Supplementary Material on Consolidated Operating Results for Fiscal Year Ended December 31, 2025

February 13, 2026

GungHo Online Entertainment, Inc.

Full-year sales and profits declined due to a slowdown in non-consolidated net sales and rising labor costs.

Consolidated Financial Results for FY 2025 Supplementary Material

• Summary of Consolidated Financial Results for Full Year

  (Millions of Yen)		FY 2024	FY 2025	Change Ratio YoY
  Net sales		103,600	93,242	▲10.0%
  Cost of sales		50,185	50,913	+1.5%
  Gross profit		53,415	42,328	▲20.8%
  SG&A		35,923	37,271	+3.8%
  	Salary and allowances	6,466	7,461	+15.4%
  	Advertising expenses	11,198	10,768	▲3.8%
  	Others	18,258	19,041	+4.3%
  Operating profit		17,491	5,056	▲71.1%
  	Operating profit Margin	16.8%	5.4%	▲11.4%
  Ordinary profit		20,013	6,780	▲66.1%
  Quarterly profit before income taxes□		19,838	6,576	▲66.8%
  Quarterly profit attributable to owners of parent		11,171	1,407	▲87.4%

  【Net Sales】

  Regarding the existing game "Puzzle & Dragons" (referred to as "P&D" henceforth), we have continued initiatives to broaden our P&D user base by targeting a wider range of generations through activities that go beyond in-game events and updates, such as airing anime and holding offline events. Compared to the previous year, there were fewer collaboration events with famous characters from other companies, resulting in full-year net sales falling below the previous year's level.

  As for "Ragnarok"-related titles in Japan, the condition remained firm through holding events and implementing continuous updates, "Ragnarok Online" celebrated its 23rd anniversary from the service launch on December 1, 2025 and "Ragnarok X" celebrated its 1st anniversary from the service launch on November 20, 2025,.

  As for subsidiary businesses, Gravity Co., Ltd. continued to release new "Ragnarok" related titles mainly in Southeast Asia and in Taiwan, Hong Kong, and Macau. Gravity Co., Ltd. achieved a YoY increase in full-year net sales, thanks to the significant contribution of titles such as" Ragnarok M: Classic" and "Ragnarok: Twilight."

  As a result, consolidated net sales for full year of FY2025 was 93,242 million yen (a decrease of 10,358 million yen year on year).

  【Gross profit】

  Gross profit decreased by 20.8% from the previous year to 42,328 million yen (down 11,086 million yen from the previous year). Gross profit margin decreased by 6.2% year-on-year to 45.4%, mainly due to a decrease in the sales composition of subsidiary Gravity in the consolidated net sales.

  【Operating profit】

  In addition to the decrease in net sales, the cost of sales ratio increased, and SG&A expenses, especially personnel expenses, increased due to the full acquisition of Alim Co., Ltd. at the end of 2024. As a result, operating profit was 5,056 million yen (a decrease of 12,434 million yen year-on-year).

• Summary of quarter consolidated result

  (Millions of Yen)	FY 2024				FY 2025
  	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q
  Net sales	25,736	27,918	22,828	27,116	23,775	26,812	23,007	19,646
  Cost of sales	12,435	13,190	11,321	13,238	12,319	14,808	12,593	11,192
  Gross profit	13,301	14,728	11,507	13,877	11,456	12,004	10,413	8,453
  SG&A	7,035	8,786	7,893	12,208	8,624	9,815	9,565	9,265
  Salary and allowances	1,376	1,461	1,522	2,104	1,566	1,636	1,741	2,517
  Advertising expenses	1,886	3,130	2,424	3,756	2,489	3,267	2,671	2,340
  Others	3,771	4,194	3,945	6,346	4,569	4,911	5,152	4,407
  Operating profit	6,266	5,941	3,614	1,669	2,831	2,189	848	-811
  Operating profit Margin	24.3%	21.2%	15.8%	6.1%	11.9%	8.2%	3.7%	-4.1%
  Ordinary profit	6,935	6,569	3,741	2,766	3,224	2,127	1,617	-188
  Quarterly profit before income taxes	6,935	6,569	3,675	2,657	3,224	2,098	1,584	-330
  Quarterly profit attributable to owners of parent	4,002	3,820	1,868	1,479	1,609	854	428	-1,484

  【Net Sales】

  In the 4th quarter of the fiscal year ending December 31, 2025, Regarding "Puzzle & Dragons" (referred to as "P&D" henceforth), we continued the roll-out of various events, including the collaborations with famous characters of other companies and "Appreciation Celebration", which is the big event, to have more users enjoy "P & D" over the long-term.

