Presenter: Shingo Okamura, President & CEO
Hello, everyone. Thank you for joining us today.
I will now present the financial results for the third quarter of FY2025. First, let's review our progress through this quarter.
The first part is the highlights of the third quarter of FY2025. There are 4 key highlights.
First, as you can see at the bottom here, the FY2025 Q3 results were: Revenue 31.3 billion yen, IFRS Operating Profit -8.1 billion yen, and Non-GAAP Operating Profit 2.1 billion yen.
Next, we made a revision to the guidance for FY2025. Regarding Non-GAAP Operating Profit, we have made an upward revision considering business progress up to Q3, and other factors. On the other hand, for IFRS Operating Profit, in addition to this, we are reflecting an impairment loss of 9.6 billion yen on goodwill related to Allm in Q3.
Third, regarding the progress of Action to Implement Management that is Conscious of Cost of Capital and Stock Price, including the capital allocation approach, an updated announcement is scheduled within this fiscal year.
Fourth, based on the outline announced on November 10, 2025, we are currently promoting a comprehensive review of capital allocation to achieve substantial and structural improvements in capital efficiency. Regarding the return of profits through dividends, we will change our basic dividend policy to a DOE-based approach starting from FY2025.
Regarding the financial results summary, there's nothing specific to highlight here.
Regarding Revenue by Segment, I would like to explain the details later in the business section.
Also, regarding profit/loss by segment, I would like to touch upon one point.
As mentioned, in the Healthcare & Medical Business, following the start of this fiscal year, plans have been thoroughly reviewed, especially within the Medical area where prioritization & focus aimed at profitability improvement have been advanced.
As a result, an impairment loss of 9.6 billion yen related to Allm's goodwill was recorded under Other Expenses in Q3.
Regarding the Cost and Expence Breackdown, it is as you see here, and I believe that there are no items of particular note.
Please note that we will partially change our reporting segments starting from the FY2025 full-year earnings report. Specifically, Smart City-related businesses, which are currently included in the "New Businesses and Others" segment, will be combined with the Sports Business to form the "Sports & Smart City Business."
As I will explain later, with the upcoming grand opening of BASEGATE YOKOHAMA KANNAI and the start of operations at two directly managed facilities, our Smart City-related businesses are entering a full-scale phase. This change reflects both qualitative factors and the quantitative thresholds for reporting segments under IFRS.
Now, let's move on to a detailed explanation of each business.
First is the Game Business.
The graph on the left shows virtual currency consumption, and the right shows segment revenue and profit.
Virtual currency consumption of Pokémon Trading Card Game Pocket slightly increased quarter-on-quarter. On the other hand, other games have dropped slightly. Therefore revenue and profit on the right side have declined slightly.
In any case, we believe we must pay the closest attention to Pokémon Trading Card Game Pocket, and please understand that this title has continued to progress steadily through Q3, consistent with the upper end of the range of the previous earnings guidance.
Also, we released the role-playing and social deduction game Fire Emblem Shadows on September 25, 2025, and EDGE POKER on January 27, 2026.
I would like to look at Pokémon Trading Card Game Pocket in a bit more detail.
Regarding the Q3 FY2025 results, the average MAU was approx. 28 million, and about 60% of the virtual currency consumption came from international. New user acquisition remains steady.
As explained previously, we are firmly recognizing challenges and taking action with the aim to enhance user retention rate and login frequency.
To ensure that maintaining and growing MAU progresses through these efforts, we have implemented an update under the theme of making card collecting more accessible and enjoyable for even more players, specifically to enrich the collection experience.
Additionally, by continuously releasing in-game events, new booster packs, and other creative updates, the title is providing enjoyment to a wide global audience. As this remains a vital title, we will continue to work firmly alongside The Pokémon Company and Creatures Inc., while sharing our respective roles.
Next is the Live Streaming Business.
Regarding this segment, we have continued our focus on improving profitability since H2 FY2024 and delivered steady results. If you look at the business profit/loss on the right side, I believe you can see that we have firmly secured profit for this fiscal year.
Looking at the services individually, first regarding Pococha, I believe we have been firmly executing initiatives to retain and enhance the usage for both new and core users.
