CTW (Nasdaq: CTW) posts 1H 2026 loss but lifts margins and cash
Rhea-AI Filing Summary
CTW reported first-half fiscal 2026 results showing nearly flat top-line but materially higher profitability at the operating level. Revenue slipped 1% year over year to $40.9 million, as softer monetization from new titles and normal aging of legacy games weighed on performance.
Despite this, segment profit rose 55% to $18.0 million, helped by sharply lower advertising spend and reduced revenue share with developers and IP holders, even as server costs increased. Adjusted EBITDA improved 16% to $4.3 million, or 10.5% of revenue, while the company posted a net loss of $1.2 million, versus net income of $0.6 million a year earlier, largely reflecting higher public company and infrastructure costs.
Key operating metrics were mixed: gross in-game purchases edged down to $48.6 million, MAUs declined, and paying user retention softened, but average revenue per paying user and return on ad spend of 109.29% improved. Cash and cash equivalents increased to $19.5 million, supported by IPO proceeds, as CTW invests in new anime-based titles and international expansion, including a New York presence.
Positive
- None.
Negative
- None.
Insights
Flat revenue but stronger unit economics and cash bolster CTW’s flexibility.
CTW delivered essentially stable first-half revenue at $40.9M, while segment profit rose to $18.0M. This reflects tighter advertising spend and lower revenue share with developers and IP holders, consistent with an asset-light, margin-focused model.
However, net results swung to a $1.2M loss from prior-year profit as public company and infrastructure costs grew. User metrics show pressure: gross in-game purchases slipped to $48.6M, MAUs fell, and paying user retention rates eased, even as ARPPDAU and ARPMAU increased.
Liquidity improved, with cash and cash equivalents at $19.5M after IPO proceeds, while Adjusted EBITDA of $4.3M (10.5% margin) indicates positive underlying earnings power. Subsequent filings may clarify how new titles and international expansion translate into user growth and monetization.
Key Figures
Key Terms
Adjusted EBITDA financial
segment profit financial
return on advertisement spend ("ROAS") financial
paying monthly active users ("PMAUs") financial
rights-of-use assets financial
impairment of advance to game developers financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2026
Commission File Number: 001-42758
CTW
(Exact Name of Registrant as Specified in Its Charter)
29F, 1 Chome-9-10,
ARK
Hills Sengokuyama Mori Tower
Roppongi, Minato City,
Tokyo 106-0032, Japan
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Press Release – CTW Announces Financial Results for First Half of Fiscal 2026 | |
| 99.2 | CTW Cayman Fiscal 2025 Supplemental Material |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 13, 2026 | CTW | |
| By: | /s/ Patrick Liu | |
| Name: | Patrick Liu | |
| Title: | Chief Financial Officer | |
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Exhibit 99.1
CTW Announces Financial Results for First Half of Fiscal 2026
Management will host an earnings webcast on Wednesday, May 13 at 8:30 a.m. ET
TOKYO, JAPAN, May 13, 2026 – 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 live on G123.jp as of January 31, 2026 with 6 titles in pre-registration and 20 in backlog |
| ● | Opened 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.
1
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 a 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).
| * | Further clarification and explanation of Segment profits can be found in the Segment Reporting section of the press 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 press release and at ctw.inc/investors. |
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.
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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
investor@ctw.inc
Media:
Edwina Frawley-Gangahar
EFG Media Relations
+44 7580 174672
edwina@efgmediarelations.com
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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.
| For the Six Months Ended | ||||||||
| January 31, | ||||||||
| 2026 | 2025 | |||||||
| Gross in-game purchase amount(1) | $ | 48,603,849 | $ | 49,125,267 | ||||
| Paying daily active users (“PDAUs”) | 14,519 | 16,373 | ||||||
| Daily active users (“DAUs”) | 236,904 | 247,379 | ||||||
| PDAUs to DAUs ratio | 6.13 | % | 6.62 | % | ||||
| Paying monthly active users (“PMAUs”)(2) | 75,715 | 76,684 | ||||||
| Monthly active users (“MAUs”)(2) | 1,984,354 | 3,269,618 | ||||||
| PMAUs to MAUs ratio | 3.82 | % | 2.35 | % | ||||
| PDAUs to PMAUs ratio | 19.18 | % | 21.35 | % | ||||
| DAUs to MAUs ratio | 11.94 | % | 7.57 | % | ||||
| ARPPDAU | $ | 18.19 | $ | 16.31 | ||||
| ARPDAU | $ | 1.12 | $ | 1.08 | ||||
| ARPPMAU | $ | 106.99 | $ | 106.77 | ||||
| ARPMAU | $ | 4.08 | $ | 2.50 | ||||
| Day 1 retention rate for paying users(3) | 58.23 | % | 60.74 | % | ||||
