GungHo Online Entertainment FY2025 Earnings Release

Financial Results of Fiscal Year Ended December 31, 202 5
[Japanese GAAP] (Consolidated)

February 1 3, 202 6
Name of listed company: GungHo Online Entertainment, Inc.
Stock exchange listing: Tokyo Stock Exchange
Code number: 3765
URL: https://www.gungho.co.jp/en/
Representative: Kazuya Sakai , Representative Director & President, CEO
Contact: Kazumasa Takayama , Corporate Officer, CFO & IRO , Executive General Manager of Corporate Planning
Division
TEL: 03 -6895 -1650
Annual general shareholders’ meeting date: March 30 , 202 6
Securities report issuing date: March 19, 202 6
Dividend payment date: April 20, 202 6
Supplemental information for financial statements: Yes
Financial results briefing session: Yes (For institutional investors and analysts)

(Amounts are rounded off to the nearest million yen .)

1. Consolidated financial results for the f iscal year ended December 31, 202 5 (from January 1, 202 5 to
December 31, 202 5)
(1) Consolidated operating results (% figure represents the year -on -year change)
Net sales Operating income Ordinary income Profit attributable to
owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen %
Fiscal year ended
December 31,
202 5
93 ,242 (10.0) 5,056 (71 .1) 6,780 (66 .1) 1,407 (87 .4)
Fiscal year ended
December 31,
202 4
103,600 (17.3) 17,491 (37.3) 20,013 (31.7) 11,171 (32.0)
(Note) Comprehensive
income
Fiscal year ended
December 31, 202 5
5,969 million yen
(61 .5%)
Fiscal year ended
December 31, 202 4
15 ,491 million yen
(34. 4%)
Profit per share Diluted net profit
per share Return on equity Ordinary profit on
total assets
Operating profit to
net sales
Yen Yen % % %
Fiscal year ended
December 31,
202 5

25 .79

25 .51

1.1

3.9

5.4
Fiscal year ended
December 31,
202 4

182.67

180.70

8.8

11.7

16.9
(2) Consolidated financial position
Total assets Net assets Shareholders’ equity
ratio Net assets per share
Millions of yen Millions of yen % Yen
Fiscal year ended
December 31,
202 5

169 ,474

15 1,333

71.9

2,2 42.37
Fiscal year ended
December 31,
202 4

175,464

153,535

72.6

2,280.75

(Reference) Shareholders’ equity: Fiscal year ended
December 31, 202 5
121,856 million
yen
Fiscal year ended
December 31, 202 4
127, 311 million
yen
(3) Status of consolidated cash flows
Cash flows from
operating activities
Cash flows from
investing activities
Cash flows from
financing activities
Balance of cash and
cash equivalents at the
end of the year Millions of yen Millions of yen Millions of yen Millions of yen
Fiscal year ended
December 31,
202 5

149

(28,676 )

(8,82 7)

31 ,021
Fiscal year ended
December 31,
202 4

17 ,132

(47 ,588 )

(12 ,217 )

68 ,171
2. Dividends
Dividends per share Total
dividends
Dividend
payout ratio (Consolidated)
Dividend on
equity ratio (Consolidated) 1st quarter 2nd quarter 3rd quarter 4th quarter Total
Yen Yen Yen Yen Yen Millions of yen % %
Fiscal year ended
December 31,
202 4

－

0.00

－

60.00

60 .00

3,349

32.8

2.7

Fiscal year ended
December 31,
202 5

－

0.00

－

90.00

90.00

4,890

348.9

4.0
Fiscal year ending
December 31,
202 6(Forecast)
– – – – – –
(Note) The year -end dividend for the fiscal year end ed December 31, 202 5 is currently a forecast , and will be confirmed by the resolution of the Board of Directors meeting scheduled to be held on March 30 , 202 6.
For details, please refer to “ Change to Shareholder Return Policy ” in “ Information Related to the Consolidated Earnings Forecast and Other Future Projections” on page 3 . Dividend forecasts for the fiscal year ending December 31, 202 6 have yet to be determined.

