The FY26 results confirm the company is in a revenue contraction phase with deteriorating profitability. The bright spots are international revenue growth and a disciplined ROAS-driven marketing model. Monitor the FY27 pipeline for new game launches, particularly the performance of High School of the Dead Day 0 sustainment and the 14 games in backlog, to assess whether the company can return to growth.
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Executive Summary
CTW filed its FY26 20-F, reporting a 9% YoY revenue decline to $82.5M and a net loss of $4.1M (vs. net income of $3.8M in FY25). The deterioration was driven by weaker performance of new game launches, partially offset by growth in international markets and disciplined advertising spend. The filing also disclosed a material weakness in internal controls over financial reporting related to ITGC deficiencies.
Key Facts
- Revenue decreased 9% YoY to $82.5 million in FY26 from $90.4 million in FY25.
- Net loss of $4.1 million ($0.07 per share) in FY26, compared to net income of $3.8 million ($0.06 per share) in FY25.
- Adjusted EBITDA declined 56% YoY to $3.5 million (4.2% of revenue) from $8.0 million (8.8% of revenue).
- Gross in-game purchases decreased 10% YoY to $96.8 million from $107.0 million.
- Segment profits increased 3% YoY to $32.3 million (33.4% of in-game purchases) from $31.3 million (29.3% of in-game purchases).
- Advertising expense reduced by $11.4 million, or 22% YoY, to $41.0 million.
- Revenue from users outside Japan grew 8% YoY to $29.7 million, or 36% of total revenue (up from 30% in FY25).
- Cash and cash equivalents were $14.4 million as of July 31, 2026, up 18% YoY from $12.2 million, with no debt.
- A material weakness in internal control over financial reporting was identified related to ITGC deficiencies.
- Vivid Army contributed 20.2% of FY26 revenue, down from 30.1% in FY25.
- High School of the Dead Day 0 generated approximately $6.0 million in revenue from its April 28, 2026 launch through July 31, 2026.
Financial Impact
Revenue declined by $7.9 million (8.7%) YoY; net income swung to a $4.1 million loss from a $3.8 million profit; operating loss widened to $7.3 million from $1.1 million.
Risk Factors
- Revenue decline of 9% YoY with a shift to a net loss, indicating fundamental business challenges.
- Material weakness in internal controls over financial reporting could lead to reporting delays or restatements.
- Heavy reliance on a few flagship games (Vivid Army at 20.2% of revenue) creates concentration risk.
- Uncertainty around the ability to consistently launch hit titles to offset declines in existing games.
Investment Themes
Documents Analyzed
This report is based on 15 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 20-F Filing (Primary) | 0001213900-26-110271 |
| Document: ea030833001ex2-2.htm | 0001213900-26-110271 |
| Document: ea030833001ex97-1.htm | 0001213900-26-110271 |
| Document: ea030833001ex12-1.htm | 0001213900-26-110271 |
| Document: ea030833001ex12-2.htm | 0001213900-26-110271 |
| Document: ea030833001ex15-1.htm | 0001213900-26-110271 |
| Document: ea030833001ex15-2.htm | 0001213900-26-110271 |
| Document: ea030833001ex8-1.htm | 0001213900-26-110271 |
| Document: ea030833001ex13-2.htm | 0001213900-26-110271 |
| Document: ea030833001ex13-1.htm | 0001213900-26-110271 |
| Document: ea030833001ex15-3.htm | 0001213900-26-110271 |
| Document: ea030833001ex15-4.htm | 0001213900-26-110271 |
| Document: 0001213900-26-110271-index-headers.html | 0001213900-26-110271 |
| Document: 0001213900-26-110271-index.html | 0001213900-26-110271 |
| Document: 0001213900-26-110271.txt | 0001213900-26-110271 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 10d ago | 20-F | $1.87 $1.74 | ▲ +6.95% | ▲ +6.81% | $1.74 (+6.95%) |
Oct 15, 2026 11d ago | 6-K | $1.87 $1.75 | ▲ +6.42% | ▲ +5.99% | $1.74 (+6.95%) |
Oct 15, 2026 11d ago | Press Release | $1.87 $1.75 | ▲ +6.42% | ▲ +5.99% | $1.74 (+6.95%) |
Oct 5, 2026 21d ago | Press Release | $2.10 $2.07 | ▼ −1.43% | ▼ −1.29% | $1.74 (−17.14%) |
May 13, 2026 23w ago | 6-K | $2.90 $2.72 | ▲ +6.21% | ▲ +5.05% | $1.74 (+40.00%) |
May 13, 2026 23w ago | Press Release | $2.90 $2.72 | ▲ +6.21% | ▲ +5.05% | $1.74 (+40.00%) |
May 12, 2026 23w ago | 6-K | $2.91 $2.88 | ▼ −1.03% | ▼ −1.11% | $1.74 (−40.21%) |
Apr 17, 2026 27w ago | 6-K | $2.30 $2.75 | ▲ +19.57% | ▲ +19.01% | $1.74 (−24.35%) |
US Market Status
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