| Day 7 retention rate for paying users(3) | 35.50 | % | 38.47 | % | ||||
| Day 30 retention rate for paying users(3) | 16.00 | % | 18.47 | % | ||||
| Day 1 retention rate for active users(4) | 6.15 | % | 5.86 | % | ||||
| Day 7 retention rate for active users(4) | 2.59 | % | 2.16 | % | ||||
| Day 30 retention rate for active users(4) | 1.00 | % | 0.85 | % | ||||
| Return on advertisement spend (“ROAS”) | 109.29 | % | 105.80 | % | ||||
| (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) | PMAUs and MAUs for each period represents the average number of PMAUs and MAUs across all the months of the respective period. |
| (3) | 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. Pay 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. |
| (4) | 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 paying user retention rate for the period is then determined by averaging these daily platform retention rates over all days in the respective period. |
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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 daily 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 daily 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 month 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 divided 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 and 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; |
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CTW
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Amounts in U.S. dollars, except for number of shares)
| For the Six Months Ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | 40,932,347 | $ | 41,213,907 | ||||
| Cost and expenses: | ||||||||
| Cost of revenue | 13,876,078 | 9,942,740 | ||||||
| General & administrative expenses | 5,119,691 | 4,507,982 | ||||||
| Research & development expenses | 1,657,902 | 1,322,913 | ||||||
| Sales and marketing expenses | 22,027,806 | 25,982,034 | ||||||
| Total cost and expenses | 42,681,477 | 41,755,669 | ||||||
| (Loss) income from operations | (1,749,130 | ) | (541,762 | ) | ||||
| Other income | ||||||||
| Interest income, net | 333,453 | 282,507 | ||||||
| Foreign currency transaction gain | 260,296 | 221,056 | ||||||
| Other income | 499,078 | 292,677 | ||||||
| Other income, net | 1,092,827 | 796,240 | ||||||
| (Loss) income before income tax expense | (656,303 | ) | 254,478 | |||||
| Income tax provision (benefit) | 504,937 | (384,307 | ) | |||||
| Net (Loss) income | (1,161,240 | ) | 638,785 | |||||
| Other comprehensive income | ||||||||
| Foreign currency translation adjustment | (249,230 | ) | (566,536 | ) | ||||
| Comprehensive (Loss) income | $ | (1,410,470 | ) | $ | 72,249 | |||
| Earnings per share | ||||||||
| Basic and Diluted* | $ | (0.02 | ) | $ | 0.01 | |||
| Weighted average number of ordinary shares | ||||||||
| Basic and Diluted* | 62,321,739 | 60,000,000 | ||||||
| * | Retrospectively restated for effect of share reorganization (see Note 13) |
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CTW
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in U.S. dollars, except for number of shares)
| As of January 31, | As of
July 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | (Unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalent | $ | 19,497,920 | $ | 12,208,630 | ||||
| Restricted cash | 129,741 | 160,620 | ||||||
| Accounts receivable, net | 1,625,129 | 1,410,083 | ||||||
| Deferred offering cost | — | 1,429,523 | ||||||
| Prepaid expenses and other current assets | 2,867,509 | 2,866,243 | ||||||
| Total current assets | 24,120,299 | 18,075,099 | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 1,198,179 | 1,098,679 | ||||||
| Prepaid royalties, net | 4,207,499 | 3,499,962 | ||||||
| Investments in films & television programs, net | 432,618 | 576,956 | ||||||
| Advance to game developer, net | 19,937,664 | 14,561,726 | ||||||
| Deferred tax assets, net | 62,968 | 49,067 | ||||||
| Rights-of-use assets, net | 7,415,273 | 6,782,354 | ||||||
| Other noncurrent assets | 4,916,847 | 1,858,413 | ||||||
| Total non-current assets | 38,171,048 | 28,427,157 | ||||||
| TOTAL ASSETS | $ | 62,291,347 | $ | 46,502,256 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,024,289 | $ | 2,377,279 | ||||
| Accrued advertising expenses | 3,916,206 | 475,099 | ||||||
| Tax payable | 462,404 | 293,482 | ||||||
| Lease liabilities - current | 4,343,563 | 2,728,326 | ||||||
| Accrued expenses and other current liabilities | 3,192,831 | 2,549,763 | ||||||
| Total current liabilities | 14,939,293 | 8,423,949 | ||||||
| Non-current liabilities: | ||||||||
| Lease liabilities - noncurrent | 3,142,682 | 4,222,089 | ||||||
| Deferred tax liabilities, net | 6,819,986 | 6,208,161 | ||||||
| Total non-current liabilities | 9,962,668 | 10,430,250 | ||||||
| Total liabilities | 24,901,961 | 18,854,199 | ||||||
| Shareholders’ equity | ||||||||
