CTW Cayman

CTW Cayman operates as a leading globally accessible, web-based gaming platform, G123.jp, specializing in free-to-play games inspired by popular Japanese animations ¹. The company's core business model revolves around serving game developers by providing a comprehensive platform for revenue generation and global audience reach. Revenue is primarily derived from a share of in-game purchases made by end-users, with CTW Cayman retaining a pre-agreed percentage of these purchases as service fees ². The company leverages established relationships with leading Japanese animation IP holders to offer premium IP resources and ancillary support, including distribution and marketing services, to game developers ³. This collaborative revenue-sharing structure incentivizes developers to create high-quality, engaging content, ensuring a steady flow of fresh games for players and building long-term value for the platform ⁴.

The company's platform, G123.jp, is HTML5-based, removing barriers such as downloads, installations, and mandatory registrations, providing seamless, instant access across various devices, including mobile and PCs ⁵. As of the date of the annual report, CTW Cayman hosts 29 active games and has 11 games in pre-registration ⁶. According to the Frost & Sullivan Report, CTW Cayman was the largest anime IP-based H5 games platform in 2023 globally in terms of gross billings ⁷. The company's customer base for game developers is diverse, ranging from small to large companies, all possessing dedicated full-time studios ⁸.

CTW Cayman's product and service lines are centered around its G123.jp platform, offering a diverse selection of free-to-play games across multiple categories including RPG, simulation, card, and MMO, all inspired by Japanese animation ⁹. As of July 31, 2025, the platform featured nine RPG games, nine simulation games, seven card games, and four MMO games, with 25 of these based on licensed Japanese animation IPs ¹⁰. Key games include Vivid Army, a real-time strategy game launched in 2019, which generated approximately US$334.1 million in cumulative in-game purchases through July 31, 2025, and maintained 39,382 daily active users with an average daily transaction amount of approximately US$81,000 in 2025 ¹¹. Queen's Blade Limit Break, a card game launched in 2022, generated approximately US$56.3 million in cumulative in-game purchases as of July 31, 2025, with approximately 41,277 daily active users and average daily transaction amounts exceeding US$30,000 in 2025 ¹². A new RPG game, So I'm a Spider, So What? Ruler of the Labyrinth, launched in October 2024, generated US$16.9 million in total transaction amount through July 31, 2025, from 1,238,759 active users ¹³. Another new title, Arifureta: From Commonplace to World's Strongest – Rebellion Soul, launched in January 2025, accumulated 940,698 active users and 111,088 paying users ¹⁴.

For the fiscal year ended July 31, 2025, CTW Cayman reported total revenue of US$90,370,793 ¹⁵, an increase of 32.07% from US$68,424,577 in the prior fiscal year ¹⁶. Cost of revenue increased by 35.95% to US$22,040,054 ¹⁷, representing 24.4% of total revenue ¹⁸, up from 23.7% in fiscal 2024 ¹⁹. Operating income shifted from a positive US$6,656,282 in fiscal 2024 to an operating loss of US$(1,065,124) in fiscal 2025 ²⁰. Net income decreased by 35.95% to US$3,828,563 in fiscal 2025 from US$5,977,639 in fiscal 2024 ²¹. Basic and diluted EPS for fiscal 2025 was US$0.06, down from US$0.10 in fiscal 2024 ²². Net cash provided by operating activities was US$111,375 ²³ in fiscal 2025, a decrease from US$1,587,647 in fiscal 2024 ²⁴. As of July 31, 2025, cash and cash equivalents stood at US$12,208,630 ²⁵, and total current liabilities were US$8,423,949 ²⁶. The company does not report total debt or net debt figures explicitly.