3. Consolidated financial results f orecast for the fiscal year en ding December 31, 202 6(from January 1,
202 6 to December 31, 202 6) The GungHo Group engages in the content business that is highly novel in nature and is subject to facing sudden,
short -term changes in the operating environment. Since this makes it difficult to calculate proper and rational
earnings forecasts, the Company adopts th e policy of providing timely disclosure of financial results and summary
of operations on a quarterly basis while refraining from disclosing its full -year consolidated earnings forecast.

*Notes
(1) Changes in significant subsidiaries during the period (Changes in scope of
consolidation of specified subsidiaries.) : No
(2) Changes in accounting policies, changes in accounting estimates and restatements
1) Changes in accounting policies due to revisions of accounting standards : Yes
2) Changes in accounting policies due to reasons other than 1) : No
3) Changes in accounting estimates : No
4) Restatements : No (3) Number of shares of common stock issued
1) Number of shares of common stock
outstanding at the end of the period
(including treasury shares)
Fiscal year ended December 31, 202 5
69,161,416 shares
Fiscal year ended December 31, 202 4
83,161 ,416 shares
2) Number of treasury shares at the end of
the period
Fiscal year ended December 31, 202 5
14,818 ,472 shares
Fiscal year ended December 31, 202 4
27,3 41,332 shares
3) Average number of shares during the
period
Fiscal year ended December 31, 202 5
54,57 7,520 shares
Fiscal year ended December 31, 202 4
61,157 ,128 shares

(Reference) Summary of non -consolidated operating results

1. Non -consolidated financial results for the Fiscal Year Ended December 31, 202 5 (From January 1,
202 5 to December 31, 202 5)
(1) Non -consolidated operating results (% figure represents the year -on -year change)
Net sales Operating profit Ordinary profit Net profit
Millions of yen % Millions of yen % Millions of yen % Millions of yen %
Fiscal year ended
December 31,
202 5

33 ,579

(32.5)

(3,702 )

–

(3,470 )

–

(3,653 )

–
Fiscal year ended
December 31,
202 4

49,731

3.3

7,731

(26.4)

7,831

(29.7)

5,400

(27.9)

Net profit per share Diluted net profit per
share
Yen Yen
Fiscal year ended
December 31,
202 5

(66.9 4)

–
Fiscal year ended
December 31,
202 4

88.31

87.35

(2) Non -consolidated financial position
Total assets Net assets Shareholders’ equity
ratio Net assets per share
Millions of yen Millions of yen % Yen
Fiscal year ended
December 31,
202 5

87 ,625

81 ,315

91 .5

1,474 .99
Fiscal year ended
December 31,
202 4

102,666

93,137

89.3

1,642.30
(Reference) Shareholders’ equity: Fiscal year ended
December 31, 202 5 80 ,155 million yen
Fiscal year ended
December 31, 202 4 91,673 million yen

* This report of consolidated financial results is outside scope of the audit review process of Certified
Public Accountants and Auditor. * Appropriate use of earnings forecast and other matters to note  This document contains forward -looking statements including forecasts in relation to the results of operations
and they are based on information available to the Company at the time of preparing the document along with
certain assumptions that are deemed t o be rational. Actual results may differ materially from those expressed
or implied by the statements due to various factors. For the assumptions underlying the earnings forecast
presented and other information regarding the use of such forecasts, please r efer to “ Information Related to
the Consolidated Earnings Forecast and Other Future Projectio ns” on page 3 of the Appendix.
 The Company plans on holding a financial results briefing session for investors as follows. All documents
distributed at the briefing session will be posted on the company’s website after the briefing session is held.
 Financial results briefing session for institutional investors and analysts: Friday , February 1 3, 202 6