| Class A ordinary shares, par value $0.0001 per share, 200,000,000 shares authorized, 50,400,000 shares and 48,000,000 shares issued and outstanding as of January 31, 2026 and July 31, 2025, respectively. | 5,040 | 4,800 | ||||||
| Class B ordinary shares, par value $0.0001 per share, 20,000,000 shares authorized, 12,000,000 shares issued and outstanding as of January 31, 2026 and July 31, 2025 | 1,200 | 1,200 | ||||||
| Additional paid-in capital | 12,023,874 | 872,315 | ||||||
| Statutory reserve | 676,416 | 676,416 | ||||||
| Retained earnings | 30,701,099 | 31,862,339 | ||||||
| Accumulated other comprehensive loss | (6,018,243 | ) | (5,769,013 | ) | ||||
| Total Shareholders’ equity | 37,389,386 | 27,648,057 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 62,291,347 | $ | 46,502,256 | ||||
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CTW
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in U.S. dollars, except for number of shares)
| For the Six Months Ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (1,161,240 | ) | $ | 638,785 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,109,775 | 1,323,096 | ||||||
| Impairment of advance to game developers | 750,416 | 1,113,863 | ||||||
| Impairment of prepaid royalties | — | 278,747 | ||||||
| Amortization of right-of-use asset | 1,514,860 | 1,017,089 | ||||||
| Gain from disposal of property, equipment and software | — | (3,211 | ) | |||||
| Foreign currency exchange gain | (139,961 | ) | (65,249 | ) | ||||
| Deferred income tax expenses | 705,348 | (510,750 | ) | |||||
| Share-based compensation | 1,913,692 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (247,360 | ) | (352,211 | ) | ||||
| Prepaid expenses and other current assets, net | (261,481 | ) | 954,348 | |||||
| Advance to game developers, net | (6,193,386 | ) | (211,492 | ) | ||||
| Prepaid royalties, net | (1,198,137 | ) | (730,946 | ) | ||||
| Other non-current assets | (978,578 | ) | 15,369 | |||||
| Accounts payable | 713,339 | (494,929 | ) | |||||
| Accrued advertising expenses | 3,498,413 | 1,966,414 | ||||||
| Tax payable | 173,365 | (471,055 | ) | |||||
| Accrued expenses and other current liabilities | 1,055,017 | (711,989 | ) | |||||
| Operating lease liabilities | (1,604,380 | ) | (1,134,783 | ) | ||||
| Amount due to related parties | (30,706 | ) | (36,003 | ) | ||||
| Net cash (used in) provided by operating activities | (381,004 | ) | 2,585,143 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | (604,817 | ) | (188,774 | ) | ||||
| Proceeds from disposal of property and equipment | — | 27,765 | ||||||
| Investments in films and television programs | (112,494 | ) | (107,648 | ) | ||||
| Investments in software | (2,101,942 | ) | — | |||||
| Advances to third-party loan | — | (410,000 | ) | |||||
| Net cash used in investing activities | (2,819,253 | ) | (678,657 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from shareholder’s contribution | — | 27,848 | ||||||
| Proceeds from issuance of shares - IPO | 10,645,000 | — | ||||||
| Deferred offering cost | — | (667,720 | ) | |||||
| Net cash provided by (used in) financing activities | 10,645,000 | (639,872 | ) | |||||
| Effect of exchange rate changes | (186,332 | ) | (658,886 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | 7,258,411 | 607,728 | ||||||
| Cash, cash equivalents and restricted cash, beginning of the period | 12,369,250 | 14,594,265 | ||||||
| Cash, cash equivalents and restricted cash, end of the period | $ | 19,627,661 | $ | 15,201,993 | ||||
| Cash, cash equivalents and restricted cash, end of the period | $ | 19,627,661 | $ | 15,201,993 | ||||
| Less: restricted cash, end of the period | 129,741 | 129,127 | ||||||
| Cash and cash equivalents, end of the period | $ | 19,497,920 | $ | 15,072,866 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | — | $ | 264,574 | ||||
| Cash paid for operating leases | $ | 1,450,936 | $ | 1,174,328 | ||||
| Supplemental disclosures of non-cash activities: | ||||||||
| Obtaining right-of-use assets in exchange for operating lease liabilities | $ | 2,282,775 | $ | 1,126,466 | ||||
| Offering costs charged against additional paid-in capital | $ | 1,107,209 | $ | — | ||||
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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:
For the Six Months Ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net (loss) income | $ | (1,161,240 | ) | $ | 638,785 | |||
| Depreciation & amortization | 1,109,775 | 1,323,096 | ||||||
| Amortization of right-of-use asset | 1,514,860 | 1,017,089 | ||||||
| Interest income, net | (333,453 | ) | (282,507 | ) | ||||
| Income tax provision (benefit) | 504,937 | (384,307 | ) | |||||
| Impairment of advance to game developers | 750,416 | 1,113,863 | ||||||
| Impairment of prepaid royalties | — | 278,747 | ||||||
| Share-based compensation | 1,913,692 | — | ||||||
| Adjusted EBITDA (non-GAAP) | $ | 4,298,987 | $ | 3,704,766 | ||||
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.
