CTW

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management intentionally prioritized returns over top-line growth, scaling back marketing for titles that did not meet internal performance thresholds. - Revenue declined 8.7% year-over-year, primarily due to underperforming first-half launches and mature titles reaching the end of their life cycles. - The company maintained a Return on Ad Spend (ROAS) of 105.8%, successfully keeping in-game purchases above the cost of user acquisition despite market headwinds. - Geographic diversification gained momentum, with international revenue rising to 36% of the total, driven by strong anime appeal in South Korea and Taiwan. - A significant decline in Monthly Active Users (MAUs) was concentrated among non-paying users, while the paying user base remained stable, improving the paying user ratio to 3.95%. - Operating losses widened to $7.3 million due to increased personnel, infrastructure costs, and the buildup of corporate functions following the IPO. - The launch of 'High School of the Dead Day 0' demonstrated that established catalog IPs can outperform newer titles if they resonate with dedicated fan communities. - Management expects a return to sustained growth in fiscal year 2027, supported by a pipeline of new titles and expanded global presence. - General and administrative expenses are projected to increase only modestly now that the core public company infrastructure is largely in place. - The New York team, established in February 2026, is tasked with driving long-term growth in North America through localized partnerships and user acquisition. - Future marketing strategies will explore diversified channels, including social media influencers and OEM-related distribution partnerships, to improve acquisition efficiency. - Ongoing investments in AI-enabled tools and data analytics are intended to streamline game launches and support a larger scale of operations without significant headcount growth. - Recorded $2 million in non-cash share-based compensation expense related to IPO-related grants for directors and employees. - Early adoption of ASU 2025-06 resulted in the capitalization of $4.1 million in internal-use software development costs for the G123 platform. - Advances to game developers reached $17.9 million, carrying inherent impairment risks if titles fail to meet commercial expectations; $2.6 million was impaired in FY2026. - A $0.5 million Taiwan business tax expense was recognized, a portion of which related to prior periods. - Management clarified that the recency of an IP does not dictate commercial potential; rather, success depends on how well the game captures the original content's characteristics. - The company maintains a diversified approach, balancing high-profile new licenses with established catalog titles that have dedicated fan bases. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Initial views on new launches are formed within the first few weeks by monitoring first-day retention, paying user conversion, and expected ROAS. - Marketing spend is adjusted dynamically; if a title demonstrates attractive returns, investment is increased, but it is quickly scaled back if performance falls below expectations. - Management noted increasing interest from developers in alternative distribution channels like their browser-based G123 platform due to rising competition and costs in traditional app stores. - Recent U.S. and Japanese regulatory developments are expected to allow CTW to engage with larger, more established developers who previously focused only on native apps. - Participation in Anime NYC was a strategic move to build brand awareness and gather insights into the preferences of North American audiences. - While immediate traffic metrics weren't disclosed, the event facilitated critical connections with licensing and gaming professionals to support long-term regional growth. - Advances are non-interest bearing and recovered through revenue sharing, with underwriting based on developer track records and IP popularity. - Management acknowledged that game performance is inherently difficult to predict, requiring a disciplined portfolio approach to manage the risk of unsuccessful launches.

Image source: The Motley Fool. Friday, October 16, 2026 - Head of Investor Relations - Patrick Federle - Founder, Chief Executive Officer, and Chairman - Ryuichi Sasaki - Chief Financial Officer - Patrick Liu Patrick Federle: [Audio Gap] CTW earnings conference call for fiscal year 2026, representing the 12-month period ended July 31, 2026. Please note that today's conference call may be recorded. My name is Patrick Federle, Head of Investor Relations at CTW. Hosting today's call is Ryuichi Sasaki, Founder, Chief Executive Officer and Chairman of CTW and Patrick Liu, Chief Financial Officer of CTW. Before we begin, please be aware that today's discussion may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These statements reflect management's current expectations and involve risks and uncertainties that could cause actual results to differ materially. CTW undertakes no obligation to update these statements, except as required by law. For a detailed discussion of risks and uncertainties, please refer to our Form 20-F filed yesterday and our other filings with the SEC. We will also discuss certain non-GAAP financial measures. These measures should not be viewed as a substitute for GAAP results and may differ from those used by other companies. Reconciliations to the most comparable GAAP measures can be found in our earnings release and our Form 6-K filed yesterday and on the Investors section of our website. With that, I will now turn the call over to Ryuichi. Ryuichi Sasaki: [Foreign Language] Patrick Liu: Thank you, Ryuichi, and good morning and good evening, everyone. As Ryuichi mentioned, prioritizing returns over top line growth is central to our strategy. From a financial standpoint, the ongoing discipline guided 4 priorities in fiscal year '26, moving quickly when new titles underperformed, keeping our advertising spend above our return threshold, investing selectively in our platform and global expansion and maintaining a strong debt-free balance sheet. The results reflect those choices. Revenue declined, but segment profits grew. ROAS stayed above our 100% benchmark. Adjusted EBITDA remained positive, and we ended the year with $14.4 million in cash and cash equivalents and no debt. Revenue for fiscal year '26 was $82.5 million compared with $90.4 million in fiscal year '25, a decrease of 8.7%. Gross in-game purchases were $96.8 million, down 9.5% year-over-year. We launched 15 new games during the year and ended fiscal year '26 with 42 active titles. However, the titles we launched in the first half performed below our expectations and several mature titles continued moving through the later stages of their life cycle. We saw success in the launch of High School of the Dead, the Day 0, which was released towards the end of April, meaning slightly over 3-months of contribution was recognized in fiscal year '26. So the strong user traction we have seen to-date in Asia and North America with this title is only partially realized in these results. Within our user base, the decline in activity was concentrated among non-paying users. Monthly active users declined 33% to approximately 2.26 million from approximately 3.38 million last year, while paying monthly active users increased slightly to approximately 89,100 compared with approximately 88,500 last year. As a result, the ratio of Paying Monthly Active Users to Monthly Active Users improved to 3.95% from 2.62%. Paying daily active users declined 13% compared with a 7% decrease in overall daily active users, while average revenue per paying monthly active users declined to $90.60 from $100.74. We believe these trends partially reflect the weaker performance of our first half launch. ROAS was 105.8% in fiscal year '26 compared with 116.4% in fiscal year '25. While lower than last year, ROAS remained above our 100% benchmark, meaning the in-game purchase generated by newly acquired users continued to exceed the advertising spend used to acquire them. This supports our long-term ROAS-focused marketing strategy. We also continued to make progress on geographic diversification. Revenue from users outside of Japan increased 8.2% to $29.7 million or 36% of our total revenue, up from 30.4% last year. Revenue from users in South Korea increased 12.4% to $10.5 million and revenue from users in Taiwan, Hong Kong and Macau collectively increased 71.2% to $8 million. It is encouraging to see this momentum in Asia outside of Japan. Combined revenue from users in these markets grew 31.9% to $18.5 million or 22.4% of total revenue, up from 15.5% last year, and we believe the appeal of anime across the region gives us room to build on this growth. Revenue from users in North America, which includes the United States and Canada, was $6.2 million compared with $7.5 million last year are result of reduced user acquisition spending on underperforming titles. Building our presence in North America is a long-term effort, and our New York team established in February 2026 is focused on partnerships, user acquisition in that region, localization efforts and corporate communications. We expect to see a return to growth as we issue new titles and continue to implement our presence and growth initiatives in the region. Revenue from users in Japan decreased 16.1% to $52.8 million. Japan remains our largest market, but expanding our international mix remains a key strategic priority. Turning to expenses and profitability. Cost of revenue increased 29.2% year-over-year to $28.5 million driven largely by higher personnel, outsourcing and server and software costs, along with higher revenue share to IP holders and amortization, partly offset by lower payment processing fees and the absence of the prior year prepaid royalty impairment. These increases reflect our continued investment in the team, infrastructure and external creative resources that support our platform and game operations. General and administrative expenses increased 37.9% to $11.7 million, primarily reflecting the buildup of our corporate and administrative functions as a public company. The opening of our New York City office and approximately $0.5 million of Taiwan business tax expense, a portion of which related to prior periods. We believe the core infrastructure required of a public company is now largely in place, and we expect the general and administrative expenses to increase only modestly in absolute terms over time as the business scales. Research and development expenses decreased 31.2% to $3.8 million. Sales and marketing expenses decreased 17.2% to $45.9 million, driven by an $11.4 million or 21.7% reduction in advertising expense to $41 million. Advertising declined at more than twice the rate of revenue. This reduction was intentional. When titles did not meet our internal performance thresholds, we scaled back marketing rather than pursue top line growth at unattractive returns. As a result, segment profits increased 3% to $32.3 million or 33.4% of in-game purchase compared with $31.3 million or 29.3% of in-game purchase in fiscal year '25 as lower advertising expense more than offset lower in-game purchase and higher server costs. We reported an operating loss of $7.3 million compared with an operating loss of $1.1 million in fiscal year '25. Net loss was $4.1 million or $0.07 per share compared with net income of $3.8 million or $0.06 per share last year. Fiscal year '25 net income included a $4.7 million contingent gain on recovery of previously impaired assets and fiscal year '26 included an income tax benefit of $1.7 million. There are also two items worth noting for the year. First, we recorded $2 million of noncash share-based compensation expense compared to none in fiscal year '25, most of which related to share options granted to directors, executive officers and certain employees in December 2025 in recognition of their long-term commitment to the company and efforts in successfully launching our IPO. Second, following our early adoption of ASU 2025-06 effective August 1, 2025, we capitalized $4.1 million of internal-use software development costs for our G123 platform. Both items are relevant to understanding the year-over-year financial profile and the level of ongoing investment in the business. On a non-GAAP basis, adjusted EBITDA was $3.5 million or 4.2% of revenue compared with $8 million or 8.8% of revenue in fiscal year '25. We remain adjusted EBITDA positive while reducing advertising spend and continuing investing in headcount, platform development and our global expansion initiative. Turning to cash flow and balance sheet. Net cash used in operating activities was $3.2 million compared with $0.1 million of cash provided in fiscal year '25. This change reflected our net loss and working capital movements, including $6 million of advances to our game developers as we invest in future content. Net cash used in investing activities was $4.7 million, including the $4.1 million of capitalized software development costs. We ended fiscal year '26 with $14.4 million in cash and cash equivalents, up from $12.2 million at July 31, 2025, and supported by $10.6 million of net proceeds received at the closing of our IPO. We believe this positions us to continue investing selectively in content, systems and international growth, while maintaining strong liquidity and financial discipline. Overall, fiscal year '26 was a year of softer top line performance, but also one that demonstrated the responsiveness of our operating model. We acted quickly when new title performance did not met expectations, reduced advertising significantly while keeping ROAS above our 100% benchmark, grew segment profit and maintained positive adjusted EBITDA and a debt-free balance sheet, with a vision to return to sustained growth in fiscal year 2027. Thank you for your time and interest in CTW. I will now turn the call back to Pat for Q&A session. Patrick Federle: [Operator Instructions] Okay. It looks like we have a few questions here. So with that, we're going to begin with Vincent Fernando from ZER0 0NE Research. Vincent Fernando: So I just have a few questions actually. I'll try to ask them to save some time. So the first question is your launch have drawn on current anime, older catalog titles and original games. From what you're seeing, what kind of property works? What kind of anime property works best relative to cost? How does that shape what you choose to license next? Patrick Liu: Thank you very much, Vincent. So I'm going to respond to this question. So first of all, I do want to let you know, so from our perspective, we do not necessarily view newer anime IP or established catalog titles or original games as inherently more attractive than the other ones maybe. I think each anime title, each anime IP has its unique characteristics, cost structures and potential audiences. So from the company perspective, when we evaluate content opportunities, we consider a range of factors including the popularity and engagement of the underlying fan base, expected monetization relative to the cost of licensing and launching the game and including -- which include the prepaid royalties, the royalty rate, revenue share rate and advance to the game developers. So as of the end of fiscal year '26, we had partnerships with 38 anime IP holders and have 48 IP licenses. I think from our prior experiences launching the IP-based games, we see that the age or the recency of an IP does not necessarily determine its commercial potential. So for example, High School of the Dead Day Zero, which