Supplementary Material on Consolidated Operating Results for the 1st Quarter of Fiscal Year Ending December 31, 2026

May 8, 2026

GungHo Online Entertainment, Inc.

Strong performance from Gravityʼs ʻRagnarokʼ related titles propelled consolidated results. Both sales and operating profit increased

QoQ and YoY.

■Summary of quarter consolidated result

【Net Sales】

In the 1st quarter of the fiscal year ending December 31, 2026, "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, net sales for the 1st quarter of the year were 26,594 million yen (an increase of 6,948 million yen quarter on quarter).

【Gross profit】

Consolidated gross profit for the 1st quarter was JPY 11,889 million (an increase of JPY3,435 million quarter on quarter) due to the higher net sales. The gross profit margin was 44.7% (increased by 1.7% quarter on quarter).

【Operating profit】

[Salary and allowances]

As of at the end of the 1st quarter of the year, the number of GungHo non-consolidated employees was 457 (an increase of 15 year on year and decrease of 2 quarter on quarter), and the number of consolidated

employees was 1,609 (an increase of 17 year on year and decrease of 5 quarter on quarter). For the 1st quarter, the salary and allowances were JPY 1,810 million (a decrease of JPY 707 million quarter on quarter). This is because there was no bonus payments made unlike in the previous quarter.

[Advertising expenses]

During the first quarter, GungHo conducted promotional activities for existing titles, including "Puzzule & Dragons." In Gravity, advertising expenses for Ragnarok-related titles-including newly released ones-remained at a low level. As a result, advertising expenses for the first quarter totaled JPY 1,741 million yen (a decrease of JPY 598 million yen compared to the previous quarter).

As a result, the operating profit for the 1st quarter of this year was JPY 3,693 million (an increase of JPY 4,504 million quarter on quarter). The operating profit margin was 13.9%.

• GungHo Online Entertainment Transition of non-consolidated monthly sales

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  In the 1st 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. Due to strategic operations and event implementation, "P&D" performed solidly and largely in line with expectations, while "RAGNAROK ONLINE" saw strong performance from January to February due to the campaign.

• 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	16million	11/28/2025
  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

  Ninala	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）

  	2024				2025				2026
  	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q
  Current assets	155,592	118,559	113,889	120,875	111,729	153,074	152,411	153,750	151,829
  Cash and deposits	135,724	97,371	95,574	99,598	91,851	131,804	130,192	130,474	123,384
  Accounts receivable-trade and contract	11,986	13,713	10,764	13,515	11,398	11,891	10,263	10,130	12,652
  Short-term investment securities	4,384	4,743	4,542	5,018	4,787	5,028	5,778	5,775	5,598

  Others	3,497	2,731	3,007	2,742	3,692	4,350	6,176	7,370	10,195
  Non-current assets	11,989	52,176	52,434	54,588	54,573	15,506	15,498	15,723	17,818
  Property, plant and equipment	1,114	1,026	901	1,326	1,347	1,396	1,401	1,412	1,280
  Intangible assets	483	458	436	748	618	832	692	568	504
  Investments and other assets	10,390	50,690	51,096	52,513	52,608	13,277	13,405	13,743	16,033
  Long-term deposit	-	40,000	40,000	40,000	40,000	-	-	-	-

  Others Total assets Current liabilities Notes and accounts payable-trade	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	13,743 169,474 15,368 5,817	16,033 169,648 22,132 7,300
  		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 2,963 4,110 1,699 2,989 1,298 1,802 697 592 1,683

  Others	7,925	8,996	8,168	10,602	11,708	8,231	8,296	8,959	13,148
  Non-current liabilities	1,035	1,020	1,037	2,475	2,533	2,538	2,581	2,773	2,627
  Total liabilities	17,856	19,458	15,885	21,929	21,337	20,217	18,039	18,141	24,760
  Shareholder's equity	123,416	122,247	124,115	125,624	118,884	120,212	120,652	119,167	112,913
  Capital stock	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	5,498	5,492	5,487	5,487
  Retained earnings	200,621	192,324	194,193	195,670	152,447	153,301	153,729	152,249	149,059

  Treasury shares	-88,031	-80,903	-80,904	-80,872	-44,389	-43,926	-43,908	-43,908	-46,972
  Total Accumulated other comprehensive income	2,352	3,592	1,356	1,687	15	1,157	1,268	2,689	1,794
  Foreign currency translation adjustment	2,352	3,592	1,356	1,687	15	1,157	1,268	2,689	1,794
  Others	-	-	-	-	-	-	-	-	-
  Stock Option	1,350	1,394	1,444	1,464	1,514	1,088	1,117	1,160	1,202
  Non Controlling Interests	22,606	24,043	23,521	24,759	24,552	25,905	26,831	28,315	28,978
  Total net assets	149,725	151,277	150,437	153,535	144,966	148,364	149,870	151,333	144,888
  Total liabilities and net assets	167,582	170,735	166,323	175,464	166,303	168,581	167,909	169,474	169,648

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