  On December 4, 2025, we began global service for consoles (PlayStation5) and PCs for the latest installment in the "LET IT DIE" series, "LET IT DIE: INFERNO," a rogue-lite survival action game.

  Furthermore, subsidiary Gravity Co., Ltd. and its consolidated subsidiaries worked to continuous release new titles with the launch of "Ragnarok: Southeast Asia on October 23, 2025 and "Ragnarok: Back to Glory" in China on December 25, 2025.

  As a result, net sales for the 4th quarter of the year was 19,646 million yen (a decrease of 3,361 million yen quarter on quarter).

  【Gross profit】

  Consolidated gross profit for the 4th quarter was JPY 8,453 million (a decrease of JPY1,959 million quarter on quarter) due to the lower net sales. The gross profit margin was 43.0% (decreased by 2.2% quarter on quarter).

  【Operating profit】

  [Salary and allowances]

  As of the end of the 4th quarter of the year, the number of GungHo non-consolidated employees was 459 (an increase of 15 year on year and a decrease of 3 quarter on quarter), and the number of consolidated employees was 1,614 (an increase of 31 year on year and a decrease of 23 quarter on quarter). Due to the bonus payments in the 4th quarter, the salary and allowances were JPY 2,517 million (an increase of JPY 776 million quarter on quarter).

  [Advertising expenses]

  In the 4th quarter of the fiscal year ending December 31, 2025, in addition to the promotion of existing titles such as "Puzzle & Dragons," we implemented the promotion of the new title, "LET IT DIE: INFERNO ". Gravity implemented promotions related to its new Ragnarok-related titles. As a result, advertising expenses in the 4th quarter were JPY 2,340 million (a decrease of JPY 331 million quarter on quarter).

  As a result, the operating profit for the 4th quarter of this year was JPY811 million (a decrease of JPY 1,659 million quarter on quarter).

• GungHo Online Entertainment Transition of non-consolidated monthly sales

  Non-consolidated monthly sales
  
  

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  In the 4th quarter, we have been making comprehensive efforts with the aim of having a greater number of users enjoy our games, such as adding new content, collaboration with famous characters from other companies and TV anime broadcasts. Moreover, "RAGNAROK ONLINE" and "Ragnarok X" celebrated anniversary and "LET IT DIE: INFERNO," a new title in the "LET IT DIE" series, was launched for global on December 4, 2025.

• GungHo Online Entertainment Main titles currently distributed

  Original Titles	Platform	Release Date	Distribution Area	Downloads	Reached Date
  Puzzle & Dragons （Japan）	Smart Phone	2/20/2012	Japan	63million	4/30/2025
  Puzzle & Dragons （North America）	Smart Phone	11/8/2012	North America	15million	9/10/2023
  Puzzle & Dragons （Korea）	Smart Phone	12/10/2012	Korea	3million	2/22/2020
  Puzzle & Dragons （Hong Kong / Taiwan）	Smart Phone	1/23/2014	Hong Kong Taiwan	3million	1/9/2020
  Puzzle & Dragons Battle	Smart Phone	3/17/2016	Japan	6million	9/29/2018
  SUMMONS BOARD	Smart Phone	2/10/2014	Japan Hong Kong Taiwan	6million	4/9/2024
  LET IT DIE	Playstation4・5 Steam（PC）	12/3/2016	Japan / North America / Europe / Asia / Latin America	9million	6/7/2025
  Ninjala	Nintendo Switch™	6/25/2020	Japan / North America / Europe / Asia / Australia	11milliion	5/14/2024
  LET IT DIE: INFERNO	Playstation5 Steam（PC）	12/4/2025	Japan / North America / Europe / Asia / Latin America	-	-
  Partner Publishing Titles			Platform		Release Date in Japan
  Ragnarok Online		PC		12/1/2002
  Ragnarok Masters		Smart Phone		6/5/2019
  Rangarok X		Smart Phone, PC		11/20/2024