9
CTW
Segment Reporting
(Amounts in U.S. dollars)
| For the Six Months Ended January 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Consolidated in-game purchases | $ | 48,603,849 | $ | 49,125,267 | ||||
| Less: Revenue share with game developers and IP holders | 8,186,251 | 9,453,531 | ||||||
| Transaction fee | 2,245,367 | 2,486,795 | ||||||
| Advertisement expense | 18,760,029 | 24,651,703 | ||||||
| Server cost directly related to hosting the games | 1,400,430 | 894,239 | ||||||
| Segment profits | 18,011,772 | 11,638,999 | ||||||
| Other operating expenses: | ||||||||
| Payroll and related cost | 7,698,199 | 4,025,616 | ||||||
| Share-based compensation cost | 1,913,692 | - | ||||||
| Lease expense | 1,451,104 | 1,101,375 | ||||||
| Depreciation and amortization expense (including prepaid royalties amortization) | 867,889 | 1,339,080 | ||||||
| Impairment expense | 892,534 | 1,392,610 | ||||||
| Recoup of advances made to game developers | 1,549,346 | 1,362,612 | ||||||
| Other cost of sales (1) | 2,325,095 | 805,784 | ||||||
| Other selling and marketing expenses (2) | 1,441,766 | 766,401 | ||||||
| Other general and administrative expenses (3) | 1,621,277 | 1,387,283 | ||||||
| Total other operating expenses | 19,760,902 | 12,180,761 | ||||||
| (Loss) from operation | (1,749,130 | ) | (541,762 | ) | ||||
| Interest income, net | 333,453 | 282,507 | ||||||
| Foreign Currency Transaction gain | 260,296 | 221,056 | ||||||
| Other income | 499,078 | 292,677 | ||||||
| (Loss) Income before income tax | $ | (656,303 | ) | $ | 254,478 | |||
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.
10
Exhibit 99.2
CTW Fiscal First Half 2026 Results May 13, 2026
Disclosures 2 The following materials have been prepared for use in the May 13, 2026 conference call on CTW results of operations for the s ix months ending January 31, 2026. The call will be archived on the internet at https://ctw.inc/investors?lang=en. This presentation contains“forward - looking statements ˮ within the meaning of the“safe harbor ˮ provisions of the Private Securities Litigation Reform Act of 1995. These forward - looking statements are made as of the date they were first issued and were based on current plans, expectations, estimates, forecasts, and projections as we ll as the beliefs and assumptions of management. Words such as“expect, ˮ “vision, ˮ “envision, ˮ “evolving, ˮ “drive, ˮ “anticipate, ˮ “intend, ˮ “maintain, ˮ “should, ˮ “believe, ˮ “continue, ˮ “plan, ˮ “goal, ˮ “opportunity, ˮ “estimate, ˮ “predict, ˮ “may, ˮ “will, ˮ “could, ˮ “hope, ˮ “target, ˮ “project, ˮ “potential, ˮ “might, ˮ “shall, ˮ “contemplate, ˮ and“would, ˮ and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward - loo king statements. Forward - looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond ou r control. Our actual results could differ materially from those stated or implied in forward - looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Secur ities and Exchange Commission (the“SEC ˮ ), including our annual reports on Form 20 - F, our semi - annual reports on Form 6 - K, and other filings and reports we make with the SEC from time to time. In particular, the fo llowing factors, among others, could cause results to differ materially from those expressed or implied by such forward - looking statements. Additional information regarding these and other risks and uncertaintie s that could cause actual results to differ materially from our expectations is included inthereports wehave filedor willfilewiththe SEC,includingourannualreport on Form20 - F. The forward - looking statements included in this presentation represent our views as of the date of this presentation. We anticip ate that subsequent events and developments will cause our views to change. However, we undertake no intention or obligation to update or revise any forward - looking statements, whether as a result of new information, future events, or otherwise. These forward - looking statements should notbe reliedupon asrepresenting our viewsasof anydate subsequent to thedate of thispresentation. NoOffer or Solicitation This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation to purchase , a ny securities in any jurisdiction, or the solicitation of any vote. consent or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of any securities in any jurisdiction where, or to any pe rso n to whom such offer, solicitation or sale may be unlawful under the laws of such jurisdiction. ThisPresentation does not constitute eitheradvice or a recommendation regarding any securities. Nooffering of s ecu rities shall be made except by means of a prospectus meeting the requirement of theSecuritiesActof 1933, asamended, orinrelianceon anexemption therefrom. FinancialData The financial information presented in this presentation should be read in conjunction with the audited consolidated financia l s tatements and related notes included inCTW’s annual report on Form 20 - F filed with theSEC on November 17,2025,andon Form 6 - Kfiledwiththe SECon May13, 2026,whichprovides amore completediscussion of its accounting policies andcertainother information. Please review our risk factors on Form 20 - F filed with the SEC.
3 Fiscal First Half 2026 Highlights 2.0M Monthly Active Users (MAUs), down 39% 7 New game titles launched on G123.jp platform $48.6M In - Game Purchases, down 1% 109% Return on Ad Spend (ROAS) $40.9M Revenue, down 1% $4.3M Adjusted EBITDA, 10.5% margin, despite topline trend 32% % of revenue outside of Japan, up from 29% in the first half of fiscal 2025 $1.2M Net Loss * See Glossary of Key Terms for definitions of key performance indicators on page 17 and Non - GAAP reconciliations on page 18.
