Interim report
Page 1
This document has been translated from the original document written in Japanese for reference purposes only. In the event of any discrepancy between translated and original documents, the original shall prevail. November 11, 2025 Non-consolidated Financial Results for Six Months Ended September 30, 2025 (Under Japanese GAAP) Company name: COVER Corporation Listing: TSE Growth Market Securities code: 5253 URL: https://cover-corp.com/en Representative: Motoaki Tanigo, President and CEO Inquiries: Yosuke Kaneko, Director and CFO Phone: +81 3 (6280) 4036 Scheduled date to commence dividend payments: - Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions unless otherwise noted.) 1. Financial results for the six months ended September 30, 2025 (from April 1, 2025 to September 30, 2025) (1) Non-consolidated operating results (Percentages indicate year- on-year changes) Revenue Operating Profit Ordinary Profit Net Profit Six months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % September 30, 2025 21,754 27.2 2,666 (20.9) 2,674 (19.0) 1,999 (5.7) September 30, 2024 17,104 39.3 3,372 46.3 3,301 42.8 2,120 28.0 Basic earnings per share Diluted earnings per share Six months ended Yen Yen September 30, 2025 30.46 29.82 September 30, 2024 34.21 31.68 (2) Non-consolidated financial position Total assets Net assets Equity-to-asset ratio As of Millions of yen Millions of yen % September 30, 2025 33,080 18,947 57.3 March 31, 2025 33,060 16,947 51.3 Reference: Equity As of September 30, 2025: 18, 946 million As of March 31, 202 5: 16, 946 million 2. Cash dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2025 - 0.00 - 0.00 0.00 Fiscal year ended March 31, 2026 - 0.00 Fiscal year ending March 31, 2026 (Forecast) - 0.00 0.00 (Note) Revision to the forecast for dividends announced most recently: None
Page 2
3. Forecast for the fiscal year ending March 31, 2026 (from April 1, 2025 to March 31, 2027) (Percentages indicate year -on-year changes) Net Sales Operating Profit Ordinary Profit Net Profit Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % yen Full-year 52,500 21.0 8,200 2.5 8,200 3.0 5,700 2.5 86.82 (Notes) Basic earnings per share for the fiscal year ending March 31, 2026 (forecast) were calculated u sing the number of shares issued and outstanding (excluding treasury stock) as of March 31, 2 025 as the divider . Notes 1. Accounting methods adopted particularly for the preparation of quarterly financial statements: None 2. Changes in accounting policies, changes in accounting estimates , and retrospective restatement (1) Changes in accounting policies due to the revision of accounting standards: None (2) Changes in accounting policies other than (1) above: None (3) Changes in accounting estimates: None (4) Retrospective restatement: None 3. Number of shares issued and outstanding (common stock) (1) Total number of issued shares at the end of the period (including treasury stock): September 30, 2025: 65,650,100 Shares March 31, 2025: 65,650,100 Shares (2) Total number of treasury stock at the end of the period: September 30, 2025: 84 Shares March 31, 2025: 84 Shares (3) Average number of shares during the period: September 30, 2025 65,650,016 Shares September 30, 2024 61,991,783 Shares * These quarterly financial results are outside the scope of the audit by certified public accountants or an audit firm * Explanation of the proper use of financial results forecast and other notes The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable and are not intended to be a guarantee by the Company of future performance. Actual results may differ materially from these forecasts due to various factors.
Page 3
1 Table of Contents of Attachments 1. Qualitative information regarding results for the period ........................................................................................ 2 (1) Explanation of business results .............................................................................................................................. 2 (2) Explanation of financial position ........................................................................................................................... 3 (3) Explanation on earnings forecasts and other forward-looking information ................................................... 3 2. Financial Statements and Primary Notes................................................................................................................... 4 (1) Balance sheet ............................................................................................................................................................. 4 (2) Statement of income ................................................................................................................................................. 6 (3) Statement of cash flows ........................................................................................................................................... 7 (4) Notes to financial statements .................................................................................................................................. 8 (Assumptions for going concern) ................................................................................................................................ 8 (Notes in case of significant changes in shareholders’ equity) ................................................................................... 8
Page 4