While there was a slight decrease in monthly unique paying users quarter-on-quarter, we actually succeeded with large events in Q3, such as at the end of the year, and the number and activity of core users in particular remained stable.
In any case, we have improved profitability by continuing thorough cost control measures, including a review of marketing initiatives and other fixed cost reductions, from H2 FY2024 onward.
Next is the Sports Business.
As you can see, professional baseball has entered the off-season, but centering on the professional baseball business, it has delivered solid performance, and we are seeing a continued year-on-year increase in revenue and profit. It is exactly as you see here.
Regarding professional baseball in particular, updates to the spectator experience and other initiatives led to the 2025 season's home game attendance reaching 2.36 million. This was already at a record high last year, but we have surpassed that, setting a new team record following the previous season.
Also, as you can see from the revenue trends, the professional baseball business is generally divided into ticket sales, merchandise/food & beverage, and sponsorships. Each of these various revenues comprehensively contributed to the year-on-year revenue increase, and I believe we have achieved a very well balanced revenue mix.
As I mentioned earlier, the Sports Business will expand its business domain in the form of the Smart City-related Businesses.
As you can see, we are advancing initiatives in areas such as Yokohama and Kawasaki. For the upcoming schedule, the BASEGATE YOKOHAMA KANNAI grand opening is set for March 19, 2026, and two directly managed facilities are scheduled to open on the same day.
With Wonderia Yokohama Supported by Umios, we want to provide an immersive experience facility integrating our expertise, know-how & technology cultivated in entertainment. We are also working on developing a dedicated app utilizing the gamification concept fostered in the Game Business.
Furthermore, at THE LIVE Supported by Daiwa Jisho, we intend to screen not only team home games but also visitor games, starting from the preseason matches.
Including these and other initiatives, I believe we can provide a new excitement to everyone. Please look forward to it.
And next, I will explain the Healthcare & Medical Business.
As I have been mentioning recently, we have continued the thorough review and promotion of initiatives towards future growth.
Specifically in the Medical area, we have been promoting prioritization & focus and structural optimization towards core areas that we can firmly grow from here on.
And, for the Healthcare & Medical Business, we have revised our target. We will target profitability in FY2026 and prioritize our efforts to meet the goal.
Regarding Allm, we have increased the ownership stake to 95.3% in order to strengthen the corporate infrastructure and accelerate structural reforms.
I would like to speak about the Medical area in detail.
In the Medical area, amid business model evolution and changes in the business environment from our initial assumptions, as I mentioned earlier, we have accelerated prioritization & focus this fiscal year.
Regarding this, I would like you to look at the graph on the left. We are concentrating management resources into three areas: Join in Japan, Global expansion, and Join Mobile Clinic, which is an evolved form of Join. In doing so, we are stopping other activities to focus on these three areas, as we believe this is where we will see future growth.
Consequently, while the top line has become a bit weaker, significant progress has been made in fixed cost reductions.
Specifically, with Join in Japan, while promoting further adoption and usage penetration within facilities, we recognize that medical sites face various individual challenges. We intend to focus on maximizing business opportunities highly compatible with Join, such as healthcare digital transformation.
In global expansion, we will focus on regions with high demands for medical resource expansion by local governments, such as large and mass territories like Brazil.
Furthermore, for Join Mobile Clinic, the pipeline buildup is progressing steadily towards next fiscal year, so we will proceed in a way that firmly grows these three core areas.
Please also look at the right side. In that sense, for example, we had many overseas bases-more than 10-but we have consolidated subsidiaries and bases in response to strategy changes, reducing them by about half to focus on areas where our business is viable. As you can see, we are advancing fixed cost reduction. By combining these fixed cost reduction with our focused areas, we will work toward achieving profitability next fiscal year as I mentioned earlier.
Next, I will explain the Healthcare area.
While it is best to look at the results on an annual basis, the business is broadly divided into the Data Use Business and the Data Health Business.
First, as you can see on the left for Q3 results of the Data Use Business. We are working to enhance our operational structures to meet diversifying and deepening customer needs.
Thanks to these efforts, both revenue and KPIs surpassed the previous year, so please consider that progress is solid.
