WonderPlanet Inc. Q2 FY2025 earnings call

Corporate Overview

• Headquartered in Nagoya with a secondary office in Tokyo; 143 employees as of the end of February 2025, focused exclusively on mobile game development and operation.
• Mission is to bring shared fun entertainment to users across the world as an everyday activity.

Operational Updates

• クラフィ ran multiple high-performing collaborations with popular IP including the Magilumiere Co. Ltd. anime and Hatsune Miku alongside its 9.5th anniversary campaign, all of which performed above expectations.
• パンドランド completed collaborations with the Bakusou Kyoudai Let's & Go!! anime and Mega Man series, and has officially confirmed its late April 2025 global launch.
• The company issued 500 million yen in unsecured bonds this quarter, recording 11 million yen in issuance costs as non-operating expenses; this structure reduces future interest burden compared to traditional bank borrowing.
• Cash and cash equivalents increased by 473 million yen year-over-year at quarter end.
• Employee headcount is being maintained at the current optimal level for business operations for the foreseeable future.

Strategic Direction

• Targeting growth in the global hybrid casual mobile game market, which has grown approximately 2.8x since 2020 even as the broader global game market enters a correction phase.
• For joint development projects including パンドランド and new in-development titles, the company prioritizes limiting its own capital contribution, resulting in slower but more stable profit growth, and allows participation in larger projects than the firm could pursue independently, leveraging its core strength in long-term game operation.
• Three specialized cross-functional departments (Mobile Game Business Headquarters, EDMO for proprietary platform development, Global Marketing & Creative Division) collaborate to deliver global-standard hybrid casual games efficiently.
• Proprietary common development platform SEED is being built to eliminate inefficient knowledge silos across projects, improve title quality, and free up developer time to focus on user and business value creation; SEED will be used for all upcoming new titles.
• Two major partnered IP titles are currently in development, with one scheduled for release in summer 2025, to be formally announced soon; the company targets roughly one new release per year starting in 2025.

For the 2nd quarter of the 2025 August fiscal year:

• クラフィ (Crash Fever): Delivered solid revenue growth driven by its 9.5th anniversary campaign and multiple popular collaborations, contributing the majority of the company's total revenue growth this quarter.
• パンドランド (Pandorland): Development and operating revenue was roughly flat quarter-over-quarter. A 20 million yen additional investment burden was incurred for the upcoming global launch, but this cost was fully absorbed within the company's operating profit framework.
• New title development: Combined development and operating revenue for new titles and existing titles excluding クラフィ came to 320 million yen for the quarter, flat compared to the prior quarter.

Consolidated total: 632 million yen in total revenue, 9 million yen in operating profit (black ink), achieving operating profitability as initially forecast. For the first half cumulative, total revenue was 1.164 billion yen, with an operating loss of 45 million yen.

• Full year 2025 August fiscal guidance is maintained unchanged from initial projections: the company expects year-over-year revenue growth and full-year operating profitability, even with ongoing front-loaded growth investment.
• Q3 is projected to see a slight year-over-year revenue decrease compared to Q2, but all investment spending for パンドランド's global launch and new development will remain within a range that does not impact the full-year operating profit target. クラフィ is expected to see a limited profit decline after Q2's strong anniversary quarter, while パンドランド is projected to deliver revenue growth compared to Q2 following its late April global launch, though investment spending will remain front-loaded.
• クラフィ will focus on user re-engagement promotions for its upcoming 10th anniversary, with recent updates including re-opening the Traditional Chinese version storefront and implementing in-app advertising to drive incremental revenue.
• パンドランド targets early profit contribution following its global launch in late April 2025.
• Q4 is expected to deliver sufficient profit scale similar to the prior year's Q4, driven by クラフィ's 10th anniversary campaign and profit contributions from パンドランド's global expansion, putting full-year operating profitability within reach.
• No dividend is planned for the 2025 August fiscal year, as the company prioritizes improving retained earnings first.
• Full-year detailed quantitative guidance remains non-disclosed per company policy.

• The Q3 revenue and profit outlook is dependent on the performance of クラフィ and パンドランド, with revenue variability possible based on user reception of new content and marketing campaigns.
• Front-loaded growth investment for new titles and パンドランド's global expansion could create pressure on operating results if revenue projections are not met.
• No additional specific operational or market risks were discussed in the provided transcript.

Q: What is the certainty of achieving full-year operating profitability this fiscal year? / A: Management reaffirms that the full-year target of year-over-year revenue growth and operating profitability remains unchanged, with no updates to initial projections. The first half progressed in line with expectations: the 20 million yen additional investment for パンドランド's global launch was fully absorbed by strong performance from クラフィ's 9.5th anniversary campaign, keeping the impact within the planned full-year profit range. Q3's front-loaded investment is also expected to stay within a range that does not harm the full-year target, while Q4 will see profit support from クラフィ's 10th anniversary campaign and パンドランド's post-launch contribution, putting the full-year profit target well within reach. The company will continue to advance growth investment for the 2026 profit growth phase while working to deliver full-year profitability this year.