Tokyo Tsushin Group FY2026 Q2 Earnings Deep Dive: Double-Digit Growth Across All Segments and the Full Scope of the IP Portfolio Strategy

1. Overview of Financial Results and Key Analysis

Tokyo Tsushin Group (Securities Code: 7359) achieved significant growth in both revenue and profit for the second quarter (interim period) of the fiscal year ending December 2026. This performance was driven by the growth of its core Media business and improved profit margins across all segments. For the cumulative second quarter, consolidated net sales reached JPY 3,798 million (+19.6% YoY) , operating profit hit JPY 234 million (+66.8% YoY) , ordinary profit rose to JPY 266 million (+153.4% YoY) , and net profit attributable to owners of the parent surged to JPY 135 million (+196.2% YoY) . EBITDA, a key indicator of cash flow generation, also showed strong momentum at JPY 381 million (+19.1% YoY) .

The key highlights of these financial results can be summarized in the following 10 points:

1. Double-digit profit growth in all segments : Achieved double-digit profit growth across all three core businesses: Media, Platform, and Fan Business.
2. Record-high sales in the Media business : Driven by hit hyper-casual game apps, the segment achieved its highest quarterly sales to date.
3. Optimization of app operations : The average number of monthly active apps reached 238, exceeding the full-year plan (236), while simultaneously pursuing higher profitability per app.
4. Structural improvement in the Platform business : Benefited from increased average revenue per user (ARPU) in the flagship "Telephone Fortune-telling Charis" service and cost reductions following the completion of amortization for customer-related assets acquired through M&A.
5. Rapid growth of "Renai Sodan METHOD" : Monthly sales hit record highs for two consecutive quarters, establishing it as a second pillar of revenue.
6. 7th consecutive quarter of profit for "B4ND" : The "Oshikatsu" (fan activity) x messaging app has solidified its position, driving the profit base of the Fan Business segment.
7. Structural shift in the IP business : Transitioned from indirect involvement to a direct management structure following the acquisition of rights related to "WHITE SCORPION."
8. Unveiling of the "IP Portfolio Strategy" : Outlined a medium-to-long-term growth equation aiming to acquire 20 IPs by FY2029 .
9. Strengthening of the financial base : Retained earnings increased due to interim net profit, expanding net assets to JPY 1,013 million (+JPY 123 million from the end of the previous fiscal year) .
10. High progress rate against earnings forecasts : Achieved an operating profit progress rate of 93.7% and an ordinary profit progress rate of 102.5% (full-year forecasts remain unchanged due to ongoing consideration of M&A and other investments).

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2. Performance Highlights and Segment Profitability

First, we examine the performance highlight slide to understand the overall earnings structure and the contribution of each segment.

This slide provides critical data detailing the year-on-year growth of each of Tokyo Tsushin Group's segments. It confirms that the Media business drove the expansion in net sales, while the structural changes in the Platform business and the significant growth of the Fan Business were the primary contributors to the increase in segment profit.

Deep Dive into Segment Performance

• Media Business : Net sales were JPY 2,271 million (+23.1% YoY) , and segment profit was JPY 258 million (+14.5% YoY) . Hyper-casual game apps such as "Tricky Mean 2" drove sales and profit, while the stable operation of the image maker platform "Picrew" and the corporate-focused "PicLab" also contributed to the growth.
• Platform Business : Net sales remained flat at JPY 1,049 million (+0.1% YoY) , but segment profit saw a significant increase to JPY 198 million (+35.6% YoY) . In addition to optimizing advertising operations with a focus on profitability and increasing ARPU, the completion of amortization for customer-related intangible assets from past M&As in March directly contributed to the profit increase.
• Fan Business : This segment showed rapid growth, with net sales of JPY 460 million (+80.2% YoY) and segment profit of JPY 48 million (+81.5% YoY) . Success in promotions for the "B4ND" app led to an increase in members, while the expansion of official fan club services for affiliated artists and an increase in events have yielded results.
• Others (New Businesses, etc.) : Net sales were JPY 15 million (-38.8% YoY) , with a segment loss of JPY 12 million (compared to a loss of JPY 18 million in the same period last year) , reflecting efforts to narrow losses while developing advanced projects like the metaverse space "AMIZA CITY GINZA."