is based on Manga first serialized back in 2006 and adapted for television in 2010, generated approximately $6 million in its first 3 months plus -- a little bit over 3 months is launch. And the game itself actually became the highest revenue-generating games on our platform over that period. So I think this is actually a great example that demonstrates that established catalog IPs with dedicated fan communities can continue to offer meaningful opportunities, even though the Manga, the TV adoption of this anime was almost over 10 years old right from right now. And also beyond the popularity of the original IP, we also learned that successful game performance also depends heavily on how well the game captures the characteristics that fans appreciate about original content. And beyond that is the users also care a lot about overall quality of the game play, the overall user engagement and monetization. So that means even -- sometimes even a very highly popular IP may not necessarily translate into a very successful game if the gaming experiences does not meet the users' expectations. So we also recognize that sometimes different genres and different game play mechanics may appeal to different audiences and geographic markets. So from our perspective, I think looking ahead, we intend to maintain a diversified approach to content selection, balancing well-known anime IPs and properties, established catalog IPs and opportunities involve original games or different game genres. So from the company side, we will continue working closely with our IP and developer partners to evaluate the commercial potential of each opportunity and draw our experiences from prior launches and game operations to help us to continue grow the platform and grow the business. I think from the business side, the objective is very clear. So we don't just want to secure the most recognizable IPs. But to us, we want to identify the content that can deliver an attractive user engagement and sustainable monetization relative to the investments required. Vincent Fernando: Got it. My next question is just in regards to how you look at games when they launch. So what I understand is you have systems where you read a new game launch and within a couple of weeks, you're receiving data and you're steering advertising towards titles that seem to be performing better based on various metrics. So I just want to dig into that a little bit. What does a title -- what do you look for in a title when it launches? That shows you that, okay, I should put more ad spend on that title. And then so how do you -- kind of on the corollary to that, how do you decide when to lean into the user acquisition on the platform and different titles? So I guess just get some visibility on what you look for in the metrics like right after a launch? Patrick Liu: Okay. Got it. Thank you for the question again. So from our perspective, after a game is launched in the very first few weeks after launch, we look closely at engagement and monetization data, something like user acquisition and character creation data, the first retention, paying user conversion and some other early monetization trends and also most importantly, the expected ROAS of our advertisement spending on the new launches. We believe that these indicators help us assess how well a game is attracting and retaining users and also most importantly, how effectively it converts interest into actual spending and whether its performance supports additional marketing investments. So we typically try to form an initial view of a new launch within the first few weeks. But after the game launches and operated on the platform, we definitely will continue to monitor the performance of the games and refine our assessment as more operating data became available to us. So from a company perspective, our approach to user acquisition is basically, as you said, and also we talked at this a lot during the earnings call. So we approach user acquisition driven by the actual performance of individual games rather than the single platform-wide advertising decision. So basically, that means for each individual title that launched and operated on the platform, we actually evaluated the actual and expected ROAS and other operating KPIs to determine whether we want to invest additional marketing investment, and whether those additional investment is actually justified. So when a game demonstrate attractive returns, we generally seek to increase advertising investment to capture additional monetization of the opportunities. But sometimes we do see for whatever reason, some of the games has not performed as we expected, the performance falls below the expectation. At that moment, we will adjust the spending accordingly. I think from what we have -- this is actually exactly what we have experienced for fiscal year '26. And also, we do believe this discipline will continually get us into fiscal year '27. Vincent Fernando: Yes, I noticed like, for example, in the latest results, maybe some of that's playing out because obviously, maybe you pulled back a bit because I saw like the total MAUs come off a bit, but actually paying MAUs still very stable. So that's what I thought maybe that's that dynamic there. My last question is, so Japan has new smartphone rules, as I've understood. And then we've seen some U.S. court rulings on App Store payments that's kind of starting to loosen App Stores hold on app payments. And so are you seeing increased interest maybe from publishers who maybe previously felt they were locked into the app stores now looking for in-browser game distribution through you? Is that -- is there any change now in how you're speaking to potential partners because of these new developments for App Stores? Patrick Liu: Got it. Thank you. So this is actually a quite interesting question. So we have actually talked with a lot of industry players, especially on the gaming -- studio game development partner side. So we believe over the past few years, we have observed some increasing interest from game developers, publishers in distribution channels outside of the traditional app store ecosystem. I mean, through today, we still believe that app stores remain as one of the important distribution channels for a lot of the game distributors and the gaming studios. But the app store have become increasingly competitive in today, especially considering the large number of games right now available through app stores. So I think as a result of that, we do see some of the -- more and more developers are actually increasingly interested in exploring some alternative ways to reach users, improve some distribution efficiencies and manage platform with the cost. So we believe that the recent regulatory developments, as you mentioned, actually further support this broader trend that we observed from our side. I think this actually gives some unique advantages to our browser-based platform, because G123 was designed from the beginning as a browser-based gaming platform and operating independently from the traditional app store ecosystem. So our games can be accessible globally across devices, and we don't need app downloads, and we process in-game purchases through established third-party payment providers that are connected directly with our platform. And also beyond just the global accessibility, we also offer some additional benefits to game developers and game studios. So beyond just the distribution, we also offer our game development partners, user acquisition and marketing capabilities, and we also support game developers in designs in their games, and we provide localization services, and we also give them access to an established Anime and Manga IPs. So from our perspective, we believe these in combination represent some very attractive value for all the game developers and publishers in the world. So I think this basically also means that from the company side, from CTW side, we believe the growing interest in the alternative distribution models and channels actually create some additional opportunities for CTW to expand our developer and publisher relationships networks. And in particular, I think it may allow us to engage with some larger and more established games developers that have traditionally focused more on just the native app distribution. So I think that's actually what we expect to see in the near future. Vincent Fernando: But just a quick -- just a super quick follow-on that. You mentioned that new -- other game developers now may be more open to this outside the App Store. What about IP owners? Are -- were there some Japanese IP holders, maybe they kind of for some reason, they always want to be inside the app stores and now maybe are there -- is there new opportunities for new IP owners to work with you? Patrick Liu: Yes. So from our side, I think based on our observation, we do see there are more and more IP holders that became more interesting of exploring other potential monetization channels and distribution channels. So -- but from our side, we don't necessarily think that there are direct connections or incentives for the IP holders to seek for distribution channels outside of traditional app stores just because of the fact of the recent regulatory updates. Right? From our perspective of views, we have been seeing, and I think this is actually what will continue to be part of the truth is from IP holder side, they always want to have a diversified monetization channels and approach. So that means from -- because we are -- the platform we have built is totally outside of the traditional app store ecosystems. So that's always going to be something valuable for the IP holders to consider when they explore the different monetization opportunities beyond of the traditional app store distribution channels. So I think from that perspective of views from our side, we will continually contact and connect with new IP holders whenever opportunities comes. And beyond of just the traditional Japanese Manga and Manga IP holders and Anime IP holders, we may, from time to time, depends on market conditions, it depends on the opportunities. We may also exploring other IP holders outside of Japan as well. Patrick Federle: So our next question here will come from Steve Silver at Argus Research. Steven Silver: Okay. Great. So Anime NYC was more than a month ago now, and it took place after the end of fiscal 2026. So I was just curious if you could talk or provide any color around whether there was any meaningful change in website traffic noticed in the weeks following the conference? And just if you could talk a little bit about the types of professionals that attended that conference that you think may provide business development opportunities moving forward? Patrick Liu: Thank you, Steve. So we actually attended Anime NYC in August of 2026. And I think from our perspective, so this is actually the very first time we have been actively participating in a very large anime-focused convention in North America. And the main purposes of this event, the participation of this event is really try to put the G123 brand in front of fans and industry professionals in the markets that we are trying to build. I think the event itself, we have been -- received some event report. It said that over 170,000 attendees participated in the anime NYC. And there's -- we definitely have a lot of very interesting connections with professionals that are working on licensing, working on gaming and other parts that's relevant to our business. So I think from our side, one of the most valuable aspects of this event is really just the opportunity to interact directly with anime fans and to better understand their interest and preferences and expectations. So I think from our side, these interactions actually provided a very useful insight into the anime IPs, the game experiences that resonate with North American audiences that we are trying to expand into. So from our side, we don't really disclose event-specific website traffic metrics or anything quantifying the immediate impact at the current stage. From our side, we believe these type of initiatives really together contribute to building a stronger foundation for our long-term growth in North America. And most importantly, this is really just the brand awareness and buildup and also help us to better understand the local demands and the needs for anime-themed gaming. Steven Silver: Great. And one more, if I may. So the company closely tracked the number of preregistrations for titles, including, I guess, The Apothecary Diaries and Shakugan. So I'm curious as to whether there's anything you could say just in terms of how initial in-game purchases might have just tracked the number of pre-registrations that you saw? And maybe just more in general, how historically -- how launches of new titles that had strong preregistrations have gone. Obviously, market conditions are different and each title's launch might be different. But I'm just curious as to historically, whether the trend has followed through any strong preregistration trend? Patrick Liu: Thanks for the question, Steven. So from CTW side, one, we see the preregistration numbers. So first of all, we do believe that these preregistration numbers is definitely a valuable indicator of initial market interest in a particular anime or Manga IP and the game associated with those IPs. So I think for us, we do see based on the previous experiences, if we do see a strong preregistration interest, it actually help us to build the awareness ahead of the actual launch of the game and also it's going to help us to improve overall efficiency of early-stage user acquisition. However, I think based on our prior experiences, we do see that the preregistration numbers sometimes do not necessarily translate directly into actual game performance or in-game purchase after the game is launched. I think ultimately, the game success is actually depends on a lot of other factors beyond just the simple popularity of the underlying IP. So the other factors, including things like the overall quality of the game play, whether the game actually align with the fans expectations, overall user engagement, retention and monetization. So I think based on our prior experiences, sometimes a title with strong preregistration numbers may attract users more efficiently at launch, but that does not necessarily mean that it will achieve higher retention or paying user conversion rate. So from the company side, we continue to closely track preregistration numbers as part of our launch preparation. And -- but when the game is actually launched, so our focus is going to shift from just monitoring the preregistration numbers to actually monitor the actual performance of the game, including the things that we have mentioned in the previous earnings call, means that user acquisition, retention, the paying user conversion, monetization and most importantly, the ROAS. So we actually use these indicators to continually evaluate the game's performance and use these indicators to optimize the game content and the marketing strategy to try to get maximize monetization and maximize profitabilities from the game. Patrick Federle: Our next question will come from Aaron Grey at Alliance Global Partners. Aaron Grey: So maybe dive a bit deeper into some things that have already been covered a bit more forward-looking. Talking about some of the drivers between the MAU trends and in-game purchases during the period. As we look forward, do you expect those to trend more in a similar direction over the long term with some volatility near term? What are the things that might drive that divergence on a go-forward basis? And any commentary you