Key Positives From The Results
Adjusted EBITDA of JPY 22.839B (+48.6% YoY) and adjusted net income of JPY 9.405B (+55.6% YoY) delivered strong growth on a Non-GAAP basis. With 26 M&A transactions during the year and 45 consolidated subsidiaries now under the group umbrella, the earnings base has deepened considerably. Next-fiscal-year guidance of JPY 215.0B in revenue (+25.8%) points to continued momentum.
- Revenue reached JPY 170.787B (+52.7% YoY). Amusement revenue of JPY 118.221B (+58.7% YoY) was the primary growth driver, underpinned by 22 new domestic store openings and 69 stores acquired via M&A
- Following the acquisition of Player One in North America, Kiddleton-format prize game machines have been deployed to a cumulative 305 locations. Revenue at deployed locations has expanded versus pre-installation levels
- SMART EXCHANGE posted YoY revenue growth in every month since joining the group and recorded its all-time highest monthly revenue in October 2025. The addition of "Tourism" and "Lifestyle" verticals has broadened the portfolio
- Karaoke operations acquired a total of 100 locations; the acquisition of Kaji Corporation brought the group's #1 and #2 karaoke equipment distribution businesses under one roof, advancing vertical integration
- The company will initiate its inaugural dividend (JPY 8.00/share annually) starting next fiscal year, alongside the announced plan to voluntarily adopt IFRS — reinforcing its commitment to capital markets engagement
Key Concerns From The Results
GAAP operating income of JPY 7.425B (▲6.1% YoY) and recurring profit of JPY 5.979B (▲17.5% YoY) marked declines on a GAAP basis. M&A-related expenses of JPY 1.999B (+JPY 624M YoY) and interest expense of JPY 1.566B (+JPY 887M YoY) weighed on profitability, while the swelling goodwill balance of JPY 50.664B presents an additional risk factor.
- GAAP OPM deteriorated ▲2.7pt to 4.3% (vs. 7.0% prior year). Accelerated M&A drove goodwill amortization to JPY 3.632B and SG&A to JPY 31.844B (+82.1% YoY), compressing margins
- Goodwill balance of JPY 50.664B (22.8% of total assets). This includes JPY 10.76B from Player One where provisional accounting remains incomplete, leaving residual risk of additional amortization charges once PPA is finalized
- Total interest-bearing debt of JPY 102.951B (short-term borrowings JPY 39.626B + current portion of long-term debt JPY 14.27B + long-term borrowings JPY 37.755B + bonds JPY 11.3B). Equity ratio declined to 29.2% (vs. 30.8% prior year) as financial leverage increased
- Investing cash flow of ▲JPY 71.641B — driven by subsidiary share acquisitions (▲JPY 39.061B) and capex on tangible fixed assets (▲JPY 26.433B) — reflects a significant cash-outflow-first posture, with the gap versus operating cash flow widening
- EPS declined ▲7.7% to JPY 20.59 (vs. JPY 22.30 prior year), reflecting dilution from stock splits and new share issuances
Focus Areas / Items To Monitor Going Forward
- Progress on Player One integration and the trajectory of EBITDA improvement. Clarity on the path from the trailing EBITDA of USD 18M at acquisition to the medium-to-long-term target of USD 35M, along with disclosure of specific revenue uplift rates at the 305 locations where Kiddleton-format machines have been deployed, will be critical
- The magnitude of earnings contribution from GENDA Playnation Entertainment (UK) next fiscal year, accounting for its seasonality (April–October peak). As the deemed acquisition date is December 31, 2025, only one month's contribution was captured this fiscal year — the full-year annualization impact warrants close monitoring
- The impact of the transition to IFRS goodwill accounting next fiscal year (from amortization to non-amortization plus impairment testing), and the outlook for narrowing the divergence between adjusted and GAAP metrics
- Quantitative milestones for Player One EBITDA improvement KPIs (incremental prize machine deployments, revenue per store, etc.)
