KLab (3656): FY2025 Results Summary — Net Loss Widens on Software Impairment as Cost Cuts Hold Operating Loss Flat

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

KLab Inc. reported FY2025 (ended Dec. 31, 2025) revenue of 6,856 million yen, down 17.5% year on year, as revenue from its core game titles declined despite contributions from the support model title Haikyu!! Fly High and from GPU server sales. Thorough fixed-cost reductions kept the operating loss at -1,304 million yen, broadly the same level as the previous year’s -1,342 million yen. However, profit attributable to owners of parent was -4,176 million yen, a loss widened by 1,393 million yen, mainly due to the impairment loss on software assets for EA SPORTS FC TACTICAL recorded in the second quarter. During the year the company raised approximately 5.1B yen through new shares and stock acquisition rights, lifting cash and deposits to 5,214 million yen.

Consolidated Results (Full-Year Actual)

According to the company, revenue declined compared to the previous fiscal year due to lower revenue from existing titles, although Haikyu!! Fly High and GPU servers contributed to revenue. The company made thorough efforts to reduce fixed costs, including downsizing and relocating offices, reducing hiring and offering voluntary retirement, and as a result the operating loss improved by 37 million yen year on year. Ordinary income was -1,421 million yen (difference to YoY: -140 million yen).

Item (In Millions of Yen)	FY2025	FY2024	YoY Difference	YoY Difference (%)
Revenue	6,856	8,306	-1,450	-17.5%
Gross Profit (% of revenue)	830 (12.1%)	1,132 (13.6%)	-302	-26.7%
Operating Income (% of revenue)	-1,304 (-19.0%)	-1,342 (-16.2%)	37	―
Ordinary Income (% of revenue)	-1,421 (-20.7%)	-1,280 (-15.4%)	-140	―
Profit Attributable to Owners of Parent (% of revenue)	-4,176 (-60.9%)	-2,782 (-33.5%)	-1,393	―

In the fourth quarter (October–December 2025), revenue was 1,922 million yen, up 8.5% from the third quarter, as the global anniversary campaign for Captain Tsubasa: Dream Team progressed smoothly and GPU server orders contributed. The operating loss widened to -443 million yen due to expenses related to new businesses and temporary expenses such as advertising and personnel costs, while the quarterly net loss narrowed to -202 million yen owing to extraordinary income related to the downsizing and relocation of offices.

Item (In Millions of Yen)	FY2025 4Q	FY2025 3Q	QoQ (%)	FY2024 4Q	YoY (%)
Revenue	1,922	1,772	+8.5%	2,247	-14.5%
Gross Profit (% of revenue)	238 (12.4%)	275 (15.6%)	-13.6%	422 (18.8%)	-43.7%
Operating Income (% of revenue)	-443 (-23.1%)	-212 (-12.0%)	―	-228 (-10.2%)	―
Ordinary Income (% of revenue)	-375 (-19.5%)	-215 (-12.1%)	―	-98 (-4.4%)	―
Profit Attributable to Owners of Parent (% of revenue)	-202 (-10.5%)	774 (43.7%)	―	-1,025 (-45.6%)	―

Cost Structure and Business Trends

KLab does not present segment results in the materials; the company instead breaks down its costs. COGS fell 16.0% to 6,025 million yen, with labor costs down 21.0% due to a reduction in the number of employees and royalties & commissions down 24.2% on lower revenue, while other COGS rose 35.8% due to the procurement of GPU servers. SG&A fell 13.7% to 2,134 million yen. The number of group full-time employees was 322 as of the end of December 2025, significantly reduced by the voluntary retirement program implemented at the end of June 2025.

Item (In Millions of Yen)	FY2025	FY2024	Difference	Difference (%)
COGS	6,025	7,173	-1,147	-16.0%
Labor costs	2,662	3,369	-707	-21.0%
Outsourcing & Subcontracting	1,545	2,096	-551	-26.3%
Royalties & Commissions	2,709	3,576	-867	-24.2%
Other (COGS)	1,025	755	270	35.8%
Account Transfers (-)	1,917	2,624	707	-26.9%
SG&A	2,134	2,474	-339	-13.7%
Allowance	665	641	23	3.7%
PR & Promotions	400	438	-37	-8.6%
Other (SG&A)	1,068	1,395	-326	-23.4%

By title, overseas revenue mainly consists of Captain Tsubasa: Dream Team and BLEACH Brave Souls, and the proportion of overseas revenue in the game business currently exceeds 70%, according to the company. On the balance sheet, cash and deposits rose to 5,214 million yen from 1,605 million yen, reflecting fundraising, the sale of strategically held shares and the transfer of GlobalGear Co. Ltd., while intangible assets decreased to 3,167 million yen from 7,811 million yen, primarily due to the impairment of software assets for EA SPORTS FC TACTICAL. The equity ratio improved to 76.9% from 65.6%.

Fundraising and Financial Strategy

KLab raised approximately 5.1B yen by issuing new shares and stock acquisition rights, while also granting paid stock options to directors and employees for management stability. The third-party allotment of common stock totaled 2,876 million yen and the stock acquisition rights 2,258 million yen, with a maximum dilution rate of 40.56%. The largest allottee is ULTIMATE CLASSIC INVESTMENT LLC (UCI), a Dubai-based investment company, and the partnership with allottee Sun* Inc. (TSE Prime Market: 4053) will be developed into a capital and business alliance. Under a “dual gold treasury strategy,” 70% of the funds is allocated to purchasing Bitcoin and gold (gold ETFs, etc.), with a target ratio of 6:4 and a basic approach of dollar-cost averaging.

Use of Funds	Amount	Share
Purchase of Bitcoin and gold (gold ETF, etc.)	3.6B yen	70%
Planning, development, and operation of new large-scale mobile online games	1B yen	20%
New business development	0.5B yen	10%
Total amount raised	approx. 5.1B yen	―

FY2026 Management Policy and Outlook

The presentation does not provide numerical full-year forecasts for FY2026; this cannot be confirmed from the materials. For FY2026 the company aims for a game business transformation toward profitability and a V-shaped recovery, with two new titles scheduled for release, and for management diversification in which new businesses move from the testing phase to the execution phase. New businesses have generated revenue of approximately 2B yen, but the company states it is still in the investment phase. Focus areas have been redefined as “IP/Entertainment,” “AI” and “Blockchain,” spanning a GPU AI cloud business, the AI music label KLab AI Entertainment, AI creative production for businesses, an AI VTuber and an AI automated trading system. JoJo’s Bizarre Adventure: Golden Anthem, developed in collaboration with WANDA CINEMAS GAMES, began closed beta testing on January 29.

Mid-Term Management Plan: VISION 2028

Under VISION 2028, KLab targets turning profitable and achieving a V-shaped recovery through new title releases in 2026, steady growth in 2027, and record-breaking results in 2028 with revenue of 35B yen and operating profit of 5B yen. For 2028, the plan envisions 15B yen in game revenue and new business revenue reaching 20B yen.

Shareholder Returns

The presentation does not state a dividend or share buyback policy for FY2025 or FY2026; this cannot be confirmed from the materials. The company says it will first give top priority to business recovery, and then work to improve corporate value over the mid- to long-term by promoting the mid-term management plan and further enhancing IR activities. ROE for 2025 was -40.6% and PBR was 2.8, with an end-of-period stock price of 378 yen.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.