might be able to provide maybe quarter-to-date now that we're about 2.5 months into the next half? Patrick Liu: Thank you so much, Aaron, for your question. So from our side, so first of all, I do want to just reemphasize the games offered on G123 platform are all under free-to-play pay-to-win mode. So the monetization basically primarily driven by the in-game micro transactions, the in-game purchases. So from an operating perspective, we only focus on -- so we focus not only on attracting users to our platform, but also try to convert the free users into paying users and retain those paying users and encouraging continued engagement and spending within the games on our platform. So I think from that perspective, MAU and in-game purchase volume and the reported revenue are related but distinct merits of our business performance. So I think one very important distinction is that for us, nonpaying users tend to be more sensitive to advertising and promotional activities. And because these activities are significant drivers of new user acquisitions most of the times. And on the other side, for paying users, generally, they demonstrate a stronger engagement and retention and most of the times are less directly affected by changes in advertising spending. So I think basically, that means when we change our user acquisition investment, it's going to have a greater impact on overall active users than our paying user base or in-game purchases. I think this is actually something you see in the past fiscal year '26. I think from our side, we do believe that we want to continually introduce new games to the platform and maintain the high-quality games on our platform. I think over the long term, as our platform grows and our user base becomes more mature, we're probably going to see sometimes that the active users, the MAU and in-game purchase to generally move together and driven mostly by new launches of the new games. But in near term, we believe as we continue expand globally and trying to address demands from new markets to the company, and we believe that you will continue to see there's going to be some divergence in MAU movements and the in-game purchase movements. Aaron Grey: Okay. Great. Appreciate that, Patrick. Second one for me, just commenting a bit further on some of your marketing initiatives to increase awareness to the platform, maybe more particularly here in the U.S., but also Japan as well. And really through some of the commentary you had on reducing some of the marketing just because of some of the traction you were getting. Like how do you think about the juxtapose position of we need to spend more to get more attention, but then again, wanting to keep up the ROAs. Do you maybe just reallocate maybe where some of that spending could go to into the games that are getting the ROAs? Or how can we better think about not having to reduce the marketing spend to keep the ROA up whereas reallocating it to different games or otherwise to keep the ROA up while still keeping revenues flat to growing? Patrick Liu: Okay. Thank you again for the question, Aaron. So I want to let you know from the company's perspective, we -- basically, we see these in two -- basically, we think that this actually comes into two questions. The first question is how we're going to continue -- from a marketing strategy perspective, how we're going to continue to allocate our advertisement spending into different games and what decide how much money we want to spend on marketing and overall advertisement. So from that perspective, I think we have repeatedly talking about our core strategy, which is the ROAS-focused marketing strategy. So from the company side, that means we're going to continue to evaluate the actual performance of each individual game on the platform and use the actual performance or expected performance of those games to guide us to see how much we want to actually spend on individual games, advertisements and marketing. And also, we're going to continue to use that approach to decide how we're going to allocate advertisement budget into different games. But beyond just that, I think from our side to continue to expand the company and continue our growth, we definitely will try new things to make our advertisement or marketing efforts even more efficiently than what we have through today. So some of the things that we are trying to do since we have established our New York City office in downtown Manhattan, including things like we are trying to expand our brand awareness and user base in U.S. and by participating in more industry-focused conventions or events. I think the participation of the Anime NYC is actually one of the good example of the company doing brand awareness buildup. And beyond that, I think from the marketing team, we are also continually exploring additional user acquisition and promotional channels that may be more effective in reaching audiences globally, including U.S. and Japan. So I believe our marketing team right now are evaluating some potential OEM-related distribution and marketing partnerships. And also, we are trying to build up some collaborations with local content creators and social media influencers, which I believe -- we believe that actually going to help us to address the -- a lot of the targeting audience of our platform and our games. So I think from our side, from the marketing activity side, our objective is really try to diversify our marketing channels. We're trying to reach new audiences and also identify more efficient ways to introduce G123 and our games to the users globally. So I think by doing both ways, means continue to maintain the ROAS-focused marketing allocation and investment strategy plus the exploration of additional user acquisition and promotional channels. I think in combination, these things is going to help us to continue expand globally and get back to growth phase of the company. Patrick Federle: It looks like we have time for one more set of questions. So our next question asker will be Michael Kupinski from NOBLE Capital Markets. Michael Kupinski: Thanks, Pat. Yes, I was wondering in terms of the advances to game developers rose to like $17.9 million net. And I was wondering if -- how do you think about underwriting these advances? And how should investors think about impairment risk? Patrick Liu: Thank you so much for the question, Michael. So from the company perspective, advances to game developers is actually a very important part of our business model. So these advances allow us to support the development of new games for the distribution on our platform. All of these advances we made to the game developers are noninterest-bearing and those will only recover through withholding of developers' revenue share after the game is launched. So the actual recovery of these advances will depend on the successful development launch and also the commercial performance of the underlying games. So I think from the company's perspective, we have been taking a selective approach when entering into agreements with game developer partners and when we try to provide advances to the game development partners. So our evaluation of these relationships and advances, including things like the overall popularity and the potential appeal of the underlying Anime or Manga IP, the developer's own technical capabilities and experiences, whether the developer has historically some track record of successfully launching games maybe through another web platform or app stores. And also sometimes we do -- if it's an existing developer partner, we also evaluate our history with the game developer as well. However, even though we do evaluate every single factor that we believe is going to impact the overall game performance, the actual game performance after its launch is inherently very, very difficult to predict. And there are external factors that's not in full control of the business. So even though we do a lot of evaluation of the risks, those whatever factors we have considered may not be able to fully eliminate the risk of unsuccessful launches. So I think for fiscal year '26, we recognized approximately $2.6 million in impairments. And in the prior fiscal year, we have roughly $3.1 million in impairment in advances to game developers. I think these generally reflect the risks associated with overall game development and monetization. I think from the company side, we will definitely continue to manage our advance to the game developers as part of our broader portfolio strategy and recognizing that the performance of individual titles, individual games can vary significantly. I think from our side, the focus is the same that we will continue selecting capable development partners, evaluating the commercial potentials of new projects and monitor the performance of the games after its launch. And when we make any additional decisions of advances to game developers, we definitely will continue making disciplined investment decision based on all the information available to us. Michael Kupinski: You capitalized $4.1 million of software development under ASU 2025-06. How will that affect the P&L going forward? And what is the platform investment delivering at this point? Patrick Liu: I think from our side, we have early adopted the ASU 2025-06 from the beginning of last fiscal year. So from our side of view, we believe that this new framework actually provides a more appropriate basis for recognizing, qualifying software development investments as assets, rather than just relying the traditional sequential development stages. And so of the $4.1 million we have capitalized in fiscal year of 2026, roughly -- we have a net remaining balance of about $3.5 million after considering the amortization happened in the fiscal year. Of that $3.5 million net balances, around $2.5 million are software or services that already placed in service at the year-end. And we do have roughly around another $1 million still under development as of the end of the fiscal year of '26. So of the capitalized portion, we believe for the next 2 fiscal years, we're probably going to have roughly $1 million amortization -- annual amortization for each of those 2 years. I think from the company side, these investments in software development actually supports the overall platform and features and functions and also a lot of those developments actually are used across game launches, marketing, localization and ongoing game operations. I think that these developments actually help us to streamline a lot of our internal workflows and ultimately -- certain repetitive process for the business. I think overall, these developments help us to be able to support a much larger scale of operation with roughly same size of the team or resources we have today. I think from the company side, we do expect that we will continue to invest in platform and internal technology capabilities, including things like AI-enabled tools, data analytics tools, workflow automation. So the focus is still to trying to improve overall efficiency over game launches, helping us to improving user acquisition and performance monitoring capabilities. So I think these ongoing investments over the time will help us to continue improving overall operating efficiency and help us to compete more efficiently in this gaming sector. Patrick Federle: Thank you, Michael, and thank you once again to everyone for joining us on today's fiscal year 2026 earnings webinar. We thank you for your continued support of CTW, and you may now disconnect your lines. Have a great weekend. Bye. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. CTW (CTW) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management intentionally prioritized returns over top-line growth, scaling back advertising spend by 21.7% when new titles failed to meet internal performance thresholds. - Revenue decline of 8.7% was driven by underperformance of first-half launches and the natural life cycle progression of mature titles. - The company successfully improved the ratio of paying monthly active users to 3.95% by focusing on high-value user retention while non-paying user activity declined. - Geographic diversification gained momentum with international revenue rising to 36% of the total, led by a 71.2% increase in the Taiwan, Hong Kong, and Macau markets. - Segment profits grew 3% to $32.3 million as the reduction in advertising expenses more than offset lower in-game purchases and higher infrastructure costs. - The launch of 'High School of the Dead: Day 0' demonstrated that established catalog IPs can outperform newer properties when game mechanics align with fan expectations. - Operating losses widened to $7.3 million due to investments in public company infrastructure, the new New York office, and higher personnel and server costs. - Management expects a return to sustained growth in fiscal year 2027, supported by a pipeline of new titles and expanded international presence. - General and administrative expenses are projected to increase only modestly in absolute terms now that core public company infrastructure is largely in place. - The New York team will focus on North American partnerships, localization, and user acquisition to reverse recent revenue declines in that region. - Future content selection will maintain a diversified approach, balancing well-known anime IPs with original games and different genres based on monetization potential. - The company plans to continue investing in AI-enabled tools and data analytics to improve game launch efficiency and automate internal workflows. - Early adoption of ASU 2025-06 resulted in the capitalization of $4.1 million in internal-use software development costs for the G123 platform. - Recorded $2 million in non-cash share-based compensation expense related to IPO-related grants, a one-time recognition of long-term commitment. - Advances to game developers increased to $17.9 million net, reflecting a strategic investment in future content despite inherent impairment risks. - The company maintains a debt-free balance sheet with $14.4 million in cash, providing liquidity for selective investments in content, systems, and international growth. - Management clarified that the age of an IP does not dictate commercial success; rather, success depends on capturing the original content's characteristics. - The objective is to identify content with attractive engagement relative to licensing costs, such as prepaid royalties and revenue shares. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Initial assessments are formed within the first few weeks based on character creation data, first-day retention, and paying user conversion. - Marketing spend is adjusted dynamically per title; if a game demonstrates attractive ROAS, advertising is scaled up to capture additional monetization. - Management believes loosening App Store holds creates opportunities for their browser-based G123 platform to attract larger developers seeking alternative channels. - The platform offers developers a way to bypass app downloads while providing localization, marketing, and access to established anime IPs. - Participation in events like Anime NYC is intended to build brand awareness and gather insights into the preferences of North American fans. - The marketing team is exploring OEM-related distribution and collaborations with local social media influencers to reach new audiences more efficiently. - Advances are non-interest-bearing and recovered through revenue sharing, with underwriting based on developer track records and IP popularity. - Management acknowledged that $2.6 million in impairments were recognized in FY26, reflecting the inherent difficulty in predicting game performance.

