CyberAgent, Inc.

We would like to begin CyberAgent's FY2026 first quarter earnings briefing session. This session is being streamed. With respect to the content we will be sharing today, please refer to the disclaimer included within the presentation material. President Yamauchi will take you through our results. My name is Yamauchi. I have become the new president in December. From this session onwards, I will be sharing our results with you. Overall, we've done well in Q1, and FY2026 is off to a solid start. Sales has increased by 14%, And the OP has increased 2.8 fold year on year. Although we have made proper investments in media and IP, we have increased profits and this business has started to contribute to our results. We have seen significant increases in the game business profit thanks to the performance of existing titles as well as global business. With respect to advertising, in the third quarter of FY 2025, we saw one large client leave. And this will have impact on each quarter for one year. However, the situation has begun to improve in the recent months. We believe we will be able to get back on to our growth trajectory next quarter and see strong growth from the third quarter of this fiscal year. Our first quarter tends to be weaker, but we have seen powerful growth this year. For the first quarter, we have seen record high results. We also booked record high OP for Q1 this fiscal year. With such a great Q1, our fiscal year looks bright. SG&A expenses follow the typical year-on-year trend. Here are the trends in the number of employees. We will welcome 377 new graduates in April. Here is a P&L. And this is our balance sheet. We would like to move on to the FY2026 forecast. As Fujita explained during the previous earnings briefing, the results for the game business is difficult to forecast, so we have provided our forecast as a range. As we've had a great start in the first quarter, the OP achievement is ahead of plans. We hope to continue to deliver solid results for the rest of the fiscal year. Now moving on to each segment. Sales has continued to show strong growth over the long term. OP was $4.9 billion for the quarter, so we have started to see decent profits. We didn't generate profits by reining in costs. We made necessary investments in content while increasing profits, so we have realized quality growth. Until now, Abema TV on its own was not profitable, but this quarter it has become profitable. The fact that we were able to reach the break-even point without balance contraction, without overdoing things, it's a good sign, and we have even higher expectations for this business. We now have 1,000 advertisers on Abema. If you look at this graph, you can see that the FY 2022 World Cup coverage was a turning point. Centered around Abema, we will continue to create content and establish other monetization streams, including gamification. Our anime studio, Cygames Pictures, will be transferring into the media and IP segment. By consolidating our group strength, we hope to create even better content. Next is the internet ad business. As I mentioned earlier today, we have seen impact from the departure of one large client, and it may seem as though we mentioned this each session, but we will continue to see an impact for one year. This will end next quarter, and we believe things have started to look up. Overall, we will see positive change in the next quarter, so we will get back on our growth trajectory two quarters from now. With regards to the OP, we have seen positive trends over the last couple of months. We hope to further improve our profitability going forward. In terms of new businesses, we are attempting to fully automate the creation of video ads. We are servicing every aspect of advertising using AI. We began our foray into AI quite early. Drawing on this trend, we aim to become an agency that can maximize the effectiveness of our ads. Next, moving on to the game business. With respect to sales, the titles we released in the previous fiscal year continue to do well. First quarter tends to be a tough quarter without many anniversaries, but we saw dramatic increase in sales year on year. With the increase in sales, we also saw a significant increase in OP. The titles you see here have in particular enabled us to perform well in global markets. This fiscal year there will be many noteworthy topics including anime and movies. We also have new titles planned for release so we have high expectations for this business this year. This is one of the highly expected titles. It will be released across the world simultaneously. And today we release information about this title. Granblue Fantasy Relink sold more than 2 million copies, and we will be releasing a new title of this series, Granblue Fantasy Relink Endless Ragnarok, on July 9, simultaneously around the world. Lastly, our mid- to long-term strategy. As it has been in the past, We aim to become a highly profitable company over the mid to long term with the continuous growth of the media and IP business with its now profitable Abema, a stable advertising business, and a game business with many hit titles. This concludes my presentation. Thank you for your kind attention. This concludes CyberAgent's FI2026 first quarter earnings briefing session. Should you have any questions, please contact the IR team. Thank you very much for joining us today.