Link-U Group Inc.

Business Details

Leveraging its proprietary, self-designed servers as a strength for high-speed, low-cost data delivery infrastructure, the company's core business is a Recurring Services model in which it handles the development and operation of manga apps for major publishers on a one-stop basis. In its production business, it continues to win large-scale development projects that capture client DX demand. It also operates a Marketing Services business, though this continues to be affected by reduced transactions with a key client. Through a business alliance with Crunchyroll, LLC, the company has launched a manga service for North America, shifting the axis of its growth increasingly toward overseas markets.

Recent Overview

Revenue and operating profit declined year on year, but profit attributable to owners of parent recovered sharply to 2.3 times the prior-year level

For the cumulative third quarter of FY2026 (ending July 2026) (August 2025 to April 2026), revenue was ¥3,548 million (96.4% of the same period prior year) and operating profit was ¥241 million (86.6%), representing a decline in both revenue and profit. The main cause was reduced transactions with a key client in the Marketing Services business. On the other hand, corporate income tax expense declined sharply from ¥141 million to ¥92 million year on year, resulting in profit attributable to owners of parent for the quarter of ¥139 million (227.4% of the same period prior year), a substantial increase. Both the manga service business and the production business recorded record-high revenue for the second consecutive quarter. Progress was made on measures to strengthen global expansion and business infrastructure, including the launch of the North American manga service "Crunchyroll Manga" through the business alliance with Crunchyroll, LLC, and the new consolidation of Link-U Products Co., Ltd. as a subsidiary (from this quarter). Investments accounted for using the equity method increased substantially, from ¥45 million at the end of the prior fiscal year to ¥405 million. The full-year earnings forecast (revenue of ¥4,900–5,100 million, operating profit of ¥320–400 million) remains unchanged.

Key Products

Growth Drivers

• Launch of the North American manga service "Crunchyroll Manga" through the business alliance with Crunchyroll, LLC, and expansion of overseas IP content distribution
• Continued winning of large-scale development projects capturing client DX demand in the production business (record-high revenue for two consecutive quarters)
• Improved engineer productivity and strengthened competitive advantage through the shift to an AI-driven development structure
• Building a future pillar of overseas revenue by expanding the provision of proprietary and third-party IP content to overseas platforms
• Medium- to long-term expansion of the e-book market (market size of ¥6,703 million in FY2024, projected to approach ¥800 billion by FY2029)
• Expansion of business scope through the new consolidation of Link-U Products Co., Ltd. as a subsidiary

Risks

• Continued impact on revenue and profit from reduced transactions with a key client in the Marketing Services business
• A somewhat downward trend amid intensifying competition in the domestic manga service market
• Short-term decline in profitability due to increased costs associated with overseas expansion and upfront investment
• Risk of dependence on specific clients
• Uncertainty in the operating environment due to prolonged interest rate and foreign exchange fluctuations and geopolitical risk
• Impact on liquidity from a decrease in cash and cash equivalents (from ¥1,654 million at the end of the prior fiscal year to ¥1,160 million at the end of the current quarter)