Interim report
Page 1
Happinet Consolidated Financial Results for the 1st Quarter of the Fiscal Year Ending March 31 , 2027 August 10 , 2026 I. Financial Summary II . Consolidated Quarterly Financial Statements ( i ) Consolidated Quarterly Balance Sheets ( ii ) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income III . Consolidated Quarterly Financial Results by Business Segments DISCLAIMER This document is a translation of the cover page of the original “ Kessan Tanshin ” in Japanese . HAPPINET CORPORATION provides this translation for your reference and convenience only and without any warranty as to its accuracy or otherwise . In the event of any discrepancy , the original “ Kessan Tanshin " in Japanese shall prevail . This document contains forward - looking statements that are based on management's estimates , assumptions and projections at the time of publication . A number of factors could cause actual results to differ materially from expectations .
Page 2
Ⅰ. Financial Summary Company name HAPPINET CORPORATION Stock listing Tokyo Stock Exchange Code No. URL: https://happinet.co.jp/ Representative Toshiyuki Mizutani, Representative Director, President and Chief Operating Officer Contact Hiroshi Ishimaru, Director, Chief Financial Officer Scheduled starting date for dividend payments: The additional materials of the financial results: Yes The information session of the financial results: No 1. Consolidated Results for the 1st Quarter of the Fiscal Year Ending March 31, 2027 (April 1, 2026 - June 30, 2026) (1) Consolidated Operating Results （For the three months Ended June 30, 2026） FY2027.3 1st Quarter FY2026.3 1st Quarter (Note) (2) Consolidated Financial Position As of June 30, 2026 As of March 31, 2026 Net assets 41.660,285 59,883million yen Net sales 144,003 1st Quarter of the Fiscal Year Ended March 31, 2026 Consolidated Financial Results for the 1st Quarter of the Fiscal Year Ending March 31, 2027 [Japanese GAAP] 7552 - (Percentages indicate year-on-year changes) Ordinary profitOperating profit 95,927 Quarterly Earnings 2,437million yen(Note) Comprehensive income: 63.40 62.39 16.5 4,571 ¥ million 4,534 15.0 % Quarterly Earnings per share (diluted) (△44.4%) 4,383million yen 3,943 20.3 (61.3%) 4,068 17.1 ¥ million August 10, 2026 12.3 △ 17.3 % (Figures are in millions of yen, rounded down) 105,281 9.8 ¥ 1st Quarter of the Fiscal Year Ending March 31, 2027 ¥ million % As of March 31, 2026 58,746million yen 75.60 Equity ratio ¥ million 59,149 42.3 Shareholder's equity: 74.41 As of June 30, 2026 138,776 ¥ million Total assets % (Reference) 3,319 39.0 1st Quarter of the Fiscal Year Ending March 31, 2027 ¥ 1st Quarter of the Fiscal Year Ended March 31, 2026 Quarterly Profit attributable to owners of parent ¥ million 2,746 % On January 1, 2026, the Company conducted a two-for-one share split of its common shares. The calculation of quarterly earnings per share and diluted quarterly earnings per share is done under the assum ption that the share split occurred at the start of the previous fiscal year.
Page 3
2. Dividend (Note) Revision to the projections: No 1. 2. 3. Consolidated Projections for the Fiscal Year ending March 31, 2027 (April 1, 2026 - March 31, 2027) (Note) Revision to the projections: No ※ Other Information (1) Significant changes in the scope of consolidation during the period: No (2) Application of special accounting methods for quarterly consolidated financial statements: No (3) Changes in accounting policies, changes in accounting estimation and restatement a) Changes in accounting policies due to revisions to accounting standards and other regulations: No b) Changes in accounting policies due to revisions to other reasons: No c) Changes in accounting estimation: No d) Restatement: No (4) Number of issued shares (common shares) a) Number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 As of March 31, 2026 b) Number of treasury shares at the end of the period As of June 30, 2026 As of March 31, 2026 c) Average number of shares during the period For the 1st quarter of the fiscal year ending March 31, 2027 For the 1st quarter of the fiscal year ended March 31, 2026 *Proper use of earnings projections, and other special matters *The way to access the Supplement material 80.00 － Total － － － ¥ － ¥ Fiscal Year Ending March 31, 2027 (Projection) Fiscal Year Ending March 31, 2027 End of 1Q End of 2Q － 15.00 25.00 Fiscal Year Ended March 31, 2026 ¥ Dividend per share Fiscal Year-end － ¥ End of 3Q ¥ We will post the Supplement material on the site (https://www.happinet.co.jp/english/) on August 10, 2026. 43,903,351shares 43,324,396shares (Percentages indicate year-on-year changes) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Earnings per share ¥ million % ¥ million % ¥ million % ¥ million % ¥ Interim Year 200,000 1.8 7,800 △ 10.5 8,000 △ 10.3 5,000 △ 25.1 48,100,000shares 48,100,000shares *Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: No 114.36 Full Year 450,000 2.5 15,800 1.3 16,000 On January 1, 2026, the Company conducted a two-for-one share split of its common shares. The end of second quarter dividend for the fiscal year ended March 31, 2026 has been made based on the number of shares before the share split. The annual dividend per share for the fiscal year ended March 31, 2026 is not stated because the amounts cannot be simply combined due to the implementation of the share split. If the share split is considered, the annual dividend for the fiscal year ending March 31, 2026 is 92.5 yen. Concerning the projected amounts of the end of second quarter dividends for the fiscal year ending March 31, 2027, the stable dividend is stated based on the Company’s basic policy on the distribution of profits. The year-end dividend for the fiscal year ending March 31, 2027, will be considered by the Company based on the basic policy on the distribution of profits. The above projections are based on information available to the Company as of the date of the announcement of these materials. Actual business results may differ from the projections due to a number of factors in the future. 1.9 10,500 4.0 240.15 4,787,411shares 4,771,611shares