2 1. Qualitative information regarding results for the period (1) Explanation of business results With the mission of “Together, Let’s Create Culture Loved by All” the Company aims to increase the activity opportunities for creators involved in cultural content such as anime and gaming, which are unique strengths of Japan, by creating Japan-originated entertainment culture content and distributing it to users across the world. In the interim period under review, live events during the summer season, "hololive OFFICIAL CARD GAME," and domestic and overseas Licensing/Collaboration projects, including joint game production projects with external developers, performed strongly. On the other hand, factors such as the impact of North American tariffs and substitution effects among product sales channels caused a temporary slowdown in the growth of in- house EC sales, and coupled with inventory valuation losses mainly related to products manufactured in and before the previous year, resulted in increased revenue but decreased profit compared to the same period last year. Furthermore, we are continuing to actively promote initiatives aimed at strengthening the medium-to-long term growth foundation, such as improving expressive technologies, optimizing the logistics system, and strengthening overseas business development. These upfront investment expenditures are temporarily pushing down the operating margin, but they are positioned as an important step toward future sustainable growth Performance by service was as follows. In the Streaming/Content service, the large-scale project "Holo Summer Paradise," which involved cross- language/regional group streaming implemented throughout July 2025, contributed to trend formation. Additionally, asset-type content such as music videos by affiliated talents functioned as accumulating, continuous audience acquisition channels. As a result, net sales in this service totaled 4,474 million yen (up 6.0% year-on-year). In the Concerts/Events service, multiple arena-scale live concerts were held, including Amane Kanata's 1st Solo Live Concert 'LOCK ON' and Ookami Mio's 1st Solo Live Concert 'Our Sparkle'. Furthermore, the full live concert 'hololive English 3rd Concert -All for One-' by the English-speaking VTuber group "hololive English" was held at the Radio City Music Hall in New York, contributing to strengthening brand recognition locally. As a result, net sales in this service totaled 2,356 million yen (up 57.7% year-on-year). In the Merchandising service, sales expansion in the Trading Card Game (TCG) and retail channels performed strongly. However, the growth of EC sales slowed due to the impact of North American tariffs and short-term substitution effects between sales channels. In the TCG business, tournament measures were implemented to attract a wide range of players, from competitive to casual fans, and cross-promotion between fan communities was advanced through PR collaboration with talents. As a result, net sales in this service totaled 11,678 million yen (up 32.5% year-on-year). In the Licensing/Collaborations service, pop-up events capitalizing on foot traffic during the summer holiday period were intensively held in domestic locations like Shibuya, Ikebukuro, Tokyo, and Ariake. Overseas, a collaboration event with the Los Angeles Dodgers was held for the second consecutive year. These initiatives contributed to expanding general brand recognition and improving fan engagement within the community. Furthermore, game-related revenue steadily increased its presence, recording over 200 million yen per quarter solely from contributions from small to medium-sized titles. As a result, net sales in this service totaled 3,244 million yen (up 25.7% year-on-year). As a result, for the interim period under review, revenue totaled 21,754 million yen (up 27.2% year-on- year), operating profit was 2,666 million yen (down 20.9% year-on-year), ordinary profit was 2,674 million yen (down 19.0% year-on-year), and net profit was 1,999 million yen (down 5.7% year-on-year).
Page 5
3 (2) Explanation of financial position (i) Assets, liabilities and net assets (Assets) Total net assets at the end of the interim period under review amounted to 33,080 million yen, an increase of 20 million yen from the end of the previous fiscal year. This was mainly due to an increase in Cash and deposits of 1,558 million yen, an increase in intangible fixed assets centered on the software account of 455 million yen, offset by a decrease in Accounts receivable of 1,179 million yen, and a decrease in Merchandise of 562 million yen. (Liabilities) Total liabilities at the end of the interim period under review amounted to 14,133 million yen, a decrease of 1,979 million yen from the end of the previous fiscal year. This was mainly due to a decrease in Income taxes payable of 753 million yen and a decrease in Accounts payable - trade of 705 million yen. (Net assets) Total net assets at the end of the interim period under review were 18,947 million yen, an increase of 1,999 million yen from the end of the previous fiscal year. This was mainly due to an increase in retained earnings of 1,999 million yen. (ii) Explanation of cash flows Cash and cash equivalents (hereinafter, "Cash") at the end of the interim period amounted to 13,056 million yen, an increase of 1,558 million yen from the end of the previous fiscal year. (Cash flows from operating activities) Cash provided from operating activities during the interim period under review recorded 2,953 million yen (compared with 2,903 million yen provided in the same period of the previous fiscal year). This was mainly due to increases from the posting of interim profit before income taxes of 2,637 million yen, income due to the decrease in trade receivables of 1,179 million yen, and the posting of Depreciation of 712 million yen, offset by a decrease due to payment of income taxes of 1,453 million yen. (Cash flows from investing activities) Cash used for investing activities during the interim period under review amounted to 1,391 million yen (compared with 1,315 million yen used in the same period of the previous fiscal year). This was mainly due to the acquisition of intangible fixed assets of 1,094 million yen. (Cash flows from financing activities) Cash provided from financing activities during the interim period under review amounted to no change (compared with 59 million yen provided in the same period of the previous fiscal year). (3) Explanation on earnings forecasts and other forward-looking information There are no changes to the forecast for the fiscal year ending March 2025 from the full-year forecast disclosed on May 13, 2025.
