#Japan #Tokyo #KADOKAWA #ELDEN RING #IP Creation

KADOKAWA's Fiscal Year 2025 Results

KADOKAWA, the diverse entertainment powerhouse based in Tokyo, has announced its consolidated financial results for the fiscal year ending March 2025. The report revealed a significant increase in sales despite facing substantial setbacks from cyberattacks that impacted operations. Revenue rose by 7.7% to ¥277.9 billion, whereas operating profit witnessed a decline of 9.8%, landing at ¥16.7 billion. The net profit dropped sharply by 35.1% to ¥74 billion, primarily due to substantial special losses related to cyberattacks, amounting to ¥2.4 billion.

Excluding Cyber Impact

Strikingly, when excluding the effects of the cyberattack — which led to reductions of ¥8.3 billion in revenue and about ¥4.7 billion in operating profit — KADOKAWA would have experienced a much more robust growth, with 11% revenue rise and a 16% increase in operating profits. This indicates the company's underlying strength and growth potential, even in challenging circumstances.

Segment Performance

Publishing and IP Creation

The Publishing and IP creation segment saw growth with increased investment in talent leading to a greater number of new IPs. Despite challenges from the cyber incident that adversely affected domestic printed books, the robust performance of eBooks, overseas printed books, and licensing revenues helped maintain a growth of 6.6% within the segment overall.

Anime and Live Action

The Anime and Live Action segment performed extraordinarily well, achieving record revenue and profit figures for the second consecutive period. A strong lineup and successful distribution both domestically and abroad, along with appealing licensing for games and merchandise, have led the anime business to attain record industry performance, boosting the entire segment's profitability.

Games

The Games division benefited from robust sales of 'ELDEN RING’ as well as its DLC, fueling both revenue and operating profit growth. The sustained interest in this title contributes significantly to KADOKAWA's strong position in the gaming market.

Web Services

Conversely, the Web Services sector faced substantial impacts from cyberattacks, witnessing a revenue drop of ¥3.95 billion and an operating profit decline of ¥2.1 billion. This sector remains a critical area for recovery moving forward.

Education and EdTech

KADOKAWA's Education and EdTech segment has also exhibited notable strength, with an impressive increase in student numbers at facilities like Vantan and N/S High, resulted in continued high growth in this segment.

Other Segments

Cost control measures and decreased depreciation costs have helped reduce losses in the Other segment, demonstrating effective management strategies amidst hardships.

2026 Outlook

Looking ahead, KADOKAWA is optimistic about its fiscal year ending March 2026, planning for overall revenue growth and an increase in profits. Contributions from the 'ELDEN RING' title are expected to taper, but the company anticipates achieving growth beyond expectations.

In the Publishing and IP segment, electronic books and foreign printed books are projected to grow, while the domestic printed book segment is expected to recover from its 2025 declines. The Anime and live-action sectors are poised for additional hits with a notable increase in new releases, targeting record performance for a third consecutive period.

Conclusion

Despite the adversity faced due to cyber incidents this past fiscal year, KADOKAWA remains on a path of strategic growth, primarily driven by its commitment to tech-linked IP creation and a global media mix strategy. The company's focused efforts in diverse segments position it well for sustainable growth and a strong financial future. Additional details are available on KADOKAWA's IR portal.

For further information, visit KADOKAWA Group's IR Materials.

About KADOKAWA

Founded as a comprehensive entertainment company, KADOKAWA operates in publishing, anime and real film production, gaming, web services, and education/EdTech. Through its global media mix strategy, the company seeks to optimize and deliver a wide range of intellectual properties (IPs) across various platforms and audiences globally.