Page 4
(￥million) Prior Fiscal Year (As of March 31, 2026) Current 1st Quarter (As of June 30, 2026) Assets Current assets Cash and deposits 50,825 41,830 Notes and accounts receivable - trade 50,860 52,135 Electronically recorded monetary claims - operating 4,065 5,722 Inventories 8,689 11,227 Other 6,451 5,735 Allowance for doubtful accounts △4 △4 Total current assets 120,888 116,647 Non-current assets Property, plant and equipment 5,172 5,163 Intangible assets Goodwill 1,460 1,314 Other 1,586 1,570 Total intangible assets 3,046 2,884 Investments and other assets Investment securities 7,997 7,557 Other 7,314 7,079 Allowance for doubtful accounts △416 △555 Total investments and other assets 14,895 14,081 Total non-current assets 23,114 22,128 Total assets 144,003 138,776 Liabilities Current liabilities Accounts payable - trade 55,154 56,857 Income taxes payable 4,179 1,262 Provision for bonuses 316 418 Other 16,610 13,357 Total current liabilities 76,261 71,896 Non-current liabilities Provision for share awards 473 506 Provision for share awards for directors (and other officers) 748 748 Retirement benefit liability 3,502 3,527 Other 2,732 2,948 Total non-current liabilities 7,456 7,730 Total liabilities 83,717 79,627 Net assets Shareholders' equity Share capital 2,751 2,751 Capital surplus 3,353 3,353 Retained earnings 54,275 53,423 Treasury shares △4,840 △4,816 Total shareholders' equity 55,539 54,711 Accumulated other comprehensive income Valuation difference on available-for-sale securities 4,336 4,028 Deferred gains or losses on hedges 76 Total accumulated other comprehensive income 4,343 4,034 Share acquisition rights 402 402 Total net assets 60,285 59,149 Total liabilities and net assets 144,003 138,776 Ⅱ. Consolidated Quarterly Financial Statements (ⅰ) Consolidated Quarterly Balance Sheets
Page 5
Prior Fiscal Year (April 1, 2025 - June 30, 2025) Current Fiscal Year (April 1, 2026 - June 30, 2026) Net sales 95,927 105,281 Cost of sales 84,077 92,170 Gross profit 11,849 13,111 Selling, general and administrative expenses 7,906 8,577 Operating profit 3,943 4,534 Non-operating income Interest income 21 1 Dividend income 111 125 Other 43 69 Total non-operating income 157 205 Non-operating expenses Interest expenses 00 Foreign exchange losses 19 － Provision of allowance for doubtful accounts 0 140 Other 12 27 Total non-operating expenses 31 168 Ordinary profit 4,068 4,571 Extraordinary income Gain on sale of non-current assets 2 － Total extraordinary income 2 － Extraordinary losses Loss on retirement of non-current assets 31 Total extraordinary losses 31 Profit before income taxes 4,067 4,569 Income taxes - current 903 1,226 Income taxes - deferred △154 596 Total income taxes 748 1,822 Profit 3,319 2,746 Profit attributable to owners of parent 3,319 2,746 (ⅱ) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income (Consolidated Quarterly Statements of Income) (￥million)
Page 6
(￥million) Prior Fiscal Year (April 1, 2025 - June 30, 2025) Current Fiscal Year (April 1, 2026 - June 30, 2026) Profit 3,319 2,746 Other comprehensive income Valuation difference on available-for-sale securities 1,066 △307 Deferred gains or losses on hedges △2 △1 Total other comprehensive income 1,064 △309 Comprehensive income 4,383 2,437 Comprehensive income attributable to Comprehensive income attributable to owners of parent 4,383 2,437 Comprehensive income attributable to non-controlling interests －－ (Consolidated Quarterly Statements of Comprehensive Income)
Page 7
Ⅲ. Consolidated Quarterly Financial Results by Business Segments (1) 1st Quarter of the Fiscal Year Ended March 31, 2026 (April 1, 2025 - June 30, 2025) (￥million) Toy business Visual and Music business Video-game business Amusement business Total Net sales To external customers 41,151 15,679 24,523 14,572 95,927 － 95,927 Inter-segment sales and transfers －－－－ － －－ 41,151 15,679 24,523 14,572 95,927 － 95,927 2,308 256 585 1,169 4,320 △ 377 3,943 The expenses cannot be assigned to any particular segment and are mostly administrative expenses incurred by the administration sector of the HAPPINET CORPORATION. *2 Segment income is adjusted to be consistent with operating profit shown on the consolidated quarterly statements of income. (2) 1st Quarter of the Fiscal Year Ending March 31, 2027 (April 1, 2026 - June 30, 2026) (￥million) Toy business Visual and Music business Video-game business Amusement business Total Net sales To external customers 46,834 14,297 25,191 18,958 105,281 － 105,281 Inter-segment sales and transfers －－－－ － －－ 46,834 14,297 25,191 18,958 105,281 － 105,281 2,636 △ 571 786 2,042 4,894 △ 360 4,534 The expenses cannot be assigned to any particular segment and are mostly administrative expenses incurred by the administration sector of the HAPPINET CORPORATION. *2 Segment income is adjusted to be consistent with operating profit shown on the consolidated quarterly statements of income. *1 The △360million yen adjustment to segment income includes unallocated operating expenses. Segment income Segments Adjustment *1 Consolidated Total *2 Total Segment income or loss(△) Consolidated Total *2 Adjustment *1 Segments Total *1 The △377million yen adjustment to segment income includes unallocated operating expenses.