• Consolidated Balance Sheets （Unit: Millions of Yen）

  	2023				2024				2025
  	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q
  Current assets	139,487	154,697	154,280	155,967	155,592	118,559	113,889	120,875	111,729	153,074	152,411	153,699
  Cash and deposits	122,633	134,173	133,753	136,198	135,724	97,371	95,574	99,598	91,851	131,804	130,192	130,474
  Accounts receivable-trade and contract	12,410	16,827	13,807	13,379	11,986	13,713	10,764	13,515	11,398	11,891	10,263	10,130
  Short-term investment securities	2,234	1,941	3,880	3,835	4,384	4,743	4,542	5,018	4,787	5,028	5,778	5,775

  Others	2,208	1,755	2,839	2,553	3,497	2,731	3,007	2,742	3,692	4,350	6,176	7,319
  Non-current assets	10,456	11,635	11,985	12,077	11,989	52,176	52,434	54,588	54,573	15,506	15,498	15,728
  Property, plant and equipment	890	1,131	1,347	1,240	1,114	1,026	901	1,326	1,347	1,396	1,401	1,412
  Intangible assets	379	356	341	502	483	458	436	748	618	832	692	568
  Investments and other assets	9,187	10,147	10,296	10,334	10,390	50,690	51,096	52,513	52,608	13,277	13,405	13,748
  Long-term deposit	-	-	-	-	-	40,000	40,000	40,000	40,000	-	-	-

  Others Total assets Current liabilities Notes and accounts payable-trade	9,187 149,944 16,486 6,001	10,147 166,332 23,002 10,626	10,296 166,265 17,767 7,740	10,334 168,045 17,493 5,616	10,390 167,582 16,820 5,931	10,690 11,096 12,513 12,608				13,277 168,581 17,678 7,644	13,405 167,909 15,457 6,463	13,748 169,428 15,343 5,817
  						170,735 18,438 5,331	166,323 14,848 4,980	175,464 19,453 5,861	166,303 18,804 5,797

  Income taxes payable 2,414 4,036 1,905 2,913 2,963 4,110 1,699 2,989 1,298 1,802 697 592

  Others	8,070	8,339	8,121	8,963	7,925	8,996	8,168	10,602	11,708	8,231	8,296	8,934
  Non-current liabilities	1,453	1,687	1,665	1,056	1,035	1,020	1,037	2,475	2,533	2,538	2,581	2,773
  Total liabilities	17,940	24,690	19,433	18,550	17,856	19,458	15,885	21,929	21,337	20,217	18,039	18,116
  Shareholder's equity	114,784	119,803	123,286	126,073	123,416	122,247	124,115	125,624	118,884	120,212	120,652	119,146
  Capital stock	5,338	5,338	5,338	5,338	5,338	5,338	5,338	5,338	5,338	5,338	5,338	5,338
  Capital surplus	5,487	5,487	5,487	5,487	5,487	5,487	5,487	5,487	5,487	5,498	5,492	5,487
  Retained earnings	187,135	192,160	195,644	198,415	200,621	192,324	194,193	195,670	152,447	153,301	153,729	152,228

  Treasury shares	-83,177	-83,183	-83,184	-83,168	-88,031	-80,903	-80,904 -80,872 -44,389			-43,926	-43,908	-43,908
  Total Accumulated other comprehensive income	608	1,660	1,882	1,390	2,352	3,592	1,356	1,687	15	1,157	1,268	2,689
  Foreign currency translation adjustment	608	1,660	1,881	1,390	2,352 3,592		1,356	1,687 15		1,157	1,268	2,689
  Others	-	-	-	-	-	-	-	-	-	-	-	-
  Stock Option	1,163	1,213	1,264	1,300	1,350	1,394	1,444	1,464	1,514	1,088	1,117	1,160
  Non Controlling Interests	15,447	18,964	20,399	20,731	22,606	24,043	23,521	24,759	24,552	25,905	26,831	28,315
  Total net assets	132,004	141,642	146,832	149,495	149,725	151,277	150,437	153,535	144,966	148,364	149,870	151,311
  Total liabilities and net assets	149,944	166,332	166,265	168,045	167,582	170,735	166,323	175,464	166,303	168,581	167,909	169,428

• Consolidated Statements of Income （Unit: Millions of Yen）