CTW · CTW Cayman Class A Ordinary Shares

CTW reported financial results for the six months ended January 31, 2026, with revenue of $40.9 million, down 0.7% from $41.2 million in the prior-year period. The decline was primarily attributed to the depreciation of the Japanese yen against the U.S. dollar, as approximately 68% of revenue is generated from Japan. Excluding foreign exchange impact, revenue was relatively stable. Net loss was $1.2 million compared to net income of $0.6 million in the prior period, driven by a 39.6% increase in cost of revenue to $13.9 million and a 13.6% rise in general & administrative expenses to $5.1 million, partially offset by a 15.2% reduction in sales and marketing expenses to $22.0 million. The increase in cost of revenue was attributed to higher royalty fees and platform maintenance costs. Operating loss widened to $1.7 million from $0.5 million. Key operating metrics showed mixed trends: gross in-game purchases decreased 1.1% to $48.6 million, monthly active users (MAUs) fell 39% to 1.98 million due to reduced marketing spend, while paying monthly active users (PMAUs) remained relatively stable at 75,715. The PMAU/MAU ratio improved to 3.82% from 2.35%, and average revenue per paying daily active user (ARPPDAU) increased to $18.19 from $16.31. Return on advertisement spend (ROAS) improved to 109.29% from 105.80%. The company launched seven new games during the period, but performance was below expectations, leading to prompt reduction and reallocation of marketing expenditures. Management expects to continue monitoring game performance and adjusting advertising budgets accordingly. The company completed an initial public offering during the period, raising $10.6 million in net proceeds from issuance of shares.