domestic and international.
Also, we are already implementing the initiatives to enhance shareholder returns to optimize capital levels and improve capital efficiency, as I explained earlier.
Furthermore, we intend to make flexible utilization of borrowings for future growth investments depending on their characteristics. To that end, to reduce surplus cash and deposits and create future borrowing capacity, full repayment of non-consolidated borrowings was completed by the end of FY2025. Also, with the establishment of new commitment lines, I believe we are now in a position to enable more flexible utilization.
Now, continuing on, I would like to explain the overview & future approach of each business.
First, regarding the Game Business.
FY2025 results exceeded the upper limit of our initial guidance, despite the reaction from a major hit in FY2024, particularly during the first half-this is the Pokémon Trading Card Game Pocket-as we have explained previously.
Also, Q4 virtual currency consumption for Pokémon Trading Card Game Pocket decreased compared to Q3, which had various initiatives; however, as you can see from this graph, performance remained solid, supported by seasonality in other titles.
Now, regarding this Game Business, the importance of Pokémon Trading Card Game Pocket remains unchanged.
Average MAU for Q4 was approximately 24 million, with about 60% of the virtual currency consumption coming from international.
As we have mentioned previously, we have been working to improve the retention rate of existing users. By promoting various initiatives such as updates, including those on the occasion of the one-year anniversary, we are improving the steadiness of MAU.
In addition to that, as stated at the very bottom, we believe that growing activities are crucial. We are also running multi-layered initiatives, including in-game events and promotions. We will make firm efforts so that users can enjoy this game even more.
To achieve this, it is not just us, but as you know, all three partners-The Pokémon Company, Creatures Inc., and DeNA-will continue to work closely together to ensure that everyone can enjoy this game for a long time.
Now, this Game Business is extremely important to us.
We aim to strengthen business structure by leveraging strengths such as live operations, AI utilization, and partnerships, and capture global growth opportunities.
Please look at the left side, the Mobile Game Market Environment. Both Japanese and global markets still have huge potential.
However, between the Japanese market and the global market, especially North America, development methods and user preferences differ significantly, so we believe we must have a solid strategy to compete globally.
Under these circumstances, looking at the right side, our mid to long term strategy.
As mentioned previously, we are working on conventional development, but in addition to that, we consider the establishment of soft launch strategy to be a key focus.
I would like to supplement this soft launch strategy on the next page.
In any case, we aim for strategic expansion by combining our experience in IP title development and live operations with achievements in soft launches, leveraging the experience and assets from both approaches.
There has been high interest in Pokémon Trading Card Game Pocket, and we have dedicated much of our explanation to it. But over the 2+ years, alongside live operations of existing titles, we have rolled out numerous projects & prototypes followed by extensive validations through low-cost, rapid cycles.
Please look at the left. This is the image of soft launch development.
For the conventional development, we spent a lot of time and investment until the release. However, with this soft launch, we put to market at a small scale at an early stage.
After that, we run cycles of feedback & improvement. We actively utilize AI for analysis and other new initiatives in this process, making it highly efficient.
As a result, we believe we can keep total development costs significantly lower than conventional development.
And regarding the current status, after various validations, multiple titles are entering the main development stage after clearing proprietary milestones.
And we want to bring these to the full-scale operation phase. This phase means a situation where, for example, if we proactively use marketing expenses, the game will gain traction, and as a result, start to grow in revenue.
We expect to launch 1-2 titles in the full-scale operation phase in FY2026.
Furthermore, for this soft launch approach, we aim to establish a structure to consistently launch multiple titles as part of our mid term outlook, so we would like to continue explaining our progress thoroughly to you at these briefings.
Now, moving on to the Live Streaming Business.
For the Live Streaming Business, we have continued to focus on improving profitability since H2 FY2024.
You can see this by looking at the graph below.
Please look at the right side. We were able to generate solid profit, and the profit structure has significantly improved.
Going forward, while continuing necessary growth investments such as individual product enhancements, focus will also be placed on maintaining and increasing revenue.
For Pococha, we are driving measures to maintain and improve the excitement of the community, such as promoting initiatives to retain and enhance the usage of both new and core users.
Furthermore, although there was a moderate decrease in monthly unique paying users from the previous fiscal year's level, the number and activity of core users remained, and we continued thorough cost control, which resulted in securing the profit I explained earlier.
And regarding IRIAM, DAU performed favorably continuously.
Monthly unique paying users are stable, and we will continue aiming to increase revenue and achieve early profitability.
Now, regarding the Sports & Smart City Business.
For FY2025, we saw solid performance, particularly for professional baseball.
