COVER (5253) investor relations material

Executive summary

• Revenue for FY2026/3 reached 49,330 million yen, up 13.7% year-over-year, driven by strong growth in Concerts/Events, Merchandising, and Licensing/Collaborations, despite declines in Streaming/Content and E-commerce due to talent and community changes.

• Operating profit declined 11.8% year-over-year to 7,056 million yen, and net profit dropped 45.7% to 3,016 million yen, mainly due to one-time non-cash costs from inventory write-downs and impairment losses on Holoearth development assets.

• Strategic asset optimization included retirement and write-down of slow-moving inventory and impairment of Holoearth development assets, impacting reported profits but not cash flow.

• The company is transitioning from quantitative to qualitative growth, focusing on talent value creation, global expansion, and capital efficiency.

Financial highlights

• Full-year revenue: 49,330 million yen (+13.7% YoY); gross profit: 23,507 million yen (+7.8% YoY); operating profit: 7,056 million yen (−11.8% YoY); net profit: 3,016 million yen (−45.7% YoY).

• Concerts/Events revenue grew 18.7% YoY; Licensing/Collaborations up 25.3% YoY; Merchandising up 15.6% YoY; Streaming/Content down 2.0% YoY.

• One-time non-cash costs: 1,800 million yen for inventory write-downs and 3,199 million yen for Holoearth impairment.

• Cash and cash equivalents at year-end: 16,008 million yen, up 4,510 million yen from the previous year.

• Gross profit margin at 48%; operating margin at 14%; net margin at 6%.

Outlook and guidance

• FY2027/3 revenue forecast: 51,350 million yen (+4.1% YoY); operating profit: 7,000 million yen (flat YoY); net profit: 4,900 million yen (+62.5% YoY).

• Guidance is conservative, reflecting ongoing adjustment in Streaming/Content and upfront investments in talent support.

• Upside catalysts include the launch of "hololive Dreams" and new talent debuts; downside risks include rising procurement costs and weaker overseas demand.

• Capital allocation will prioritize creative production, talent management, and R&D, with a cumulative growth investment and M&A budget of 50 billion yen.