GungHo Online Entertainment FY2026 Q2 Earnings Release

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Financial Results for the 2nd Quarter of Fiscal Year Ending December 31, 202 6
[Japanese GAAP] (Consolidated)
August 7, 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: Kazu ya Sakai , Representative Director & President, CEO
Contact: Kazu masa Takayama , Corporate Officer, CFO & IRO, and Executive General Manager of Corporate Planning
Division
TEL: 03 -6895 -1650
Scheduled date of filing of semi -annual report : August 7, 202 6
Dividend payment date: –
Supplemental information for quarterly financial statements: Yes
Quarterly 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 2nd quarter of fiscal year ending December 31, 202 6 (January 1, 202 6 through
June 30, 202 6)
(1) Consolidated operating results (accumulated) (Percentages indicate the changes from the same period of the
previous year)
Net sales Operating profit Ordinary profit
Interim profit
attributable to owners
of parent
Millions of yen % Millions of yen % Millions of yen % Millions of yen %
Six months ended
June 30, 202 6 51 ,759 2.3 6,380 27 .1 7,878 47.2 3,460 40.4
Six months ended
June 30, 202 5 50,588 (5.7) 5,020 (58.9) 5,351 (60.4) 2,464 (68.5)
(Note) Comprehensive
income
Six months ended
June 30, 202 6
4,176 million yen
(35 .3%)
Six months ended
June 30, 202 5
3,087 million yen
((76.8 %))
(2) Consolidated financial position
Total assets Net assets Shareholder ’s
equity ratio
Millions of yen Millions of yen %
Six months ended
June 30, 202 6 16 5,141 14 5,689 69.3
Fiscal year ended
December 31, 202 5 169,474 151,333 71.9

Interim net profit
per share
Diluted interim
net profit per share
Yen Yen
Six months ended
June 30, 202 6 64.96 64.27
Six months ended
June 30, 202 5 44.95 44.43

(Note) Shareholder’s
equity
Six months ended
June 30, 202 6
114,484 millions of yen

Fiscal year ended
December 31, 202 5
12 1,856 millions of yen

2. Dividends

Annual dividends
1st quarter 2nd quarter 3rd quarter 4th quarter Total
Yen Yen Yen Yen Yen
Fiscal year ended
December 31, 202 5 ― 0.00 ― 90 .00 90.00
Fiscal year ending
December 31, 202 6 ― 0.00
Fiscal year ending
December 31, 202 6
(Forecast)
― ― ―

3. Consolidated Earnings Forecast for the Fiscal Year Ending 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 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 .
(Note 1) Revision of forecasts for dividends most recently announced: No
(Note2) At the Board of Directors meeting held on August 7, 2026, it was resolved that no interim dividend would be paid
for the second quarter. The year -end dividend for the current fiscal year remains undecided.

*Notes
(1) Significant changes in the scope of consolidation during the interim perio d : No (2) Application of specific accounting procedures for the preparation of interim
consolidated financial statements : No
(3) Changes in accounting policies, changes in accounting estimates , and restatements
(i) Changes in accounting policies due to revisions of accounting standards : No
(ii) Changes in accounting policies other than (i) : No
(iii) Changes in accounting estimates : No
(iv) Restatements : No (4) Number of shares of common stock issued
(i) Number of shares of common stock
outstanding at the end of the period
(including treasury shares)
As of June
30, 202 6
53 ,161,416
shares
Fiscal year ended
December 31, 202 5
69,161,416
Shares
(ii) Number of treasury shares at the end of
the period
As of June
30, 202 6
794 ,532
shares
Fiscal year ended
December 31, 202 5
14,818,472
shares
(iii) Average number of shares during the
period ( six month s)
As of June
30, 202 6
53,267,571
shares
As of June 30,
202 5
54,817,360
shares
* The quarterly financial results report for the second quarter (six months) is not subject to review by a certified public
accountant or an auditing firm. * Appropriate use of earnings forecast and other matters to note ・The forward -looking statements, including earnings forecasts, contained in this document are based on information
currently available to the Company and certain assumptions that are deemed to be rational. Actual results may differ
significantly from these forecasts due to various factors. For the assumptions underlying the earnings forecasts and
other notes on the use of earnings forecasts, please refer to ” Information Related to the Consolidated Earnings
Forecast and Other Future Projections ” on page 2 of the attached materials.
・The Company plans to hold a financial results briefing for investors as follows. Materials used in this briefing will be
posted on the Company’s website after the briefing.
・August 7, 2026 (Friday) … Financial results briefing for institutional investors and analysts

