Mobile Factory (3912) Q2 FY2026 Earnings Deep Dive Report

Mobile Factory (3912) Q2 FY2026 Earnings Deep Dive Report

Mobile Factory, Inc. has released its financial results for the second quarter (interim period) of the fiscal year ending December 2026. This report provides a detailed analysis of the company's latest performance, business status, and future growth strategies based on the provided materials.

1. Q2 Cumulative Performance Highlights and Record Achievements

For the cumulative second quarter period of FY2026 (January-June), Mobile Factory achieved record-high sales and operating income . Sales increased by 1.8% year-on-year (YoY) to 1,686 million yen, EBITDA increased by 2.5% YoY to 561 million yen, and operating income also rose by 2.5% YoY to 561 million yen. These achievements were primarily driven by the introduction of the new 'Odekake Pass' feature and various promotional measures, coupled with a decrease in platform fees due to increased utilization of off-app payments.

Conversely, for the second quarter accounting period (April-June) alone, sales decreased by 2.5% YoY to 937 million yen, and both EBITDA and operating income fell by 4.5% YoY to 352 million yen. This was mainly attributed to changes in the timing of battle events for the flagship location-based game 'Eki Memo!' and a downturn in some existing merchandise.

The following slide concisely summarizes the key financial highlights for this quarter's earnings, visually presenting the significant achievement of record highs for the Q2 cumulative period.

This slide clearly illustrates the solid growth in the Q2 cumulative period and the temporary fluctuations in the standalone quarterly period . The increase in cumulative sales and profits suggests that the company's business is steadily expanding, with the growth in EBITDA and operating income surpassing sales growth, indicating improved profitability. The quarterly decline in profit is explained as being due to temporary factors such as event timing adjustments, rather than structural business issues.

2. Progress Against Full-Year Forecast

Against the full-year forecast for FY2026 (sales of 3,500 million yen, EBITDA of 1,170 million yen, operating income of 1,170 million yen), the cumulative second quarter results show a progress rate of 48.2% for sales and 48.0% for both EBITDA and operating income, indicating generally steady progress . Net income attributable to parent company shareholders also stands at 387 million yen (47.3% progress rate) against a forecast of 819 million yen, largely tracking the plan.

3. Analysis of Operating Income Fluctuations

The primary factors contributing to the 14 million yen increase in operating income compared to the previous year were higher sales (+29 million yen) and a reduction in variable costs (+50 million yen) due to increased utilization of off-app payments. Conversely, aggressive investment in advertising expenses (△30 million yen) and an increase in various fees (△27 million yen) acted as negative factors. This indicates that the company is continuing to make upfront investments for growth while also improving the efficiency of its revenue structure .

4. Trends in Cumulative Sales and Operating Income and Profitability

Reviewing past cumulative performance trends, both sales and operating income have shown continuous growth. Notably, in the cumulative Q2 of 2026, sales reached 1,686 million yen and operating income hit 561 million yen, setting new record highs . The operating profit margin remains high at 33.3%, and the sales-to-advertising expense ratio is 9.0%, suggesting efficient marketing investments.

The following slide is crucial for visually understanding the trends in sales and operating income over cumulative periods.

This graph clearly demonstrates Mobile Factory's consistent track record of increasing sales and operating income over several years . The stable and high operating profit margin, exceeding 30%, underscores the robustness and profitability of the company's business model. Furthermore, the relatively low advertising expense ratio suggests a balanced approach to maintaining existing user engagement and acquiring new users, which is considered a foundation for sustainable growth.

5. Quarterly Performance Trends and Impact of 'Eki Memo!' Events

In terms of standalone quarterly performance, Q2 FY2026 saw sales of 937 million yen and operating income of 352 million yen. As mentioned, this was primarily due to changes in the timing of 'Eki Memo!' battle events, resulting in a decrease compared to Q2 FY2025 (sales of 961 million yen, operating income of 368 million yen). However, it represents a significant recovery from Q1 FY2026 (sales of 749 million yen, operating income of 209 million yen), confirming that the fluctuation was a temporary effect of event timing adjustments .

