Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2019
(Six Months Ended September 30, 2018) (Based on J-GAAP)
October 31, 2018
Company name:
Stock Code:
Representative:
Contact:

Marvelous Inc.
Listing: First Section of Tokyo Stock Exchange
7844
URL:
https://corp.marv.jp
Haruki Nakayama, Chairman, CEO
Seiichiro Kato, Director, Executive Officer, CFO, Chief Senior Director of Administration
Tel: +81-3-5769-7447
Scheduled date of filing Quarterly Securities Report: November 2, 2018
Scheduled commencement date of dividend payout: —Explanatory documents supplemental to the abridged Quarterly Financial Statement: Yes
Quarterly results briefing: Yes (For Institutional Investors and Analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2019
(April 1, 2018 – September 30, 2018)(1) Consolidated Results of Operations (six months)(Percentages represent year-over-year changes)
Net sales

Operating profit

Ordinary profit

Million yen% Million yen% Million yen
1H FY 201913,314
20.9
2,767
56.8
2,870
1H FY 2018
11,014(15.3)
1,764
33.9
1,784
Note: Comprehensive income (million yen):
1H FY 2019: 2,030 (62.1%)

Profit attributable toowners of parent% Million yen
60.9
1,941
69.1
1,236
1H FY 2018: 1,252 (73.4%)

%
57.0
54.7

Diluted net income per
share
Yen
Yen
37.54
—
23.91
—

Net income per share
1H FY 2019
1H FY 2018

(2) Consolidated Financial Position
Total assets
Million yen
1H FY 201925,840FY 2018
25,488Reference: Shareholders' equity (million yen):

Net assets
Million yen
18,71818,414
1H FY 2019: 18,716

Equity ratio

Net assets per share
%
Yen
72.4
361.8772.2
355.93
FY 2018: 18,408

2. Dividends
1Q-endInterimYen——

Dividends per share
3Q-end
Yen
Yen
0.00
—
0.00

FY 2018
FY 2019
FY 2019(forecasts)
Note: Revisions to the dividend forecast in the current quarter: None—

Year-end

Annual
Yen
33.00

Yen
33.00

33.00

33.00

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)(Percentages represent year-over-year changes)

Net sales

Operating profit

Ordinary profit

Million yen% Million yen% Million yen
Full year
25,000(1.2)
4,500 (12.6)
4,500
Note: Revisions to the financial forecast in the current quarter: None%
(11.9)Net income
per share
Million yen%
Yen
2,980 (15.2)
57.62

Profit attributable toowners of parent

*Notes(1) Changes in significant subsidiaries during the consolidated period (six months) under review(changes in subsidiaries accompanying change in the scope of consolidation): None
New:
None (Company name:)
Excluded: None (Company name:)(2) Application of accounting procedures specific to creation of quarterly financial statement: Yes(3) Changes in accounting principles, estimates and restatement
1) Changes in accounting principles caused by revision of accounting standards: None
2) Changes in accounting principles other than those mentioned above: None
3) Changes in accounting estimates: None
4) Restatement: None
(4) Number of shares issued and outstanding (shares of common stock)1) Number of shares outstanding (including
1H FY 201953,593,100 shares FY 2018
53,593,100 shares
treasury stock) at end of period
2) Number of treasury stock at end of period
1H FY 2019
1,872,421 shares FY 2018
1,872,421 shares
3) Average number of shares outstanding during
1H FY 2019
51,720,679 shares 1H FY 2018
51,720,680 sharesthe period (six months)
Note: The number of treasury stock stated includes 500,000 shares held by Trust & Custody Services Bank, Ltd. (Trust
E Units) as trust assets of the "Board Benefit Trust (BBT)."* Quarterly summaries of financial statements are not subject to quarterly review by a CPA or audit firm.
* Cautionary statement with respect to forward-looking statements and other special items
This document contains forward-looking statements including forecasts of the Company’s business performance,
which are based on information currently available to the Company as well as on certain assumptions that theCompany deems reasonable. Therefore, results including actual business performance could differ materially fromthose described in these forward-looking statements as a result of numerous factors.

