WOWOW INC. Q1 FY2026 earnings call

Overall Financial Performance

• Consolidated revenue for the first quarter of 2025 (fiscal 2026) totaled 18.694 billion yen, a 96 million yen decrease year-over-year, resulting in a year-over-year revenue decline despite higher group company sales. This decline was driven primarily by lower membership revenue.
• Consolidated ordinary income totaled 1.422 billion yen, a 231 million yen decrease year-over-year. Positive factors including higher group company profits and cost reductions from ending 4K broadcasting were not enough to offset the membership revenue decline.
• A 42 million yen special gain was recorded from the sale of IMAGICA GROUP shares in response to a third-party takeover bid request, resulting in net quarterly profit of 997 million yen, a 109 million yen year-over-year decrease.

Membership Status

• New paid memberships totaled 157,000 in the quarter, a 41,000 decrease year-over-year. The prior year period benefited from the launch of WOWSPO and broadcast/streaming rights for UEFA EURO 2024, which did not repeat this period, despite strong performance from sports content (UEFA Champions League, French Open) and music content (TVXQ, SUPER BEAVER).
• Cancellations totaled 234,000, a 4,000 decrease year-over-year (an improvement) despite cancellations following the conclusion of high-demand event content.
• Net membership change was negative 77,000 for the quarter, bringing total cumulative net membership to 2,283,000, a 145,000 decrease year-over-year.

Content Lineup

• The Q3-August to October 2025 content lineup features high-profile original dramas, including two original series starring renowned Japanese actors, and extensive live music content: exclusive broadcast/streaming of SUMMER SONIC 2025, and YOASOBI's first Europe solo concert at Wembley Arena.

Multi-Layered Business Expansion (Mid-Term Strategic Priority)

• WOWOW is expanding beyond broadcast content into related live events and merchandise: it will host ATEEZ's largest ever Japan arena tour (planned 75,000 total attendees across 7 dates, with on-site merchandise sales), and the second sold-out edition of the sold-out Jazz Not Only Jazz live event, which will also offer streaming tickets and a theatrical release of the first event's recording.
• New e-commerce service WOWOW Department Store is on track for a fall 2025 launch, positioned as a lifestyle department store for adults focused on content-linked products, seasonal limited items, and general lifestyle goods. Branding and operational preparation is complete.

Consumer Insight Initiative

• WOWOW Muchu no Tobirabo, an initiative to research consumer engagement and well-being, released its first joint research report with Hakuhodo in May 2025, which found that people with self-aligned personal passions have double the life satisfaction of those without. A second deeper report focused on adults over 50 will be released fall 2025, with an accompanying webinar, and the initiative is open to external business partners to identify new opportunities.

1. Media & Content Segment: Revenue decreased 453 million yen (4.53 billion yen year-over-year decrease) compared to the prior year period. Operating income decreased 404 million yen year-over-year. The segment is primarily driven by membership subscription revenue, which declined enough to offset increases in other revenue from group companies like WOWOW BRIDGE. 2. Telemarketing Segment (WOWOW Communications): Revenue increased 298 million yen year-over-year, driven by the inclusion of CINRA, which was acquired in October 2024. Operating income increased 184 million yen year-over-year alongside the revenue growth.

• Full-year 2025 (fiscal 2026) financial and membership guidance is maintained unchanged from the May 2025 public release.
• Full-year revenue is expected to decrease year-over-year: growth from full-year CINRA contribution, higher telemarketing segment external sales, and multi-layered new business will not offset expected membership revenue declines.
• Full-year ordinary profit is expected to decrease year-over-year: cost savings from efficient marketing and ending 4K broadcasting will not offset the revenue decline. Full-year net profit is expected to increase year-over-year, as there are no special impairment losses that were recorded in the prior fiscal year.
• Full-year net membership change is guided to negative 100,000, bringing cumulative total membership to 2.26 million. The first quarter's negative 77,000 net change is in line with management expectations, as post-season cancellations for sports content were forecast, and management expects lapsed members to return with the start of the new sports season, supported by new content rollout in the second half of the fiscal year.
• The full-year dividend plan is unchanged: 30 yen per share, with management committed to maintaining stable dividends going forward.
• Management continues to pursue its mid-term strategic goal of building a less membership-dependent revenue structure by accelerating growth through multi-layered content-linked businesses.

• Declining membership revenue from net membership attrition continues to create downward pressure on overall revenue and profitability, offsetting growth in other business segments.
• Membership net attrition is concentrated in the first quarter due to seasonal cancellations after major sports content concludes, creating near-term pressure even if memberships recover later in the year.

Q: What are WOWOW's plans for expansion and monetization of vertical short drama, following the announcement of a joint validation project in this area? Management noted that the company plans to initially distribute the content for free on YouTube and TikTok, and the question asks for further details on planned monetization timelines and strategy. / A: The transcript cuts off before management can provide a full answer to this question. The public announcement confirms the project is focused on testing market demand for vertical short dramas as a new business line, with the initial free distribution phase designed to build audience reach before any monetization steps are considered.