WOWOW INC. Q3 FY2026 earnings call

Overall Consolidated Financial Performance

• Total consolidated revenue reached 57.126 billion yen, an increase of 0.681 billion yen year-over-year. Revenue grew despite a decline in member subscription revenue, due to increases in non-subscription business revenue (such as events) and group company revenue.
• Consolidated ordinary income reached 4.666 billion yen, an increase of 2.464 billion yen year-over-year, driven by higher revenue and lower costs including programming expenses and 4K broadcast-related costs following the end of 4K broadcasting.
• Consolidated net income reached 3.205 billion yen, an increase of 2.516 billion yen year-over-year. This large increase is partially because the prior year period recorded 1.773 billion yen in extraordinary losses related to impairment charges from the end of 4K broadcasting.

Subscription Member Performance

• New gross subscriptions totaled 445,000 in the quarter, a decrease of 95,000 year-over-year. While sports and music content performed well and drove new acquisitions, the prior year period benefited from large hit content (including the drama Golden Kamuy) and the launch of the WOWSPO sports offering that drove stronger new sign-ups.
• Cancellations totaled 592,000 in the quarter, a decrease of 13,000 year-over-year, meaning churn improved versus the prior year period despite cancellations following the conclusion of the LPGA Women's Golf Tour.
• Net subscriptions for the quarter were negative 148,000, bringing total cumulative net subscriptions to 2,212,000.
• Pay-per-view season passes for UEFA Champions League and Europa League sold through WOWOW On Demand are not included in the subscription count, and their sales volume increased year-over-year.

NTT Docomo Business Partnership Announcement

WOWOW entered into a business partnership in the content field with NTT Docomo in November 2025, focused on accelerating video business growth and maximizing customer value by combining both companies' strengths through co-production, joint procurement, and mutual content provision. Key initiatives include:

• Co-production of original content: The first project is the large-scale original drama Hokusetsu Den by Kenzan Kitahata, launching in February 2026, which will be broadcast and streamed on both WOWOW and Lemino. Popular titles from WOWOW's original Drama W series will also be sequentially distributed on Lemino.
• Expansion of sports content: Both companies will mutually provide portions of their existing popular sports content (including NBA and UEFA Champions League) to reach a wider audience, with additional collaborations under discussion.
• Expansion of live music content: Content from popular artists including DREAMS COME TRUE, Fumiya Fujii, and MISIA will be offered as a multi-month continuous series on both WOWOW and Lemino.

Upcoming Flagship Content Initiatives

• Hokusetsu Den by Kenzan Kitahata launches broadcast/streaming on February 15, 2026. As part of multi-layered revenue initiatives, original branded merchandise (including character goods and book covers themed to the drama) is currently available for sale through the WOWOW Department Store e-commerce platform.
• Golden Kamuy: The Attack on Abashiri Prison (WOWOW FILMS) will premiere in theaters on March 13, 2026. The prior 2024 Golden Kamuy film was the biggest hit in WOWOW-sponsored film history, drawing over 2 million theatergoers and grossing approximately 3 billion yen in box office revenue. The latest installment continues the story from the 2024 drama series, and WOWOW targets another major hit for the spring release window.
• Upcoming high-profile programming also includes exclusive live broadcast of the 68th Grammy Awards from Los Angeles, same-night streaming of the 98th Academy Awards, continuing live broadcast of the Australian Open tennis tournament, and the knockout stage of the UEFA Champions League and Europa League.

1. Media & Content Segment: This segment generates the majority of its revenue from member subscription fees. It reported a total revenue decrease of 302 million yen (0.302 billion yen) year-over-year; non-subscription other revenue increased, but this growth was not enough to offset the decline in member subscription revenue. Operating income increased 2.246 billion yen year-over-year, driven by lower programming and other operating costs compared to the prior year period.
2. Telemarketing Segment (operated by WOWOW Communications): This segment reported a total revenue increase of 648 million yen (0.648 billion yen) year-over-year, driven by growth in existing telemarketing business revenue and the addition of revenue from CINRA, which was acquired in October 2024. Operating income increased 230 million yen (0.23 billion yen) year-over-year as a result of the revenue growth.

• Full-year 2025 (fiscal year ending March 2026) consolidated financial guidance is maintained unchanged from the May public announcement: targets of 76.6 billion yen in total revenue and 1.5 billion yen in ordinary income. Although year-to-date profit through the third quarter exceeds the full-year plan, management maintains the original guidance because the fourth quarter plans to allocate significant programming expenses to flagship content (including Hokusetsu Den by Kenzan Kitahata, Australian Open tennis, and the late stages of the UEFA soccer competitions) plus incur investments to support growth from next fiscal year onward.
• Full-year 2025 subscription guidance is maintained unchanged from the May public announcement: a full-year net subscription decline of 100,000 and total cumulative net subscriptions of 2,260,000. While the third quarter net decline of 148,000 is below the full-year pace to date, cancellations after the conclusion of LPGA were partially expected, and management aims to hit the annual target by strengthening promotions for upcoming high-profile content including WOWSPO to drive new subscriptions.
• Management continues to target a transition to a profit structure that is less impacted by fluctuations in subscription counts, by growing revenue through multi-layered content-linked businesses beyond core subscriptions.
• Full-year 2025 dividend guidance is maintained unchanged: a 30 yen per share dividend.

The provided transcript does not contain explicit discussion of material operational risks or failures. Management notes that the current full-year plan includes a projected net decline in total subscriptions, and that net declines in overall subscription volume expand the expected fourth quarter net loss. No other material risks are disclosed in the available portion of the transcript.

Q: Is the growth in non-subscription event revenue driving the overall revenue increase mostly attributable to WESSION FESTIVAL 2025?

A: The October 2025 WESSION FESTIVAL 2025 was very successful, but revenue from this event will be recognized in the fourth quarter and is not included in the third quarter results. The event revenue driving third quarter growth comes from events held in the first half of the fiscal year, including Disney Broadway Hits feat. Alan Menken.

Q: Based on the year-to-date operating profit of 3.9 billion yen and the full-year operating profit target of 0.7 billion yen, the fourth quarter is expected to have an operating deficit of 3.2 billion yen, driven by concentrated programming expenses for flagship content and investments for future growth. The third quarter cumulative programming expense through nine months is 17.18 billion yen – what is the expected programming expense for the fourth quarter?

A: For full-year 2025, total programming expense is expected to be just under 26.2 billion yen, which equals approximately 42% of standalone revenue, as noted in the original financial plan guidance. Subtracting the 17.18 billion yen spent through the third quarter, just under 9 billion yen in programming expense is expected for the fourth quarter. While we do not disclose specific individual budget amounts, Hokusetsu Den by Kenzan Kitahata is a major priority original content that receives significant investment, and the fourth quarter budget includes investment in this content, sports content, and related promotion to meet the annual subscription acquisition target. We also note that the ongoing year-over-year decline in total subscription volume contributes to the expanded fourth quarter deficit.

Q: What is the expected profit trend for next fiscal year and beyond? Is the current fiscal year a bottom for profits, with improvement expected after this year, or will low profit levels continue due to ongoing upfront investment?

A: Next fiscal year plans are currently being developed in line with the previously announced mid-term management strategy. The size of the total member base at the end of this fiscal year will have a major impact on next fiscal year's results. We are planning to continue pursuing new initiatives including the launch of a new independent SVOD streaming service and expansion of the NTT Docomo partnership starting next fiscal year, which will require a certain level of upfront investment. We are withholding comment on specific profit figures or the expected trajectory of revenue and profit growth at this time.