【Earnings Analysis Report】 W TOKYO, Inc. Full-Year Fiscal 2026 Results and Future Growth Strategy Analysis

This report provides a detailed analysis of the full-year fiscal 2026 financial results and future business strategy for W TOKYO, Inc. (Securities Code: 9159). The company operates businesses centered on the "TOKYO GIRLS COLLECTION (TGC)" brand, including event production, content production/branding, and digital advertising. Based on the officially released earnings presentation materials, this report provides a comprehensive analysis of performance highlights, business topics, strategic alliances, and the future earnings outlook.

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1. Fiscal 2026 Full-Year Performance Highlights and Financial Analysis

For the fiscal year ended June 2026, W TOKYO achieved year-on-year growth in both revenue and all profit tiers . While revenue exceeded the company's initial forecast, profit figures fell short of expectations.

【Explanation and Significance of Slide 2】

The performance highlights slide above provides the fundamental data for quantitatively assessing the current fiscal year's management results. Revenue reached 4,375 million yen (up 11.5% YoY) , achieving 108.0% of the initial forecast of 4,051 million yen. This strong performance was driven by large-scale events such as "TGC 2026 S/S" and "TGC in Aichi/Nagoya 2026," as well as the acquisition of major advertising contracts.

On the other hand, the achievement rates for profit targets were as follows, falling below the projected figures:

• Operating Profit : 398 million yen (up 13.4% YoY, 76.5% of forecast)
• Ordinary Profit : 394 million yen (up 15.5% YoY, 76.2% of forecast)
• Net Profit : 251 million yen (up 45.5% YoY, 75.5% of forecast)
• Adjusted Operating Profit : 561 million yen (up 9.0% YoY)

The primary reasons for the profit shortfall include an increase in direct costs associated with executing large-scale priority projects, and a continuing upward trend in production costs across event and content production. The gross profit margin declined by 1.4 percentage points to 33.8% , down from 35.2% in the previous fiscal year.

Quarterly Trends and SG&A Expenses

Looking at quarterly performance, the company's revenue structure is heavily skewed toward the timing of Tokyo Girls Collection events (Q1 and Q3) . Specifically, the fourth quarter (Q4 FY26/6) saw no concentration of large-scale regional events comparable to those held in the same period of the previous year (e.g., "TGC in Osaka/Kansai Expo 2026," "TGC Kumamoto 2025," and "TGC Kagawa 2025"), making it a period focused on preparing the business foundation for the next fiscal year.

Selling, General and Administrative (SG&A) expenses for the full year were kept in check at 1,079 million yen (up 4.9% YoY) . While there were increases in human capital investment (personnel costs) for sales and administrative departments and higher outsourcing fees to external partners due to business expansion, the company maintained disciplined cost management through the flexible control of other expenses.

Financial Soundness (Balance Sheet)

Total assets at the end of the fiscal year expanded to 3,102 million yen (an increase of 516 million yen YoY) . This was primarily due to an increase in advances received (532 million yen, up 361 million yen YoY) and advances paid (248 million yen, up 197 million yen YoY) following the commencement of large-scale advertising contracts. Cash and deposits remained abundant at 2,044 million yen (up 200 million yen YoY) . Although the equity ratio slightly declined from 60.8% at the end of the previous fiscal year to 58.9% , the company maintains a high level of financial soundness.

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2. Business Highlights: Domestic/Overseas Expansion and Regional Revitalization

During the fiscal year, the company advanced various initiatives in Japan and abroad, primarily within the "TGC Production" segment.

Domestic TGC, Regional Events, and City Promotion

In addition to the regular "Tokyo Girls Collection" events (2025 A/W, 2026 S/S), the company held "TGC Regional Events" in the following four cities to promote regional revitalization:

• TGC Kitakyushu 2025
• TGC Hiroshima 2025
• TGC Shizuoka 2026
• TGC in Aichi/Nagoya 2026

Furthermore, through "City Promotion" projects in collaboration with local governments—such as Edogawa Ward (Tokyo), Gamagori City (Aichi), Ichinomiya City (Aichi), and Sabae City (Fukui)—the company advanced the construction of a regional revitalization model utilizing IP.

Overseas TGC (Global Expansion)

The company is strengthening efforts to export Japanese pop culture and entertainment content overseas:

• Indonesia : Held "Kao presents TGC JAKARTA 2025" in collaboration with Mitsui & Co. and local conglomerate CT Corp (approx. 7,500 attendees over two days).
• Vietnam : Prepared and executed "Acecook presents TOKYO GIRLS COLLECTION in VIETNAM 2026" in a three-way partnership with Sojitz and POPS, one of Southeast Asia's largest digital entertainment companies.
• Thailand : Launched the "Sumitomo Corporation presents TGC in Thailand 2026" project in partnership with local conglomerate Saha Group and Sumitomo Corporation.

