GENDA (9166) Q1 2025 earnings summary

Executive summary

• 1Q FY2025 revenue rose 106% YoY to ¥24.7bn and EBITDA increased 49% YoY to ¥3.3bn, driven by strong organic and M&A growth in amusement arcades and karaoke.

• Operating income grew 23% YoY to ¥2.1bn, reversing earlier expectations of a decline due to better-than-expected post-merger integration.

• Net income attributable to owners was ¥1.2bn, up 22.8% YoY; comprehensive income was ¥1.45bn, down 8.6% YoY.

• Acquisition of National Entertainment Network (NEN) in the U.S. adds ~8,000 mini-locations, expanding U.S. footprint and enabling Japanese-style prize games.

• Shareholder benefit program launched with coupons for GiGO and Karaoke BanBan to expand shareholder base and stabilize stock price.

Financial highlights

• 1Q revenue: ¥24.7bn (+106% YoY); EBITDA: ¥3.3bn (+49% YoY); operating income: ¥2.1bn (+23% YoY).

• Net income before amortization of goodwill: ¥1.5bn; net income attributable to owners: ¥1.2bn.

• Gross margin for 1Q: 21.4%; EBITDA margin: 13.2%; operating margin: 8.3%.

• Total assets grew to ¥79.2bn from ¥52.1bn as of January 31, 2024.

• M&A contributed 50% of EBITDA growth; existing businesses contributed 10% growth.

Outlook and guidance

• Full-year revenue forecast is ¥100bn (+79.5% YoY), with operating income projected at ¥7bn (+30.3% YoY) and EBITDA at ¥13bn (+60.4% YoY).

• Full-year forecast remains unchanged despite strong 1Q, pending summer peak season results.

• Net income to shareholders forecasted at ¥4.3bn, with EPS of ¥62.29.

• Decision on forecast revision to be made after July-August.