- Post-integration PMI framework and organizational structure for the broader North American amusement business (NEN + Kiddleton + Player One + Barberio)
- Quarterly impact estimates of GENDA Playnation Entertainment (UK) seasonality on consolidated earnings
- Key assumptions underlying impairment testing for the JPY 50.664B goodwill balance (discount rates, growth rates)
- Plans for revising management KPIs post-IFRS adoption and whether Non-GAAP metric disclosure will continue
- Refinancing / tenor extension plans for JPY 39.626B in short-term borrowings and mitigation strategy for rising interest rate risk
- Quantitative synergy targets from integrating the karaoke equipment distribution businesses (Kaji Corporation + Ontsu)
- Expansion targets for SMART EXCHANGE foreign currency exchange machine installations and underlying inbound tourism demand assumptions
- Dividend policy for the inaugural JPY 8.00/share annual dividend (payout ratio targets, framework for future increases)
- Potential for future equity financing to fund M&A and measures to mitigate dilution for existing shareholders
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 170.787B | +52.7% |
| Gross Profit | JPY 39.27B | +54.6% |
| Operating Income | JPY 7.425B | ▲6.1% |
| Recurring Profit | JPY 5.979B | ▲17.5% |
| Net Income Attributable to Owners of Parent Company | JPY 3.655B | +12.3% |
| EPS | JPY 20.59 | ▲7.7% |
| Adjusted EBITDA | JPY 22.839B | +48.6% |
| Adjusted Operating Income | JPY 13.345B | +27.2% |
| Adjusted Net Income | JPY 9.405B | +55.6% |
| Adjusted EPS | JPY 52.98 | +27.8% |
| Comprehensive Income | JPY 5.912B | +62.3% |
| Operating Cash Flow | JPY 13.473B | +70.8% |
| Investing Cash Flow | ▲JPY 71.641B | - |
| Financing Cash Flow | JPY 64.958B | +153.2% |
| ROE | 7.2% | ▲4.6pt |
| Recurring Profit / Total Assets | 3.5% | ▲5.1pt |
| OPM | 4.3% | ▲2.7pt |
GAAP operating income declined ▲6.1%, but adjusted metrics — which add back JPY 1.999B in M&A-related expenses (+JPY 624M YoY) — showed profit growth of +27.2% to +55.6%. Gross profit margin improved modestly to 23.0% (vs. 22.7% prior year, +0.3pt).
Performance By Business Segment
| Segment | Revenue | YoY | Segment Profit (EBITDA) | YoY | Margin |
|---|---|---|---|---|---|
| Entertainment Platform | JPY 156.519B | +55.1% | JPY 19.353B | +44.6% | 12.4% |
| Entertainment Content | JPY 21.363B | +47.7% | JPY 764M | +90.8% | 3.6% |
- Amusement (Domestic): 22 new store openings and 69 locations acquired via M&A drove +58.7% YoY growth. Flagship store launches including GiGO Roppongi (with GiGO POKER) also contributed
- Amusement (Overseas): Large-scale M&A — Player One (US/Canada; 104 amusement centers + ~2,000 mini-locations), GENDA Playnation Entertainment (UK; ~100 stores + ~150 mini-locations), among others — produced a sharp acceleration in overseas revenue
- Tourism (SMART EXCHANGE): Every month post-acquisition outperformed YoY, with record-high monthly revenue in October 2025. AI-powered cash collection route optimization and other initiatives proved effective
- Karaoke: 100 store acquisitions augmented by the launch of VSING Shibuya (new format) and the Kaji Corporation deal, which advanced value chain vertical integration in equipment distribution
- Content & Promotion: GAGA distributed 26 titles including "The Substance" (Academy Award winner) and "Triumph" (JPY 1.67B box office). The addition of Eiga.com to the group enabled online-to-offline advertising integration
- None (all services achieved revenue growth; however, GAAP OPM declined due to increased M&A-related expenses and goodwill amortization)
Progress Versus Full-Year Guidance
This period represents full-year actuals. For next fiscal year (FY01/2027), the company has issued guidance of JPY 215.0B in revenue, JPY 30.0B in adjusted EBITDA, and JPY 10.6B in adjusted net income — implying +25.8% revenue growth and +31.3% adjusted EBITDA growth versus current-year actuals. Full-year contributions from in-period M&A and operational improvements are expected to be the key growth drivers. Note that GAAP operating income, recurring profit, and net income guidance for next fiscal year have not been disclosed.