- Interested in CTW Cayman? Here are five stocks we like better. - Fiscal 2026 performance weakened: Revenue fell 8.7% to $82.5 million and gross in-game purchases declined 9.5% to $96.8 million as new titles underperformed and mature games progressed through their life cycles. Monthly active users dropped 33%, although the paying-user ratio improved to 3.95%. - Marketing cuts protected segment profitability: CTW reduced advertising spending 21.7% to $41 million, keeping ROAS above its 100% benchmark and raising segment profit 3% to $32.3 million. However, the company posted a $7.3 million operating loss and adjusted EBITDA fell to $3.5 million. - Growth prospects depend on new content and international expansion: High School of the Dead Day 0 generated about $6 million in its first three-plus months and showed the potential of older anime properties. CTW aims to return to sustained growth in fiscal 2027 while investing in its browser-based G123 platform, AI tools and international partnerships; it ended the year debt-free with $14.4 million in cash. CTW Cayman (NASDAQ:CTW) reported lower fiscal 2026 revenue and in-game purchases as several new titles underperformed and mature games progressed through later stages of their life cycles, while the company reduced advertising spending to preserve returns. Chief Financial Officer Patrick Liu said fiscal 2026 revenue declined 8.7% to $82.5 million, while gross in-game purchases fell 9.5% to $96.8 million. The company launched 15 games during the year and ended the period with 42 active titles. Liu said launches in the first half fell short of expectations, though High School of the Dead Day 0, released near the end of April, gained traction in Asia and North America. → Don't Get NVIDIA's Reflection AI Interest Wrong: Its Moat Could Deepen The title generated about $6 million during its first three-plus months after launch and was the platform's highest-revenue-generating game over that period, according to Liu. He said the contribution from the game was only partially reflected in fiscal 2026 results. CTW reduced advertising expense by $11.4 million, or 21.7%, to $41 million. Total sales and marketing expense declined 17.2% to $45.9 million. Liu said the reduction was intentional, as the company scaled back marketing for titles that did not meet internal performance thresholds rather than pursuing growth at unattractive returns. → Tesla Wants to Make Its Own Chips—What Could Go Wrong? Return on advertising spend, or ROAS, was 105.8%, down from 116.4% in fiscal 2025 but remaining above the company's 100% benchmark. Liu said this indicated that in-game purchases generated by newly acquired users continued to exceed the advertising costs required to acquire them. Segment profit increased 3% to $32.3 million, representing 33.4% of in-game purchases, compared with $31.3 million, or 29.3% of in-game purchases, a year earlier. Lower advertising expense more than offset reduced in-game purchases and higher server costs. → Birkenstock's Strong Growth Creates a Buying Opportunity The company recorded an operating loss of $7.3 million, compared with an operating loss of $1.1 million in fiscal 2025. Net loss was $4.1 million, or $0.07 per share, compared with net income of $3.8 million, or $0.06 per share, in the prior year. Fiscal 2025 net income included a $4.7 million contingent gain related to recovery of previously impaired assets, while fiscal 2026 included a $1.7 million income tax benefit. Adjusted EBITDA was $3.5 million, or 4.2% of revenue, compared with $8 million, or 8.8% of revenue, in fiscal 2025. Liu noted that fiscal 2026 also included $2 million of non-cash share-based compensation expense, largely related to options granted in December 2025. Monthly active users declined 33% to approximately 2.26 million, from approximately 3.38 million a year earlier. However, paying monthly active users increased slightly to approximately 89,100 from approximately 88,500, lifting the paying-user ratio to 3.95% from 2.62%. Liu said the decline in activity was concentrated among non-paying users, who tend to be more sensitive to changes in advertising and promotional spending. Average revenue per paying monthly active user declined to $90.60 from $100.74, while paying daily active users declined 13% and overall daily active users fell 7%. Revenue outside Japan rose 8.2% to $29.7 million and accounted for 36% of total revenue, compared with 30.4% a year earlier. Revenue from South Korea increased 12.4% to $10.5 million, while combined revenue from Taiwan, Hong Kong and Macau climbed 71.2% to $8 million. Combined revenue from South Korea, Taiwan, Hong Kong and Macau grew 31.9% to $18.5 million, or 22.4% of total revenue. North American revenue declined to $6.2 million from $7.5 million, reflecting reduced user-acquisition spending on underperforming titles. Japan revenue decreased 16.1% to $52.8 million. Liu said CTW's New York team, established in February 2026, is focused on partnerships, user acquisition, localization and corporate communications. The company also attended Anime NYC in August, its first active participation in a major North American anime convention. Liu said the company does not disclose event-specific traffic data but viewed the event as an opportunity to build brand awareness and develop relationships with licensing, gaming and other industry professionals. In response to analyst questions, Liu said CTW does not regard newer anime properties, catalog titles or original games as inherently more attractive than one another. The company evaluates content based on fan engagement, expected monetization, licensing costs, royalty rates, revenue-sharing terms and developer advances. As of the end of fiscal 2026, CTW had partnerships with 38 anime intellectual-property holders and held 48 IP licenses. Liu said the performance of High School of the Dead Day 0, based on a manga first serialized in 2006, showed that older catalog properties can still have commercial potential when paired with games that meet fan expectations for gameplay, engagement and monetization. The company assesses new titles in the first weeks after launch using metrics including user acquisition, character creation, first-day retention, paying-user conversion, early monetization trends and expected ROAS. CTW generally increases advertising when a game produces attractive returns and reduces spending when performance is below expectations. Liu also said the company has observed growing interest from developers and publishers in distribution outside traditional app stores. He said CTW's browser-based G123 platform can offer global access without app downloads, payment processing through third-party providers, user-acquisition support, localization services and access to anime and manga IP. Net cash used in operating activities was $3.2 million, compared with $0.1 million of cash provided in fiscal 2025, reflecting the net loss and working-capital movements. CTW advanced $6 million to game developers during the year as it invested in future content. The company ended fiscal 2026 with $14.4 million in cash and cash equivalents, up from $12.2 million at the end of the prior fiscal year, supported by $10.6 million in net IPO proceeds. CTW reported no debt. CTW also capitalized $4.1 million of internal-use software development costs for the G123 platform after early adopting ASU 2025-06. Liu said approximately $3.5 million remained after amortization, including about $2.5 million of software and services already placed in service. The company expects roughly $1 million in annual amortization for each of the next two fiscal years. Liu said CTW expects to continue investing in platform capabilities, including AI-enabled tools, data analytics and workflow automation, to support game launches, localization, marketing and operating efficiency. He said the company's objective for fiscal 2027 is to return to sustained growth while maintaining its ROAS-focused marketing discipline and debt-free balance sheet. CTW Cayman Limited is a holding company associated with CTW Inc, a Japan-based developer and operator of online games. Through its G123 platform, the company provides browser-based games that can be played without downloading dedicated applications. The company's games are generally based on popular anime and other entertainment properties and are offered through a free-to-play model, with revenue generated from in-game purchases and related digital content. Its platform is designed to support the development, publication and operation of games for users across desktop and mobile devices. CTW serves players primarily in Japan and also distributes its games internationally. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "CTW Cayman H2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Management will host an earnings webinar on Friday, October 16, at 8:30 a.m. ET 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 - 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. 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 [email protected] CTW Key Operating Metrics The following table includes the Company's key operating metrics for the years ended July 31, 2026, 2025, and 2024. | | For the Years Ended | | | July 31, | | | 2026 | | | 2025 | | | 2024 | Gross in-game purchase amount(1) | | $ | 96,813,340 | | | $ | 106,994,440 | | | $ | 84,461,982 | Paying daily active users ("PDAUs")(2) | | | 15,152 | | | | 17,458 | | | | 16,446 | Daily active users ("DAUs")(2) | | | 245,522 | | | | 264,149 | | | | 197,100 | PDAUs to DAUs ratio | | | 6.17 | % | | | 6.61 | % | | | 8.34 | % Paying monthly active users ("PMAUs")(3) | | | 89,053 | | | | 88,503 | | | | 62,621 | Monthly active users ("MAUs")(3) | | | 2,257,341 | | | | 3,378,835 | | | | 2,301,929 | PMAUs to MAUs ratio | | | 3.95 | % | | | 2.62 | % | | | 2.72 | % PDAUs to PMAUs ratio | | | 17.01 | % | | | 19.73 | % | | | 26.26 | % DAUs to MAUs ratio | | | 10.88 | % | | | 7.82 | % | | | 8.56 | % ARPPDAU | | $ | 17.51 | | | $ | 16.79 | | | $ | 14.07 | ARPDAU | | $ | 1.08 | | | | 1.11 | | | $ | 1.17 | ARPPMAU | | $ | 90.60 | | | $ | 100.74 | | | $ | 112.40 | ARPMAU | | $ | 3.57 | | | $ | 2.64 | | | $ | 3.06 | Day 1 retention rate for paying users(4) | | | 57.4 | % | | | 59.6 | % | | | 62.7 | % Day 7 retention rate for paying users(4) | | | 35.8 | % | | | 37.5 | % | | | 41.0 | % Day 30 retention rate for paying users(4) | | | 17.1 | % | | | 17.1 | % | | | 21.3 | % Day 1 retention rate for active users(5) | | | 6.1 | % | | | 5.9 | % | | | 6.2 | % Day 7 retention rate for active users(5) | | | 2.6 | % | | | 2.2 | % | | | 2.4 | % Day 30 retention rate for active users(5) | | | 1.0 | % | | | 0.8 | % | | | 0.9 | % Return on advertisement spend ("ROAS") | | | 105.8 | % | | | 116.4 | % | | | 99.3 | % (1) | "Gross in-game purchase amount" means the total in-purchase amounts, or top-ups, paid by end-users for games on G123.jp platform. (2) | PDAUs and DAUs for each period represents the average number of PDAUs and DAUs across all the days of the respective period. (3) | PMAUs and MAUs for each period represents the average number of PMAUs and MAUs across all the months of the respective period. (4) | Paying user retention rate is calculated by dividing the number of paying users who return to the same game on a specific day (e.g., Day 1, Day 7, or Day 30) and remain active for at least one minute, by the number of users who made their first in-game purchase in that game on Day 0. Paying user retention rate is measured on a per-game basis and reflects whether the same paying user returns to the same game following their initial purchase activity. We track paying user retention rates on a per-game basis and monitor user retention for each subsequent day following a user's initial in-game purchase. For each day in a given period, we calculate