Financial Results for the 1st Quarter of Fiscal Year Ending December 31, 2026

May 8, 2026

Name of listed company: GungHo Online Entertainment, Inc.

Stock exchange listing: Tokyo Stock Exchange

Code number: 3765

URL: https://www.gungho.co.jp/en/

Representative: Kazuya Sakai, Representative Director & President, CEO

Contact: Kazumasa Takayama, Corporate Officer, CFO & IRO, and Executive General Manager of Corporate Planning Division

TEL: 03-6895-1650

Dividend payment date: -

Supplemental information for quarterly financial statements: Yes

Quarterly financial results briefing session: Yes (For institutional investors and analysts)

(Amounts are rounded off to the nearest million yen)

1. Consolidated financial results for the 1st quarter of fiscal year ending December 31, 2026 (January 1, 2026 through March 31, 2026)

   1. Consolidated operating results (accumulated) (Percentages indicate the changes from previous year)

      	Net sales		Operating profit		Ordinary profit		Quarterly net profit
      Three months ended March 31, 2026 Three months ended March 31, 2025	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      	26,594 23,775	11.9 (7.6)	3,693 2,831	30.5 (54.8)	4,575 3,224	41.9 (53.5)	1,700 1,609	5.6 (59.8)

      (Note) Comprehensive income

      Three months ended March 31, 2026

      1,466 million yen

      (-%)

      Three months ended March 31, 2025

      -263 million yen

      (-%)

      	Quarterly net profit per share	Diluted quarterly net profit per share
      Three months ended March 31, 2026	Yen 31.47	Yen 31.14
      Three months ended March 31, 2025	28.92	28.57

   2. Consolidated financial position

   	Total assets	Net assets	Shareholder's equity ratio
   	Millions of yen 169,648 169,474	Millions of yen 144,888 151,333	%
   Three months ended March 31, 2026				67.6
   Fiscal year ended December 31, 2025				71.9

   (Note) Shareholder's equity

   Three months ended March 31, 2026

   114,707millions of yen Fiscal year ended

   December 31, 2025

   121,856 millions of yen

2. Dividends

   	Dividends per share
   	1st quarter	2nd quarter	3rd quarter	4th quarter	Total
   Fiscal year ended December 31, 2025 Fiscal year ending December 31, 2026	Yen	Yen	Yen	Yen	Yen
   	- -	0.00	-	90.00	90.00
   Fiscal year ending December 31, 2026 (Forecast)		-	-	-	-

   (Note1) Revision of forecasts for dividends most recently announced: No

   (Note2) Dividend forecasts for the fiscal year ending December 31, 2026 have yet to be determined.

3. Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2026(From January 1, 2026 to December 31, 2026)

The GungHo Group engages in the content business that is highly novel in nature and is subject to facing sudden, short-term changes in the operating environment. Since this makes it difficult to calculate proper and rational earnings forecasts, the Company adopts the policy of providing timely disclosure of financial results and summary of operations on a quarterly basis while refraining from disclosing its full-year consolidated earnings forecast.

*Notes

1. Changes in significant subsidiaries during the period (Changes in scope of consolidation of specified subsidiaries)

2. Adoption of any particular accounting methods for the preparation of quarterly consolidated financial statements

3. Changes in accounting policies, changes in accounting estimates and restatements

   : No

   : No

   1. Changes in accounting policies due to revisions of accounting standards : No

   2. Changes in accounting policies due to reasons other than 1) : No

   3. Changes in accounting estimates : No

   4. Restatements : No

4. Number of shares of common stock issued

   As of March 31, 2026	69,161,416 shares	Fiscal year ended December 31, 2025	69,161,416 Shares
   As of March 31, 2026	16,030,427 shares	Fiscal year ended December 31, 2025	14,818,472 shares
   As of March 31, 2026	54,026,307 shares	As of March 31, 2025	55,674,515 shares

   1. Number of shares of common stock outstanding at the end of the period (including treasury shares)

   2. Number of treasury shares at the end of the period

   3. Average number of shares during the first quarter

• This quarterly Summary of Consolidated Financial Results (Quarterly "Tanshin") is outside the scope of the external auditor's quarterly review procedure.

