Avex Inc. (7860): FY2025 Results Summary — Return to Profitability on Live Events and Overseas Anime Growth

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Avex Inc. reported FY2025 (fiscal year ended March 31, 2026) net sales of ¥146,571 million (+11.3% YoY) and a return to profitability, with operating profit of ¥4,085 million versus an operating loss of ¥1,819 million in FY2024. The company attributes the improvement to an increase in live performance-related revenue in the Music Business, strong overseas sales of anime titles in the Anime & Visual Content Business, and a reduction in SG&A expenses. Profit attributable to owners of parent was ¥3,553 million (+212.1% YoY). Final results exceeded the company’s initial forecast for the period, announced on May 8, 2025, of ¥3,000 million operating profit and ¥1,200 million profit attributable to owners of parent.

Consolidated Results (Full-Year Actual)

Net sales increased in both the Music Business and the Anime & Visual Content Business, reaching a record high since the COVID-19 pandemic. Operating profit returned to profitability and increased significantly due to a reduction in SG&A expenses, resulting from a decrease in the provision of allowance for doubtful accounts and a review of expense execution. The company recorded extraordinary income following the transfer of shares in equity-method affiliate SANRIO SOUTHEAST ASIA PTE. LTD. in December 2025.

Item (million yen)	FY2024	FY2025	YoY change	Rate
Net sales	131,691	146,571	+14,879	+11.3%
Gross profit	35,839	41,779	+5,940	+16.6%
Gross profit margin	27.2%	28.5%	+1.3pt	–
Total SG&A expenses	37,658	37,694	+36	–
Operating profit	-1,819	4,085	+5,904	–
Operating margin	–	2.8%	–	–
Ordinary profit	-1,703	4,333	+6,037	–
Profit before income taxes	3,762	4,927	+1,165	+31.0%
Profit attributable to owners of parent	1,138	3,553	+2,414	+212.1%

Extraordinary income was ¥1,220 million (versus ¥6,486 million in FY2024), and extraordinary losses were ¥626 million (versus ¥1,020 million). Income taxes were ¥951 million (versus ¥2,420 million in FY2024), and profit attributable to non-controlling interest was ¥422 million (versus ¥203 million).

Segment Results

The Music Business returned to profitability, driven primarily by an increase in live performance-related sales. The Anime & Visual Content Business saw an increase in both net sales and operating profit, supported by strong overseas distribution of animated works.

Segment (million yen)	FY2024 Net Sales	FY2025 Net Sales	FY2024 Operating Profit	FY2025 Operating Profit
Music Business	114,574	122,312	-1,180	3,468
Anime & Visual Content	18,492	21,723	299	1,062
Other Businesses	4,109	4,726	-939	-439
Adjustment	-5,485	-2,190	0	-5
Total	131,691	146,571	-1,819	4,085

Within the Music Business, net sales in the Music Business were ¥122,312 million (+6.8% YoY), with Live sales of ¥53,482 million (+17.4%), Merchandising of ¥8,238 million (+10.4%), Management of ¥12,102 million (+7.2%), Music package sales of ¥19,741 million (-7.9%), Digital music distribution of ¥15,644 million (+12.5%), Music publishing of ¥3,262 million (+1.5%), E-Commerce of ¥17,834 million (+7.9%) and Other of ¥8,792 million (+7.6%). Operating profit in the Music Business was ¥3,468 million versus an operating loss of ¥1,180 million in FY2024, for an operating margin of 2.8%.

Music Business breakdown (million yen)	FY2024	FY2025	YoY change	Rate
Net Sales in the Music Business	114,574	122,312	+7,737	+6.8%
Live	45,571	53,482	+7,910	+17.4%
Merchandising	7,465	8,238	+772	+10.4%
Management	11,292	12,102	+810	+7.2%
Music package	21,445	19,741	-1,704	-7.9%
Digital music distribution	13,909	15,644	+1,735	+12.5%
Music publishing	3,214	3,262	+48	+1.5%
E-Commerce	16,535	17,834	+1,298	+7.9%
Other	8,172	8,792	+620	+7.6%

Net sales in the Anime & Visual Content Business grew to ¥21,723 million (+17.5% YoY), driven by Anime net sales of ¥17,138 million (+26.9%), which more than offset a decline in Live-action net sales to ¥4,377 million (-7.3%) and Other of ¥208 million (-20.0%). Operating profit rose to ¥1,062 million (+254.8%), for an operating margin of 4.9% (+3.3pt YoY). Net sales in Other Businesses were ¥4,726 million (+15.0% YoY), and the operating loss narrowed to ¥439 million from ¥939 million in FY2024.

FY2026 Forecast

Consolidated financial forecasts for FY2026 (announced May 14, 2026) are set at ¥6,000 million for operating profit and ¥3,200 million for profit attributable to owners of parent. The company will maintain its dividend policy of a 35% dividend payout ratio and a minimum annual dividend of ¥50.

Item (million yen)	FY2025 (Results)	FY2026 (Forecast)	YoY	Rate
Net sales (Reference value)	146,571	–	–	–
Operating profit	4,085	6,000	+1,915	46.9%
Profit attributable to owners of parent	3,553	3,200	– 353	– 9.9%
Annual dividends (yen)	50	50	±0	–

Shareholder Returns

Avex maintains a dividend policy under which the consolidated dividend payout ratio is 35% or more and the minimum level of annual dividend per share is ¥50, with stock buybacks flexibly decided with consideration of the business environment. Over FY2022 to FY2025 the company continued to provide a minimum dividend of ¥50, for a total amount of approximately ¥8.8 billion, and completed a stock buyback totaling ¥4.3 billion from May 2024 to December 2024. Under the capital allocation plan set out at the time of its Medium-Term Business Plan announcement (before revision of target measures), the company estimated five-year operating cash flows before investment of 30 billion yen, of which 10 billion yen or more was allocated to shareholder returns via dividends; combined with cash and deposits excluding working capital of 30 billion yen, 25 billion yen was allocated to strategic investment for the creation of intellectual property. The company notes that five-year operating cash flow has decreased compared to initial projections.

Capital allocation item	Plan (5-year, before revision of target measures)
Estimate of 5-year operating cash flows (before investment)	30 billion yen
Shareholder return (Dividends)	10 billion yen or more
Cash and deposits excluding working capital	30 billion yen
Strategic investment for creation of intellectual property	25 billion yen

Medium-Term Plan / Topics

The company states that ROE improved significantly to 7% for FY2025, and that it will promote business strategies for medium- to long-term growth along with initiatives to reduce the cost of capital, in order to achieve profitability exceeding an estimated cost of shareholders’ equity of 6.0% to 8.0%. Stated business strategy actions include IP creation with a global perspective, strategic acquisition of rights, maximization of value, and the implementation of group-wide structural reforms aimed at improving profitability. Stated capital and financial strategy actions include increasing capital efficiency through balance sheet management, implementing measures to increase capital profitability including shareholder returns, enhancing disclosure of non-financial information through the integrated report, and promoting dialogue with shareholders.

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.