the platform-level paying user retention rate as the average of the paying user retention rates across all games on our platform. The overall platform paying user retention rate for the period is then determined by averaging these daily platform retention rates over all days in the respective period. (5) | Active user retention rate is calculated by dividing the number of users who return to the same game on a specific day (e.g., Day 1, Day 7, or Day 30) and remain active for at least one minute, by the number of users who played that game for the first time on Day 0 and initiated gameplay by creating a character role on that day. Active user retention rate is measured on a per-game basis and only includes new users to that specific game. We track active user retention rates on a per-game basis and monitor user retention for each subsequent day following a user's initial in-game purchase. For each day in a given period, we calculate the platform-level active user retention rate as the average of the active user retention rates across all games on our platform. The overall platform active user retention rate for the period is then determined by averaging these daily platform retention rates over all days in the respective period. | Glossary of Terms for Key Operating Metrics - "ARPDAU" are to average daily in-game purchase amount per daily active user during a given period, calculated by dividing the total in-game purchase amount in a given period generated on our G123.jp platform by the average number of daily active users, which is averaged over each day within the respective period, by further dividing the number of days in the respective period; - "ARPPDAU" are to average daily in-game purchase amount per paying daily active user during a given period, calculated by dividing the total in-game purchase amount in a given period by the average number of paying daily active users, which is averaged over each day within the respective period, by further dividing the number of days in the respective period; - "ARPMAU" are to average monthly in-game purchase amount per monthly active user during a given period, calculated by dividing the total in-game purchase amount in a given period generated on our G123.jp platform by the average number of monthly active users, which is averaged over each month by further dividing by the number of months in the respective period; - "ARPPMAU" are to average monthly in-game purchase amount per paying monthly active user during a given period, calculated by dividing the total in-game purchase amount in a given period by the average number of paying monthly active users, which is averaged over each month by further dividing by the number of months in the respective period; - "DAUs" are to daily active users, which is a performance indicator that captures the number of Active Users who accessed our G123.jp platform at least once during a 24-hour period. DAUs for a given period is the average DAUs across all days in the respective period, which is calculated by summing the number of DAUs for each day during the given period and dividing the total by the number of days in the respective period; - "MAUs" are to monthly active users, which is a performance indicator that captures the number of Active Users who accessed our G123.jp platform at least once during the preceding 30-day period. MAUs for a given period is the average MAUs across all months in the respective period, which is calculated by summing the number of MAUs for each month during the given period and dividing the total by the number of months in the respective period; - "PDAUs" are to paying daily active users, which is a performance indicator that captures the number of users who made at least one in-game purchase, and have spent at least one (1) minute on G123.jp platform during the preceding 24-hour period. PDAUs for a given period is the average PDAUs across all days in the respective period, which is calculated by summing the number of PDAUs for each day during the given period and dividing the total by the number of days in the respective period; - "PMAUs" are to paying monthly active users, which is a performance indicator that captures the number of users who made at least one in-game purchase, and have spent at least one (1) minute on G123.jp platform during the preceding 30-day period. PMAUs for a given period is the average PMAUs across all months in the respective period, which is calculated by summing the number of PMAUs for each month during the given period and dividing the total by the number of months in the respective period; - "ROAS" are to return on advertisement spending based on created users, calculated by dividing in-game purchase amount generated by created user by advertising expenses during the applicable period. Advertising expenses include all expenses recorded under advertising expenses in our financial statements during the applicable period, which consist primarily of paid media costs for online channels and ad placements that are directly attributable to digital marketing efforts aimed at acquiring new users. We exclude from our ROAS calculation the costs not classified as advertising expenses, including (i) compensation for marketing personnel, (ii) travel expenses, event-related costs, and (iii) general overhead, which are not considered advertising expenses under our accounting policies and are separately reported within the broader sales and marketing expenses line item in our financial statements. In-game purchases generated by created users reflect only spending by users acquired during the applicable period and exclude in-game purchases made by existing users. This differs from the gross in-game purchase amounts disclosed elsewhere, which represent total spending by all users on the platform; CTW Consolidated Statements of Comprehensive (Loss) Income (Amounts in U.S. dollars, except for number of shares and per share data) | | | | | For the years ended July 31, | | | 2026 | | | 2025 | | | 2024 | Revenue | | $ | 82,509,410 | | | $ | 90,370,793 | | | $ | 68,424,577 | Cost and expenses: | | | | | | | | | | | | Cost of revenue | | | 28,471,179 | | | | 22,040,054 | | | | 16,211,779 | General and administrative expenses | | | 11,693,359 | | | | 8,479,853 | | | | 5,177,570 | Research and development expenses | | | 3,805,447 | | | | 5,528,733 | | | | 952,440 | Sales and marketing expenses | | | 45,863,160 | | | | 55,387,277 | | | | 39,426,506 | Total cost and expenses | | | 89,833,145 | | | | 91,435,917 | | | | 61,768,295 | (Loss) income from operations | | | (7,323,735 | ) | | | (1,065,124 | ) | | | 6,656,282 | Other income (expense): | | | | | | | | | | | | Interest income, net | | | 540,933 | | | | 494,358 | | | | 300,985 | Foreign currency transaction gain (loss) | | | 293,764 | | | | (287,946 | ) | | | 784,674 | Other income | | | 424,638 | | | | 555,012 | | | | 454,286 | Contingent gain on recovery of previously impaired assets | | | 238,561 | | | | 4,709,029 | | | | — | Total other income, net | | | 1,497,896 | | | | 5,470,453 | | | | 1,539,945 | (Loss) income before income tax | | | (5,825,839 | ) | | | 4,405,329 | | | | 8,196,227 | Income tax (benefit) expense | | | (1,694,171 | ) | | | 576,766 | | | | 2,218,588 | Net (loss) income | | $ | (4,131,668 | ) | | $ | 3,828,563 | | | $ | 5,977,639 | Other comprehensive loss: | | | | | | | | | | | | Foreign currency translation adjustment | | $ | (804,411 | ) | | $ | (42,427 | ) | | $ | (1,021,512 | ) Comprehensive (loss) income | | $ | (4,936,079 | ) | | $ | 3,786,136 | | | $ | 4,956,127 | (Loss) earnings per share – basic and diluted | | $ | (0.07 | ) | | $ | 0.06 | | | $ | 0.10 | Weighted average number of ordinary shares outstanding – basic and diluted | | | 62,418,382 | | | | 60,000,000 | | | | 60,000,000 | | | | | | | | | | | | | CTW Consolidated Balance Sheets (Amounts in U.S. dollars, except for number of shares) | | | | | As of July 31, | | | 2026 | | | 2025 | ASSETS | | | | | | Current assets: | | | | | | Cash and cash equivalents | | $ | 14,437,097 | | | $ | 12,208,630 | Restricted cash | | | 125,812 | | | | 160,620 | Accounts receivable, net | | | 1,688,806 | | | | 1,410,083 | Deferred offering cost | | | — | | | | 1,429,523 | Prepaid expenses and other current assets | | | 4,293,774 | | | | 2,866,243 | Total current assets | | | 20,545,489 | | | | 18,075,099 | Non-current assets: | | | | | | | | Property, plant and equipment, net | | | 1,078,644 | | | | 1,098,679 | Intangible assets, net | | | 3,536,837 | | | | — | Prepaid royalties, net | | | 4,063,304 | | | | 3,499,962 | Investments in films and television programs, net | | | 225,967 | | | | 576,956 | Advance to game developers, net | | | 17,932,786 | | | | 14,561,726 | Deferred tax assets, net | | | 102,939 | | | | 49,067 | Right-of-use assets, net | | | 6,100,345 | | | | 6,782,354 | Restricted cash, noncurrent | | | 497,905 | | | | — | Other noncurrent assets | | | 755,590 | | | | 1,858,413 | Total non-current assets | | | 34,294,317 | | | | 28,427,157 | TOTAL ASSETS | | $ | 54,839,806 | | | $ | 46,502,256 | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | Current liabilities: | | | | | | | | Accounts payable | | $ | 2,289,251 | | | $ | 2,377,279 | Accrued advertising expenses | | | 4,792,659 | | | | 475,099 | Tax payable | | | 1,774,598 | | | | 293,482 | Lease liabilities – current | | | 2,230,338 | | | | 2,728,326 | Accrued expenses and other current liabilities | | | 1,965,165 | | | | 2,549,763 | Total current liabilities | | | 13,052,011 | | | | 8,423,949 | Non-current liabilities: | | | | | | | | Lease liabilities – noncurrent | | | 4,053,098 | | | | 4,222,089 | Deferred tax liabilities, net | | | 3,629,799 | | | | 6,208,161 | Total non-current liabilities | | | 7,682,897 | | | | 10,430,250 | Total liabilities | | | 20,734,908 | | | | 18,854,199 | Commitments and contingencies | | | | | | | | Shareholders' equity: | | | | | | | | Class A ordinary shares ($0.0001 par value; 200,000,000 shares authorized; 52,616,000 and 48,000,000 shares issued, and 50,529,048 and 48,000,000 shares outstanding, as of July 31, 2026 and 2025, respectively)* | | | 5,053 | | | | 4,800 | Class B ordinary shares ($0.0001 par value; 20,000,000 shares authorized; 12,000,000 shares issued and outstanding as of July 31, 2026 and 2025) | | | 1,200 | | | | 1,200 | Additional paid-in capital | | | 12,264,982 | | | | 872,315 | Statutory reserve | | | 691,380 | | | | 676,416 | Retained earnings | | | 27,715,707 | | | | 31,862,339 | Accumulated other comprehensive loss | | | (6,573,424 | ) | | | (5,769,013 | ) Total shareholders' equity | | | 34,104,898 | | | | 27,648,057 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 54,839,806 | | | $ | 46,502,256 | * | Shares issued include 2,086,952 Class A ordinary shares held by Futu Trustee Limited in the Company's share incentive reserve that had not been delivered to award holders as of July 31, 2026; these shares are not considered outstanding | CTW CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Amount in U.S. dollars, except for number of shares) | | | | | | | | | | | | | | | | | | | | | | | Class A ordinary shares | | | Class B ordinary shares | | | Additional paid-in | | | Statutory | | | Retained | | | Accumulated other comprehensive | | | Total shareholders' | | | Shares | | | Amount | | | Shares | | | Amount | | | capital | | | reserve | | | earnings | | | loss | | | equity | Balance as of July 31, 2023 | | | 48,000,000 | | | $ | 4,800 | | | | 12,000,000 | | | $ | 1,200 | | | $ | 849,848 | | | $ | 673,339 | | | $ | 22,059,214 | | | $ | (4,705,074 | ) | | $ | 18,883,327 | Net income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,977,639 | | | | — | | | | 5,977,639 | Appropriation to statutory reserve | | | — | | | | — | | | | — | | | | — | | | | — | | | | 817 | | | | (817 | ) | | | — | | | | — | Foreign