TOKYO, JAPAN, October 15, 2026 – CTW (Nasdaq: CTW) (“CTW” or “the Company”), a leading game platform company providing global access to web-based games through its flagship platform, G123.jp, today reported financial results for the fiscal year ended July 31, 2026 (“FY26”).
Financial and Business Highlights
● Generated revenue of $82.5 million in FY26, down 9% YoY, while increasing segment profits 3% YoY to $32.3 million, or 33.4% of in-game purchases (up from 29.3% in FY25)
● Reduced advertising expense by $11.4 million, or 22% YoY, a notably larger decline than revenue, reflecting CTW’s ROAS-focused business model and disciplined approach to marketing spend
● Grew revenue from users outside of Japan 8% YoY to $29.7 million, or 36% of total revenue (up from 30% in FY25), led by South Korea, up 12% YoY, and Taiwan, Hong Kong and Macau, up 71% YoY collectively
● Reported net loss of $4.1 million ($0.07 per share) compared to net income of $3.8 million ($0.06 per share) in FY25, and positive Adjusted EBITDA of $3.5 million (4.2% of revenue), down 56% YoY from $8.0 million (8.8% of revenue)
● Ended FY26 with $14.4 million in cash and cash equivalents, up 18% YoY from $12.2 million, and no debt
● Opened CTW’s first North American office at One World Trade Center in New York City in February 2026, building a local team focused on partnerships, marketing, user acquisition, and corporate communications to support the Company’s global expansion initiative
● Launched 15 new games on G123.jp across FY26, including High School of the Dead Day 0 and The Apothecary Diaries Palace Chronicles, bringing total active games to 42, with 16 games in backlog as of July 31, 2026. High School of the Dead Day 0, which launched on April 28, 2026, generated approximately $6.0 million in revenue from launch through July 31, 2026, a period of slightly more than three months, or an average of approximately $2.0 million per month, making it the highest revenue-generating game on G123.jp during that period, ahead of Vivid Army.
Comments from Ryuichi Sasaki, Founder, CEO, and Chairman of CTW
“Fiscal 2026 was a year of mixed performance for CTW. Several of our game releases did not achieve the engagement and monetization we expected, and that weighed on our overall results. Furthermore, we pulled back on advertising and user acquisition spending once we saw these weaker engagement trends, which negatively impacted our user base.
However, other developments during the year strengthened our conviction in the long-term opportunity for G123. Most notably, the launch of High School of the Dead Day 0 in the second half demonstrated the positive impact that the right combination of recognizable IP, compelling gameplay, and effective execution can have on our platform. Additionally, we also saw some encouraging signs within our user base that we believe are important when evaluating the health of the platform. While overall users declined significantly in fiscal 2026, our paying users remained remarkably resilient, increasing slightly year over year. As a result, monthly paying active users represented 3.95% of monthly active users compared with 2.62% in fiscal 2025, while average in-game purchases per monthly active user increased 35%. We believe these metrics reflect the resilience of G123’s core player base: paying users held steady even as lower acquisition spending reduced overall traffic. At the same time, daily engagement, spending per monthly paying user and early-stage retention among paying users were softer, and broadening our active user base and increasing the frequency with which our players return and spend are priorities for fiscal 2027.
That distinction is important, as we do not view fiscal 2026 as evidence that the opportunity for our platform has diminished. Rather, the year reinforced how much the quality and execution of individual game releases matter to our results. We are taking those lessons into fiscal 2027 by becoming more focused on the games we bring to G123, how we position and market those titles, and where we allocate capital. Our objective is to build upon the characteristics that drove our stronger-performing titles and make successful launches more consistent across our portfolio. Fiscal 2026 also demonstrated that our ROAS-driven model is built to be resilient when a title underperforms and to accelerate when one succeeds. When games fell short of our return thresholds, we reduced advertising spending quickly, which is why segment profits grew and ROAS remained above 100% in a year when revenue declined. When a game demonstrates strong engagement and monetization, as High School of the Dead did following its launch Day 0 in late April, we direct marketing investment toward it to scale its audience. That discipline limited the downside this past year, and we believe it will compound the upside as the quality of our pipeline improves.
We are also encouraged by the opportunity outside Japan. International revenue grew during fiscal 2026 despite the decline in total Company revenue. Moreover, our New York presence gives us greater ability to localize our content and marketing in Western markets, pursue partnerships, and better understand North American gamers.
With 42 active games, a growing international presence, a stable base of monthly paying users, and additional titles in development, we believe the opportunity ahead of CTW remains substantial. Our task now is execution, and we enter fiscal 2027 focused on applying what we learned this year to deliver more consistent content performance, broaden our engaged audience, and return CTW to sustainable growth.”
