CTW Stays Disciplined: Focusing on Profitability Amid Revenue Decline

CTW's prioritization of returns over top-line growth continues to guide its financial strategy, as evident in the company's recent fiscal year 2026 results. Despite a revenue decline of 8.7% compared to the previous year, segment profits grew, reflecting the company's ongoing discipline and focus on profitability.

In an effort to move quickly on underperforming titles and maintain a strong debt-free balance sheet, CTW made strategic decisions that led to these results. Revenue for fiscal year 2026 was $82.5 million, down from $90.4 million in the previous year, with gross in-game purchases totaling $96.8 million, a decrease of 9.5% year-over-year.

The company launched 15 new games during the year and ended fiscal year 2026 with 42 active titles. However, several mature titles continued moving through their life cycle, and some first-half launches underperformed expectations. Notably, CTW saw success in the launch of High School of the Dead Day 0, which was released toward the end of April.

The strong user traction seen to date in Asia and North America with this title is only partially realized in these results. Within its user base, the decline in activity was concentrated among non-paying users, with monthly active users declining 33% to approximately 2.26 million from approximately 3.38 million last year.

On a more positive note, 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.

CTW's revenue stream is diversified across regions, and the company made progress on geographic diversification during fiscal year 2026. Revenue from users outside of Japan increased 8.2% to $29.7 million, or 36% of 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. 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.

CTW's results reflect reduced user acquisition spending on underperforming titles and a focus on building its presence in North America through partnerships, user acquisition efforts, localization, and corporate communications. The company expects to see growth as it issues new titles and continues to implement these initiatives.