Financial Performance - The company generated a net income of approximately $3.8 million for the year ended July 31, 2025, compared to $6.0 million in 2024 and $3.4 million in 2023[378]. - Revenue for the fiscal year ended July 31, 2025, was approximately $90.37 million, reflecting a 32.07% increase from $68.42 million in 2024[330]. - Gross in-game purchase amount for fiscal year 2025 reached $106.99 million, up from $84.46 million in 2024 and $81.39 million in 2023, representing a year-over-year increase of 26.5%[311]. - Net income decreased by about US$2.2 million, or 36.4%, from about US$6.0 million in fiscal 2024 to about US$3.8 million in fiscal 2025[369]. Cash Flow and Investments - As of July 31, 2025, the company had approximately $12.2 million in cash and cash equivalents, a decrease from $14.5 million in 2024, while net working capital increased from $6.1 million in 2024 to $9.7 million[375]. - For the year ended July 31, 2025, net cash provided by operating activities was approximately $0.1 million, down from $1.6 million in 2024 and $2.6 million in 2023[376]. - The company used about $1.2 million in investing activities for the year ended July 31, 2025, primarily for property and equipment purchases and investments in films and television programs[382]. - The net cash used in investing activities for 2025 was about US$1.2 million, consistent with 2024, and an increase from US$0.5 million in 2023[382][383]. User Metrics and Engagement - Daily active users (DAUs) increased to 264,149 in fiscal year 2025, compared to 197,100 in 2024 and 189,985 in 2023, reflecting a growth of 33.9% year-over-year[311]. - Monthly active users (MAUs) increased to 3,378,835 in fiscal year 2025, compared to 2,301,929 in 2024, marking a growth of 46.9% year-over-year[311]. - Paying daily active users (PDAUs) rose to 17,458 in fiscal year 2025, a 6.2% increase from 16,446 in 2024 and a 29.0% increase from 13,541 in 2023[311]. - The ratio of PDAUs to DAUs decreased to 6.61% in fiscal year 2025 from 8.34% in 2024, indicating a decline in conversion efficiency[311]. Expenses and Cost Management - Cost of revenue increased by approximately $5.8 million, or 36.0%, to $22.04 million for the fiscal year ended July 31, 2025[337]. - General and administrative expenses rose by 63.78% to $8.48 million, driven by increased administrative functionalities and public company costs[330][323]. - Research and development expenses surged by 480.48% to $5.53 million, reflecting the company's commitment to technology and content improvement[330][325]. - Sales and marketing expenses increased by approximately US$16.0 million, or 40.5%, in fiscal 2025, accounting for approximately 61.3% of total revenue[355]. Market and Revenue Sources - Japan remained the largest market, contributing approximately 69.6% of total revenue in fiscal 2025, down from 81.5% in fiscal 2024[335]. - Revenue from South Korea increased by approximately $6.1 million, or 188.0%, indicating strong user growth following new releases[334]. - The developer of "Vivid Army" was the largest customer, contributing 30.1%, 40.3%, and 58.2% of revenues for the fiscal years ended July 31, 2025, 2024, and 2023, respectively[303]. Future Outlook and Strategic Initiatives - The company expects significant capital expenditures in the foreseeable future to support business expansion and enhance research and development capabilities[386]. - The company aims to expand its active user base and enhance monetization through collaborations with leading game developers and IP providers[312]. - The company plans to continue investing in research and development to improve user gaming experience and operational efficiency[390]. Accounting and Compliance - The company appointed Golden Ocean FAC PAC as its new independent registered public accounting firm effective September 5, 2025, succeeding YCM CPA INC.[372]. - The company has not entered into any off-balance sheet financial guarantees or derivative contracts that are not reflected in its combined financial statements[389]. - The adoption of ASC 326 for expected credit losses did not have a material impact on the company's financial statements[394].
CTW Cayman-A(CTW) - 2025 Q4 - Annual Report