-1-
 Table of Contents for Appendix

1. Overview of Operating Results ………………………….. ………………………….. ………………………….. ……………… 2
(1) Overview of Operating Results for the current fiscal year ………………………….. ………………………….. ….. 2
(2) Overview of Financial Position for the current fiscal year ………………………….. ………………………….. ….. 3
(3) Overview of the cash flow for the current fiscal year ………………………….. ………………………….. …………. 3
(4) Information Related to the Consolidated Earnings Forecast and Other Future Projectio ns ……………… 3
2. Basic stance on selection of accounting standards ………………………….. ………………………….. ………………. 3
3. Consolidated Financial Statements and principal notes ………………………….. ………………………….. ………… 5
(1) Consolidated Balance Sheets ………………………….. ………………………….. ………………………….. …………… 5
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ………. 7
(3) Changes in Net Assets ………………………….. ………………………….. ………………………….. ……………………. 9
(4) Consolidated Cash Flow Statements ………………………….. ………………………….. ………………………….. .. 11
(5) Notes on consolidated financial statements ………………………….. ………………………….. …………………. 12
(Notes on Going -concern Assumption) ………………………….. ………………………….. ………………………….. . 12
(Changes in Accounting Policies) ………………………….. ………………………….. ………………………….. ……… 12
(Changes in accounting estimates) ………………………….. ………………………….. ………………………….. …… 12
(Restatements) ………………………….. ………………………….. ………………………….. ………………………….. ….. 12
(Changes in presentation method) ………………………….. ………………………….. ………………………….. ……. 12
(Segment Information) ………………………….. ………………………….. ………………………….. …………………….. 12
(Per share information) ………………………….. ………………………….. ………………………….. ……………………. 15
(Significant Subsequent Events) ………………………….. ………………………….. ………………………….. ……….. 16

-2-
1. Overview of Operating Results
(1) Overview of Operating Results for the current fiscal year
Regarding the economic circumstances in the fiscal year under review , strong inflationary pressure continued, and
various costs were on an upward trend. As for the domestic gaming market, although the size of the mobile gaming
sector has generally remained flat since 2021, as t he ways smartphone users spend their leisure time are becoming
more diversified including the viewing of video content. This makes it increasingly necessary to closely monitor user
trends for effective user retention in mobile games .
Against this backdrop, the Company continued to strengthen its development structure to concentrate on game
development with an emphasis on global distribution, resulting in increased costs related to new development titles,
primarily due to outsourcing ex penses.
As for the global development of our titles, we released “LET IT DIE: INFERNO,” a rogue -lite survival action game,
on December 4, 2025. This is the latest installment of our first global title “LET IT DIE” released in 2016, and it is now
available globally with multi -lingual support.
Regarding “Puzzle & Dragons”, which is our flagship title, we have worked to maintain and expand MAU (Monthly
Active User: the number of users who log into the game at least once a month) and have made efforts to strengthen
the brand of game to maximize the value of existing game. We have held various events such as appreciation
celebration and collaboration s with famous characters from other companies for ensuring players continue to enjoy
the game over the long term . Besides in -game events, we have continued our efforts to expand user base such as
hosted the off -line events, released titles related to “P&D ”, and approach to e -sports.
Looking at “Ragnarok” related titles, which subsidiary Gravity Co., Ltd. and its consolidated subsidiaries are
operating, it continued to contribute to the consolidated financial result due to the global service of new title such as
“Ragnarok : Twilight ”, which was released in Southeast Asia on Octo ber 23, 202 5
As a result, net sales for the fiscal year ended December 31, 202 5 amounted to 93 ,242 million yen, ( a decrease of
10.0% year -on -year). Operating profit was 5,056 million yen, (a decrease of 71.1% year -on -year), ordinary profit was
6,780 million yen, (a decrease of 66 .1% year -on-year), and profit attributable to owners of parent came to 1,407
million yen, (a decrease of 87 .4% year on year).
The GungHo Group is a single -segment company; therefore, no segment information is disclosed.

-3-
(2) Overview of Financial Position for the current fiscal year
Total assets as of December 31, 202 5 were 169,474 million yen with an increase of 5,989 million yen from the end of
the previous fiscal year. This was mainly due to the decrease in cash and deposit including l ong -term deposit .
Total liabilities wer e 18,141 million yen with an decrease of 3,787 million yen from the end of the previous fiscal
year. This was primarily attributable to a decrease in income taxes payable etc. resulting from payment of income
taxes etc.
Total net assets were 15 1,333 million yen with an de crease of 2,202 million yen from t he end of the previous fiscal
year. This was mainly due to a decrease in shareholders’ equity resulting from payment of dividends and the
acquisition of treasury shares.

(3) Overview of the cash flow for the current fiscal year
Cash and cash equivalents (hereinafter “Funds”) as of December 31, 202 5 were 31,021 million yen, down 37,150
million yen from the end of the previous fiscal year.
Cash flow conditions for the fiscal year ended December 31, 202 5 and relevant factors are described below.