4 Notable Game Launches in Fiscal 1H 2026 November 2025 November 2025 December 2025 December 2025 January 2026 December 2025 6 Games in pre - registration as of January 31, 2026 20 New games in backlog as of January 31, 2026 7 New games launched in 1H 2026 October 2025
$81,388,946 $84,461,982 $106,994,440 2023 2024 2025 $39,388,946 $42,000,000 $41,929,805 $42,532,177 $49,125,267 $57,869,173 $48,603,849 1H 2023 2H 2023 1H 2024 2H 2024 1H 2025 2H 2025 1H 2026 5 In - Game Purchases Year - over - year growth % - 1.1%
$62,944,073 $68,424,577 $90,370,793 2023 2024 2025 $32,182,824 $30,761,249 $33,444,464 $34,980,113 $41,213,907 $49,156,886 $40,932,347 1H 2023 2H 2023 1H 2024 2H 2024 1H 2025 2H 2025 1H 2026 6 Revenue Year - over - year growth % - 0.7%
2,170,678 2,301,929 3,378,835 2023 2024 2025 2,067,851 2,273,505 2,077,715 2,526,143 3,269,618 3,488,052 1,984,354 1H 2023 2H 2023 1H 2024 2H 2024 1H 2025 2H 2025 1H 2026 7 User Trends Note: See Glossary of Key Terms on page 17 for definitions of key performance indicators. - 39.3% Paying Monthly Active Users (“PMAUs”) Year - over - year growth % 47,421 46,756 54,978 70,264 76,684 100,322 75,715 1H 2023 2H 2023 1H 2024 2H 2024 1H 2025 2H 2025 1H 2026 - 1.3% 47,088 62,621 88,503 2023 2024 2025 Monthly Active Users (“MAUs”) Year - over - year growth %
$3.12 $3.06 $2.64 $4.08 FY 2023 FY 2024 FY 2025 1H 2026 $144.04 $112.40 $100.74 $106.99 FY 2023 FY 2024 FY 2025 1H 2026 130.3% 99.3% 116.4% 109.3% FY 2023 FY 2024 FY 2025 1H 2026 8 Other KPIs Average Revenue Per Monthly Active Users (“ARPMAUs”) Average Revenue Per Paying Monthly Active Users (“ARPPMAUs”) Return on Ad Spend (“ROAS”) Note: See Glossary of Key Terms on page 17 for definitions of key performance indicators.
9 Profitability Measures Segment Profitability Adjusted EBITDA Net Income (Loss) * See Non - GAAP reconciliations on page 16. $24,989,040 $27,045,916 $31,345,844 $11,638,999 $18,011,772 2023 2024 2025 H1 2025 H1 2026 $3,398,384 $5,977,639 $3,828,563 $638,785 - $1,161,240 2023 2024 2025 H1 2025 H1 2026 $10,633,603 $11,999,232 $7,960,968 $3,704,766 $4,298,987 2023 2024 2025 H1 2025 H1 2026
Trended Financial Statements and Reconciliations from GAAP to Non - GAAP 10
11 Key Performance Indicators Fiscal 2024 Fiscal 2025 Fiscal 2026 FY 2023 H1 2024 H2 2024 FY 2024 H1 2025 H2 2025 FY 2025 H1 2026 Gross in - game purchase amount $81,388,946 $41,929,805 $42,532,177 $84,461,982 $49,125,267 $57,869,173 $106,994,440 $48,603,849 Paying daily active users (“PDAUs”) 13,541 15,966 16,938 16,446 16,373 18,561 17,458 14,519 Daily active users (“DAUs”) 189,985 179,892 214,497 197,100 247,379 281,197 264,149 236,904 PDAUs to DAUs ratio 7.13% 8.88% 7.90% 8.34% 6.62% 6.60% 6.61% 6.13% Paying monthly active users (“PMAUs”) 47,088 54,978 70,264 62,621 76,684 100,322 88,503 75,715 Monthly active users (“MAUs”) 2,170,678 2,077,715 2,526,143 2,301,929 3,269,618 3,488,052 3,378,835 1,984,354 PMAUs to MAUs ratio 2.17% 2.65% 2.78% 2.72% 2.35% 2.88% 2.62% 3.82% PDAUs to PMAUs ratio 28.76% 29.04% 24.11% 26.26% 21.35% 18.50% 19.73% 19.18% DAUs to MAUs ratio 8.75% 8.66% 8.49% 8.56% 7.57% 8.06% 7.82% 11.94% ARPPDAU $16.47 $14.32 $13.89 $14.07 $16.31 $17.23 $16.79 $18.19 ARPDAU $1.17 $1.18 $1.17 $1.17 $1.08 $1.14 $1.11 $1.12 ARPPMAU $144.04 $127.11 $100.89 $112.40 $106.77 $96.14 $100.74 $106.99 ARPMAU $3.12 $3.36 $2.81 $3.06 $2.50 $2.77 $2.64 $4.08 Day 1 retention rate for paying users 71.7% 66.5% 60.3% 62.7% 60.7% 59.6% 59.6% 58.2% Day 7 retention rate for paying users 49.0% 46.3% 37.6% 41.0% 38.5% 37.2% 37.5% 35.5% Day 30 retention rate for paying users 27.9% 25.5% 18.7% 21.3% 18.5% 16.5% 17.1% 16.0% Day 1 retention rate for active users 5.2% 6.3% 6.2% 6.2% 5.9% 5.4% 5.9% 6.2% Day 7 retention rate for active users 2.1% 2.6% 2.2% 2.4% 2.2% 2.1% 2.2% 2.6% Day 30 retention rate for active users 0.9% 1.1% 0.9% 0.9% 0.8% 0.7% 0.8% 1.0% Return on advertisement spend (“ROAS”) 130.3% 96.6% 111.7% 99.3% 105.8% 125.8% 116.4% 109.3%