○Table of Contents for Appendix

1. Qualitative Information Concerning Interim Financial Results ………………………………… ………………….. .2
(1) Description of Operating Results…………………………………………………………………………….. …………………2
(2) Description of Financial Position …………………………………………………………………………… …………………..2
(3) Information Related to the Consolidated Earnings Forecast and Other Future Projections…………………. 2
2. Interim Consolidated Financial Statements and main notes ………………………………………………………………. 3
(1) Interim Consolidated Balance Sheets……………………………………………………………………… …………………. 3
(2) Interim Consolidated Statements of Income and Interim Consolidated Statements of
Comprehensive Income…………………………………………………………………………………………… ……………… 4
(Interim Consolidated Statements of Income ) …………………………………………………………… …… 4
(Interim Consolidated Statements of Comprehensive Income ) …… …………………………………………………5
(3) Notes to Interim Consolidated Financial Statements………………………………………………….. ……… ……….. 6
(Notes on the Going -concern Assumption)………………………………………………………………………………… 6
(Notes on Any Significant Changes to the Amount of Shareholders’ Equity) ……………………………………. 6
(Notes on Segment Information , etc. )……………………………….. ……….. ………………………….. …….. ………… 6
(Significant Subsequent Events)…………………………………………………………………………………. …………… 6

1. Qualitative Information Concerning Consolidated Financial Results for the Interim period
(i) Description of Operating Results
Regarding the economic circumstances in the current interim period, the outlook remained uncertain against the
backdrop of prolonged global inflation and intensifying international tensions. With changes in the environment such as
the high level of the yen ‘s depreciation and rising interest rates, the financial and securities markets also experienced
significant fluctuations.
In the gaming market, although the size of the domestic mobile gaming sector has generally remained flat in recent
years, the ways smartphone users spend their leisure time are becoming more diversified, including competition for
disposable time such as vi ewing video content. Accordingly, the importance of accurately capturing customer trends
for user retention in mobile games has increased more than ever.
Against this backdrop, the Company has continued to focus on game development with an eye toward global
distribution. In June 2026, we announced that “Ninjala 2: The Uncharted Planet,” a successor to “Ninjala,” which has
surpassed 12 million downloads worldwide, will be released next spring. Including this title, we are currently developing
nine new pipelines, and costs related to new titles, primarily outsourcing expenses, are being incurred in advance.
Regarding our flagship title “Puzzle & Dragons,” we have continued to work on maintaining and expanding MAU
(Monthly Active User: the number of users who log into the game at least once a month) and strengthening the game
brand to maximize the value of exi sting assets. We have continued to roll out diverse events, such as seasonal original
events and collaborations with famous characters from other companies, and net sales have remained solid. In addition,
the game surpassed 64 million cumulative domestic d ownloads in June 2026, and commemorative events were held
starting in July.
Regarding Ragnarok -related titles operated by our subsidiary Gravity Co., Ltd. and its consolidated subsidiaries,
“Ragnarok Origin Classic,” which was released in South Korea, Taiwan, Hong Kong, Macau, and Southeast Asia on
March 26, 2026, performed well a nd contributed to the consolidated financial results for the current interim period. We
continue to focus on the global service expansion of new titles, such as the launch of “Ragnarok: Twilight” in Europe,
North America, and Latin America on June 4.
As a result, the Company’s consolidated results of operations for the interim period under review were as follows. Net
sales increased 2.3% year -on -year to JPY 51 ,759 million, operating profit increased 27 .1% year -on -year to JPY 6,380
million, ordinary profit increased 47.2% year -on-year to JPY 7,878 million, and Interim net profit attributable to owners
of parent company increased 40 .4% year -on -year to JPY 3,460 million.
The GungHo Group is a single -segment company; therefore, no segment information is disclosed.

(ii) Description of Financial Position
Total assets as of the end of the current interim consolidated accounting period were 165,141 million yen (a decrease
of 4,332 million yen from the end of the previous fiscal year). This was mainly due to a decrease in cash and deposits.
Total liabilities were 19,452 million yen (an increase of 1,310 million yen from the end of the previous fiscal year). This
was primarily attributable to an increase in income taxes payable.
Total net assets were 145,689 million yen (a decrease of 5,643 million yen from the 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) 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.
2. Interim Consolidated Financial Statements and Principal Notes