(Cash flows from operating activities)
Funds obtained from operating activities wer e 149 million yen. This was mainly because the Company recorded a
profit before income taxes and minority interests of 6,576 million yen and payment of income taxe s which
amounted to 4,804 million yen.

(Cash flows from investing activities)
Funds used for investing activities were 28,676 million yen. This was mainly due to expenditures (net amount) of
27 ,119 million yen resulting from deposits into and withdrawals from time deposits.

(Cash flows from financing activities)
Funds used for financing activities were 8,827 million yen. This was mainly due to the acquisition of treasury shares
of 5,002 and the payment of 3,350 million yen for dividends.

(4) Information Related to the Consolidated Earnings Forecast and Other Future Projections
The GungHo Group engages in the content business that is highly novel in nature and is subject to facing sudden,
short -term changes in the operating environment. Since this makes it difficult to calculate proper and rational earnings
forecasts, the Company adopts the policy of providing timely disclosure of financial results and summary of
operations on a quarterly basis while refraining from disclosing its full -year consolidated earnings forecast.

(Change to Shareholder Return Policy)

The Company resolved at the Board of Directors meeting held on February 1 3, 202 6 that it would change its
shareholder return policy. In addition, the Company announces as follows regarding the forecast for the year -end
dividend for the fiscal year ended December 202 5, which had previously been undecided.
Furthermore, the year -end dividend for the fiscal year ended December 202 5 is planned to be determined at the
Board of Directors meeting scheduled for March 30 , 202 6, based on the revised shareholder return policy, setting the
ordinary dividend at 90.00 yen per share.

(i) Reason
The Company has consistently provided stable and continuous profit returns. However, we have decided to revise
our shareholder return policy, in order to implement a more proactive profit return to our shareholders.

-4-
(ii) Details

-Before change –
The Company recognizes that one of its important management challenges is to achieve profits on an ongoing basis
and to provide a stable return to shareholders. In determining the specific total amount of returns to shareholders, the
Company comprehensivel y considers the management environment, business performance, financial soundness,
and investment for growth, while striving to increase its corporate value over the long term. Its basic policy for
returning profits to shareholders is to combine stable div idends in line with profit levels and forecasts with flexible
share buybacks.
As for a more detailed basic policy, dividends will be to maintain a consolidated
dividend payout ratio of 30% or more, and to implement such dividend payout on a stable and continuous basis.
Share buybacks are positioned as a flexible capital policy aimed at enhancing capital efficiency, taking into account
market stock prices and our financial condition, and will be continuously implemented based on decisions at the
Board of Directors meetings.

-After change –
The Company recognizes that one of its important management challenges is to achieve profits on an ongoing basis
and to provide a stable return to shareholders. In determining the specific total amount of returns to shareholders, the
Company comprehensivel y considers the management environment, business performance, financial soundness,
and investment for growth, while striving to increase its corporate value over the long term. Its basic policy for
returning profits to shareholders is to combine stable div idends in line with profit levels and forecasts with flexible
share buybacks.
As for a more detailed basic policy, to balance capital efficiency -conscious management with stable and continuous
shareholder returns, we will introduce DOE (Dividend on Equity) with a target of 4%, while keeping the consolidated
dividend payout ratio at 50% or higher . Furthermore, share buybacks are positioned as a flexible capital policy aimed
at enhancing capital efficiency, taking into account market stock prices and our financial condition, and will be
continuously implemented based on decisions at th e Board of Directors meetings.

iii) Effective Period
The above change will take effect from the fiscal year ended December 31, 202 5

2. Basic stance on selection of accounting standards
The Company currently adopts the Japanese accounting standards.
The Company’s policy is to consider adopting international accounting standards in view of domestic and global
situations in the future.