currency translation adjustment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,021,512 | ) | | | (1,021,512 | ) Balance as of July 31, 2024 | | | 48,000,000 | | | $ | 4,800 | | | | 12,000,000 | | | $ | 1,200 | | | $ | 849,848 | | | $ | 674,156 | | | $ | 28,036,036 | | | $ | (5,726,586 | ) | | $ | 23,839,454 | Net income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,828,563 | | | | — | | | | 3,828,563 | Appropriation to statutory reserve | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,260 | | | | (2,260 | ) | | | — | | | | — | Capital injection | | | — | | | | — | | | | — | | | | — | | | | 22,467 | | | | — | | | | — | | | | — | | | | 22,467 | Foreign currency translation adjustment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (42,427 | ) | | | (42,427 | ) Balance as of July 31, 2025 | | | 48,000,000 | | | $ | 4,800 | | | | 12,000,000 | | | $ | 1,200 | | | $ | 872,315 | | | $ | 676,416 | | | $ | 31,862,339 | | | $ | (5,769,013 | ) | | $ | 27,648,057 | Issuance of ordinary shares in the IPO, net of offering costs of $2,756,303 (Note 15) | | | 2,400,000 | | | | 240 | | | | — | | | | — | | | | 9,243,457 | | | | — | | | | — | | | | — | | | | 9,243,697 | Share-based compensation – options and RSUs (Note 16) | | | — | | | | — | | | | — | | | | — | | | | 1,965,368 | | | | — | | | | — | | | | — | | | | 1,965,368 | Shares issued on RSU settlement (Note 16) | | | 24,000 | | | | 2 | | | | — | | | | — | | | | 29,038 | | | | — | | | | — | | | | — | | | | 29,040 | Shares issued to IPO consulting firm in settlement of offering costs (Note 15) | | | 96,000 | | | | 10 | | | | — | | | | — | | | | 142,070 | | | | — | | | | — | | | | — | | | | 142,080 | Exercise of share options (Note 16) | | | 9,048 | | | | 1 | | | | — | | | | — | | | | 12,734 | | | | — | | | | — | | | | — | | | | 12,735 | Appropriation to statutory reserve | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,964 | | | | (14,964 | ) | | | — | | | | — | Net loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (4,131,668 | ) | | | — | | | | (4,131,668 | ) Foreign currency translation adjustment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (804,411 | ) | | | (804,411 | ) Balance as of July 31, 2026 | | | 50,529,048 | | | $ | 5,053 | | | | 12,000,000 | | | $ | 1,200 | | | $ | 12,264,982 | | | $ | 691,380 | | | $ | 27,715,707 | | | $ | (6,573,424 | ) | | $ | 34,104,898 | Share data are retrospectively restated for the effect of the share reorganization. CTW Consolidated Statements of Cash Flows (Amounts in U.S. dollars) | | | | | For the years ended July 31, | | | 2026 | | | 2025 | | | 2024 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | Net (loss) income | | $ | (4,131,668 | ) | | $ | 3,828,563 | | | $ | 5,977,639 | Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | | | | | | | | | | | | Share-based compensation | | | 1,994,408 | | | | — | | | | — | Depreciation and amortization | | | 2,560,907 | | | | 2,673,255 | | | | 2,067,706 | Impairment of advance to game developers | | | 2,635,761 | | | | 3,147,411 | | | | 401,451 | Impairment of prepaid royalties | | | — | | | | 483,149 | | | | — | Minimum guarantee carried over by licensor | | | (30,522 | ) | | | — | | | | — | Impairment of investments in films and television programs | | | — | | | | — | | | | 46,453 | Amortization of right-of-use assets | | | 2,881,333 | | | | 2,455,211 | | | | 1,634,833 | Loss from termination of operating lease agreement | | | — | | | | 33,055 | | | | — | Loss (gain) from disposal, derecognition and impairment of property, equipment and software | | | 31,543 | | | | 21,332 | | | | (19,931 | ) Foreign currency exchange (gain) loss, net | | | (726,079 | ) | | | 450,964 | | | | (742,819 | ) Deferred income tax (benefit) expense | | | (2,399,972 | ) | | | 507,034 | | | | 1,734,765 | Changes in operating assets and liabilities: | | | | | | | | | | | | Accounts receivable, net | | | (352,516 | ) | | | (33,896 | ) | | | 12,495 | Amount due from related parties | | | (9,414 | ) | | | — | | | | — | Prepaid expenses and other current assets, net | | | (749,702 | ) | | | (630,207 | ) | | | (1,536,692 | ) Advance to game developers, net | | | (6,007,955 | ) | | | (3,946,469 | ) | | | (4,559,682 | ) Prepaid royalties, net | | | (1,380,447 | ) | | | (2,024,883 | ) | | | (2,105,413 | ) Other non-current assets | | | (350,040 | ) | | | (80,476 | ) | | | 374,397 | Accounts payable | | | 29,205 | | | | (939,611 | ) | | | (811,959 | ) Accrued advertising expenses | | | 4,438,296 | | | | (2,948,326 | ) | | | 931,036 | Tax payable | | | 1,500,692 | | | | (518,420 | ) | | | 149,583 | Accrued expenses and other current liabilities | | | (200,322 | ) | | | 87,188 | | | | (13,896 | ) Operating lease liabilities | | | (2,851,219 | ) | | | (2,501,114 | ) | | | (1,898,561 | ) Amount due to related parties | | | (39,282 | ) | | | 47,615 | | | | (53,758 | ) Net cash (used in) provided by operating activities | | $ | (3,156,993 | ) | | $ | 111,375 | | | $ | 1,587,647 | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | Purchase of property and equipment | | | (408,305 | ) | | | (584,668 | ) | | | (710,457 | ) Proceeds from disposal of property and equipment | | | 25,723 | | | | 28,109 | | | | 106,374 | Investments in films and television programs | | | (149,345 | ) | | | (258,882 | ) | | | (569,647 | ) Purchase of intangible assets and capitalized software development costs | | | (4,131,713 | ) | | | (9,947 | ) | | | — | Advances to third-party loan | | | — | | | | (410,000 | ) | | | — | Proceeds from due from related parties | | | — | | | | 55,351 | | | | — | Net cash used in investing activities | | $ | (4,663,640 | ) | | $ | (1,180,037 | ) | | $ | (1,173,730 | ) CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | Proceeds from shareholder's contribution | | | — | | | | 22,202 | | | | — | Proceeds from issuance of ordinary shares in IPO, net of underwriting discounts and issuance costs deducted at closing | | | 10,645,000 | | | | — | | | | — | Proceeds from exercise of share options | | | 6,473 | | | | — | | | | — | Payment of other offering costs | | | (114,671 | ) | | | (1,134,538 | ) | | | — | Net cash provided by (used in) financing activities | | $ | 10,536,802 | | | $ | (1,112,336 | ) | | $ | — | Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | (24,605 | ) | | | (44,017 | ) | | | (812,504 | ) Net change in cash, cash equivalents and restricted cash | | $ | 2,691,564 | | | $ | (2,225,015 | ) | | $ | (398,587 | ) Cash, cash equivalents and restricted cash, beginning of the year | | | 12,369,250 | | | | 14,594,265 | | | | 14,992,852 | Cash, cash equivalents and restricted cash, end of the year | | $ | 15,060,814 | | | $ | 12,369,250 | | | $ | 14,594,265 | | | For the years ended July 31, | | | 2026 | | | 2025 | | | 2024 | Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets: | | | | | | | | | Cash and cash equivalents | | $ | 14,437,097 | | | $ | 12,208,630 | | | $ | 14,461,251 | Restricted cash – current | | | 125,812 | | | | 160,620 | | | | 133,014 | Restricted cash – noncurrent | | | 497,905 | | | | — | | | | — | Total cash, cash equivalents and restricted cash | | $ | 15,060,814 | | | $ | 12,369,250 | | | $ | 14,594,265 | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | | | | | | | Income taxes paid (refunded), net | | $ | (292,899 | ) | | $ | 4,527 | | | $ | 6,928 | Cash paid for amounts included in the measurement of operating lease liabilities | | $ | 3,139,813 | | | $ | 2,602,143 | | | $ | 1,969,440 | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | | | | Right-of-use assets obtained in exchange for operating lease liabilities | | $ | 2,431,609 | | | $ | 5,129,642 | | | $ | 1,685,257 | Derecognition of right-of-use assets and lease liabilities on lease termination | | $ | — | | | $ | 516,625 | | | $ | — | Purchases of property and equipment included in accrued expenses and payables | | $ | 25,563 | | | $ | — | | | $ | — | Prepayments transferred to property and equipment | | $ | 91,103 | | | $ | — | | | $ | — | Class A ordinary shares issued to IPO consulting firm charged to additional paid-in capital as offering costs | | $ | 142,080 | | | $ | — | | | $ | — | Deferred offering costs charged to additional paid-in capital upon completion of the IPO | | $ | 1,454,223 | | | $ | — | | | $ | — | Share option exercise proceeds receivable | | $ | 6,262 | | | $ | — | | | $ | — | | | | | | | | | | | | | 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: | | For the years ended July 31, | | | 2026 | | | 2025 | | | 2024 | Net (loss) income | | $ | (4,131,668 | ) | | $ | 3,828,563 | | | $ | 5,977,639 | Depreciation and amortization | | | 2,560,907 | | | | 2,673,255 | | | | 2,067,706 | Amortization of right-of-use assets | | | 2,881,333 | | | | 2,455,211 | | | | 1,634,833 | Interest income, net | | | (540,933 | ) | | | (494,358 | ) | | | (300,985 | ) Income tax (benefit) expense | | | (1,694,171 | ) | | | 576,766 | | | | 2,218,588 | Contingent gain on recovery of previously impaired assets | | | (238,561 | ) | | | (4,709,029 | ) | | | — | Impairment of advance to game developers | | | 2,635,761 | | | | 3,147,411 | | | | 401,451 | Impairment of prepaid royalties | | | — | | | | 483,149 | | | | — | Share-based compensation | | | 1,994,408 | | | | — | | | | — | Adjusted EBITDA (non-GAAP) | | $ | 3,467,076 | | | $ | 7,960,968 | | | $ | 11,999,232 | | | | | | | | | | | | | 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. CTW Segment Reporting (Amounts in U.S. dollars) | | | | | For the years ended July 31, | | | 2026 | | | 2025 | | | 2024 | Consolidated in-game purchases | | $ | 96,813,340 | | | $ | 106,994,440 | | | $ | 84,461,982 | Less: Revenue share with game developers and IP holders | | | 15,093,625 | | | | 15,898,478 | | | | 14,975,047 | Transaction fee | | | 4,526,299 | | | | 5,265,054 | | | | 3,812,118 | Advertising expense | | | 41,013,358 | | | | 52,396,511 | | | | 37,309,197 | Server cost directly related to hosting the games | | | 3,889,772 | | | | 2,088,553 | | | | 1,319,704 | Segment profits | | $ | 32,290,286 | | | $ | 31,345,844 | | | $ | 27,045,916 | Less: Payroll and related cost | | | 17,325,876 | | | | 13,621,485 | | | | 9,756,710 | Lease expense | | | 3,148,822 | | | | 2,661,149 | | | | 1,738,249 | Depreciation and amortization expense | | | 2,076,874 | | | | 2,702,360 | | | | 2,099,728 | Impairment expense | | | 2,635,761 | | | | 3,632,218 | | | | 447,904 | Recoup of advances made to game developers | | | 3,222,344 | | | | 3,583,143 | | | | 2,477,840 | Other cost of sales (1) | | | 4,490,687 | | | | 2,087,031 | | | | 1,563,366 | Other selling and marketing expenses (2) | | | 2,346,442 | | | | 1,713,981 | | | | 1,402,889 | Other general and administrative expenses (3) | | | 4,367,215 | | | | 2,409,601 | | | | 902,948 | Total other operating expense | | $ | 39,614,021 | | | $ | 32,410,968 | | | $ | 20,389,634 | (Loss) income from operations | | $ | (7,323,735 | ) | | $ | (1,065,124 | ) | | $ | 6,656,282 | Interest income, net | | | 540,933 | | | | 494,358 | | | | 300,985 | Foreign currency transaction gain (loss) | | | 293,764 | | | | (287,946 | ) | | | 784,674 | Other income | | | 424,638 | | | | 555,012 | | | | 454,286 | Contingent gain on recovery of previously impaired assets | | | 238,561 | | | | 4,709,029 | | | | — | (Loss) income before income tax expense | | $ | (5,825,839 | ) | | $ | 4,405,329 | | | $ | 8,196,227 | (1) | Other cost of sales mainly includes server and infrastructure cost that are not directly related to the host of a specific game and certain outsourcing cost. (2) | Other selling and marketing expenses mainly includes cost associated with meeting, travel and promotions. (3) | Other general and administrative expenses mainly includes cost associated with professional services, office supplies, recruiting and education. | 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.

