GREE Holdings Inc (3632) Q2 2025 earnings summary

Executive summary

• Consolidated net sales for FY25 Q2 reached ¥15.6 billion, with operating profit at ¥2.2 billion and EBITDA at ¥2.3 billion, reflecting strong quarter-over-quarter growth driven by the Game and Anime and Investment Businesses.

• Net sales for the six months ended December 31, 2024, were ¥28,520 million, down 5.0% year-over-year, with operating profit of ¥2,115 million, up 3.9% year-over-year, and net profit attributable to owners of parent of ¥955 million, up 32.6% year-over-year.

• Game and Anime Business saw successful events for mainstay titles, resulting in sales of ¥9.9 billion and operating profit of ¥1.2 billion, both up QoQ.

• The Investment Business contributed significantly with sizable dividends, boosting consolidated results.

• Aggressive investments continued in Game and Anime, Metaverse, DX, and Investment Businesses, with segment reclassification merging Commerce into DX from July 1, 2024.

Financial highlights

• Consolidated net sales increased by ¥2.6 billion QoQ to ¥15.6 billion; operating profit rose by ¥2.4 billion to ¥2.2 billion.

• Ordinary profit and net income increased both QoQ and YoY, supported by foreign exchange gains.

• Three-segment basis (excluding Investment): net sales ¥13.7 billion (+8% QoQ), operating profit ¥1.2 billion (+78% QoQ), EBITDA ¥1.3 billion (+71% QoQ).

• Gross profit for the period was ¥14,770 million, down from ¥16,444 million year-over-year.

• Basic earnings per share increased to ¥5.58 from ¥4.22 year-over-year.

Outlook and guidance

• Q3 FY25 estimates for three segments: sales expected to rise 3% QoQ, but operating profit to decline 39% QoQ due to increased promotional and development costs in Game and Anime.

• Full-year FY25 sales are expected to decrease versus the initial forecast due to delayed game releases, but operating profit is forecast to increase.

• Medium-term targets anticipate sizable growth from FY 2027, especially in the metaverse and DX businesses, with profit CAGR (FY25-27) targeted at 41%.

• Disclosure of consolidated earnings forecast for the fiscal year ending June 30, 2025, has been suspended due to rapid changes in the business environment, especially impacting the Investment Business.