-5-
3. Consolidated Financial Statements
(1) Consolidated Balance Sheets

(Millions of yen)
As of December 31, 202 4 As of December 31, 202 5
Assets
Current assets
Cash and deposits 99,598 130,474
Accounts receivable – trade, and contract
assets 13,515 10,130
Securities 5,018 5,775
Merchandise 16 47
Other 2,785 7,3 89
Allowance for doubtful accounts (59 ) (67 )
Total current assets 120,875 153, 750
Non -current assets
Property, plant and equipment 1,326 1,412
Intangible assets
Software 197 366
Other 551 201
Total intangible assets 748 568
Investments and other assets
Long -term deposit 40,000 ―
Deferred tax assets 7,122 7,54 2
Other 5,391 6,201
Total investments and other assets 52,513 13,74 3
Total non -current assets 54,588 15,72 3
Total assets 175,464 169,4 74

-6-
(Millions of yen)
As of December 31, 202 4 As of December 31, 202 5
Liabilities
Current liabilities
Accounts payable – trade 5,861 5,817
Income taxes payable 2,989 592
Provision for performance -linked remuneration 87 24
Other 10,515 8,9 34
Total current liabilities 19,453 15,3 68
Non -current liabilities
Long -term accounts payable – other 1,277 1,348
Retirement benefit liability 17 30
Other 1,180 1,394
Total non -current liabilities 2,475 2,773
Total liabilities 21,929 18,1 41
Net assets
Shareholders’ equity
Share capital 5,338 5,338
Capital surplus 5,487 5,487
Retained earnings 195,670 152,2 49
Treasury shares (80,872 ) (43,908 )
Total shareholders’ equity 125,624 119,1 67
Accumulated other comprehensive income
Foreign currency translation adjustment 1,687 2,689
Total accumulated other comprehensive income 1,687 2,689
Share acquisition rights 1,464 1,160
Non -controlling interests 24,759 28,315
Total net assets 153,535 151,3 33
Total liabilities and net assets 175,464 169,4 74

-7-
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

(Millions of yen)
Fiscal year ended
December 31, 202 4
Fiscal year ended
December 31, 202 5
Net sales 103,600 93,242
Cost of sales 50,185 50,913
Gross profit 53,415 42,328
Selling, general and administrative expenses 35,923 37,2 71
Operating profit 17,491 5,0 56
Non -operating income
Interest income 1,955 1,809
Foreign exchange gains 428 ―
Other 168 132
Total non -operating income 2,552 1,941
Non -operating expenses
Interest expenses 15 29
Commission for purchase of treasury shares 11 2
Foreign exchange losses ― 183
Other 3 2
Total non -operating expenses 30 217
Ordinary profit 20,013 6,780
Extraordinary losses
Impairment losses 174 203
Total extraordinary losses 174 203
Profit before income taxes 19,838 6,5 76
Income taxes – current 6,363 2,688
Income taxes – deferred (1,532 ) (40 3)
Total income taxes 4,831 2,285
Profit 15,007 4,2 91
Profit attributable to non -controlling interests 3,835 2,883
Profit attributable to owners of parent 11,171 1,407

-8-
Statements of Comprehensive Income
(Millions of yen)
Fiscal year ended
December 31, 202 4
Fiscal year ended
December 31, 202 5
Profit 15,007 4,2 91
Other comprehensive income
Foreign currency translation adjustment 483 1,678
Total other comprehensive income 483 1,678
Comprehensive income 15,491 5,9 69
Comprehensive income attributable to
Comprehensive income attributable to owners of
parent 11,468 2,410
Comprehensive income attributable to non –
controlling interests 4,022 3,559

-9-
(3) Changes in Net Assets
FY202 4 (from January 1, 202 4 to December 31, 202 4)
(Million yen)

Shareholders’ equity
Share Capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity
Balance at the beginning of current period 5,338 5,487 198,415 (83,168 ) 126,073
Changes during the period
Dividends of surplus (1,796 ) (1,796 )
Profit attributable to owners of parent 11,171 11,171
Exercise of share acquisition rights (8) 50 42
Purchase of treasury shares (9,865 ) (9,865 )
Disposal of treasury shares ― ― ―
Cancelation of treasury shares (12,111 ) 12,111 ―
Transfer from retained earnings to capital surplus 12,119 (12,119 ) ―
Net changes in items other than shareholders’ equity ―
Total changes during period ― ― (2,745 ) 2,296 (449 )
Balance at the end of current period 5,338 5,487 195,670 (80,872 ) 125,624