Participation in New Domains and Urban Development

The company has expanded into advanced technology and spatial production businesses beyond mere fashion shows, such as initiating experiential urban development through participation in the "Uraga Dock Redevelopment and Operation Project" in Yokosuka City, and event space production utilizing the next-generation communication technology "IOWN" in co-creation with NTT Docomo.

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3. Strategic Alliances and Shareholder Returns

Key topics for the fiscal year include the conclusion of a capital and business alliance with a major financial and Web3-based corporate group, and the strengthening of shareholder return measures.

【Explanation and Significance of Slide 9】

Slide 9 summarizes the capital and business alliance with SBI Holdings, Inc. concluded on March 27, 2026. Following the alliance, the SBI Group gradually acquired additional shares, becoming the second-largest shareholder with over 10% of the issued shares .

This alliance aims to fuse the SBI Group's "customer base of over 80 million people, financial services, and Web3 network" with W TOKYO's "overwhelming influence on the youth demographic, ability to generate excitement, and TGC brand production know-how." Specific collaborative projects already underway include:

• Collaboration as a platinum partner for "SBI Securities presents TGC MATSUYAMA 2026" and "TGC KITAKYUSHU 2026."
• Joint hosting of regional revitalization sessions at events like the "SBI Neo Media Summit 2026."

The creation of a new ecosystem through the fusion of finance and entertainment is a critical component for the diversification of the company's future revenue structure.

Share Buybacks (Shareholder Returns)

To improve shareholder value and optimize capital efficiency, the company announced a share buyback program :

• Number of shares to be acquired : Up to 53,000 shares (2.03% of total issued shares)
• Total acquisition cost : Up to 100 million yen
• Acquisition period : September 1, 2026, to November 30, 2026

This clearly demonstrates the company's commitment to flexible capital policy and shareholder returns.

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4. Fiscal 2027 Full-Year Earnings Forecast and Mid-to-Long-Term Growth Strategy

Finally, we explain the earnings outlook for the next fiscal year (ending June 2027) and the mid-to-long-term challenges and strategies set forth by the company.

【Explanation and Significance of Slide 10】

Slide 10 is a critical slide outlining the full-year earnings forecast for FY2027, its underlying assumptions, and the challenges ahead . The forecast for the next fiscal year is as follows:

• Revenue : 4,009 million yen (down 8.4% YoY)
• Operating Profit : 410 million yen (up 3.0% YoY, 10.2% operating margin)
• Ordinary Profit : 407 million yen (up 3.3% YoY, 10.2% ordinary margin)
• Net Profit : 268 million yen (up 6.8% YoY, 6.7% net margin)
• Adjusted Operating Profit : 573 million yen (up 2.1% YoY, 14.3% adjusted operating margin)

Structure and Background of the Revenue Decline/Profit Growth Forecast

The projected decline in revenue is due to the reactionary decrease following the completion of large-scale, one-off advertising production projects that occurred in FY2026. The next fiscal year does not anticipate similar one-off projects of that scale and is calculated based on confirmed orders and solid projections.

Conversely, the background for securing profit growth and aiming for a return to an operating profit margin in the 10% range (10.2%) includes:

1. Shift to High-Value-Added Projects : Reducing low-margin projects and concentrating resources on high-gross-margin projects that leverage production know-how.
2. Completion of Goodwill Amortization : A reduction in SG&A expenses due to the completion of goodwill amortization as of August 2026, which previously cost 6 million yen per month (approx. 72 million yen annually).

Management Challenges

As stated in Slide 10, the company has indicated its policy to focus on the following four points for mid-to-long-term growth:

• Transformation to a High-Value-Added Structure : Promoting profit-oriented management through appropriate resource allocation.
• Expansion of Regional Revitalization Projects : Building continuous regional revitalization businesses beyond one-off events.
• Development of Sustainable Revenue Models : Creating business models that generate stock-type/recurring revenue rather than relying on one-off sales.
• Execution of Mid-to-Long-Term Growth Strategy : Expanding business domains through alliances (e.g., SBI) and M&A.

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5. Conclusion

W TOKYO's fiscal 2026 results saw revenue reach record highs; however, the company faced challenges in profitability due to rising production costs and increased expenses for large-scale projects.

Nevertheless, for the upcoming fiscal year ending June 2027, the company has clearly signaled a shift from pursuing top-line scale to a "profit-margin-focused, high-value-added" model . With the tailwinds of a powerful capital and business alliance with SBI Holdings, the full-scale launch of overseas production businesses, and the reduction of fixed costs following the completion of goodwill amortization, the company plans to return to an operating profit margin exceeding 10%.

Attention will be focused on the progress of the company's structural reforms as it leverages the strong IP influence of TGC to drive expansion into new domains such as regional revitalization, global markets, and the fusion of Web3 and finance.