Analysis on business performance(FY2018)

The number of paying subscribers to smartphones was 4.57 million at the end of September 2018 (down 0.75 million from the end of September 2017) due to difficulty acquiring paying subscribers to smartphones at cellphone shops, and the total number of paying subscribers decreased to 5.60 million (down 0.96 million from the end of September 2017).
 Net sales totaled ¥29,075 million (down 6.0% year on year) as a result of a decrease in the total number of paying subscribers from the previous fiscal year despite the continuing upward trend of average revenue per user (ARPU) and additional revenue from Video Market Corporation, a subsidiary consolidated in March 2017.
 Gross profit declined to ¥22,670 million (down 10.4% year on year), reflecting an increase in cost of sales as a result of boosting the lineup in video distribution in addition to the reduced net sales.
 Operating income and ordinary income also declined, to ¥3,218 million (down 20.6% year on year) and ¥3,116 million (down 21.6% year on year), respectively, mainly due to the decrease in gross profit despite a decrease in selling, general, and administrative expenses primarily because of a fall in advertising and subcontract expenses.
 Profit attributable to owners of parent increased to ¥1,629 million (up 13.6% year on year), primarily attributable to a decrease in tax expense as a result of having taken over the loss carried forward of Climb Factory Co., Ltd., a wholly owned subsidiary, concurrently with its absorption-type merger (October 1, 2017).

【Consolidated operating results】

(Millions of yen)

2018/9 2017/9 Change Percentage
Net sales 29,075 30,933 (1,858) (6.0%)
Gross profit 22,670 25,288 (2,618) (10.4%)
Operating income 3,218 4,053 (835) (20.6%)
Ordinary income 3,116 3,972 (856) (21.6%)
Profit attributable to owners of parent 1,629 1,434 +194 +13.6%