ENVALITH
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COVER Corporation

5253・Growth Market・Information & Communication

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カバー株式会社 logo
COVER Corporation5253

Business

COVER Corporation develops "VTuber" virtual entertainer characters using motion-capture technology and anime-style avatars, and operates the VTuber production "hololive production" (VTuber Production). As of the end of March 2026, 84 VTubers were active, with total YouTube channel subscribers exceeding 95.02 million. The company operates across four business areas—Streaming/Content Services, Live/Event Services, Merchandising Services, and License/Tie-up Services—and promotes multifaceted IP commerce based on its domestic and overseas fan communities. Its main customers are domestic and overseas VTuber fans and corporate tie-up partners (approximately 500 partner companies).

Business Model

The company licenses VTuber character IP to content creators, enhancing fan engagement through livestreaming, music, and events. Building on the IP brand strength cultivated this way, it diversifies revenue opportunities into merchandising such as goods and trading card games, as well as licensing out to external companies and tie-up advertising. The IP commerce revenue (Merchandising Services + License/Tie-up Services) share of total sales has expanded from 39.8% in FY2021 (ending March 2021) to 62.7% in FY2026 (ending March 2026), establishing a multifaceted revenue structure that has moved away from dependence on streaming.

Company Strengths

As of the end of March 2026, total YouTube channel subscribers exceeded 95.02 million, with 43 talents surpassing 1 million subscribers each. Cumulative video posts reached approximately 150,000, and the number of live streams in FY2026 (ending March 2026) exceeded 29,000. The IP portfolio and large-scale fan community accumulated through years of operation form an entry barrier that competitors cannot easily replicate in a short period.

'hololive OFFICIAL CARD GAME,' released in September 2024, had cumulative shipments exceeding 30 million packs as of the end of March 2026, driving Merchandising Services segment revenue of ¥23,747 million (up 15.6% year on year). A multi-channel sales structure combining proprietary e-commerce, retail stores, and improved overseas shipping, along with supply chain optimization through the launch of a new distribution center, is enhancing the stability of the revenue base.

License-out deals, which enable the use of IP in game characters, product packaging, and other applications without requiring direct performer involvement, are highly profitable, with the number of partner companies expanding to approximately 500 as of the end of March 2026. Revenue in this segment maintained high growth at ¥7,198 million (up 25.3% year on year), reflecting a business structure capable of scalable revenue expansion unconstrained by performer availability.

ENVALITH's Perspective

Net income attributable to owners of parent for FY2026 (ending March 2026) fell sharply to ¥3,016 million (down 45.7% year on year), but the main causes were a one-time impairment loss of ¥3,199 million related to "HoloEarth" assets and the write-off/valuation loss of slow-moving inventory. Operating cash flow improved significantly to ¥7,204 million from ¥5,285 million in the previous period, and cash and cash equivalents remain ample at ¥16,008 million. Excluding these one-time expenses, the underlying business remains robust, and the increase in deferred tax assets (¥1,596 million) indicates continued progress in utilizing tax losses.

In FY2026 (ending March 2026), revenue from the Streaming/Content Services segment declined to ¥9,137 million (down 2.0% year on year), making it the only segment to post a revenue decrease. This was attributable to short-term fluctuations in streaming traffic caused by changes in talent lineup and the community environment, and the FY2027 (ending March 2027) forecast also reflects a cautious outlook, with cumulative operating profit for the first half down 27.6% year on year. External factors, including U.S. tariff risk and a pullback in overseas consumer demand due to currency fluctuations, are also heightening uncertainty over earnings, and the timing of the recovery in streaming revenue will be key to full-year performance.

The earnings forecast for FY2027 (ending March 2027) calls for revenue of ¥51,350 million (up 4.1% year on year) and operating profit of ¥7,000 million (down 0.8% year on year), reflecting an anticipated slowdown in growth. This structure reflects upfront investment in upgrading the creative production environment and expanding the talent management system, which is expected to weigh on profit. On the other hand, the release of the company's first major smartphone game, 'hololive Dreams', and the expansion of the fan base through new talent debuts are explicitly cited as potential upside factors, with net income attributable to owners of parent expected to recover sharply to ¥4,900 million (up 62.4% year on year). Achieving the FY2030 financial targets (revenue of ¥100,000 million and operating profit of ¥25,000 million) will require sustaining growth of roughly 20% per year, and the company has entered a phase in which the results of this investment period will be put to the test.

Growth Strategy

Transition from quantitative expansion to qualitative expansion, targeting sales of ¥100,000 million and operating profit of ¥25,000 million or more by FY2030 (ending March 2030)

Focusing on the continued growth in popularity of the trading card game "hololive OFFICIAL CARD GAME," the company is advancing expansion of retail distribution channels, improvements to overseas shipping (fixed shipping rates, expanded delivery regions), and logistics infrastructure development. In FY2026 (ending March 2026), sales in this segment reached ¥23,747 million (up 15.6% year on year), growing to become the largest segment, accounting for approximately 48% of total company sales.

In addition to large-scale solo and unit live performances at domestic venues, the company continued its overseas world tour (7 cities in FY2026, ending March 2026). "hololive SUPER EXPO 2026" and "hololive 7th fes." were held for the first time as 3-day events in the series, achieving the largest scale to date. Progress was also made in real-event development for new-generation talents, including "ReGLOSS"'s first solo live performance at Ariake Arena.

Progress in media mix development, including the release of the first large-scale smartphone game "hololive Dreams," is expected to be an upside factor for FY2027 (ending March 2027). The technical achievements gained from the change in development policy for "Holo Earth" have been consolidated into existing operations, and a strategic shift has already been implemented to reallocate management resources toward core areas such as talent activity support and deepening of expressive technology.

The number of projects and business partners has been expanded through strengthened collaboration with domestic and overseas sales agencies and enhanced sales structures. Large-scale deals have progressed against a backdrop of deepening transactions across a wide range of industries, including games, toys, food, and daily necessities, as well as improved brand recognition. Sales in FY2026 (ending March 2026) maintained high growth at ¥7,198 million (up 25.3% year on year).

As part of capital allocation, the company has established a cumulative growth investment and M&A framework of approximately ¥50.0 billion, promoting investment in areas with high strategic fit as well as continuous research and development. The management strategy is shifting from a phase of quantitative expansion to a phase of qualitative expansion that emphasizes earnings quality and capital efficiency. While securing on-hand liquidity backed by strong operating cash flow, the company is also implementing flexible shareholder returns (in May 2026, it resolved to acquire treasury shares with an upper limit of 3,000,000 shares and ¥3,000,000,000).

Last updated: July 19, 2026