ENVALITH
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KAYAC Inc.

3904・Growth Market・Information & Communication

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株式会社カヤック logo
KAYAC Inc.3904

Business

Kayac Inc. was founded in 1998 and is headquartered in Kamakura City, Kanagawa Prefecture, as a digital content company. Under its management philosophy of "increasing the number of creators," it forms a group comprising 21 consolidated subsidiaries and 2 affiliated companies. Its main businesses consist of four services: (1) "Game Entertainment," centered on Hyper-casual Games; (2) "Omoshiro Produce," which provides marketing and branding support for clients; (3) "eSports," led by GLOE Inc.; and (4) "Regional Capitalism," a regional revitalization platform. Its main customers span a wide range, including domestic and overseas game users, advertisers, local governments, and regional companies. Net sales for FY2025 (ending December 2025) were ¥20,095 million. The company plans to begin disclosing segment information from FY2026 (ending December 2026).

Business Model

In Game Entertainment, in-game advertising revenue via ad networks is the main revenue source, with AppLovin Corp. accounting for 21.9% of net sales as the largest client. Omoshiro Produce earns revenue from planning and development contracted by advertising agencies and direct clients. Esports consists of contracted event operations and system usage fees for Tonamel, while Chiiki Capitalism comprises introduction fees and monthly usage fees for Smout and Machi no Coin, plus contracted regional promotion fees. The company maintains an organizational structure with a creator ratio exceeding 90% and operates multiple businesses efficiently by allocating resources across them.

Company Strengths

Maintained the No.1 ranking among Japanese companies in the global app download ranking for 5 consecutive years through 2025. In FY2025 (ending December 2025), downloads reached a record high of approximately 346.12 million, up 10.8% year on year. The company has established a trading foundation with major ad networks such as AppLovin Corp., Mintegral, and Unity, and stably generates advertising revenue.

The company routinely practices cross-domain synergies, such as applying gamification insights from game entertainment to Omoshiro Produce, and utilizing advertising know-how for Chiiki Capitalism promotions. By centrally managing creator resources through an assignment system and maintaining a creator ratio of over 90%, the company has secured the ability to respond to rapid changes in the business environment.

In FY2025 (ending December 2025), Chiiki Capitalism sales increased 61.3% year on year to ¥1,451 million. Smout's cumulative registered users grew 28.5% year on year to approximately 84,000, and the number of regions where it has been introduced reached 1,164 (an adoption rate of approximately 68.5% against roughly 1,700 municipalities nationwide). Machi no Coin's cumulative registered users also expanded 26.8% year on year to 215,000.

ENVALITH's Perspective

Cumulative operating profit for 1Q FY2026 was ¥340 million (up 36.5% year on year) and ordinary profit was ¥355 million (up 88.3% year on year), showing clear improvement in the core business. Meanwhile, quarterly net profit attributable to owners of the parent fell sharply to ¥185 million (down 55.2% year on year). In the same period of the prior year, extraordinary gains totaling ¥286 million were recorded, comprising gains on sale of investment securities, gains on sale of shares in affiliated companies, and gains on business transfer, whereas in the current period such gains amounted to only ¥2 million. While the improvement in core earnings power is commendable, the sustainability of net profit needs to be judged based on the degree to which the company moves away from its dependence on extraordinary gains.

In the Game & Animation segment, the company plans to make upfront investments of approximately ¥300 million in the next fiscal year for a new game business developed jointly with a major IP, and this development expense is planned to be recorded as an expense in the consolidated income statement. The full-year FY2026 operating profit forecast stands at ¥1,000 million (down 6.6% year on year), indicating an expected decline in profit. Although the decline in profit margin during the investment phase is already factored in, continued attention is needed regarding the uncertainty of development delays and monetization after market launch.

The full-year FY2026 forecast (net sales of ¥23,000 million, operating profit of ¥1,000 million) remains unchanged. 1Q net sales of ¥5,202 million correspond to 22.6% of the full-year forecast, representing a generally favorable start. However, the Regional Capitalism segment has a structure in which revenue tends to concentrate in 1Q due to the impact of local government fiscal years, so it is necessary to confirm the seasonal pattern of sales and profit from 2Q onward. As an external environment factor, weak consumer sentiment continues, and its impact on demand for Brand & Marketing Contracting Business should also continue to be monitored.

Growth Strategy

Aiming for sustainable growth through three axes: the four-segment structure, large-scale IP investment, and Smout's expansion into the private sector

Transitioning from project-based production and implementation to a support model that integrates multiple specialized functions spanning strategic design through ongoing operations. DX contracting at Kayac Bond Inc. served as a driver, with 1Q FY2026 operating profit reaching ¥217 million, up 36.8% year on year. The company aims to stabilize profit margins and achieve sustained improvement in profitability.

Advancing a new game business through co-development with a major IP. Aiming for future breakthrough growth after a development period of nearly two years. Development costs of approximately ¥300 million are to be recorded as expenses on the consolidated statement of income, placing full-year FY2026 profit in an investment phase that will weigh on earnings.

Targeting 10 Hyper-casual Games and 4 hybrid-casual game releases for full-year FY2026. As of 1Q, 2 Hyper-casual Games (Pistol Duel and Aqua Form) and 1 hybrid-casual game (Untape) had been released, progressing favorably. The company is also promoting collaboration with partners, leveraging its brand, which has ranked No. 1 globally for five consecutive years.

Building on its track record of adoption by approximately 1,200 municipalities nationwide, the company is expanding its business domain to target private companies. As of the end of 1Q FY2026, the number of users stood at 88,892 (full-year target: 130,000), the number of paid regions at 997 (full-year target: 1,184), and the adoption rate at 11% (full-year target: 20%), indicating a solid start. The company aims to establish a highly profitable model combining the platform with related contracted services.

Effective from the fiscal year ending December 2026, the company is transitioning from a single-segment structure to a four-segment structure, improving transparency regarding the growth phase, profitability characteristics, and management resource allocation of each business. The company aims to enhance disclosure to investors and increase corporate value. Disclosure of segment-based profit and loss began in 1Q.

Last updated: July 17, 2026