• Appropriate use of earnings forecast and other matters to note

・This document contains forward-looking statements including forecasts in relation to the results of operations and they are based on information available to the Company at the time of preparing the document along with certain assumptions that are deemed to be rational. Actual results may differ materially from those expressed or implied by the statements due to various factors. For the assumptions underlying the earnings forecast presented and other information regarding the use of such forecasts, please refer to "Information Related to the Consolidated Earnings Forecast and Other Future Projections" on page 2 of the Appendix.

• The Company plans on holding a financial results briefing session for investors as follows. All documents etc. distributed at the briefing session will be posted on the company's website after the briefing session is held.

• Financial results briefing session for institutional investors and analysts: Friday, May 8, 2026

• Table of Contents for Appendix

  1. Qualitative Information Concerning Consolidated Financial Results

     for the Quarter Under Review 2

     1. Description of Operating Results 2

     2. Description of Financial Position 2

     3. Information Related to the Consolidated Earnings Forecast and Other Future Projections 2

  2. Quarterly Consolidated Financial Statements and main notes 3

     1. Quarterly Consolidated Balance Sheets 3

     2. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income 4

        Quarterly Consolidated Statements of Income (Three-months Period) 4

        Quarterly Consolidated Statements of Comprehensive Income (Three-months Period) 5

     3. Notes to the Quarterly Consolidated Financial Statements 6

(Notes on the Going-concern Assumption) 6

(Notes on Any Significant Changes to the Amount of Shareholders' Equity) 6

(Segment Information) 6

(Notes on Quarterly Consolidated Cash Flow Statements) 6

(Significant Subsequent Events) 6

1

1. Qualitative Information Concerning Consolidated Financial Results for the Quarter

1. Description of Operating Results

   Regarding the economic circumstances in the fiscal year under review, uncertainty about the future due to the unstable international situation and strong inflationary pressure continued. As for the domestic gaming market, the mobile gaming sector still maintains a certain size, and smartphone users' use of leisure time is diversifying into various kinds of content, including video content.

   Against this backdrop, our company has continued to concentrate on game development with a focus on global distribution. Having strengthened our development structure and increased the number of new titles in the pipeline from five to nine last year, costs related to new development titles, primarily outsourcing expenses, are on an upward trend "Puzzle & Dragons" celebrated its 14th launch anniversary on February 20, 2026, and we have continued working to maintain and increase MAU (Monthly Active User: the number of users who log into the game at least once a month) and strengthen the game's brand in order to maximize its existing value. Sales remained strong as we continued to hold a variety of events such as original events each season, anniversary events, and collaborations with famous characters from other companies.

   In addition, "Ragnarok" related titles, which subsidiary Gravity Co., Ltd. and its consolidated subsidiaries are operating, have continued to contribute significantly to the consolidated financial results with rolling out global services of new titles, such as the launch of "Ragnarok: The New World" on January 15, 2026 in Taiwan, Hong Kong, and Macau and "Ragnarok Origin Classic" on March 26, 2026 in South Korea, Taiwan, Hong Kong, Macau, and Southeast Asia.

   As a result, the Company's consolidated results of operations for the period under review were as follows. Net sales increased 11.9% year-on-year to JPY26,594 million, operating profit increased 30.5% year-on-year to JPY3,693 million, ordinary profit increased 41.9% year-on-year to JPY4,575 million, and quarterly net profit attributable to owners of parent company increased 5.6% year-on-year to JPY1,700 million.

   The GungHo Group is a single-segment company; therefore, no segment information is disclosed.

2. Description of Financial Position

   Total assets for the period under review stood at JPY169,648 million, an increase of JPY173 million from the end of the previous fiscal year. This was in line with the end of the previous fiscal year.

   Total liabilities amounted to JPY24,760 million, an increase of JPY6,618 million from the end of the previous fiscal year. This was mainly due to an increase in unpaid dividends.

   Total net assets came to JPY144,888 million, a decrease of JPY6,444 million from the end of the previous fiscal year. This was mainly due to a decrease in shareholders' equity resulting from payment of dividends and acquisition of treasury shares.

3. Information Related to the Consolidated Earnings Forecast and Other Future Projections

The GungHo Group engages in the content business that is highly novel in nature and is subject to facing sudden, short-term changes in the operating environment. Since this makes it difficult to calculate proper and rational earnings forecasts, the Company adopts the policy of providing timely disclosure of financial results and summary of operations on a quarterly basis while refraining from disclosing its full-year consolidated earnings forecast.

2