Presenter: Tomoko Namba, President & CEO
I will now begin the Q1 FY2026 operating results briefing.
From late June, we have been swiftly executing management evolution and driving full-scale momentum under our new leadership.
In Q1 FY2026, both revenue and operating profit progressed in line with our initial guidance announced at the beginning of the fiscal year.
In addition, following the listing of GO Inc. on June 16, we have recorded 39.5 billion yen in equity in earnings of affiliates as equity investment returns (income & gains).
As for the guidance on profit for the period attributable to owners of the parent, we are not disclosing guidance, since it is difficult to provide a reasonable estimate while we prioritize updating our strategies regarding the business portfolio and business creation.
Now for the Q1 FY2026 Results.
As shown here, revenue was 37.2 billion yen, and operating profit (IFRS) was 7.4 billion yen.
Revenue and profit/loss by segment are as shown in this and next slides, and I will touch on the details as I go through each business.
Starting with the Game Business: Pokémon Trading Card Game Pocket was the main driver of the change here.
There wasn't a major change in MAU, and the overseas proportion increased slightly.
Also, our soft-launch strategy, which is our main focus, is progressing steadily-we expect 1-2 titles to enter the full-scale operation phase during this fiscal year, and that, too, is tracking as planned.
For Live Streaming Business, we've broken this out into Pococha and IRIAM.
On the left is Pococha. This has become a highly engaged community at its core, and it's now a service with the demonstrated ability to generate roughly 1.0 billion yen in profit per quarter, consistently.
This fiscal year we plan to make some marketing investments, but we intend to proceed carefully while verifying the effectiveness of those investments.
IRIAM has seen very strong user growth, and achieved quarterly profitability for the first time this quarter.
All of its key metrics are trending steadily.
For Sports & Smart City Business, revenue and profit/loss are as shown. Year on year, both revenue and profit grew.
Our two directly operated facilities, THE LIVE Supported by Daiwa Jisho and Wonderia Yokohama Supported by Umios, opened on March 19, and we're beginning to see the contribution.
Since these are new initiatives, there are still trials and errors. So far customer satisfaction has been very high, so we will proactively pursue business/growth opportunities.
Turning to Healthcare & Medical Business.
We are placing the highest priority on overall business profitability for FY2026 by conducting a thorough review for growth, prioritization & focus, and fixed cost reductions.
On the Medical side, pipelines for Join Mobile Clinic, developed in prior fiscal years, are expected to begin contributing during FY2026.
To wrap up, our priorities within the segment remain unchanged.
Now that we have a new leadership in place, let me walk you briefly through our Key Initiatives for Growth.
There are four major pillars, and we're pursuing them at full throttle.
The first is structural evolution-what we've described as Realize a Business Creation Ecosystem, which I'll explain in more detail shortly.
Second, we're also proactively advancing Leverage of M&A on the inorganic side.
Third, we're accelerating our efforts to Build an AI-Native Organization across the entire company.
And fourth, we're now working in earnest to Strengthen a Unified Marketing Infrastructure to pursue synergies across our businesses.
Let's start with the first pillar, or Realize a Business Creation Ecosystem.
On the left side in the diagram, we have "High-Velocity 0-to-1 Initiatives." This includes new ventures we build in-house, as well as investments in startups made mainly through funds such as Delight Ventures.
From among these, we "Pick" out the projects where we believe DeNA's involvement-putting our resources behind them-can meaningfully accelerate growth, and we bring our resource assets to bear on them, driving them toward "Growth". Some of these eventually "Exit." From this process, we also aim to produce businesses that become strong, core operating businesses for DeNA.
We're working on each of these points individually, but we also need to build strong connections across them.
People often ask us, "Is your core business gaming, or is it sports?" But we think of our actual core business as being a factory for businesses-continuously creating new businesses and growing them one after another.