12 Income Statement Fiscal 2024 Fiscal 2025 Fiscal 2026 FY 2023 H1 2024 H2 2024 FY 2024 H1 2025 H2 2025 FY 2025 H1 2026 Revenue $62,944,073 $33,444,464 $34,980,113 $68,424,577 $41,213,907 $49,156,886 $90,370,793 $40,932,347 Cost of revenue 17,049,167 7,808,156 8,403,623 16,211,779 9,942,740 12,097,314 22,040,054 13,876,078 G&A expenses 4,473,647 2,193,904 2,983,666 5,177,570 4,507,982 3,971,871 8,479,853 5,119,691 R&D expenses 2,913,436 703,667 248,773 952,440 1,322,913 4,205,820 5,528,733 1,657,902 S&M expenses 32,919,491 17,236,140 22,190,366 39,426,506 25,982,034 29,405,243 55,387,277 22,027,806 Total expenses 57,355,741 27,941,867 33,826,428 61,768,295 41,755,669 49,680,248 91,435,917 42,681,477 Operating income (loss) 5,588,332 5,502,597 1,153,685 6,656,282 (541,762) (523,362) (1,065,124) (1,749,130) Interest income, net 41,035 708 300,277 300,985 282,507 211,851 494,358 333,453 Foreign currency transaction gain (loss) (566,100) 331,852 452,822 784,674 221,056 (509,002) (287,946) 260,296 Other income 173,291 135,148 319,138 454,286 292,677 262,335 555,012 499,078 Contingent gain on recovery of previously impaired assets 0 0 0 0 0 4,709,029 4,709,029 0 Other income/(expense), net (351,774) 467,708 1,072,237 1,539,945 796,240 4,674,213 5,470,453 1,092,827 Income (loss) before income tax expense 5,236,558 5,970,305 2,225,922 8,196,227 254,478 4,150,851 4,405,329 (656,303) Income tax expense 1,838,174 1,999,078 219,510 2,218,588 (384,307) 961,073 576,766 504,937 Net income (loss) 3,398,384 3,971,227 2,006,412 5,977,639 638,785 3,189,778 3,828,563 (1,161,240) Foreign currency translation adjustment (1,151,842) (509,684) (511,828) (1,021,512) (566,536) 524,109 (42,427) (249,230) Total comprehensive income (loss) 2,246,542 3,461,543 1,494,584 4,956,127 72,249 3,713,887 3,786,136 (1,410,470)
13 Consolidated Balance Sheet H2 2023 H1 2024 H2 2024 H1 2025 H2 2025 H1 2026 ASSETS Cash and cash equivalent $14,852,169 $15,531,649 $14,461,251 $15,072,866 $12,208,630 $19,497,920 Other current assets 2,550,213 2,732,048 3,696,978 3,835,996 5,866,469 4,622,379 Total current assets 17,402,382 18,263,697 18,158,229 18,908,862 18,075,099 24,120,299 Total non - current assets 20,881,618 22,430,224 25,784,278 24,471,714 28,427,157 38,171,048 Total Assets 38,284,000 40,693,921 43,942,507 43,380,576 46,502,256 62,291,347 LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities 11,856,546 10,175,834 12,012,879 12,416,915 8,423,949 14,939,293 Total non - current liabilities 7,544,127 8,173,217 8,090,174 7,024,342 10,430,250 9,962,668 Total Liabilities 19,400,673 18,349,051 20,103,053 19,441,257 18,854,199 24,901,961 Total Shareholders' equity 18,883,327 22,344,870 23,839,454 23,939,319 27,648,057 37,389,386 Total Liabilities and Shareholders’ Equity 38,284,000 40,693,921 43,942,507 43,380,576 46,502,256 62,291,347
14 Cash Flow Statement Fiscal 2024 Fiscal 2025 Fiscal 2026 FY 2023 H1 2024 H1 2024 FY 2024 H1 2025 H1 2025 FY 2025 H1 2026 Net income (loss) $3,398,384 $3,971,227 $2,006,412 $5,977,639 $638,785 $3,189,778 $3,828,563 ($1,161,240) Depreciation and amortization 779,368 899,404 1,168,302 2,067,706 1,323,096 1,350,159 2,673,255 1,109,775 Amortization of right - of - use asset 1,369,188 755,100 879,733 1,634,833 1,017,089 1,438,122 2,455,211 1,514,860 Impairment of advance to game developers 2,457,900 412,796 (11,345) 401,451 1,113,863 2,033,548 3,147,411 750,416 Impairment of prepaid royalties 831,624 0 0 0 278,747 204,402 483,149 0 Impairment of investments in films and television programs 0 0 