Fiscal 2026 Results
Revenue decreased 9% in FY26 to $82.5 million compared to $90.4 million in FY25. Gross in-game purchases decreased 10% YoY to $96.8 million compared to $107.0 million in FY25, primarily reflecting weaker overall performance of newly launched games, partially offset by a 4.1% increase in revenue from existing games. Revenue from users outside of Japan increased 8% YoY to $29.7 million, or 36.0% of revenue, compared to $27.5 million, or 30.4% of revenue, in FY25, while revenue from users in Japan decreased 16% YoY to $52.8 million. In FY26, CTW launched 15 new games that collectively generated $22.0 million in revenue, compared to seven new games launched in FY25 that generated $32.3 million in revenue.
Segment profits* increased 3% in FY26 to $32.3 million (33.4% of in-game purchases) compared to $31.3 million in FY25 (29.3% of in-game purchases), as lower advertising expense more than offset lower in-game purchases and higher server costs. Advertising expense decreased $11.4 million, or 22%, to $41.0 million in FY26 (42.4% of in-game purchases) compared to $52.4 million in FY25 (49.0% of in-game purchases), a significantly larger decline than revenue, reflecting CTW’s focus on ROAS and disciplined management of its marketing budget. ROAS was 105.8% in FY26, compared to 116.4% in FY25.
Key operating metrics reflected a stable paying user base amid lower overall user activity. Paying monthly active users (PMAUs) were 89,053 in FY26, up 0.6% YoY from 88,503, while monthly active users (MAUs) decreased 33% YoY to 2.26 million from 3.38 million, as the decline in user activity was concentrated among non-paying users. As a result, the PMAUs to MAUs ratio increased to 3.95% from 2.62% in FY25, and ARPMAU increased 35% YoY to $3.57 from $2.64. ARPPDAU increased 4% YoY to $17.51 from $16.79, while paying daily active users (PDAUs) decreased 13% YoY to 15,152 from 17,458.
Cost of revenue increased 29% to $28.5 million in FY26 compared to $22.0 million in FY25, reflecting higher personnel, outsourcing, server and software costs and IP royalties and amortization as the Company invested in its team, infrastructure and external creative resources, partly offset by lower payment-processing fees. Revenue share to game developers and IP holders was 15.6% of in-game purchases compared to 14.9% in FY25.
General and administrative expenses increased 38% to $11.7 million compared to $8.5 million in FY25, primarily due to additional corporate and administrative personnel and higher legal, accounting and other costs of operating as a public company and the setup of the Company’s New York office, as well as approximately $0.5 million of Taiwan business tax expense, a portion of which related to prior periods. Management believes the core infrastructure required of a public company is now largely in place and expects general and administrative expenses to increase only modestly in absolute terms.
Sales and marketing expenses decreased 17% to $45.9 million compared to $55.4 million in FY25, driven by the $11.4 million reduction in advertising expense.
Research and development expenses decreased 31% to $3.8 million compared to $5.5 million in FY25. The decrease primarily reflected the capitalization of qualifying development payroll following the Company’s early adoption of ASU 2025-06 and lower developer-advance impairment expense, rather than a reduction in development activity.
Additionally, across all functions, FY26 cost and expenses included $2.0 million of non-cash share-based compensation (none in FY25), most of which related to share options granted in December 2025.
Net Loss was $4.1 million ($0.07 per share) in FY26 compared to net income of $3.8 million ($0.06 per share) in FY25. Loss from operations was $7.3 million in FY26 compared to $1.1 million in FY25. FY25 net income included a $4.7 million contingent gain on recovery of previously impaired assets, and FY26 included a $0.2 million final recovery on the same claim and an income tax benefit of $1.7 million. Interest income, net was $0.5 million in both FY26 and FY25, as CTW maintained its bank deposits.
Adjusted EBITDA** was $3.5 million (4.2% of revenue) in FY26 compared to $8.0 million (8.8% of revenue) in FY25. CTW maintained positive Adjusted EBITDA while reducing advertising spend and continuing to invest in headcount, platform development and its global expansion initiative.
Cash and cash equivalents were $14.4 million as of July 31, 2026 compared to $12.2 million as of July 31, 2025. Net proceeds of $10.6 million received at the closing of the IPO were partially offset by net cash used in operating activities of $3.2 million and net cash used in investing activities of $4.7 million, including $4.1 million of capitalized software development costs. The Company had no debt as of July 31, 2026.
* Further clarification and explanation of Segment profits can be found in the Segment Reporting section of the release and at ctw.inc/investors.
** Further clarification and explanation of non-GAAP measures and reconciliation to the most comparable GAAP measure can be found in the “U.S. GAAP Reconciliation of Non-GAAP Adjusted Results” section of the release and at ctw.inc/investors.
Earnings Webinar
Management will host an earnings webinar at 8:30 a.m. ET on Friday, October 16, 2026, to review these financial results and provide a general corporate update. Interested investors can register for the webinar here.
The Company has posted a supplemental slide presentation accompanying this release to its investor relations website at ctw.inc/investors. Investors are encouraged to review these materials in conjunction with this release.
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