Our core business, in other words, is the act of growing a portfolio of businesses with structural strength-and building a mechanism that lets that flow continue smoothly and indefinitely.
As shown here, we're treating both Equity Investment Returns (Income & Gains) and Earnings from DeNA's Business Operations as important performance indicators for the company.
In other words, we grow a business that was born on the left side of this diagram, and at some point, an Exit through sale is also a possible outcome.
That, too, is part of our core business.
Our thinking is that value creation itself is our core business.
Let me go through each element one by one. "0-to-1 Initiatives"-we're already pursuing a substantial amount of new business creation here, with a particular focus on AI.
We're generating new 0-to-1 businesses in-house, and we're also making a considerable number of startup investments through vehicles like Delight Ventures.
We've been investing with a focus on Vertical AI startups-Industry × AI.
To help structure these efforts, on the right side we have DelightX, a U.S.-based startup accelerator program specialized in AI.
We also have incubation programs supporting the 0-to-1 phase of business creation, such as V-ShIP and M-ShIP, which Delight Ventures runs, in addition to Pure-play Investment that Delight Ventures also carries out.
And above all, we've begun shifting personnel within DeNA to increase the pace of our 0-to-1 activities.
From among these new projects, we identify in particular the ones we believe "will succeed" and "can grow if we concentrate our resources on them," and we work to accelerate their growth.
Let me give a couple of concrete examples. One is THA Inc., a startup that provides an AI service called "AI Syacho (AI President)" aimed at small and medium-sized businesses.
It lets employees chat with an AI version of their company president at any time, drawing on the president's own thinking.
This service has an excellent reputation, and it's attracting interest from enterprises as well. That said, the founder, Ms. Nishiyama, has a strong desire to serve small and medium-sized businesses specifically, and hasn't had the bandwidth to focus on the enterprise segment.
Expanding into the enterprise space also brings different challenges-security and contracts, for example-a different set of requirements than the small and medium-sized business segment.
So our group company, DeNA AI Link Co., Ltd., is handling development for enterprises, and rolling that out-creating a structure where both companies benefit and grow together.
Another example is KAUCHE, Inc. It operates a shopping app that includes "KAUCHE Farm," a farming-game-like feature where, in a sense, growing crops in the game leads to real vegetables being delivered-it's a genuinely interesting e-commerce service.
Because it combines three elements-gaming, e-commerce, and community-our
know-how is highly relevant, so we've had a team of about ten people from DeNA joined the project and share expertise with them.
As shown in the graph on the right, this is already a company with very high labor productivity. To help them further push their productivity using AI, we've also been running workshops to share our own internal AI know-how.
There are many ways we can be useful to startups like this, and of course we make investments and support their value creation on that basis.
For companies like these, there's certainly a possibility that we acquire them through M&A and grow them as one of our well-structured profitable businesses. But of course, the founders also have the option to exit as-is-through an IPO, or through M&A by another company.
Either way, we capture the return as Equity Investment Returns (Income & Gain) or Earnings from DeNA's Business Operations, which we treat as essential outcomes for us.
As a representative example of a strategic exit, there's the case of GO Inc.
We started our automotive business back in 2015, and built a service called Taxibell (later renamed MOV). Thanks to our presence with the Yokohama DeNA BayStars, various stakeholders in Kanagawa Prefecture had already been very supportive of our new initiatives, and for this initiative the Kanagawa Taxi Association fully backed Taxibell as well.
We were confident in the product itself. Working with the Kanagawa Taxi Association gave us a competitive advantage. Following this, we merged business with JapanTaxi Co., Ltd., established Mobility Technologies Co., Ltd. in 2020.
That became GO Inc., which was newly listed on the Tokyo Stock Exchange Growth Market in June.
We had invested roughly 10.0 billion yen in the automotive business, and the total proceeds from the shares sold this time came to 36.6 billion yen-a very strong return.
We intend to use returns like this as source of funds for our next ventures-that's exactly the ecosystem we're trying to run, where returns become the fuel for the next initiative.