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3. Progress and Growth Initiatives by Business

The company classifies its business portfolio into three stages—"Profitability Phase," "Business Development Phase," and "Concept/Development Phase"—to maintain a cycle of investment and monetization.

① Media Business: Operational Optimization and Continuous Hit Creation

In the Media business, the number of smartphone game apps in operation reached a monthly average of 238 , outpacing the FY2026 plan of 236. Marketing initiatives aimed at improving profitability per app, rather than just increasing volume, are proving successful. In addition to casual games like "Junkaichu! Soku Taiho!" and "Oji Atsume," the company is advancing a "co-creation development model" to leverage synergies with external partners.

② Platform Business: Deepening Consultation Services and New Initiatives

While the telephone fortune-telling services "Charis" and "SATORI" maintain a solid foundation, the newly introduced "Renai Sodan METHOD" is expanding rapidly. Sales for this service recorded 136.4% of the previous year's level , and it hit a monthly record high in May 2026. Total consultations reached 136,000 in the first half, confirming the improvement in segment profitability.

③ Fan Business: Shift to Direct Management

In the entertainment tech sector, "B4ND" has achieved profitability for 7 consecutive quarters , growing into a stable source of cash flow. Furthermore, the company is expanding its roster of artists, including the launch of an official fan club for Saeka Okada in July 2026.

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4. Medium-to-Long-Term Growth Strategy: The Full Scope of the IP Portfolio Strategy

To propel the Fan Business to the next level, the company has launched its "IP Portfolio Strategy." We analyze the slide illustrating this strategic shift.

This slide is considered extremely important because it presents quantitative targets, specifically the "IP Growth Formula" and the "FY2029 Goal of 20 IPs," which will transform the quality of the company's future growth.

Previously, the company focused on providing platforms and indirect involvement. However, with the business transfer of the idol group "WHITE SCORPION" in July 2026, which included affiliation rights and exclusive management contracts, the company has transitioned to a direct IP management structure .

Logic of the IP Growth Formula

• Formula ① : Business Value = Number of IPs Owned × IP Value per IP (Fans × ARPU × Retention Rate × Growth Rate)
• Formula ② : Business Value = Number of IPs Owned × IP Value (Fan Club + EC + Live Events + Merchandise + Licensing)

Rather than relying excessively on a single hit, the company intends to pursue portfolio management that continuously acquires and nurtures multiple IPs , integrating its expertise in digital marketing and its proprietary media platforms. This aims to build a stable and highly scalable revenue base over the medium to long term.

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5. Progress Against Earnings Forecasts and Future Outlook

Finally, we examine the current progress against the full-year consolidated earnings forecast and the future outlook.

This slide was selected because it clearly presents the "current earnings progress" and the "reasons for maintaining or revising forecasts," which are of the highest interest to investors.

Interim Progress Against Full-Year Plan

• Net Sales : JPY 3,798 million against a full-year forecast of JPY 6,500 million ( 58.4% progress )
• Operating Profit : JPY 234 million against a full-year forecast of JPY 250 million ( 93.7% progress )
• Ordinary Profit : JPY 266 million against a full-year forecast of JPY 260 million ( 102.5% progress )
• Net Profit Attributable to Owners of the Parent : JPY 135 million against a full-year forecast of JPY 110 million ( 122.8% progress )

As of the interim period, operating profit is significantly ahead of plan, and ordinary profit and net profit have already exceeded the full-year targets . However, the company has not revised its full-year earnings forecast upward at this time, maintaining the planned figures .

Rationale for Maintaining Forecasts

According to the materials, the company is currently scrutinizing potential growth investments, including M&A, as well as strategic investments for future business expansion and the possibility of temporary expenses occurring in the third quarter and beyond. This reflects a stance of not merely locking in short-term profits, but proactively preparing for the next phase of growth. Depending on the continued success of hits in the Media business and the performance of acquired IPs, there remains a possibility of future revisions to the earnings forecast.

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6. Conclusion

The Tokyo Tsushin Group's FY2026 Q2 financial results demonstrate that a sustainable growth loop is functioning : the existing advertising-based Media business and high-margin Platform business generate solid cash, which is then reinvested into the growth areas of the Fan Business and IP Growth business. With an improved equity ratio and strengthened financial health, the focus for medium-to-long-term corporate value enhancement will be on how quickly the expanded IP portfolio can be converted into revenue.