Marvelous Inc. (7844) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2019
(Based on J-GAAP)

1. Qualitative Information Concerning Quarterly Results(1) Explanation of Consolidated Business Results
The entertainment industry in the period under review witnessed in the domestic mobile games market a continued
stream of numerous new title releases, resulting in an increasingly hostile competitive environment, while top
rankings remained captive to legacy titles enjoying deep-rooted popularity. Also among these developments,
efforts emerged at browser (HTML5) games that require no app installation. In the home-use games market,
attention focused on the fact that e-sports have come to be staged as tournaments at international sports events,
resulting in a strong boost in public awareness. In the amusement market, despite somewhat slower growth in prize
games, which to date have enjoyed enduring popularity, market size has remained unchanged. In the audio &visual market, the package products market continues to shrink, although the anime dissemination market
continues to expand. The live entertainment market remains highly successful without signs of weakening despite
issues such as a shortage of venues and ticket reselling.
Under these circumstances, the Group has been operating as a comprehensive entertainment provider deploying a"multi-content, multi-use, and multi-device" strategy to deliver diverse entertainment content in all businesssegments and on a variety of devices. In order to establish robust IPs, the Group has been driving its strategy in thethree key areas of branding, alliances, and global business, and is working to offer content that generates "buzz"
among today's users while endeavoring to enhance its services.
As a result, the Group's net sales in the first half (April 1, 2018 to September 30, 2018) marked 13,314 million yen(up 20.9% compared with the same period of the previous year), with operating profit of 2,767 million yen (up56.8% compared with the same period of the previous year), ordinary profit of 2,870 million yen (up 60.9%
compared with the same period of the previous year), and profit attributable to owners of parent of 1,941 million
yen (up 57.0% compared with the same period of the previous year).
Results by business segment are described below.
(i) Online Game Business
The Business saw sales continue slipping for major long-seller titles, specifically "Logres of Swords andSorcery: Goddess of Ancient," but "SHINOVI MASTER -SENRAN KAGURA NEW LINK-" remained
popular among titles released in the previous fiscal year. However, other new titles failed to deliver adequate
contributions to sales revenue, resulting for some titles in the transfer of operations to other companies, with
development costs summarily written off by the Company. Meanwhile, centered on the Asian region, theCompany aggressively pushed ahead with overseas business development.
As a result, segment net sales totaled 4,478 million yen (down 2.1% compared with the same period of theprevious year), with segment profit of 364 million yen (down 17.3% compared with the same period of theprevious year).
(ii) Consumer Game Business
The Business's own sales operations in June 2018 came to market in Japan with its latest series production"Fate/EXTELLA LINK (PS Vita/PS4)." Additionally, as a completely new production, the division initiatedsales of "Little Dragons Cafe HIMITSU NO RYU TO FUSHIGI NA SHIMA (Nintendo Switch/PS4)" inAugust 2018. Moreover, for "Shinobi Reflation -SENRAN KAGURA-," a hit product launched in 2017 for salein Japan, the dissemination of overseas versions started in September 2017 in North America and Europe.
Additionally, the Business recognized special revenue from the sale of mainly software assets.
At the amusement division, "Pokémon Ga-Olé" marked favorable operating rates, and although in operation for
the third consecutive year since inception, performance during the summer of this year posted the highest level
on record. Likewise, "PokémonTRETTA" had a successful overseas roll-out while domestic and overseas salesof "TRYPOD" launched previous fiscal year developed favorably.
As a result, segment net sales totaled 5,716 million yen (up 63.4% compared with the same period of theprevious year), with segment profit of 2,036 million yen (up 116.7% compared with the same period of theprevious year).
(iii) Audio & Visual Business
The Business's audio & visual division package-commercialized the TV anime "HUG! Pretty Cure," as well as
TV anime "Tokyo Ghoul:re" lead-produced by the Company with broadcasting initiated in April 2018 and "TheThousand Noble Musketeers" with broadcasting initiated in July 2018. Although animation production costs,
etc., preceded, revenue expanded from secondary usage of library works mainly for video distribution.
The stage production division launched the most recent public performances of series such as "Touken Ranbu-1-