TOKYO, Oct. 05, 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 HTML5 platform, G123.jp, today announced that it will release its financial results for the six months and fiscal year ended July 31, 2026 after market close on Thursday, October 15, 2026. Management will also host an earnings webinar at 8:30am ET on Friday, October 16, 2026, to review the financial results and provide a general corporate update. Investors can register for the webinar here. 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 180 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. Safe Harbor Statement 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 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 Media Contact: CTW Press Team [email protected] Investor Relations Contact: Patrick Federle | Head of Investor Relations [email protected]

Management will host an earnings webcast on Wednesday, May 13 at 8:30 a.m. ET TOKYO, May 13, 2026 (GLOBE NEWSWIRE) -- CTW (Nasdaq: CTW) (“the Company”), a leading game platform company providing global access to web-based games through its flagship HTML5 platform, G123.jp, reports financial results for the six months ending January 31, 2026 (“1H26”), highlighting the resilience of its asset-light operating model, which drove significant improvement in segment profitability and Adjusted EBITDA despite modest year-over-year revenue softness. 1H26 Financial and Business Highlights Revenue of $40.9 million in 1H26, a decline of 1% from $41.2 million in the six months ended January 31, 2025 (“1H25”) Segment profit increased 55% year-over-year and Adjusted EBITDA increased 16% year-over-year, demonstrating the flexibility of CTW’s asset-light operating model and disciplined marketing optimization Launched seven new games on G123.jp; Crayon Shinchan My Sugoroku Great Strategy has become one of the Company’s largest titles by in-game purchases 35 games were live on G123.jp as of January 31, 2026, with 6 titles in pre-registration and 20 in backlog Opened a New York office to support marketing, partnerships, and user acquisition for international expansion Comments from Ryuichi Sasaki, Founder, CEO, and Chairman of CTW “Gross in-game purchases and revenue each declined by 1% in the first half of fiscal 2026 compared to the first half of fiscal 2025, primarily due to softer-than-expected monetization from new titles, ongoing lifecycle trends in legacy games, and moderated player engagement. While these results fell short of our expectations, the period demonstrated the resilience and adaptability of our operating model. CTW’s platform is designed to react quickly to changing user behavior and monetization trends. During the period, we identified underperforming titles early and proactively reduced marketing and advertising spend, which preserved profitability and strengthened segment margins. We believe this disciplined, return-focused approach is a key differentiator for CTW. Looking ahead, we are optimistic about the opportunities in front of us. We have already launched several new titles in the second half, including High School of the Dead and Kakegurui ALL IN, and early engagement trends are encouraging relative to our first half releases. Our upcoming content pipeline includes additional well-known anime franchises that we believe are better aligned with user demand and support strong monetization going forward. We also continue to prioritize international expansion as a major strategic initiative. While Japan remains our largest market, we see substantial long-term potential in other regions, such as North America. Earlier this year, we established a New York City presence to support localized marketing efforts, potential strategic partnerships, and broader user acquisition initiatives. We believe our browser-first gaming ecosystem, which allows players to access games instantly across devices without downloads, is uniquely positioned within the evolving global gaming market. While the first half presented challenges, we believe CTW is still in the early stages of a much larger growth opportunity, supported by a scalable platform, a strengthening content pipeline, an expanding global footprint, and broadening global interest in anime culture.” Results for 1H26 Revenue decreased 1% year-over-year to $40.9 million, primarily reflecting underperformance of new launches in the period, normal lifecycle trends of legacy games, and softer player engagement. Segment profit* increased 55% year-over-year to $18.0 million (37.1% of in-game purchases) as compared to $11.6 million in 1H25 (23.7% of in-game purchases), demonstrating meaningful margin expansion despite slightly lower in-game purchases. The improvement was driven by lower advertisement expenses ($18.8 million in 1H26 vs. $24.7 million in 1H25) and lower revenue share with game developers and IP holders ($8.2 million in 1H26 vs. $9.5 million in 1H25) and partially offset by higher server costs ($1.4 million in 1H26 vs. $0.9 million in 1H25) and slightly lower consolidated in-game purchases ($48.6 million in 1H26 vs. $49.1 million in 1H25). Net Loss was $1.2 million, or $(0.02) per share, compared with net income of $0.6 million, or $0.01 per share, in 1H25, reflecting increased public company and infrastructure costs. Adjusted EBITDA** was $4.3 million (10.5% of revenue), a 16.0% increase from $3.7 million in 1H25 (9.0% of revenue). CTW remains focused on improving content performance, expanding internationally, and maintaining disciplined capital allocation as it enters the second half of fiscal 2026. Earnings Conference Call and Webcast Management will host an earnings webcast at 8:30 a.m. ET on Wednesday, May 13, 2026 to review the Company’s financial results and provide a general corporate update. Interested investors can register for the webcast here. The Company has posted a supplemental slide presentation at ctw.inc/investors. Investors are encouraged to review these materials in conjunction with this press release. About CTW CTW is a leading global game platform company providing instant access to free-to-play, browser-based games inspired by popular Japanese animation, 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 flagship HTML5 platform, G123.jp. For more information, visit ctw.inc. 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 Investors: Matt Chesler, CFA FNK IR 646-809-2183 [email protected] Media: Edwina Frawley-Gangahar EFG Media Relations +44 7580 174672 [email protected] CTW Key Operating Metrics The following table includes the Company’s key operating metrics for the six-month periods ending January 31, 2026 and 2025. Glossary of Terms for Key Operating Metrics CTW U.S. GAAP Reconciliation of Non-GAAP Adjusted Results (Amounts in U.S. dollars thousands) (unaudited) Reconciliation to the most directly comparable U.S. GAAP measure of the on-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 report, with non-GAAP adjusted EBITDA, “Earnings Before Interest, Taxes, Depreciation, and Amortization.” 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. CTW Segment Reporting (Amounts in U.S. dollars) In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU’s amendments “improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses”. In addition, the standard introduces new disclosure requirements specifically for entities with a single reportable segment, and it aims to help investors better understand a company’s performance and assess potential future cash flows. The new guidance applies to all public entities subject to segment reporting under ASC 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Group adopted this ASU for the year ended July 31, 2025. The adoption of ASU does not change how segments are identified, aggregated, or measured. It adds incremental disclosure requirements. 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, recoup of advances to game developers and revenue share with game developers and IP holders, advertising expenses, transaction fees, server cost directly related to the host of games, in-house payroll cost directly related to the art and design support services provided. The following table summarizes the operating results reviewed by CODM and reconciliation to net income as reported in the consolidated statement of comprehensive income.

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is estimated to report quarterly loss at $0.41 per share on revenue of $15.07 million. • Leslies (NASDAQ:LESL) is expected to report quarterly loss at $4.55 per share on revenue of $162.10 million. • Omeros (NASDAQ:OMER) is likely to report quarterly loss at $0.30 per share on revenue of $10.05 million. • AmpliTech Group (NASDAQ:AMPG) is projected to report quarterly loss at $0.05 per share on revenue of $5.00 million. • Snail (NASDAQ:SNAL) is expected to report quarterly loss at $0.21 per share on revenue of $18.00 million. • Team (NYSE:TISI) is likely to report earnings for its first quarter. • Nine Energy Service (AMEX:NINE) is likely to report earnings for its first quarter. • Braskem (NYSE:BAK) is expected to report quarterly loss at $0.43 per share on revenue of $3.27 billion. • Prestige Consumer (NYSE:PBH) is estimated to report quarterly earnings at $1.40 per share on revenue of $293.81 million. • EquipmentShare.com (NASDAQ:EQPT) is projected to report quarterly loss at $0.23 per share on revenue of $893.42 million. • HeartBeam (NASDAQ:BEAT) is projected to report quarterly loss at $0.14 per share on revenue of $139 thousand. • Hawkins (NASDAQ:HWKN) is expected to report quarterly earnings at $0.70 per share on revenue of $255.28 million. • Copa Holdings (NYSE:CPA) is estimated to report quarterly earnings at $4.42 per share on revenue of $1.03 billion. • Allogene Therapeutics (NASDAQ:ALLO) is estimated to report quarterly loss at $0.18 per share on revenue of $1 thousand. • Motorsport Games (NASDAQ:MSGM) is likely to report earnings for its first quarter. • Milestone Scientific (AMEX:MLSS) is likely to report quarterly loss at $0.01 per share on revenue of $2.25 million. • Precigen (NASDAQ:PGEN) is likely to report quarterly loss at $0.04 per share on revenue of $20.87 million. • MultiSensor AI Hldgs (NASDAQ:MSAI) is likely to report quarterly loss at $1.60 per share on revenue of $1.70 million. • Talphera (NASDAQ:TLPH) is expected to report earnings for its first quarter. • Vox Royalty (NASDAQ:VOXR) is likely to report quarterly earnings at $0.03 per share on revenue of $7.80 million. • Worksport (NASDAQ:WKSP) is likely to report quarterly loss at $0.52 per share on revenue of $5.11 million. • Fluent (NASDAQ:FLNT) is estimated to report quarterly loss at $0.22 per share on revenue of $46.30 million. • USA Rare Earth (NASDAQ:USAR) is likely to report quarterly loss at $0.21 per share on revenue of $3.74 million. • Journey Medical (NASDAQ:DERM) is likely to report quarterly loss at $0.08 per share on revenue of $15.40 million. • Aytu BioPharma (NASDAQ:AYTU) is expected to report quarterly loss at $0.40 per share on revenue of $12.04 million. • Wrap Technologies (NASDAQ:WRAP) is likely to report earnings for its first quarter. • Cyngn (NASDAQ:CYN) is estimated to report quarterly loss at $0.60 per share on revenue of $400 thousand. • Insight Molecular (NASDAQ:IMDX) is estimated to report quarterly loss at $0.26 per share on revenue of $227 thousand. • Stubhub Holdings (NYSE:STUB) is expected to report quarterly earnings at $0.03 per share on revenue of $420.51 million. • Seer (NASDAQ:SEER) is expected to report quarterly loss at $0.27 per share on revenue of $3.60 million. • Longeveron (NASDAQ:LGVN) is expected to report quarterly loss at $0.19 per share on revenue of $333 thousand. • US Global Investors (NASDAQ:GROW) is projected to report earnings for its third quarter. • Precision Optics Corp (NASDAQ:POCI) is projected to report earnings for its third quarter. • Rapid Micro Biosystems (NASDAQ:RPID) is likely to report quarterly loss at $0.25 per share on revenue of $7.58 million. • Microvision (NASDAQ:MVIS) is expected to report quarterly loss at $0.03 per share on revenue of $3.24 million. • QT Imaging Holdings (NASDAQ:QTI) is expected to report quarterly loss at $0.14 per share on revenue of $6.45 million. • SeaStar Medical Holding (NASDAQ:ICU) is projected to report quarterly loss at $0.81 per share on revenue of $450 thousand. • Aquestive Therapeutics (NASDAQ:AQST) is likely to report quarterly loss at $0.13 per share on revenue of $10.88 million. • Companhia Siderurgica (NYSE:SID) is likely to report quarterly earnings at $0.23 per share on revenue of $2.06 billion. • Spero Therapeutics (NASDAQ:SPRO) is likely to report earnings for its first quarter. • Karooooo (NASDAQ:KARO) is estimated to report quarterly earnings at $0.51 per share on revenue of $87.09 million. • Lightwave Logic (NASDAQ:LWLG) is estimated to report earnings for its first quarter. • Doximity (NYSE:DOCS) is likely to report quarterly earnings at $0.26 per share on revenue of $143.86 million. • Stewart Information Servs (NYSE:STC) is expected to report quarterly loss at $0.04 per share on revenue of $52.08 million. • Sangoma Technologies (NASDAQ:SANG) is likely to report quarterly loss at $0.04 per share on revenue of $52.12 million. • Spruce Power Holding (NYSE:SPRU) is expected to report earnings for its first quarter. • Staar Surgical (NASDAQ:STAA) is expected to report quarterly