6. Segment-Specific Operating Income Trends (Mobile Games and Content)

Looking at business segments, the Mobile Game Business experienced a decline in operating income due to changes in 'Eki Memo!' battle event timing and a downturn in some existing merchandise. Sales for the Mobile Game Business in Q2 FY2026 were 309 million yen. On the other hand, while sales in the Content Business are trending downwards, operating income is stably secured through efficient operations. Sales for the Content Business in Q2 FY2026 were 43 million yen. This situation highlights the importance of event strategy in the mobile game business and the stable revenue contribution from the content business.

7. 'Eki Memo!' Series Collaboration Strategy

For its flagship 'Eki Memo!' series, the company is implementing an aggressive collaboration strategy to enhance user engagement and acquire new users. This includes strengthening partnerships with regions and transportation agencies, such as a digital stamp rally with Izu Oshima, the 'Meguru Tabi' campaign with JR East, and a collaboration with the Oarai Kashima Line. Furthermore, collaborations with popular IPs like 'LILISPA' and 'Classroom of the Elite' have been decided, aiming to enhance brand value and expand the user base through diverse partnerships . These collaborations extend beyond in-game events to real-world events and merchandise, creating multifaceted revenue opportunities.

8. Release of New Feature 'Odekake Pass' and Participation in Local Government/Public Week

To improve user experience and enhance its appeal as a location-based game, the new feature ' Odekake Pass ' has been released. This function aims to maximize the 'joy of going out' by combining movement and collection. Additionally, to contribute to regional revitalization, the company participated in 'Local Government/Public Week 2026' to promote regional collaboration projects across all 47 prefectures. These initiatives aim to deepen the gameplay of 'Eki Memo!' while also enhancing corporate value through social contribution .

9. Short-Term Growth Strategy for 'Eki Memo!'

The future growth strategy for 'Eki Memo!' is structured around the following four pillars:

1. Maximizing the Location-Based Game Experience : Thoroughly refining the unique fun of 'Eki Memo!' – 'movement x collection x nurturing' – and enhancing user experience through 'Odekake Pass', large-scale events, new merchandise releases, and continuous high-IP collaborations.
2. Evolution as a Lifestyle Log : Transforming the 'joy of going out' from a fleeting experience into a 'valuable record,' allowing users to enjoy past memories and plan for the future. The 'Odekake Camera' function and 'Denkono Heya (tentative)' feature are planned enhancements.
3. Establishing a Position as a Regional Creation Company : Leveraging achievements to expand regional collaboration projects to all 47 prefectures, building a sustainable growth foundation while increasing recognition.
4. Stabilizing and Strengthening the Business Foundation : Maximizing user acquisition through enhanced advertising investment. Also, improving development stability and quality through aggressive investment in off-app payments and advertising, refining design guidelines, resolving technical debt and development infrastructure issues, and strengthening the quality management system.

These strategies are concretely outlined in the following roadmap:

This roadmap is highly significant as it clearly outlines the specific measures supporting the future growth of 'Eki Memo!' and their implementation timeline . In addition to 'Odekake Pass' and tutorial improvements released in the first half, the second half plans include the implementation of large-scale events, new merchandise releases, and the expansion of new features like 'Denkono Heya (tentative)'. Furthermore, initiatives to strengthen the business foundation are ongoing throughout the year, reflecting the company's commitment to sustainable growth through both short-term measures and long-term foundational reinforcement .

10. AI Utilization for Productivity Improvement and Future Outlook

Mobile Factory is actively promoting AI utilization across the entire company in anticipation of the AI co-existence era. The company is redefining its human resource profile and preparing to update core human resource definitions for recruitment, development, and evaluation. In business operations, AI is being utilized in engineering domains for technical investigations, design, and implementation flows for new initiatives, achieving a twofold increase in productivity in some tasks. In non-engineering domains, AI is also being used for policy design, analysis, content planning, and production processes, aiming for both cost reduction and quality improvement. Through these AI applications, the company aims for further productivity enhancements, service stabilization, a wider range of initiatives, and challenges in new service development.

Conclusion

Mobile Factory's Q2 FY2026 financial results show record-high sales and operating income for the cumulative period, with steady progress towards the full-year forecast. In its flagship 'Eki Memo!' business, the company is deepening user experience and expanding its business domain through the release of the new 'Odekake Pass' feature, diverse collaborations, and regional revitalization efforts. Furthermore, the company plans to enhance productivity and strengthen its future service development foundation through the active utilization of AI technology. These initiatives demonstrate a clear strategy for the company's sustainable growth and enhancement of corporate value.