Going forward, we expect to generate around 3.0 billion yen annual segment profit, supported by smart city initiatives moving beyond prior investment phase.
Also, importantly, we will leverage business experience and assets in live entertainment to create synergies across the Group by.
For example, we have introduced a new app since the 2025 season, called BAYSTAR STAR GUIDE, which utilizes DeNA Accounts and DeNA Pay as the foundation.
Likewise, we aim not only to enhance convenience and build a customer base using the foundation, but also to create synergies across the Group by including smart city initiatives. We intend to deliver solid results in this area as well.
Highlighting the professional baseball, updates to the spectator experience and other initiatives led to the 2025 season's home game attendance reaching 2.36 million, which means setting a new team record again.
As I mentioned previously, various revenues, such as ticket sales, merchandise/food & beverage, sponsorships, etc. comprehensively contributed to the year-on-year revenue increase, illustrating a clean growth trajectory.
And regarding smart cities, we are advancing initiatives in areas such as Yokohama and Kawasaki.
In Yokohama, as already announced, BASEGATE YOKOHAMA KANNAI opened on March 19, where we have two directly managed facilities.
One is THE LIVE Supported by Daiwa Jisho. This is one of Japan's largest permanent live viewing arenas.
The first floor features a variety of restaurants surrounding a large screen, and the second floor houses the BAYSTORE Flagship YOKOHAMA, the BayStars merchandise shop.
We expect revenue from these stores, along with advertising income.
We are off to a strong start, with visitor numbers exceeding initial projections by approximately 30%.
We will focus on increasing revenue through continuous operational improvements.
By screening not only team home games but also visitor games, basketball, soccer, and live music events, we aim to generate year-round excitement for everyone.
And the other one is Wonderia Yokohama Supported by Umios, an immersive experience facility.
You can fully enjoy it just by coming in, walking around, and enjoying the visuals. But our unique feature is that by installing a smartphone app, the facility offers a game-like exploration experience where visitors can acquire information about the creatures they encounter, and actually, children are very engrossed in completing missions by finding specific creatures.
This Wonderia App, which leverages DeNA's expertise in games and AI, has been more popular than expected, and has achieved a usage rate of nearly 100% among visitors.
Going forward, while firmly securing visitor numbers and enhancing the experiential value, we will ensure the facility will create excitement as a new entertainment spot in Yokohama.
Now, moving on to the Healthcare & Medical Business.
We have continued thorough review and promotion of initiatives towards future growth, with prioritization & focus on structural optimization, particularly in the Medical area.
We believe things have generally fallen into place in that sense, so although it took longer than we initially expected, we are targeting profitability in FY2026 for the segment.
As you can see from the graph on the right, I think you can observe some signs of this.
Starting with the Medical Area, we accelerated prioritization & focus from FY2025, amid business model evolution and changes in the business, as announced.
We decided to focus on the three core areas: namely, Join in Japan, which is a medical professional communication app; Global Expansion for Join; and Join Mobile Clinic, which combines Join with portable medical devices.
Therefore, by focusing spot contracts specifically on those that contribute to strengthening the three core areas; while revenue decreased YoY, and significant progress has been made in fixed cost reductions.
As you can see from the graph on the right, we have built a solid, lean structure.
Building on that, looking at the left, for Join in Japan, since many medical institutions are using Join, we are evolving, including digital transformation for medical settings, to expand our business domain.
Regarding Global Expansion, as shown on the right graph, we have reviewed global structures.
Within that, demand remains solid, and we want to firmly expand our business by concentrating on regions where telemedicine has taken root and is generating revenue, like in Brazil.
For Join Mobile Clinic, there was the impact of initial revenue from a major project in FY2024, but there were no such major projects in FY2025.
However, the pipeline for contributions in FY2026 is progressing steadily.
Next is the Healthcare Area.
In the Healthcare Area, there are two businesses.
One on the left is the Data Use Business.
For this, we enhanced its sales and other operational structure and solutions to meet diversifying and deepening customer needs.
As you can see in the graph, revenue is growing and we achieved significant results with transaction amount per customer among the major clients (top 20 companies) increasing by 25% year on year.
And on the right, the Data Health Business.
Since municipalities are our customers here, they have a Data Health plan formulation year. FY2023 was such a year, and we aim for stable growth by leveraging the customer base built during the Data Health plan formulation year. You can see from this graph that revenue has steadily emerged in FY2025.
Furthermore, orders from municipal national health insurance for FY2025, business exceeded the orders from the previous year.
Since we have finally established a foundation to firmly generate revenue in these two areas, we will continue to work towards targeting profitability in FY2026 for the Healthcare & Medical Business.
As we have consistently emphasized, our AI initiatives are crucial for us at DeNA in various ways, including our future evolutions.
