U-NEXT HOLDINGS Co.,Ltd.

Business Details

Operated by consolidated subsidiaries U-NEXT Co., Ltd. and Y.U-mobile Co., Ltd. The segment offers the monthly-subscription video distribution service "U-NEXT" (providing video, e-books, music, and live sports in a single app) and the MVNO service "y.u mobile". Its strength lies in "all-in-one entertainment," with a customer base of over 5 million paying users in the BtoC market. Cumulative sales for the third quarter of FY2026 (ending August 2026) reached ¥107,310 million, up 13.3% year on year, making it the core segment accounting for approximately 32% of total group sales.

Recent Overview

Cumulative Q3 sales grew 13.3% year on year to ¥107,310 million, an acceleration in growth

In the cumulative third quarter of FY2026 (ending August 2026) (September 2025 to May 2026), external customer sales in the Content Distribution Business were ¥107,310 million (versus ¥94,711 million in the prior-year period, +13.3%), and segment profit was ¥9,007 million (versus ¥7,754 million in the prior-year period, +16.2%), achieving both revenue and profit growth. Revenue recognized over time (subscription revenue) accounted for the majority of sales at ¥96,341 million, maintaining a stable revenue base. The revenue growth trend continued compared with the prior interim period, and progress is on track relative to the full-year forecast (sales of ¥424,000 million and operating profit of ¥33,500 million).

Key Products

Growth Drivers

• Differentiation and expansion of paying users through a rich content lineup (video, e-books, music, sports)
• Competitive advantage from exclusive and preferential distribution agreements for overseas content, such as exclusive distribution of Warner's "Max"
• Acquisition of new user segments through enhanced sports distribution including European soccer, combat sports, and golf
• Expansion of original content and distribution lineup through the joint venture established with CJ ENM and TBS Holdings
• Improvement in ARPU and customer usage rates through enhanced U-NEXT point rewards

Risks

• Consumer concentration on selected services in the video distribution market (intensifying competition with rivals)
• Margin pressure from rising content acquisition costs
• Asset and funding burden from the continued increase in content distribution rights (¥45,460 million as of the end of May 2026)
• Risk of rising overseas content acquisition costs due to yen depreciation (foreign exchange loss of ¥455 million recorded in the cumulative third quarter)
• Risk regarding the recovery of investment in original IP development and visual production