- The company's legacy businesses skew toward H2 (August–January). GENDA Playnation Entertainment (UK) peaks April–October (holiday park demand), which is expected to partially offset the group's seasonal patterns going forward
Changes To Guidance
Next-fiscal-year (FY01/2027) guidance has been newly issued. GAAP operating income, recurring profit, and net income forecasts have not been disclosed; only Non-GAAP metrics (adjusted EBITDA and adjusted net income) are provided.
Commentary On Shareholder Returns
The company plans to pay its inaugural dividend starting next fiscal year (FY01/2027), with an annual dividend of JPY 8.00/share (interim JPY 4.00 + year-end JPY 4.00). No dividend was paid through the current fiscal year (FY01/2026). During the current fiscal year, the company executed JPY 2.033B in share buybacks (treasury shares held at period-end: 2,881,076 shares).
Financial Position
Aggressive M&A activity drove total assets to JPY 222.214B (+93.3% YoY). Goodwill of JPY 50.664B (+173.3% YoY) and amusement facility equipment of JPY 31.887B (+157.7% YoY) were the primary contributors to non-current asset growth. Liabilities also ballooned to JPY 157.032B (+97.9% YoY) on M&A-related financing, pushing the equity ratio down to 29.2% (vs. 30.8% prior year, ▲1.6pt).
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Cash Equivalents | JPY 32.209B | +26.1% YoY |
| Total Assets | JPY 222.214B | +93.3% YoY |
| └ Total Current Assets | JPY 63.845B | +40.0% YoY |
| └ Total Non-Current Assets | JPY 158.315B | +128.3% YoY |
| Goodwill | JPY 50.664B | +173.3% YoY; 22.8% of total assets |
| Shareholders' Equity | JPY 65.051B | +83.6% YoY |
| Total Interest-Bearing Debt | JPY 102.951B | Short-term borrowings + long-term borrowings + bonds |
| └ Short-Term Borrowings | JPY 39.626B | +249.8% YoY |
| └ Current Portion of Long-Term Debt | JPY 14.27B | +56.9% YoY |
| └ Long-Term Borrowings | JPY 37.755B | +33.0% YoY |
| └ Bonds | JPY 11.3B | New issuance |
| EBITDA (Adjusted) | JPY 22.839B | Company-disclosed |
News Released Alongside The Earnings Announcement
Major Announcements During The Quarter
- 2025/12/17Signed a comprehensive business alliance agreement with Bushiroad Inc. focused on overseas expansion and IP utilization GENDA and Bushiroad Sign Business Alliance Agreement
- 2026/02/03Launched "Asobidas," an oshi-katsu (fan engagement) AX company. Pursuing platform expansion in the fan business domain GENDA-Backed Oshi-Katsu AX Company "Asobidas" Launches
- 2026/02/13Signed a business alliance agreement with Kotobukiya Co., Ltd. to deploy content (IP) across GENDA's global platform GENDA and Kotobukiya Sign Business Alliance Agreement
- 2026/02/26Subsidiary Shin Corporation resolved to acquire 100% of issued shares in Ottotree Entertainment, a karaoke facility operator in Malaysia — marking a full-scale entry into Southeast Asia GENDA's Karaoke Business Expands into Malaysia
- 2026/03/02Subsidiary Shin Corporation acquired one karaoke location, reopening it as "Karaoke BanBan Ochanomizu" GENDA Executes Karaoke Roll-Up M&A
Large-Shareholding Filings / Material Proposals Over The Past Year
- Midas Capital: 32.95% → 29.11% (2025/12/23) — Held as a stable shareholder. Change triggered by execution of collateral agreements and other material contracts
- Zennor Asset Management LLP: 0% → 5.62% (2025/12/17) — Investment management purpose for client assets under discretionary mandate. Filing notes the possibility of engaging with management or making material proposals as circumstances warrant
- Rheos Capital Works Inc.: 0% → 5.17% (2024/09/13) — New filing upon exceeding 5% threshold
- Capital Research and Management Company: Amendment filing (2024/11/22) — Pure investment purpose for non-Japan domiciled investment trusts managed on behalf of clients
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