46,453 46,453 0 0 0 0 Loss from termination of operating lease agreement 0 0 0 0 0 33,055 33,055 0 (Gain)/Losses from disposal of property, equipment and software 0 (20,416) 485 (19,931) (3,211) 24,543 21,332 0 Foreign currency exchange (gain) loss 0 (513,775) (229,044) (742,819) (65,249) 516,213 450,964 (139,961) Deferred income tax expenses 1,811,466 877,329 857,436 1,734,765 (510,750) 1,017,784 507,034 705,348 Share - based compensation 0 0 0 0 0 0 0 1,913,692 Changes in operating assets and liabilities (8,088,778) (4,828,310) (4,684,140) (9,512,450) (1,207,227) (12,281,372) (13,488,599) (5,073,894) Net cash provided by operating activities 2,559,152 1,553,355 34,292 1,587,647 2,585,143 (2,473,768) 111,375 (381,004) Net cash used in investing activities (485,236) (458,669) (715,061) (1,173,730) (678,657) (501,380) (1,180,037) (2,819,253) Net cash used in financing activities 0 0 0 0 (639,872) (472,464) (1,112,336) 10,645,000 Effect of exchange rate changes (998,138) (419,129) (393,375) (812,504) (658,886) 614,869 (44,017) (186,332) Net change in cash, cash equivalents and restricted cash 1,075,778 675,557 (1,074,144) (398,587) 607,728 (2,832,743) (2,225,015) 7,258,411 Cash, cash equivalents and restricted cash, beginning of the period 13,917,075 14,992,853 15,668,410 14,992,852 14,594,265 15,201,993 14,594,265 12,369,250 Cash, cash equivalents and restricted cash, end of the period 14,992,853 15,668,410 14,594,266 14,594,265 15,201,993 12,369,250 12,369,250 19,627,661
15 Revenue Recognition & Segment Profitability Fiscal 2025 Fiscal 2026 FY 2023 FY 2024 H1 2025 H2 2025 FY 2025 H1 2026 Consolidated in - game purchases $81,388,946 $84,461,982 $49,125,267 57,869,173 $106,994,440 $48,603,849 Less: Recoup of advances made to game developers 551,774 2,477,840 1,362,612 2,220,531 3,583,143 1,549,346 Revenue share paid to game developers 17,893,099 13,559,565 6,548,748 6,491,756 13,040,504 6,122,156 Consolidated revenue 62,944,073 68,424,577 41,213,907 49,156,886 90,370,793 40,932,347 Consolidated in - game purchases 81,388,946 84,461,982 49,125,267 57,869,173 106,994,440 48,603,849 Revenue share with game developers and IP holders 19,263,857 14,975,047 9,453,531 6,444,947 15,898,478 8,186,251 Transaction fee 3,659,159 3,812,118 2,486,795 2,778,259 5,265,054 2,245,367 Advertisement expense 31,080,465 37,309,197 24,651,703 27,744,808 52,396,511 18,760,029 Server cost directly related to hosting the games 2,396,425 1,319,704 894,239 1,194,314 2,088,553 1,400,430 Segment profits 24,989,040 27,045,916 11,638,999 19,706,845 31,345,844 18,011,772
16 GAAP to Non - GAAP Reconciliation Fiscal 2024 Fiscal 2025 Fiscal 2026 FY 2023 H1 2024 H2 2024 FY 2024 H1 2025 H2 2025 FY 2025 H1 2026 Net income (loss) $3,398,384 $3,971,227 $2,006,412 $5,977,639 $638,785 $3,189,778 $3,828,563 (1,161,240) Depreciation and amortization 779,368 899,404 1,168,302 2,067,706 1,323,096 1,350,159 2,673,255 1,109,775 Amortization of right - of - use asset 1,369,188 755,100 879,733 1,634,833 1,017,089 1,438,122 2,455,211 1,514,860 Interest income, net (41,035) (708) (300,277) (300,985) (282,507) (211,851) (494,358) (333,453) Income tax expense 1,838,174 1,999,078 219,510 2,218,588 (384,307) 961,073 576,766 504,937 Extraordinary Income 0 0 0 0 0 (4,709,029) (4,709,029) 0 Impairment of advance to game developers 2,457,900 412,796 (11,345) 401,451 1,113,863 2,033,548 3,147,411 750,416 Impairment of prepaid royalties 831,624 0 0 0 278,747 204,402 483,149 0 Share - based compensation 0 0 0 0 0 0 0 1,913,692 Adjusted EBITDA (non - GAAP) 10,633,603 8,036,897 3,962,335 11,999,232 3,704,766 4,256,202 7,960,968 4,298,987 GAAP Net income to Adjusted EBITDA (non - GAAP) * See additional explanation Non - GAAP reconciliations on page 18.