Accumulated other comprehensive income
Share acquisition
rights
Non -controlling
interests Total net assets Foreign currency translation adjustment Total accumulated other comprehensive income
Balance at the beginning of current period 1,390 1,390 1,300 20,731 149,495
Changes during the period
Dividends of surplus (1,796 )
Profit attributable to owners of parent 11,171
Exercise of share acquisition rights 42
Purchase of treasury shares (9,865 )
Disposal of treasury shares ―
Cancelation of treasury shares ―
Transfer from retained earnings to capital surplus ―
Net changes in items other than shareholders’ equity 297 297 163 4,027 4,488 Total changes during period
297

297

163

4,027

4,039 Balance at the end of current
period
1,687

1,687

1,464

24,759

153,535

-10 –

FY202 5 (from January 1, 202 5 to December 31, 202 5)
(Millions of yen)
Shareholders’ equity
Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity
Balance at beginning of period 5,338 5,487 19 5,670 (80,872 ) 12 5,624
Changes during period
Dividends of surplus (3,349 ) (3,349 )
Profit attributable to owners of parent 1,407 1,407
Exercise of share acquisition rights 4 482 487
Purchase of treasury shares (5,003 ) (5,003 )
Disposal of treasury shares (0) 0 0
Cancellation of treasury shares (41 ,483 ) 41,483 –
Transfer from retained earnings to capital surplus 41 ,479 (41,479 ) –
Net changes in items other than shareholders’ equity –
Total changes during period – – (43 ,420 ) 36 ,963 (6,456 )
Balance at end of period 5,338 5,487 152 ,249 (43 ,908 ) 119 ,167

Accumulated other comprehensive income Share acquisition rights Non -controlling interests Total net assets Foreign currency translation adjustment Total accumulated other comprehensive income
Balance at beginning of period 1,687 1,687 1,464 24,759 153,535
Changes during period
Dividends of surplus (3,349 ) Profit attributable to owners of parent 1,407 Exercise of share acquisition rights 487
Purchase of treasury shares (5,003 )
Disposal of treasury shares 0 Cancellation of treasury shares ― Transfer from retained earnings to capital surplus ― Net changes in items other than shareholders’ equity 1,002 1,002 (304 ) 3,556 4,254
Total changes during period 1,002 1,002 (304 ) 3,556 (2,2 02 )
Balance at end of period 2,689 2,689 1,160 28,315 151,3 33

-11 –
(4) Consolidated Cash Flow Statements
(Millions of yen)
Fiscal year ended
December 31, 202 4
Fiscal year ended
December 31, 202 5
Cash flows from operating activities
Profit before income taxes 19,838 6,576
Depreciation 951 1,012
Share -based payment expenses 205 182
Impairment losses 174 203
Increase (decrease) in allowance for doubtful accounts (8) 7
Interest and dividend income (1,955 ) (1,809 )
Interest expenses 15 29
Foreign exchange losses (gains) (104 ) (71 )
Decrease (increase) in trade receivables 430 3,360
Decrease (increase) in inventories 5 (30 )
Increase (decrease) in trade payables (329 ) (20)
Increase/decrease in consumption taxes
payable/consumption taxes refund receivable 503 (2,7 87)
Decrease (increase) in other current assets (101 ) (1,725 )
Increase (decrease) in other current liabilities 3,111 (1,865)
Other, net (341 ) 65
Subtotal 22,396 3,128
Interest and dividends received 1,684 1,854
Interest paid (15 ) (29 )
Income taxes paid (6,933 ) (4,804 )
Net cash provided by (used in) operating activities 17,132 149
Cash flows from investing activities
Payments into time deposits (90,572 ) (171,492 )
Proceeds from withdrawal of time deposits 45,342 144,373
Net decrease (increase) in short -term investment
securities (1,330 ) (633 )
Purchase of investment securities ― (63 )
Purchase of property, plant and equipment and intangible
assets (243 ) (605 )
Payments of leasehold and guarantee deposits (478 ) (277 )
Purchase of shares of subsidiaries resulting in change in
scope of consolidation (308 ) ―
Other, net 3 22
Net cash provided by (used in) investing activities (47,588 ) (28,676 )
Cash flows from financing activities
Net decrease (increase) in treasury shares (9,865 ) (5,002 )
Dividends paid (1,809 ) (3,350 )
Other, net (542 ) (474 )
Net cash provided by (used in) financing activities (12,217 ) (8,827 )
Effect of exchange rate change on cash and cash
equivalents 1,196 203
Net increase (decrease) in cash and cash equivalents (41,476 ) (37,150 )
Cash and cash equivalents at beginning of period 109,648 68,171
Cash and cash equivalents at end of period 68,171 31,021

