CTW Announces Fiscal Year 2026 Financial Results
TOKYO, Oct. 15, 2026 (GLOBE NEWSWIRE) -- 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
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.
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.
About CTW
CTW is a leading game platform company providing global access to web-based, free-to-play games inspired by popular Japanese anime IP, including So I’m a Spider, So What? Ruler of the Labyrinth, Arifureta: From Commonplace to World’s Strongest – Rebellion Soul, and Queen’s Blade Limit Break. CTW delivers these games through its globally accessible flagship platform, G123.jp, which has accumulated paying users in over 200 countries since its 2018 launch. Founded in Tokyo in 2013, CTW partners with anime and manga IP holders to bring officially licensed titles to players around the world with no downloads or account registration required.
For more information, visit www.ctw.inc or G123.jp.
Forward Looking Statements
This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "potential," "continue," "ongoing," "targets," "guidance" and similar statements. CTW may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about CTW's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: CTW's growth strategies; its future business development, results of operations and financial condition; its ability to distribute successful and engaging games with high "playability" on its platform; its ability to efficiently attract and retain end-users who come to play and make in-game purchases; its ability to achieve positive return on investment on user acquisition efforts; its ability to establish and maintain relationships with game developers; governmental policies and regulations relating to CTW's industry; and general economic and business conditions globally and in Japan and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors is included in CTW's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and CTW undertakes no obligation to update any forward-looking statement, except as required under applicable law.
Contacts
Patrick Federle | Head of Investor Relations
investor@ctw.inc
CTW
Key Operating Metrics
The following table includes the Company’s key operating metrics for the years ended July 31, 2026, 2025, and 2024.
Glossary of Terms for Key Operating Metrics
Share data are retrospectively restated for the effect of the share reorganization.
CTW
U.S. GAAP Reconciliation of Non-GAAP Adjusted Results
(Amounts in U.S. dollars)
(unaudited)
Reconciliation to the most directly comparable U.S. GAAP measure of the non-GAAP measures included in this press release is as follows. The following table reconciles the Company’s net income (loss) to Adjusted EBITDA:
CTW has determined to supplement its consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), presented elsewhere within this release, with non-GAAP Adjusted EBITDA. CTW defines Adjusted EBITDA (non-GAAP) as net income (loss) before: interest income and expense, income tax expense (benefit), depreciation and amortization, impairment losses (recoveries), and other items that management considers non-core or not reflective of ongoing operations. Management believes Adjusted EBITDA (non-GAAP) highlights operating results that are more comparable across periods by excluding the effects of non-cash charges, financing decisions, and items that can vary among companies due to capital structure or tax jurisdiction differences.
This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for Net Earnings (Loss) determined in accordance with U.S. GAAP, should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. CTW considers this non-GAAP measure in addition to its results prepared under current accounting standards, but it is not a substitute for, nor superior to, U.S. GAAP measures. This non-GAAP measure is provided to enhance readers’ overall understanding of the Company’s current financial performance and to provide further information for comparative purposes. This supplemental presentation should not be construed as an inference that the Company's future results will be unaffected by similar adjustments to Net Earnings (Loss) determined in accordance with U.S. GAAP. Specifically, CTW believes the non-GAAP measure provides useful information to management and investors by isolating certain expenses, gains, and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, CTW believes the non-GAAP measure enhances the comparability of results against prior periods.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Group’s chief operating decision maker (“CODM”) in order to allocate resources and assess performance of the segment.
The management of the Group concludes that it has only one reporting segment. The Group provides game distribution and related services to game developers. The Group’s services have similar economic characteristics with respect to nature and form of the services provided. The Group’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews Consolidated results when making decisions about allocating resources and assessing performance of the Group, rather than by geographic area; hence the Group has only one reporting segment. CODM reviews operation results on the consolidated in-game purchase amount, revenue share with game developers and IP holders, advertising expenses, transaction fees, and server cost directly related to the host of games. The above table summarizes the operating results reviewed by CODM and reconciliation to (loss) income before income tax as reported in the consolidated statements of comprehensive (loss) income.