Glossary of Key Terms 17 “ActiveUser” are to any user that spend at least one (1) minute on G123.jp platform during the applicable period. Active users are calcula te d based on cookie - based uniqueness, meaning that auser who accesses the platform on multiple devices or browsers will be counted as asingle active user “ARPMAU” are to average 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.jpplatform by the average number ofmonthly active users, which is averaged over each month byfurther dividing bythe num ber ofmonths in the respective period “ARPPMAU” are to average in - game purchase amount per paying monthly active user during a given fiscal year, calculated by dividing the to tal in - game purchase amount in a given fiscal year bythe average number ofpaying monthly active users, which is averaged over eachmonth by further dividing 12 “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 allmonths in the respective period, which is calculated by summing th e number ofMAUs for each month during the given period and dividing the totalby the number ofmonths in the respective period “PayingUser” are to any user that makes at least one in - game purchase ofno less than US$0.01 during the applicable 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 i n the respective period, which is calculated by summing the number ofPMAUs for each month during the given period and dividing the total by the number ofmonths in the respective period; “ROAS” are to return on advertisement spending based on created users, calculated by dividing average in - game purchase amount per crea ted user divided by average advertising expenses per created user during the applicable period “Grossin - gamepurchaseamount” means the total in - purchase amounts, or top - ups, paid byend - users for games on G123.jp platform. “Retentionrate” measures the percentage of users who return to the same game on a specific day (e.g. Day 1, Day 7 and Day 30) after their ini ti al engagement. Platform retention rate is the average ofthe per - game retention rate ofeach dayduring agiven period.
Non - GAAP Financial Measures 18 ReconciliationofNon - GAAPFinancialMeasures In addition to reporting financial results preparedin accordance with U.S. generally accepted accounting principles(“GAAP”), CTW (or the“Company”) presents Adjusted EBITDA (non - GAAP) forthesecondhalfandfullfiscalyears2025and2024. Adjusted EBITDA (non - GAAP) is a non - GAAP financial measure intended to provide management and investors with additional insight into CTW’s underlying operating performance. This measureisunaudited andisnotincluded inCTW’sauditedconsolidatedfinancial statementsorForm20 - F. DefinitionofAdjustedEBITDA(non - GAAP) CTW defines Adjusted EBITDA (non - GAAP) as net income (loss) before: interest income and expense, income tax expense (benefit), d epreciation and amortization, impairment losses (recoveries), and other items that management considers non - core or not reflective of ongoing operations. Management believes Ad justed 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 va ry among companies due to capital structure or tax jurisdiction differences. UseandLimitationsofNon - GAAPMeasures Adjusted EBITDA (non - GAAP) should be considered in addition to, and not as a substitute for, GAAP measures such as income from o perations, net income, or cash flows from operating activities.BecausecompaniesmaydefineAdjustedEBITDAdifferently, CTW’spresentationmaynotbedirectlycomparabletosimilarlytitledme asu resusedbyothercompanies.Thismeasure ispresentedsolelytoprovideinvestorswithsupplemental information andshouldnotberegardedasameasureofliquidity, profitability, o rfi nancial condition underGAAP. ManagementusesAdjustedEBITDA(non - GAAP),togetherwithGAAPincomefromoperationsandnetincome,toevaluateCTW’soperatingperformanceandto assistinfinancialandstrategic decision - making. TheCompanybelieves thismeasureprovidesinvestors withaclearerviewofCTW’sabilitytogenerateearningsfromitscoregami ngandplatformoperations.
Segment Profits 19 In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. Th eASU’s amendments “improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses”. In addition, the standar d i ntroduces 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 po tential 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 1 5, 2023, and interim periods within fiscal years beginning after December15, 2024. Early adoption is permitted.The Groupadoptedthis ASU fortheyearendedJuly31, 2025.The adoptionofASUdoes notc han ge howsegments are identified,aggregated, ormeasured,itaddsincremental disclosure requirements. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incu r e xpenses, and is identified on the basis of the internal financial reportsthatareprovidedtoandregularlyreviewedbythe Group’schiefoperatingdecisionmaker(“CODM”)inordertoallocateresour ces andassessperformance ofthesegment. The management of the Group concludes that it has only one reporting segment. The Group provides game distribution and relate d s ervices to game developers. The Group’s services have similar economic characteristics with respectto nature and formofthe services provided. The Group’s chief operating decision mak er 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 tha n 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 develo pers and revenue share with game developers and IP holders,advertising expenses,transactionfees,servercostdirectlyrelatedtothehostofgames,in - house payrollcostdirectlyrelatedtothea rtanddesignsupportservicesprovided.