ANYCOLOR Inc. Q1 FY2026 earnings call

• Financial Performance

  • All top and bottom line metrics (revenue, operating income, net income) beat initial Q1 projections
  • Direct variable cost ratio came in at 44.1%, 0.5 percentage points lower year-over-year, beating expectations that had predicted a higher ratio for an event-heavy quarter
  • Cost improvement initiatives in events drove the better margin outcome, with gradual margin improvement also seen in commerce and promotion; other costs and selling, general & administrative expenses progressed in-line with initial plans
  • Hiring is progressing in-line with plan, with a focus on mid-career experienced hires, internal development slots, and new graduate hiring for the following spring

• Operational Initiatives

  • Live Streaming: Held the annual large-scale にじさんじ甲子園 event and MECHATU-A 1st 3DLive, both of which generated strong engagement on YouTube
  • Events: Hosted 3 VTuber unit events and 3 にじさんじ WORLD TOUR 2025 stops in Sendai, Nagoya, and Yokohama in Q1
  • Commerce: Ran the seasonal Prism Heart June Bride campaign, plus anniversary merchandise campaigns for multiple popular VTuber units, all of which received strong positive response from fans. Plush merchandise continues to see particularly strong demand following the launch of the にじさんじ Plush Store
  • Promotion: Saw growing demand for large IP collab projects, with completed collaborations including Duel Masters TCG, Onkyo, Pigg Party, and the Virtual Asahi Mori virtual expo PR campaign
  • Talent Development: No new VTuber debuts in Q1, in-line with plan; a new 4-member female girl group concept unit debuted in August (Q2). Three different VTA auditions were held in July to continue发掘 new debut candidates

1. Live Streaming: 1.385 billion yen, in-line with management expectations, contributed approximately 9.9% of total Q1 revenue. Performance was driven by strong engagement around large-scale projects and 3D live streams, with steady YouTube view growth.
2. Commerce: 10.394 billion yen, above initial expectations, contributed approximately 74.5% of total Q1 revenue. The segment grew roughly 2x year-over-year, with strong performance driven by well-prepared anniversary and seasonal campaigns, strategic multi-stage sales of event-related merchandise, and rigorous shipping management that avoided unplanned delays.
3. Events: 2.117 billion yen, significantly above initial expectations, contributed approximately 15.2% of total Q1 revenue. Strong performance was driven by 6 major events (3 VTuber unit events and 3 にじさんじ WORLD TOUR 2025 stops) where online ticket sales far outpaced projections.
4. Promotion: Slightly above initial expectations, with both the number of projects and average project size growing steadily, and a rising trend in large cross-IP collaboration campaigns. Total Q1 operating income hit 7.004 billion yen, significantly exceeding initial projections, with both revenue and operating income hitting all-time quarterly highs.

• Q2 2026 is projected to be the quarter with the lowest revenue and profit for the full fiscal year, due to the timing of initiative planning; the company is currently focused on preparing for initiatives in the second half of the fiscal year, and no changes to initial Q2 projections have been made.
• Full year 2026 fiscal guidance has been upward revised from the prior range of 49.0 billion yen to 51.0 billion yen in revenue and 19.0 billion yen to 20.0 billion yen in operating income, to reflect the significantly stronger than expected Q1 performance. Guidance remains presented as a range to account for factors including overall fan engagement momentum and the growth trajectory of newer generation VTubers.
• Large にじさんじ WORLD TOUR 2025 events are scheduled for Q3, and the upcoming Sanrio collaboration will be reflected in full year H2 results. The next large-scale festival event is scheduled for May 2027, and will not be included in the 2026 fiscal year results, with this timing already factored into existing guidance.

• Large-scale events like the 6 major events held in Q1 cannot be scheduled every quarter, so the high Q1 event revenue level is not fully repeatable.
• AI adoption in entertainment carries material reputation and legal risks, requiring a cautious approach to any implementation.
• The overseas VTuber market, particularly for NIJISANJI EN, has not yet fully matured, and growth depends on successfully expanding viewership KPIs on YouTube, creating near-term execution uncertainty.
• The full 2026 fiscal year outlook remains dependent on performance in the remaining quarters, so guidance may require future adjustments based on actual operational progress.

Q: What are the drivers of strong commerce revenue growth, broken down by customer metrics, and what segments and product categories are growing fastest? / A: Commerce revenue is up roughly 2x year-over-year, with growth primarily driven by an increase in total customer count. Per-customer spending (average order value multiplied by purchase frequency) has also grown approximately 10% over the past year. 75% of customers are under 30, but the share of customers over 30 has gradually increased in recent years. Plush merchandise continues to see the strongest demand, following the opening of the dedicated にじさんじ Plush Store.

Q: What are the key challenges and growth strategy for NIJISANJI EN? / A: The top priority is growing YouTube engagement KPIs, as YouTube remains the core customer acquisition channel. Once viewership and audience growth is established, this will naturally flow into stronger commerce and promotion revenue. The company is also using non-language content like short-form videos from domestic VTubers to help expand the global audience, alongside regular large collaborative events to boost overall engagement for the EN branch.

Q: How does ANYCOLOR view M&A as a growth strategy, and what is its medium to long term strategic focus? / A: M&A targets will primarily be companies that own existing IP or can help grow existing IP, and VTuber groups are one potential category of targets. The core medium to long term priority remains growing the existing core VTuber business, with a focus on expanding into new markets and new customer segments while remaining focused on VTuber-related industry verticals, rather than pursuing unrelated diversification.

Q: What are the key barriers to entry in the VTuber market that explain why most new entrants struggle, and what is ANYCOLOR's competitive advantage? / A: The primary barrier is the established brand and ecosystem network effect. ANYCOLOR has an environment that attracts talented VTubers, which creates stronger overall engagement that in turn attracts more new talent, creating a self-reinforcing cycle. The company has also built out comprehensive end-to-end support infrastructure across events, commerce, promotion, design, and studio operations that lets VTubers focus on creating content, which new entrants cannot easily replicate.