Specifically, as the triangle on the right showing the 3 Perspectives in DeNA Group's
AI-ALL-IN, we have been working on AI-Driven All-Company Productivity Enhancement, AI-Driven Enhancement of Competitiveness in Existing Businesses, and AI New Business Creation & Growth.
The key point is that productivity is improving explosively with AI.
We are in a situation where what used to be done by one person can now be done with the output of 6 or 10 people, meaning our production volume is increasing.
Creating a situation where we can firmly leverage this increased production capacity-essentially shifting personnel to new businesses and new domains-is an urgent task for us.
We believe this will hold significant meaning for future AI New Business Creation & Growth, and we will continue working on it.
Next, I would like to explain the Guidance for FY2026.
Our FY 2026 Consolidated Financial Results Forecast is Revenue of 154.0 billion yen, and Operating Profit (IFRS and Non-GAAP) of 15.0 billion yen.
For the Game Business, the significant initial performance of Pokémon Trading Card Game Pocket in the previous FY, primarily in the first half, has been taken into account.
Also, as I mentioned in the Capital Allocation section earlier, we are in a period of strategic evolution. Investments necessary for future growth are expected to increase year on year. Additionally, Other income (expenses) do not include any one-off items.
Furthermore, Profit for the period attributable to owners of the parent has not been disclosed, as it is difficult to provide a reasonable estimate, given the need for a careful assessment of the impacts from GO Inc., an associate accounted for using the equity method that is currently applying for listing.
In any case, updating, defining, and executing strategies regarding our business portfolio and business creation will be our top priority for FY2026.
We are currently comprehensively updating strategies and plans, and we will promptly disclose any matters that require public announcement in a timely manner, based on the progress of our strategic review and business developments.
And as I mentioned at the beginning, there will be changes in directors following the General Meeting of Shareholders.
We are making steady progress in key focus areas under the current mid term strategy ending in FY2026, and within that, we have been working on structural strengthening of businesses, focusing on ROE, and improving capital efficiency.
In particular, as I mentioned earlier, in the latter half of FY2025, we made solid efforts, particularly to reinforce balance sheet management.
I believe the foundation is now in place to firmly achieve results and grow from here. However, there will be rapid and significant changes in the business environment. Amidst this, to ensure sustainable growth over the mid to long term, we believe we must significantly accelerate management speed to urgently evolve organizational and business models to align with the future market conditions. At this phase, we believe that it is the best for the founder, Tomoko Namba, to drive the strategic evolution as CEO, while I myself, as the Chairman, focus on accelerating our strategic initiatives through taking on the roles such as external relations with various stakeholders, including the government, local governments, and industry organizations. Accordingly, we have decided to change the roles of the two representative directors, following the General Meeting of Shareholders in June 2026.
Also, we plan to revise the executive compensation system to enhance awareness of shareholder-oriented management.
That concludes my explanation. Now, I would like to hand this over to Namba-san.
Namba:
Thank you.
I am scheduled to take on the role responsible for execution at the Board of Directors meeting following the General Meeting of Shareholders in June.
I believe there are five key points.
First is to structurally strengthen mainstay businesses.
Another point is that we will actively pursue M&A as a strategic option for business expansion; search for opportunities through a robust pipeline, execute projects, and establish a structure for PMI.
The third point is New Businesses. For this, we definitely want to accelerate new business trials. We also want to increase trials that are in connection with the Japan & US startups. Of course, internal trials are already accelerating in areas such as AI, and we will aggressively continue these as well.
Next is Diversifying Target Income.
We will define business success not only as earnings from DeNA's business, but also define equity-based gains as essential outcomes, such as dividend income and the gains from partner collaborations, and capital gains from exits to the best owners after scaling.
Thus, I believe we will be placing the utmost importance on bottom-line profit. Although I used the word 'exits,' as we increase the number of trials, it also implies making firm decisions to discontinue when necessary. That meaning is also included.
And the final point is organizational evolution. We consider ourselves an Eternal Venture and want to stay a venture company, meaning we place the highest value on people taking on challenges. We will evolve the organization into a structure centered on the philosophy
"people should leverage the organization, not the other way around." We want to function as such a platform and empower those who have entrepreneurship.
Alongside this, we must regain the speed and velocity that will outpace even a startup born just yesterday.
This part about organizational change is still conceptual, but I believe it will be a crucial evolution.
I intend to accomplish this organizational evolution over a roughly three-year period, with the mindset of completely rebuilding the company from scratch.
Further details to be provided at the Q1 FY2026 Operating Results Briefing in August, where I can give a more specific explanation.
We look forward to your continued support.