-12 –
(5) Notes on consolidated financial statements
(Notes on the Going -concern Assumption)
None

(Changes in accounting policies)
(Application of Accounting Standard for Corporate Income Taxes, etc.)
The Company has applied the “Accounting Standard for Corporate Income Taxes, etc.” (ASBJ Statement No. 27,
October 28, 2022; hereinafter the “2022 Revised Accounting Standard”), etc. from the beginning of the current
consolidated fiscal year .
Regarding the amendments related to the classification of income taxes (taxation on other comprehensive
income), the Company has followed the transitional treatment set forth in the proviso of Paragraph 20 -3 of the 2022
Revised Accounting Standard and the transitional treatment set forth in the proviso of Paragraph 65 -2 (2) of the
“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, October 28, 2022; hereinafter the
“2022 Revised Implementation Guidance”). There is no impact on the cons olidated financial statements resulting
from this change in accounting policy.
Furthermore, regarding the amendments related to the revision of the treatment in consolidated financial
statements for the deferral of gains or losses on the sale of shares of subsidiaries, etc. arising from intercompany
transactions, the Company has appl ied the 2022 Revised Implementation Guidance from the beginning of the current
consolidated fiscal year. This change in accounting policy has been applied retrospectively, and the consolidated
financial statements for the previous consolidated fiscal year reflect this retrospective application. There is no impact
on the consolidated financial statements for the previous consolidated fiscal year resulting from this change in
accounting policy.

(Application of the Accounting for and Disclosure of Current Taxes Related to the Global Minimum Tax Rules)
The Company has applied the “Accounting for and Disclosure of Current Taxes Related to the Global Minimum
Tax Rules (ASBJ Practical Solution No. 46, March 22, 2024),” from the beginning of the first quarter of the fiscal year
under review.
The impact of this change in accounting policy is minor.

(Changes in accounting estimates)
None

(Restatements)
None

(Change in presentation method)
None

(Segment Information)
(Segment Information)
I Fiscal Year 202 4 for the period from January 1, 202 4 to December 31, 202 4

Description has been omitted since the GungHo Group operates under a single segment
.

-13 –
II Fiscal Year 202 5 for the period from January 1, 202 5 to December 31, 202 5

Description has been omitted since the GungHo Group operates under a single segment.

(Relevant information)
I Fiscal year 202 4 for the period from January 1, 202 4 to December 31, 202 4

1. Information by product and service
Information on each product and service has been omitted because net sales to external customers in a single
product or service category accounted for more than 90% of net sales in the consolidated statement of income.

2. Information by region
(1) Net sales
(Millions of yen)
Japan Asia Taiwan Thailand Indonesia North
America
Latin
America
Other
regions Total
45, 393 23,837 13,132 6,854 3,591 5,596 3,704 1,489 103,600
(Note) Net sales are based on customer locations and are classified by country or region.
(Change s in indication )
“Latin America ” which was included in “Other rigions ” in the financial result of fiscal year ended December 31,
202 4, is indicated independently here considering its importance.

(2) Tangible Fixed Assets
(Millions of yen)
Japan Asia Korea Taiwan North America Total
278 99 683 252 13 1,326

II Fiscal year 202 5 for the period from January 1, 202 5 to December 31, 202 5
1. Information by products and services
Information on each product and service has been omitted because net sales to external customers in a single
product or service category accounted for more than 90% of net sales in the consolidated statement of income.

2. Information by region
(1) Net sales
(Millions of yen)
Japan Asia Taiwan Thailand Indonesia North America Other regions Total
31,831 17,531 14,370 5,641 8,982 9,011 2,815 3,057 93,242
(Note) Net sales are based on customer locations and are classified by country or region.
(Changes in indication)
“Indonesia ”, which was included in “ Asia ” in the financial result of fiscal year ended December 31, 202 4, is indicated
independently here considering its importance.
To reflect this change in presentatio n, 27,429 million yen presented in “ Asia ” in the previous fiscal year has been
reclassified as 23,837 million yen in “ Asia ” and 3,591 million yen in “Indonesia” .