earnings at $0.06 per share on revenue of $81.33 million. • CaliberCos (NASDAQ:CWD) is likely to report quarterly loss at $0.25 per share on revenue of $4.40 million. • Marchex (NASDAQ:MCHX) is estimated to report quarterly loss at $0.01 per share on revenue of $10.89 million. • Cisco Systems (NASDAQ:CSCO) is likely to report quarterly earnings at $1.00 per share on revenue of $15.56 billion. • Inovio Pharmaceuticals (NASDAQ:INO) is expected to report quarterly loss at $0.32 per share on revenue of $250 thousand. • National Healthcare (NASDAQ:NHP) is projected to report earnings for its first quarter. • Tamboran Resources (NYSE:TBN) is projected to report quarterly loss at $0.34 per share on revenue of $1.31 million. • Stantec (NYSE:STN) is projected to report quarterly earnings at $1.22 per share on revenue of $1.62 billion. • Jack In The Box (NASDAQ:JACK) is estimated to report quarterly earnings at $0.74 per share on revenue of $255.93 million. • Grocery Outlet Holding (NASDAQ:GO) is estimated to report quarterly earnings at $0.02 per share on revenue of $1.15 billion. • Health In Tech (NASDAQ:HIT) is estimated to report quarterly loss at $0.02 per share on revenue of $7.44 million. • MDxHealth (NASDAQ:MDXH) is estimated to report quarterly loss at $0.15 per share on revenue of $27.23 million. • CytoSorbents (NASDAQ:CTSO) is likely to report quarterly loss at $0.05 per share on revenue of $9.36 million. • Avino Silver & Gold Mines (AMEX:ASM) is likely to report quarterly earnings at $0.09 per share on revenue of $49.87 million. • Dyadic International (NASDAQ:DYAI) is expected to report quarterly loss at $0.03 per share on revenue of $986 thousand. • Bionano Genomics (NASDAQ:BNGO) is expected to report quarterly loss at $0.92 per share on revenue of $6.55 million. • Teekay Tankers (NYSE:TNK) is projected to report quarterly earnings at $3.39 per share on revenue of $218.72 million. • Teekay (NYSE:TK) is estimated to report earnings for its first quarter. • Logistic Properties (AMEX:LPA) is estimated to report earnings for its first quarter. • BitGo Holdings (NYSE:BTGO) is estimated to report quarterly loss at $0.01 per share on revenue of $5.65 billion. • Birchtech (AMEX:BCHT) is projected to report earnings for its first quarter. • Identiv (NASDAQ:INVE) is likely to report quarterly loss at $0.12 per share on revenue of $6.91 million. • Energous (NASDAQ:WATT) is likely to report quarterly loss at $0.60 per share on revenue of $3.15 million. • Aeluma (NASDAQ:ALMU) is projected to report quarterly loss at $0.04 per share on revenue of $1.35 million. • AEye (NASDAQ:LIDR) is estimated to report quarterly loss at $0.14 per share on revenue of $275 thousand. • Okeanis Eco Tankers (NYSE:ECO) is projected to report quarterly earnings at $1.74 per share on revenue of $128.40 million. • GrabAGun Digital Hldgs (NYSE:PEW) is likely to report quarterly loss at $0.08 per share on revenue of $24.50 million. • North American Const Gr (NYSE:NOA) is likely to report quarterly earnings at $0.40 per share on revenue of $302.04 million. • Enovix (NASDAQ:ENVX) is projected to report quarterly loss at $0.16 per share on revenue of $6.96 million. • Crescent Capital BDC (NASDAQ:CCAP) is projected to report quarterly earnings at $0.41 per share on revenue of $39.29 million. • Fossil Group (NASDAQ:FOSL) is estimated to report quarterly loss at $0.27 per share on revenue of $204.85 million. • Accelerant Hldgs (NYSE:ARX) is projected to report quarterly earnings at $0.16 per share on revenue of $245.50 million. • DeFi Development (NASDAQ:DFDV) is expected to report quarterly loss at $0.24 per share on revenue of $3.50 million. • Galiano Gold (AMEX:GAU) is projected to report quarterly earnings at $0.12 per share on revenue of $137.50 million. • Capital Southwest (NASDAQ:CSWC) is projected to report quarterly earnings at $0.58 per share on revenue of $61.65 million. • Park Dental Partners (NASDAQ:PARK) is expected to report quarterly earnings at $0.20 per share on revenue of $61.05 million. • Epsilon Energy (NASDAQ:EPSN) is expected to report earnings for its first quarter. • Spectrum Brands Holdings (NYSE:SPB) is projected to report quarterly earnings at $1.04 per share on revenue of $672.80 million. • Manulife Financial (NYSE:MFC) is expected to report earnings for its first quarter. • Global Water Resources (NASDAQ:GWRS) is estimated to report quarterly loss at $0.02 per share on revenue of $13.87 million. • Shoulder Innovations (NYSE:SI) is expected to report quarterly loss at $0.44 per share on revenue of $14.35 million. • Lulus Fashion Lounge (NASDAQ:LVLU) is estimated to report earnings for its first quarter. • PGIM Portfolio Ballast ETF (BATS:PBL) is likely to report quarterly earnings at $0.39 per share on revenue of $154.06 million. This article was generated by Benzinga's automated content engine and reviewed by an editor. UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. This article Earnings Scheduled For May 13, 2026 originally appeared on Benzinga.com © 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Interested in CTW Cayman? Here are five stocks we like better. CTW Cayman’s first-half fiscal 2026 revenue was essentially flat at $41 million, but the company posted a GAAP net loss of $1.2 million as seven new game launches underperformed and older titles lost traction. Despite lower overall user activity, monetization improved: monthly active users fell sharply, but paying monthly active users stayed roughly stable, lifting conversion, ARPU, and return on ad spend; adjusted EBITDA rose to $4.3 million. Management is tightening ad spend and focusing on international growth, especially in North America, while maintaining a strong cash balance of $90.5 million to support selective content and platform investment. CTW Cayman (NASDAQ:CTW) reported nearly flat revenue for the first half of fiscal 2026 while posting a GAAP net loss, as management said new game launches underperformed expectations and mature titles continued to age through their life cycles. On the company’s earnings call for the six months ended Jan. 31, 2026, Chief Financial Officer Patrick Liu said revenue was $41 million, down 0.7% from $41.2 million in the prior-year period. Gross in-game purchases declined 1.1% year over year to $43.6 million. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? Liu said the first half was “a softer period than we expected from a content performance standpoint,” noting that CTW launched seven new games during the period, but those titles performed below internal expectations. At the same time, several mature titles saw declining overall user activity. While overall monthly active users fell to approximately 2 million from approximately 3.3 million a year earlier, CTW’s paying monthly active users remained relatively stable at approximately 75,700, compared with approximately 76,700 last year. Liu said this helped lift the conversion rate to 3.82% from 2.35%. → MercadoLibre Boldly Invests in Growth: Discount Deepens The company also reported improved monetization and advertising efficiency metrics. Average revenue per daily active user rose to $18.90 from $16.31, while average revenue per user increased to $4 from $2.50. Return on advertising spend improved to 109% from 106%. “In practical terms, traffic declined primarily among non-paying users, while the platform continued to attract and retain a higher quality paying audience and generate more efficient returns on advertising spend,” Liu said. → MP Materials Is Quietly Building a Rare Earth Powerhouse CTW also continued to expand outside its home market. Revenue from users outside Japan increased to 31.6% of total revenue, up from 28.8% a year earlier. Liu said Japan remains the company’s largest market, but international expansion remains a strategic priority. Cost of revenue increased 39.6% year over year to $13.9 million. General and administrative expenses rose 13.6% to $5.1 million, and research and development expenses increased 25.3% to $1.7 million. Liu said those increases reflected investments in platform capabilities, organizational infrastructure and costs associated with operating as a public company. Sales and marketing expenses declined 15.2% to $22 million, driven primarily by a $5.9 million reduction in advertising spend. Liu said the reduction was intentional after some new titles failed to meet internal performance thresholds. “When new titles did not meet our internal performance thresholds, we quickly scaled back marketing rather than pursuing top-line growth at unattractive returns,” Liu said, calling that responsiveness a core strength of CTW’s operating model. The company reported an operating loss of $1.7 million, compared with a $0.5 million operating loss in the first half of fiscal 2025. Net loss was $1.2 million, compared with net income of $0.6 million a year earlier. Liu highlighted two period-specific items affecting comparisons: approximately $1.9 million of share-based compensation expense related to stock options granted in December 2025, and approximately $2.1 million of capitalized qualifying confirmed new software and cloud implementation costs following early adoption of ASU 2025-06. On a non-GAAP basis, CTW reported adjusted EBITDA of $4.3 million, up from $3.7 million, representing a 10.5% margin. Segment profit increased to $18 million from $11.6 million. Liu said those metrics showed that “the core economics of the platform remain healthy and responsive to disciplined cost management despite softer revenue and a GAAP net loss.” Net cash used in operating activities was $0.4 million, compared with $2.6 million of cash generated in the prior-year period. Liu said the change was driven primarily by working capital movements, including additional advances to game developers and higher prepaid royalties tied to future content and platform support. CTW ended the period with $90.5 million in cash and cash equivalents, up from $12.2 million at July 31, 2025, supported by proceeds from its IPO. Liu said the cash position gives the company flexibility to invest selectively in content, systems and international growth. During the question-and-answer portion of the call, Argus Research analyst Steve Silver asked how CTW uses technology to respond to changing user behavior and determine whether a new title is underperforming. Liu said CTW uses internally developed AI-backed systems and tools, including an advertising adjustment system and user data monitoring tools, to track real-time performance across new and existing games on its G123 platform. He said new games typically begin with a soft launch, with limited advertising spending during the first three days. During that period, CTW monitors metrics including paying user retention and paying user conversion rates. Based on performance from day zero to day three, Liu said the marketing team determines whether a title appears to be a hit or is underperforming, then adjusts advertising spending and strategy for days four through seven and again through days seven to 14. Asked whether weaker active user trends reflected customer reaction to the underperforming launches or macroeconomic factors, Liu said the issue was mainly related to “monetization quality and unit economics rather than traffic acquisition or initial user interest.” He said some new titles generated reasonable early engagement and user acquisition, but payer conversion, monetization depth and longer-term return on ad spending were below expectations. Silver also asked about CTW’s stated backlog of 20 titles. Liu said five or six games were in pre-registration, while the company was continuing to work with intellectual property holders and developers on the remaining titles. He said CTW could not disclose names or IP details for titles not yet in pre-registration, but said many were tied to popular anime properties, including some recently popular in North America. In response to a question from Zero One Research analyst Vincent Fernando, Liu said CTW’s improved margin between in-game purchases and revenue reflected a changing mix of games on the platform. He said Vivid Army historically carried a higher revenue share percentage with its game developer, but newer games tend to have slightly lower revenue-share arrangements. Liu also said CTW is “aggressively expanding” in North America, particularly the U.S. market, and believes that if the company can localize efficiently, find new partners and adapt its model to new regions, revenue from outside Japan could eventually reach roughly 50% to 60% of total revenue. He cautioned that outcome would depend on external factors and market trends. We are a leading globally accessible, web-based gaming platform, offering players an immersive digital space through our flagship HTML5 platform, G123.jp. Our platform showcases a diverse selection of free-to-play games inspired by popular Japanese animations, including Queen's Blade, So I'm a Spider, So What?, and Goblin Slayer. The HTML5-based G123.jp platform removes common barriers to gameplay, such as downloads, installations, and mandatory registrations, ensuring that seamless, instant access is available to players worldwide across different types of devices, including mobile devices beyond just PCs. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "CTW Cayman H1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.