Page 6
4 2. Financial Statements and Primary Notes (1) Balance sheet (Millions of yen) As of March 31, 2025 As of September 30, 2025 Assets Current assets Cash and deposits 11,498 13,056 Accounts receivable - trade 5,417 4,238 Merchandise 3,131 2,568 Prepaid expenses 627 369 Accounts receivable - other 1,894 1,676 Other 327 388 Allowance for doubtful accounts (24) (19) Total current assets 22,872 22,278 Non-current assets Property, plant and equipment Facilities attached to buildings, net 2,330 2,364 Tools, furniture and fixtures, net 1,788 1,727 Construction in progress - 2 Total property, plant and equipment 4,119 4,094 Intangible assets Patent right 35 59 Trademark right 75 102 Software 3,225 3,663 Software in progress 739 704 Total intangible assets 4,075 4,530 Investments and other assets Shares of subsidiaries and associates 146 146 Investments in capital 54 107 Guarantee deposits 1,123 1,142 Deferred tax assets 634 737 Other 33 42 Total investments and other assets 1,992 2,176 Total non-current assets 10,187 10,801 Total assets 33,060 33,080
Page 7
5 (Millions of yen) As of March 31, 2025 As of September 30, 2025 Liabilities Current liabilities Accounts payable - trade 2,695 1,989 Accounts payable - other 69 7 Accrued expenses 1,343 1,011 Income taxes payable 1,557 803 Advances received 7,964 7,979 Deposits received 116 136 Provision for bonuses 547 443 Allowance for foreign indirect tax 350 349 Other 482 387 Total current liabilities 15,128 13,107 Non-current liabilities Asset retirement obligations 984 1,025 Total non-current liabilities 984 1,025 Total liabilities 16,112 14,133 Net assets Shareholders' equity Share capital 1,096 1,096 Capital surplus Legal capital surplus 1,093 1,093 Total capital surplus 1,093 1,093 Retained earnings Other retained earnings Retained earnings brought forward 14,756 16,756 Total retained earnings 14,756 16,756 Treasury shares (0) (0) Total shareholders' equity 16,946 18,946 Share acquisition rights 0 0 Total net assets 16,947 18,947 Total liabilities and net assets 33,060 33,080
Page 8
6 (2) Statement of income Six Months Ended September 30, 2025 (Millions of yen) Six months ended September 30, 2024 Six months ended September 30, 2025 Net sales 17,104 21,754 Cost of sales 8,021 11,180 Gross profit 9,083 10,573 Selling, general and administrative expenses 5,710 7,907 Operating profit 3,372 2,666 Non-operating income Interest income 0 10 Settlement received 49 0 Other 2 7 Total non-operating income 52 18 Non-operating expenses Settlement expenses 32 - Foreign exchange losses 86 9 Other 4 0 Total non-operating expenses 123 10 Ordinary profit 3,301 2,674 Extraordinary losses Loss on retirement of non-current assets - 36 Impairment Losses 11 - Provision for foreign indirect taxes 450 - Total extraordinary losses 461 36 Profit before income taxes 2,840 2,637 Income taxes - current 890 740 Income taxes - deferred (170) (102) Total income taxes 719 638 Net Profit 2,120 1,999
Page 9
7 (3) Statement of cash flows Six Months Ended September 30, 2025 (Millions of yen) Six months ended September 30, 2025 Six months ended September 30, 2026 Cash flows from operating activities Profit before income taxes 2,840 2,637 Depreciation 299 712 Impairment losses 11 - Provision for foreign indirect tax 450 - Increase (decrease) in allowance for doubtful accounts (1) (5) Increase (decrease) in provision for bonuses (35) (104) Interest income (0) (10) Loss on retirement of non-current assets - 36 Decrease (increase) in trade receivables 1,011 1,179 Decrease (increase) in inventories (1,808) 562 Decrease (increase) in accounts receivable - other (949) 215 Increase (decrease) in trade payables (485) (705) Increase (decrease) in accrued expenses (208) (143) Increase (decrease) in advances received 3,282 14 Other (426) 7 Subtotal 3,979 4,396 Interest received 0 10 Income taxes paid (1,076) (1,453) Net cash provided by (used in) operating activities 2,903 2,953 Cash flows from investing activities Purchase of property, plant and equipment (310) (229) Purchase of intangible assets (955) (1,094) Payments for investments in capital (55) (50) Payments of guarantee deposits - (20) Refund of guarantee deposits - 2 Other 5 - Net cash provided by (used in) investing activities (1,315) (1,391) Cash flows from financing activities Proceeds from issuance of shares 59 - Net cash provided by (used in) financing activities 59 - Effect of exchange rate change on cash and cash equivalents (0) (3) Net increase (decrease) in cash and cash equivalents 1,646 1,558 Cash and cash equivalents at beginning of period 8,666 11,498 Cash and cash equivalents at end of period 10,312 13,056
Page 10
8 (4) Notes to financial statements (Assumptions for going concern) Not applicable. (Notes in case of significant changes in shareholders’ equity) Not applicable.