Round One Q1 FY2027: Revenue up 18%, net income slips 1%
Round One's April-June revenue surged 18.2% to ¥51,377 million, driven by crane game demand in Japan and the U.S., but net profit dipped 1.1% to ¥3,368 million as costs ballooned.
Key Earnings Highlights
Round One’s first-quarter revenue jumped 18.2% year on year to ¥51,377 million, while operating profit rose 4.3% to ¥6,339 million. Net profit attributable to owners of the parent slipped 1.1% to ¥3,368 million. The operating margin narrowed from 13.98% to 12.3%, and the net margin contracted from 8.4% to 6.6%.
Strong demand for crane games in both Japan and the U.S., together with collaborative campaigns and new prize offerings, supported the top line. However, selling, general and administrative expenses nearly doubled to ¥3,610 million from ¥1,805 million a year earlier, driven by new store preparations, marketing, and higher personnel costs. Finance costs surged 34.2% to ¥1,438 million due to increased lease liabilities and higher interest rates. EBITDA rose 5.9% to ¥17,492 million, and adjusted EBITDA reached ¥17,582 million, indicating cash generation remains solid even as costs offset the revenue gains.
Segment Performance
Reported segments are Japan, US, High-end dining, and Other (including China). High-end dining became a separate segment this fiscal year.
Japan delivered revenue of ¥28,549 million (+16.9%) and segment profit of ¥5,543 million (+52.0%), with an operating margin of 19.4% (up from 14.9%). All categories grew at double-digit rates: bowling +11.3%, amusement +21.3%, karaoke +14.8%, and Spo-Cha +13.7%. A new store opened in Yokosuka in May 2026, and expanded crane game areas and collaborations boosted footfall.
The US segment posted revenue of ¥22,561 million (+20.6%), but segment profit plummeted 43.1% to ¥1,618 million. While bowling (+15.2%) and amusement (+20.7%) revenues were strong, surging marketing and operational costs halved the segment margin to 7.2% from 15.2%.
High-end dining recorded no revenue and a segment loss of ¥806 million, compared with a loss of ¥396 million a year ago, as pre-opening investment in staffing and store interiors continued.
Other (including China) generated revenue of ¥266 million (‑22.9%) and a loss of ¥15 million. The three China stores remain under pressure.
Financial Position and Capital Policy
As of June 30, 2026, total assets stood at ¥328,319 million, up ¥18,431 million from the end of the previous fiscal year. Current assets increased ¥9,170 million, partly reflecting an increase in cash and cash equivalents to ¥64,179 million (up ¥9,228 million). Fixed assets rose ¥9,261 million, with tangible fixed assets reaching ¥99,772 million (up ¥9,989 million) due to new store openings and capital investment.
Total liabilities climbed ¥15,275 million to ¥242,528 million. Bonds and borrowings surged ¥15,440 million to ¥64,556 million, and lease liabilities remained high at ¥138,687 million. The equity attributable to owners of the parent ratio edged down to 26.1% from 26.7%.
The company maintained its annual dividend forecast of ¥18 per share, to be paid in quarterly installments of ¥4.5. No share buyback was announced. Depreciation rose to ¥11,153 million from ¥10,442 million a year earlier. The cash flow statement was not disclosed.
Risks and Challenges
Sustainability of crane game demand: Whether the current popularity is temporary; attention to prize regulations and changing consumer tastes is needed, as competition from similar formats could intensify.
Cost pressures: SG&A expenses nearly doubled year on year, with spending on new stores and campaigns likely to remain high. Rising labor and distribution costs could further squeeze margins, and finance costs are trending higher amid increased borrowing and rising rates.
Overseas profitability: The US segment saw sharp profit decline despite revenue growth, and China is shrinking. Strengthening overseas earnings capacity is urgent, especially operational efficiency in the US.
Geopolitical and currency risk: Uncertainty over US trade policy and geopolitical tensions could affect consumer sentiment. Currency translation risk on foreign-currency earnings should also be monitored.
Seasonality: Earnings are skewed to the second and fourth quarters, so quarterly volatility is high. Capturing demand during long holiday seasons will be key to meeting full-year targets.
Full-Year Outlook
Round One left its full-year forecast unchanged, projecting revenue of ¥219,090 million (+15.6%), operating profit of ¥33,050 million (+14.9%), and net profit of ¥18,260 million (+9.9%). The first-quarter progress stood at 13.3% of the full-year revenue target and 19.2% of the operating profit target. The company expects a significant uplift in the second quarter, which includes the summer holiday period. The outlook assumes continued crane game and collaboration momentum, contributions from new stores, and cost optimization in the US. The high-end dining business is scheduled to open in the second half, with a material profit contribution expected from the following fiscal year.
Analyst take
Round One's first quarter delivered strong revenue growth but a disappointing profit performance. The Japan segment’s margin improvement is a bright spot, but the sharp decline in US profitability is concerning, as marketing and operating cost surges ate into revenue gains. Crane game demand remains robust, so cost control is now the biggest challenge. The high-end dining venture is still in its investment phase and could add earnings volatility in the medium term. Full-year guidance looks achievable, but without a US turnaround, upside seems limited. The focus remains on maintaining Japan’s high margins while driving efficiency overseas.