Marvelous Inc. (7844) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2019
(Based on J-GAAP)

the Stage," "MUSICAL THE PRINCE OF TENNIS," and "Ensemble Stars! On Stage," as well as "Stage :SENGOKU NIGHT BLOOD" as a new performance. All performances were commercial successes (for sometitles, revenue will be recognized in the third quarter). For each series, packaged products and secondary usage
mainly for video distribution also posted favorable results.
As a result, segment net sales totaled 3,125 million yen (up 5.5% compared with the same period of theprevious year), with segment profit of 1,042 million yen (up 1.2% compared with the same period of theprevious year).
(2) Explanation of Consolidated Financial Position(1) Financial position analysis
On the consolidated balance sheets at the end of the first half, the Group had total assets of 25,840 million yen (up352 million yen from the end of the previous fiscal year), total liabilities of 7,122 million yen (up 47 million yen
from the end of the previous fiscal year), and net assets of 18,718 million yen (up 304 million yen from the end of
the previous fiscal year).
[Current assets]
Consolidated current assets at the end of the first half totaled 22,216 million yen, which was 1,078 million yen
more than at the end of the previous fiscal year, due to factors including an increase in cash and deposits, and adecrease in notes and accounts receivable-trade.
[Non-current assets]
Consolidated noncurrent assets at the end of the first half totaled 3,624 million yen, which was 726 million yen
less than at the end of the previous fiscal year, due to factors including a decrease in property, plant and equipment,
and intangible assets.
[Current liabilities]
Consolidated current liabilities at the end of the first half totaled 7,072 million yen, which was 47 million yen
more than at the end of the previous fiscal year, due to factors including a decrease in accounts payable, and anincrease in income taxes payable.
[Non-current liabilities]
Consolidated non-current liabilities at the end of the period under review were 50 million yen, unchanged from theend of the previous fiscal year.
[Net assets]
Consolidated net assets at the end of the period under review were 18,718 million yen, which was 304 million yen
higher than at the end of the previous fiscal year. This was due to 1,941 million yen in net income for the period
attributable to shareholders of the parent company, which exceeded a decline in retained earnings due to dividend
payments for the previous fiscal year.
(2) Cash flow
Consolidated net cash and cash equivalents ("cash") at the end of the first half totaled 13,134 million yen, which
was 828 million yen more than at the end of the previous fiscal year.
Main factors for the change in cash were 3,569 million yen provided by operating activities (1,589 million yen
more than in the same period of the previous year), 1,076 million yen used in investing activities (845 million yen
more than in the same period of the previous year), and 1,723 million yen used in financing activities (56 million
yen more than in the same period of the previous year), for a total of 828 million yen cash increase (99 million yen
cash increase for the same period of the previous year).
[Cash flows from operating activities]
Cash provided by operating activities was 3,569 million yen. Main factors comprised a 493 million yen decreasein accounts payable-other, 398 million yen in income tax payments, 2,873 million yen in profit before income
taxes, a 990 million yen decrease in accounts receivable-trade, and 817 million yen in depreciation charges.
[Cash flows from investing activities]
Cash used in investing activities was 1,076 million yen. Main factors comprised 41 million yen in expenditure forthe acquisition of property, plant and equipment, 256 million yen in expenditure for the acquisition of intangible
non-current assets, 1,790 million yen in expenditure for new term deposits, as well as 883 million yen in income-2-Marvelous Inc. (7844) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2019
(Based on J-GAAP)

from term deposit withdrawal and 127 million yen in income from redemptions of investment securities.
[Cash flows from financing activities]
Cash used in financing activities was 1,723 million yen due to dividend payments.
(3) Explanation of Business Outlook Including Consolidated Business Forecast
The consolidated business forecast remains unchanged from the business forecast announced on May 10, 2018.

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