At the same time, there are businesses we don't exit, and instead build into solid, structural businesses within DeNA.
The Yokohama DeNA BayStars, which we acquired through M&A, is now one of our flagship businesses and a core source of earnings.
Rather than treating this as a standalone business, we're expanding it horizontally-to, for example, basketball and soccer.
We're also deepening our commitment around the Yokohama DeNA BayStars-beyond Yokohama Stadium, this includes smart city development in the adjacent BASEGATE YOKOHAMA KANNAI, as well as the operation of THE LIVE Supported by Daiwa Jisho and Wonderia Yokohama Supported by Umios.
And this same model-horizontal expansion across sports and communities-is now expanding from Yokohama to Kawasaki, leading into the Kawasaki arena project.
Beyond that, having our own live events and venues also means we can build out capabilities as a tech company-offering event production, ticket, and fan club management systems. We see this as an opportunity to build what could become an "entertainment OS," and then expand into a business by commercializing that capability externally.
Longer term, this could also create a virtuous cycle where the promoters running these live entertainment events-our future customers-in turn make greater use of our arenas and stadiums.
So the approach is to build out related businesses around each flagship business, continually increasing our structural strength.
(Going back to page 13 on the slide)
To summarize what I've walked through: this structure-from investment in startups and
0-to-1 new businesses, through to fully nurturing the projects DeNA can grow-is designed to create a flow that produces either capital gains or large structural businesses. Building out this structure is currently our highest priority.
Next is M&A-the use of inorganic approach.
Beyond startups, the structure I just described does have all its individual elements in place already, but I think it will take five or six years before they're fully connected and this reaches a cruising speed where we can consistently and reliably generate new businesses.
Results will of course start to emerge along the way, but in the meantime, in the sense of buying time as well, we'll also leverage inorganic M&A outside of startups.
That said, we intend to be clear about our priorities as we do this.
Our first priority is core growth areas where there is synergy-namely sports & smart cities, live entertainment, and IP & anime-related businesses. This is our top priority, without question.
If there's potential for growth in leaps or value creation by leveraging our technical strengths, such as AI, we are actively exploring opportunities, even in new domains
In any case, based on our guidelines regarding investments conscious of the cost of capital, and particularly for large-scale investments, we intend to ensure a disciplined
decision-making process that takes into account the specific degree of contribution toward our ROE targets.
The third pillar is truly building an AI-Native Organization. Efficiency gains from AI adoption continue to progress steadily.
And as efficiency improves, we shift talent resource allocation toward new business-into "0-to-1 Initiatives", "Growth" areas, and high-yield activities-and we're pursuing this shift more aggressively than ever before.
Beyond that, though, the way sharing and communicating information could change fundamentally.
Some of the conventional hierarchical, layered organizational structures may simply become unnecessary in places. Decision-making can happen faster in some areas, and we can also make the reasoning behind decisions far more transparent to employees.
We're carefully examining these possibilities as we think through what a DeNA-style AI-Native Organization should look like.
The fourth pillar reflects the fact that our real strength has always been our people. We've historically given our talented people a fair amount of discretion, trusting them to create genuinely good businesses that succeed at a certain rate. Going forward, though, we also need to build the structure that spans across businesses.
One part of that is Strengthening a Unified Marketing Infrastructure across businesses.
Until now, each business has managed its own customer base separately. By bringing this together into more of a unified infrastructure, we believe we can unlock much greater marketing potential-and that's the work we're doing here.
Finally, on Capital Allocation.
We have explained this a few times before, including in February and May. Our priorities here remain unchanged.
To illustrate it briefly, this is how we think about it: based on this basic approach, we preemptively optimized our balance sheet through enhanced shareholder returns.
Going forward, we'll be focused entirely on pushing ahead with growth investments and strategic investments.
That concludes my presentation. Thank you.