WOWOW INC. Q2 FY2026 earnings call

Core Financial & Membership Performance

• Consolidated revenue hit 37.566 billion yen, an increase of 0.204 billion yen year-over-year. Ordinary profit reached 2.141 billion yen, an increase of 0.536 billion yen year-over-year, driven by higher sales and reduced costs including lower programming expenses and 4K broadcast termination-related costs.
• Interim net profit reached 1.447 billion yen, an increase of 1.627 billion yen year-over-year, as the prior year period included a 1.77 billion yen special loss from 4K broadcast termination impairment charges.
• New subscriptions totaled 344,000, down 19,000 year-over-year, as the prior year had strong tailwinds from the launch of WOWSPO and UEFA EURO 2024 broadcast. Cancellations totaled 405,000, down 24,000 year-over-year, an improvement from the prior period. Net membership was negative 61,000, a 5,000 unit improvement year-over-year, bringing cumulative net membership to 2,299,000.

Upcoming Content Highlights

• A slate of high-profile original dramas is scheduled for release: Shadow Work starring Mikako Tabe in November 2025, Jun Ikeido special The Bag Shop Inheritance in December 2025, and the flagship production Suikoden by Hokuzan Kitagata in February 2026, which has already generated strong social media attention for its all-star cast.
• Under the WOWOW FILMS label, the live-action adaptation of hit manga WIND BREAKER will release in December 2025, and the sequel to the record-breaking Golden Kamuy film, Golden Kamuy: Abashiri Prison Raid Arc, will release in March 2026.

New Service Launches

• The new "Triple Plan" pricing tier launched in October 2025, allowing simultaneous streaming on up to 3 devices and registration for up to 3 B-CAS/ACAS cards, with a discounted annual plan option to drive longer member retention.
• The new EC service WOWOW Department Store grand opened in October 2025, positioned as "a department store for adults who enjoy life", carrying content-linked exclusive goods and curated lifestyle products. Early performance shows strong demand for high-value items including autographed celebrity sports memorabilia.
• A new experiential tourism project "Fuku Ju Ryo", meaning more than tourism, less than migration, started testing in October 2025 as a joint project with partners, offering slow lifestyle-focused travel experiences that build long-term connections with local communities.

Mid-term Strategy

• The 2025-2029 mid-term management plan targets diversified revenue streams that are less reliant on membership count changes, expanding beyond core broadcast/streaming services to create multi-layered engagement with the company's 2 million+ existing member base.

1. Media & Content Segment: This segment is predominantly revenue-driven by membership fees. It reported a 577 million yen (0.577 billion yen) decrease in revenue, as growth from non-membership income and group company sales could not offset the decline in membership revenue. Operating profit increased by 164 million yen (0.164 billion yen) year-over-year, driven by lower costs including reduced programming expenses.
2. Telemarketing Segment: This segment operates under WOWOW Communications. It reported a 683 million yen (0.683 billion yen) increase in revenue, driven by higher telemarketing service sales and the addition of CINRA, which was acquired in October last year. Operating profit increased by 255 million yen (0.255 billion yen) year-over-year, following the revenue growth. Revenue contribution percentages for each segment were not disclosed in the transcript.

• Full-year 2025 consolidated revenue guidance is maintained at 76.6 billion yen, and ordinary profit guidance is maintained at 1.5 billion yen, unchanged from the May 2025 announcement. While first half profits already exceed full-year guidance, management confirmed the unchanged guidance is due to planned programming costs originally scheduled for the first half shifting to the second half, plus planned additional spending to drive growth in future periods.
• Full-year 2025 net membership guidance is maintained at negative 100,000, with cumulative net membership targeted at 2.26 million, unchanged from the initial announcement. Management reaffirmed the goal of shifting to a revenue structure less sensitive to membership fluctuations through diversified content-linked businesses.
• Full-year 2025 dividend guidance is maintained at 30 yen per share, unchanged from the initial announcement.
• For fiscal 2026 and beyond, management expects membership-linked revenue growth to remain challenging, but forecasts that new member-linked services will offset membership declines and deliver net profit growth, with detailed planning still ongoing.

• The core membership business continues to face net declines, with full-year 2025 guidance already calling for a 100,000 net membership decrease, and management expects membership revenue growth to remain challenging in future periods.
• The new EC business (WOWOW Department Store) operates in the highly competitive red ocean Japanese e-commerce market, presenting inherent challenges to sustained profitability and growth.
• Event businesses, while growing, are not expected to deliver high profit margins, so they will not meaningfully offset increased operating costs in the second half.
• Programming and content costs are variable, with higher content investment planned for future periods that could pressure short-term profitability.

Q: What is the early performance of the newly launched WOWOW Department Store, and how is it differentiated from the existing wowshop EC service? / A: The service is still very new, but the company's 2 million+ existing member base is a major advantage for the EC business. Early results show strong early demand, particularly for high-value items like autographed celebrity memorabilia, with multiple hundreds-of-thousands of yen high-ticket items selling quickly after promotional emails. Compared to the old wowshop, which only sold content-linked standalone products, WOWOW Department Store operates under a curated "for adults who enjoy life" concept, carrying both content-linked goods and premium lifestyle products that upgrade daily life (such as handcrafted cookware). It also targets 3x to 3.5x more SKUs than wowshop to build out a fuller product assortment.

Q: What is the progress of the new standalone streaming service outlined in the mid-term plan? / A: The core direction is to launch a standalone SVOD service completely separate from the existing bundled broadcast/WOWOW On Demand offering. The service will target the same adult demographic that WOWOW Department Store targets. The specific content and service details are still under review, and will be announced once finalized.

Q: Why hasn't the full-year earnings guidance been raised even though first half profits already exceed the full-year target, and what is the outlook for next fiscal year? / A: The large gap between first half results and full-year guidance is mostly due to a 1.2 billion yen increase in programming costs planned for the second half compared to the first half. This is partially a seasonal effect, as sports properties like the UEFA Champions League only incur costs during the second half 6-month season, and also reflects planned additional spending on content and promotional costs for new services launching for next year. Sales are still expected to increase in the second half from events, but events do not generate high margins. For next year, membership revenue growth is expected to remain challenging, but new member-linked new services are expected to more than offset membership declines and secure stable profitability, with detailed numbers still being finalized.

Q: What factors drove the lower cancellation rate and improved net membership performance in the second quarter? Is this due to one-time factors or structural improvements? / A: The biggest contributors were sports and music content. Continuous programming centered on Mrs. GREEN APPLE live broadcasts encouraged ongoing member retention. Sports content including UEFA Champions League/ Europa League PPV subscriptions and consecutive tennis tournaments also drove lower cancellations and higher retention. The quarter's net membership growth primarily came from the standalone PPV SVOD subscriptions for soccer, which are not included in the core cumulative membership count.