-14 –
(2) Tangible fixed assets
(Millions of yen)
Japan Asia Korea Taiwan North America Total
286 215 514 261 133 1,412
(Information concerning impairment loss on fixed assets by reportable segment)
I Fiscal year 202 4 for the period from January 1, 202 4 to December 31, 202 4
Description has been omitted since the GungHo Group operates under a single segment.

II Fiscal Year 202 5 for the period from January 1, 202 5 to December 31, 202 5
Description has been omitted since the GungHo Group operates under a single segment.

(Information concerning goodwill amortization and unamortized balance by reportable segment)
I Fiscal year 202 4 for the period from January 1, 202 4 to December 31, 202 4
Description has been omitted since the GungHo Group operates under a single segment.

II Fiscal Year 202 5 for the period from January 1, 202 5 to December 31, 202 5
Description has been omitted since the GungHo Group operates under a single segment.

(Information related to gain on bargain purchase by reportable segment )
I Fiscal year 202 4 for the period from January 1, 202 4 to December 31, 202 4
Description has been omitted since the GungHo Group operates under a single segment.

II Fiscal Year 202 5 for the period from January 1, 202 5 to December 31, 202 5
Description has been omitted since the GungHo Group operates under a single segment.

-15 –
(Per share information)

Fiscal Year 202 4
(From January 1, 202 4 to
December 31, 202 4)
Fiscal Year 202 5
(From January 1, 202 5 to
December 31, 202 5)
Net assets per share 2,280.75 yen 2,2 42.37 yen
Net profit per share 182.67 yen 25.79 yen
Fully -diluted net profit per share 180.70 yen 25 .51 yen
Notes: 1. The basis for calculating net assets per share is as follows.

Item
Fiscal Year 202 4
(From January 1, 202 4 to
December 31, 202 4)
Fiscal Year 202 5
(From January 1, 202 5 to
December 31, 202 5)
Total Net Assets (Million yen) 153,535 15 1,333
Amount to be deducted from the total
amount of net assets (Million yen) 26,223 29,476
(Amount from stock options (Million
yen)) (1,464) (1, 160 )
(Amount from minority interests
(Million yen)) (24,759) (28,315 )
Net assets attributable to common
stock at the end of the fiscal year
(Million yen)
127,311 12 1,856
Number of common stocks used in
the calculation of net assets per
share (shares)
55,820,084 54,342 ,944

2. The basis for calculating net profit per share and fully -diluted net profit per share is as follows.
Fiscal Year 202 4
(From January 1, 202 4 to December 31, 202 4)
Fiscal Year 202 5 (From January 1, 202 5 to December 31, 202 5)
Net profit per share
Net profit in the consolidated income
statements (Million yen) 11,171 1,407
Net profit attributable to common stock
(Million yen) 11,171 1,407
Average number of common stocks
outstanding during the period (shares) 61,157,128 54 ,577,520
Fully -diluted net profit per share
Increase in the number of common stocks
(shares) 667,367 614 ,711
Stock acquisition rights of the above
shares (667,367) (614 ,711 )
Description of latent shares which were not
taken into account in the calculation of fully –
diluted net profit per share because of no
dilution effect
－ －

-16 –
(Significant Subsequent Events)
(Acquisition of treasury shares and cancellation of treasury shares )

At the meeting of the Board of Directors held on February 1 3, 202 6, the Company resolved to repurchase its own
shares pursuant to Article 156 of the Companies Act of Japan, as applied pursuant to Article 165, Paragraph 3 of the
same, and cancel the treasury shares, pursuant to Article 178 of the Company Act. The details are as follows:

(1) Reasons for acquisition of treasury shares
To improve shareholder profits by implementing flexible capital policies in response to changes in the business
environment and improving capital efficiency.

(2) Details of acquisition of treasury shares
① Type of shares to be acquired Common stock of our company
② Total number of shares to be acquired 2,100,000 shares (maximum)
③ Total purchase price of shares 5,000,000,000 yen (maximum)
④ Acquisition period From February 1 6, 202 6 to June 23, 202 6
⑤ Acquisition method Market purchase

(3) Details of cancellation of treasury shares
① Type of shares to be canceled Common shares
② Total number of shares to be canceled 16,000,000 shares
③ Scheduled date of cancellation June 30, 202 6