Additionally, although this year is not a Data Health plan formulation year for the Data Health Business, we are leveraging the customer base built during the Data Health plan formulation year. For the FY2025 business, as you can see below, the number of orders from municipal national health insurance already exceeds the orders from the previous year.
Overall, the Healthcare area remains robust.
Next, I would like to comment on the updates for our group companies.
First, regarding GO, they applied for listing on the Tokyo Stock Exchange on February 2, 2026.
Additionally, regarding Cygames, we received a dividend of 8.4 billion yen from the company in November 2025.
Next, I would like to explain our progress toward mid to long term growth centered on AI.
All-company productivity is proceeding steadily. For us, development is particularly important, and the impacts are appearing remarkably in that area.
When mastering AI, depending on the development project, emergence of projects with 95% AI-led development has occurred. This has resulted in a 20 times increase in productivity, and we are fully transitioning to next-gen development.
Furthermore, for specific operations where the utilization of AI is considered particularly effective-such as Quality Assurance (QA), broadcast screening, legal, and other specific tasks-we have reconfigured the work itself around AI, succeeding in a reduction of
man-hours by 50-90%. Going forward, we intend to expand the scope of application to include all operational areas.
Please also look below. All-employee productivity is also increasing significantly. Recently, our "100 AI Drills" was released and drew a great deal of attention. As you can see, pervasive AI integration is advancing across all daily operations.
By using AI in this way, the work produced by the same headcount has significantly increased. As we are now able to handle a much larger volume of work, the core initiative going forward is the transition from this increased workload capacity to a shift toward new business.
As we advance these efforts, the most important thing with AI now is to create new added value by seeing how many businesses we can tackle.
What you see here is only a small part, but in AI-native new services and businesses, we are prioritizing Conversational AI and Vertical AI as key domains.
As you can see, within every framework approach-from DelightX (deployed by Delight Ventures) to DeNA's internal talent utilization-we intend to achieve the maximization of Japan and Global business and growth opportunities.
We intend to continuously inform you about these AI initiatives of DeNA through opportunities such as the DeNA AI Day for engineers and business professionals scheduled in March.
The above was the business overview; next, I would like to talk about the earnings guidance.
As I have explained so far, in the results up to Q3, the Game Business performed strongly against the upper limit of the previously announced guidance.
Additionally, the Live Streaming Business achieved steady results through its focus on prioritizing improving profitability. The Sports Business also performed well.
Meanwhile, as explained, we conducted a review of the Medical area within the Healthcare & Medical Business, and for operating profit (IFRS), the impact of the aforementioned impairment losses have also been taken into account.
Consequently, for this Guidance, as you can see in Revised forecast (B), Revenue is 146.5 billion yen, Operating Profit (IFRS) is 17.0 billion yen, and Operating Profit (Non-GAAP) is
26.5 billion yen.
Lastly, I would like to talk about corporate management.
At the previous financial results announcement in November, as you can see in the material here, we announced the outline of policy for initiatives.
Based on this, we are currently conducting a thorough review. Regarding the progress on the action, including the capital allocation approach, an announcement is scheduled within this fiscal year.
Additionally, while I touched upon the review of the Healthcare & Medical Business during this presentation, considering the progress of other businesses, our commitment to
Non-GAAP operating profit of 15.0 billion yen for FY2026 remains unchanged.
Based on the outline policy above, we are promoting a comprehensive review of capital allocation to achieve substantial and structural improvements in capital efficiency. From our discussion, today I would like to share our updated policy regarding the return of profits through dividends.
With respect to allocating profit to shareholders through dividends, even while it is essential to consider business attributes such as volatility as well as investments toward achieving growth in the medium to long term, in an effort to secure medium to long term support, we will change the basic policy to a DOE-based approach starting from FY2025.
As shown in the chart on the left, our new policy is to change the basic policy to target a DOE of approx. 3% and to continue to pay stable dividends. Consequently, our dividend forecast for this period is 66 yen per share, which is an outlook for a dividend increase compared to the previous fiscal year.
To the third item above, share buybacks will be responded with flexibility as one approach to addressing changes in the stock price and business environment, managing capital policies, and returning profits to shareholders.
That concludes my explanation. Thank you very much.