ENVALITH
KLab株式会社 logo

KLab inc.

3656・Prime Market・Information & Communication

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KLab株式会社 logo
KLab inc.3656

Business

KLab Inc. was founded in 2000 and listed on the Tokyo Stock Exchange in 2011 as a mobile online game company. Its core business is the planning, development, and operation of smartphone games utilizing global IP from manga, anime, and other sources, with titles such as "BLEACH Brave Souls" and "Captain Tsubasa: Dream Team" deployed worldwide. The overseas sales ratio has reached approximately 61.5%, with global users as its main customer base. Starting from FY2025 (ending March 2025), with the aim of reducing dependence on the Game Business, the company has launched new businesses such as the GPU AI Cloud Business and the Integrated AI Entertainment Business under the "Other" segment, promoting diversification of its business portfolio. The company is composed of two consolidated subsidiaries (including KLab China Inc.) and one equity-method affiliate.

Business Model

The company obtains licenses for well-known manga and anime IP and develops and operates free-to-play (F2P) smartphone games. In-app purchases from users (¥4,907 million in FY2025) constitute the main revenue source, with distribution worldwide through platforms such as Apple and Google. In new business areas, revenue from outsourcing and sales-type models, such as GPU server sales (GPU AI Cloud Business) and AI talent production, is also being added.

Company Strengths

The company deploys games globally utilizing globally recognized Japan-originated manga and anime IP such as BLEACH Brave Souls, with the overseas sales ratio reaching approximately 61.5%. Sales via Xsolla increased significantly year-on-year (from 2.9% in the previous period to 12.6% in the current period), and platform diversification is also progressing.

The company implemented workforce reductions through office downsizing/relocation and voluntary retirement programs, carrying out substantial fixed cost cuts. The operating loss for FY2025 narrowed to ¥1,304 million from ¥1,342 million in the previous period, indicating that cost control measures are showing some effect.

In FY2025, the company secured ¥2,876 million in proceeds from stock issuance and ¥2,444 million in proceeds from sales of investment securities, resulting in a 224.8% increase in cash and cash equivalents at period-end to ¥5,214 million (from ¥1,605 million in the previous period). Total liabilities were also reduced by 45.1% to ¥2,969 million, improving financial soundness.

ENVALITH's Perspective

For the first quarter of FY2026 (ending December 2026), the operating loss expanded to ¥453 million from ¥288 million in the same period of the previous year. Game business revenue declined 15.7% year-on-year to ¥1,377 million, as the decay of mainstay titles (BLEACH Brave Souls, Haikyu!! FLY HIGH) continued. While increased revenue from GPU server sales provided some offset, rising expenses put pressure on profits. The structural issue of five consecutive periods of revenue decline has still not been resolved.

For the full fiscal year ending December 2026, the company announced a forecast of revenue of ¥17,000 million (up 147.9% year-on-year) and operating profit of ¥1,000 million. Against Q1 actual revenue of ¥1,705 million, the remaining three quarters would need to generate ¥15,295 million, which is premised on the release of two major new titles and their early monetization. The degree of business volatility is extremely large depending on market acceptance of the new titles, and the forecast carries high uncertainty.

In the first quarter under review, the company recorded a valuation loss on cryptocurrency assets of ¥56 million due to fair value revaluation of its held bitcoin, as well as a loss of ¥26 million from investment partnership operations. In addition, valuation differences on other securities decreased to nearly zero from ¥33 million at the end of the previous fiscal year, illustrating how price fluctuations in non-game assets are affecting the financial statements. As an external factor, the risk that cryptocurrency market conditions and the performance of investees will sway profit and loss continues.

Growth Strategy

V-shaped recovery of the Game Business through two major new titles and diversification via AI and GPU businesses

Development of Dragon Quest Smash Grow and My Hero Academia: United Survival is progressing, with the aim of achieving full-year net sales of ¥17,000 million and operating profit of ¥1,000 million through in-app purchase revenue contribution following release. As of the first quarter, both titles remain in development.

The GPU AI Cloud Business, centered on GPU server sales, recorded Other segment net sales of ¥329 million in the first quarter, offsetting the decline in the Game Business. The company is focusing on the three priority areas of "IP/Entertainment," "AI," and "Blockchain" to establish new businesses.

Captain Tsubasa: Dream Team has performed well since the start of the fiscal period. The company continues company-wide cost control while simultaneously investing in new businesses. However, in the first quarter, losses widened due to increased expenses, and the effect of the improvement in business fundamentals has been limited.

A medium- to long-term growth scenario combining the recovery of the Game Business with the growth of new businesses. As of the first quarter, achievement of the full-year forecast itself remains uncertain, and achieving the medium- to long-term targets is premised on a series of successful new title releases and the full-scale launch of new businesses.

Last updated: July 17, 2026