(1) Interim Consolidated Balance Sheets
(Millions of yen)
Consolidated Fiscal Year 2025 (As of December 31, 2025 ) 2nd quarter of this Fiscal Year (As of June 30, 2026 )
Assets
Current assets
Cash and deposits 130,474 124,705
Accounts receivable – trade, and contract assets 10,130 11,309
Securities 5,775 5,882
Other 7,437 5,300
Allowance for doubtful accounts (67) (34)
Total current assets 153,750 147,162
Non -current assets
Property, plant and equipment 1,412 1,135
Intangible assets 568 456
Investments and other assets 13,743 16,386
Total non -current assets 15,723 17,979
Total assets 169,474 165,141
Liabilities
Current liabilities
Accounts payable – trade 5,817 6,648
Income taxes payable 592 2,133
Provisions 24 ―
Other 8,934 9,315
Total current liabilities 15,368 18,097
Non -current liabilities
Retirement benefit liability 30 29
Other 2,742 1,325
Total non -current liabilities 2,773 1,354
Total liabilities 18,141 19,452
Net assets
Shareholders’ equity
Share capital 5,338 5,338
Capital surplus 5,487 5,487
Retained earnings 152,249 104,235
Treasury shares (43,908) (2,312)
Total shareholders’ equity 119,167 112,749
Accumulated other comprehensive income
Foreign currency translation adjustment 2,689 1,735
Total accumulated other comprehensive
income 2,689 1,735
Share acquisition rights 1,160 1,220
Non -controlling interests 28,315 29,984
Total net assets 151,333 145,689
Total liabilities and net assets 169,474 165,141

(2) Interim Consolidated Statements of Income and Interim Consolidated Statements of Comprehensive Income
(Interim Consolidated Statements of Income)
(Millions of yen)
2nd quarter of the Fiscal Year
2025(From January 1, 2025 to June 30, 2025)
2nd quarter of the Fiscal Year
2026 (From January 1, 2026 to June 30, 2026)
Net sales 50,588 51,759
Cost of sales 27,127 28,881
Gross profit 23,460 22,877
Selling, general and administrative expenses 18,440 16,497
Operating profit 5,020 6,380
Non -operating income
Interest income 862 1,016
Foreign exchange gains ― 446
Other 18 63
Total non -operating income 880 1,526
Non -operating expenses
Interest expenses 14 13
Commission for purchase of treasury shares 2 5
Foreign exchange losses 529 ―
Miscellaneous loss 3 8
Total non -operating expenses 549 27
Ordinary profit 5,351 7,878
Extraordinary income
Gain on sales of investment securities ― 31
Total extraordinary income ― 31
Extraordinary losses
Impairment losses 28 81
Total extraordinary losses 28 81
Profit before income taxes 5,323 7,828
Income taxes – current 2,073 2,882
Income taxes – deferred (711) (857)
Total income taxes 1,361 2,024
Profit 3,961 5,804
Profit attributable to non -controlling interests 1,497 2,344
Profit attributable to owners of parent 2,464 3,460

(Interim Consolidated Statements of Comprehensive Income)
(Millions of yen)
2nd quarter of the Fiscal Year
2025 (From January 1, 2025 to June 30, 2025)
2nd quarter of the Fiscal Year
2026 (From January 1, 2026 to June 30, 2026)
Profit 3,961 5,804
Other comprehensive income
Foreign currency translation adjustment (874) (1,628)
Total other comprehensive income (874) (1,628)
Comprehensive income 3,087 4,176
Comprehensive income attributable to
Comprehensive income attributable to owners of parent 1,934 2,506
Comprehensive income attributable to non – controlling interests 1,152 1,669

(3) Notes to the Interim Consolidated Financial Statements
(Notes on Going -concern Assumption)
None

(Notes on Any Significant Changes to the Amount of Shareholders’ Equity)
(The acquisition of treasury shares)
The Company acquired 1,981,500 treasury shares based on the resolutions at the Board of Directors meeting
held on February 13, 2026. Treasury shares increased by 4,999 million yen during this interim consolidated
accounting period due to the acquisition of treasury shares mentioned above.

(The cancellation of treasury shares)
The Company cancelled 16,000,000 treasury shares on June 30, 2026, based on the resolution at the Board of
Directors meeting held on February 13, 2026. Due to the cancellation of treasury shares, retained earnings and
treasury shares each decreased by 46,5 79 million yen during the six months ended June 30, 2026.
As a result, retained earnings amounted to 104,235 million yen and treasury shares amounted to 2,312 million
yen as of June 30, 2026.

(Notes to Segment Information, etc.)
[Segment Information]
I The six months ended June 30, 2025 (from January 1, 2025 to June 30, 2025)
Segment information has been omitted as the GungHo Group is comprised of a single segment.

II The six months ended June 30, 2026 (from January 1, 2026 to June 30, 2026)
Segment information has been omitted as the GungHo Group is comprised of a single segment.

(Significant Subsequent Events)
None.