GREE Holdings Inc (3632) Q4 2024 earnings summary

Executive summary

• FY 2024 net sales were JPY 61.3 billion, operating profit JPY 6.0 billion, and EBITDA JPY 6.3 billion, in line with expectations.

• Net profit attributable to owners of parent was JPY 4.63 billion, down 50.1% YoY.

• Segment reorganization split the former Internet Entertainment Business into Game and Anime, Metaverse, DX, Commerce, and Others, and renamed Investment and Incubation to Investment Business.

• Group earnings stability improved, with progress on medium to long-term growth initiatives and continued investment in VTuber and Investment Businesses.

Financial highlights

• FY 2024 sales and operating profit declined both QoQ and YoY, with net sales down 19% YoY and operating profit down 52% YoY, mainly due to a reactive decline from major anniversary events in the game and anime business.

• Net profit per share was 27.10 yen, down from 54.07 yen YoY.

• Ordinary profit was impacted by foreign exchange losses from yen depreciation.

• Variable and fixed costs declined in Q4, reducing total costs by JPY 2.0 billion to JPY 12.7 billion.

• Year-end dividend raised to JPY 16.5 per share, reflecting a revised policy targeting DOE of 3% and payout ratio of 30%+.

Outlook and guidance

• FY 2025 sales forecast at JPY 60.2 billion, operating profit at JPY 3.8 billion, with profit decline expected due to higher development costs for new titles.

• Q1 FY 2025 projected sales of JPY 12.9 billion, expecting to break even at operating level.

• Medium-term FY 2026 targets lowered due to delayed new title releases; growth expected to resume in FY 2027.

• Due to rapid changes in the business environment, especially impacting the Investment Business, consolidated earnings forecasts for the next fiscal year have been suspended.