The year-over-year revenue growth of 32.07% ²⁷ was primarily driven by new game launches, which collectively generated approximately US$32.3 million in revenue in fiscal 2025 ²⁸. This was partially offset by a US$10.4 million net decrease from existing games due to declining user engagement ²⁹. Revenue from Japan increased by 12.8% ³⁰, South Korea by 188.0% ³¹, North America by 80.1% ³², and Taiwan, Hong Kong, and Macau by 67.6% ³³. The geographic revenue mix shifted, with Japan's contribution decreasing to 69.6% of total revenue in fiscal 2025 from 81.5% in fiscal 2024 ³⁴, while South Korea, North America, and Taiwan, Hong Kong, Macau combined increased to 23.7% from 14.9% ³⁵. Cost of revenue as a percentage of total revenue slightly increased to 24.4% in fiscal 2025 from 23.7% in fiscal 2024 ³⁶, mainly due to higher royalties and infrastructure costs. Research and development expenses saw a significant increase of 480.5% to US$5,528,733 ³⁷, driven by a US$2.7 million increase in impairment charges for game developer advances and US$1.9 million in payroll expenses for a new R&D center in Shanghai ³⁸. Sales and marketing expenses increased by 40.5% to US$55,387,277 ³⁹, primarily due to intensified advertising campaigns for new games and international expansion ⁴⁰.

During the reported period, CTW Cayman launched seven new games in fiscal 2025, including "So I'm a Spider, So What? Ruler of the Labyrinth" in October 2024 and "Arifureta: From Commonplace to World's Strongest – Rebellion Soul" in January 2025 ⁴¹. The company also established a new research and development center in Shanghai and hired 59 software engineers and project managers to strengthen internal capabilities ⁴². On August 7, 2025, CTW Cayman closed its initial public offering of 2,400,000 Class A ordinary shares at US$5.00 per share, receiving gross proceeds of US$12,000,000 ⁴³. On September 11, 2025, Golden Ocean FAC PAC was appointed as the new independent registered public accounting firm, succeeding YCM CPA INC. ⁴⁴.

CTW Cayman anticipates continued growth, driven by its focus on acquiring high-quality content and strategic partnerships, as well as expansion into the global market ⁴⁵. The company expects its overall profitability to increase in the long run ⁴⁶. Management is committed to investing in high-quality IP content and collaborating with top-tier developers to deliver games that appeal to a wider global audience, aiming to further its presence in global markets beyond Japan and increase its market share in the mobile game segment ⁴⁷.

A key growth area is the expansion of its game portfolio through new titles based on globally recognized animation IPs. Notable future releases include "Doraemon," a highly anticipated title set to launch in early 2025, and "Kakegurui" ⁴⁸. As of the date of the annual report, 11 new games, including "Doraemon Comic Traveler" and "Kakegurui All In," are in pre-registration and are expected to launch in the remainder of 2025 and 2026 ⁴⁹. The company has also recently launched "Arifureta: From Commonplace to World's Strongest – Rebellion Soul" in January 2025 and "Negima! Magister Negi Magi – Mahora Panic" in February 2025, which are already contributing to revenue and user growth ⁵⁰.

Operationally, CTW Cayman expects its cost of revenues to increase in absolute amount in line with business expansion and customer base growth, but to decrease as a percentage of revenues in the long run through economies of scale and improved operational efficiency ⁵¹. General and administrative expenses are expected to increase in absolute amount due to the expansion of administrative infrastructure and public company compliance efforts ⁵². Research and development expenses are also projected to increase as a percentage of total revenues in the foreseeable future, driven by continued investment in technology and content to improve user gaming experience and efficiency ⁵³. This includes active development and implementation of AI-backed technologies, such as automatic advertisement management systems, to enhance platform intelligence, personalization, and operational decision-making ⁵⁴. The company is also investing in enhancing key internal production and operational systems to streamline development workflows and support efficient new game launches ⁵⁵. Sales and marketing expenses are expected to further increase as a percentage of total revenues in the foreseeable future, as the company plans to continue investing in brand awareness, user retention, and new user acquisition, while enhancing marketing efficiency through advanced AI marketing tools ⁵⁶.

The company's capital allocation plans include continued significant capital expenditures in the foreseeable future to support business growth, enhance research and development capabilities, and improve operational efficiency and production capacity ⁵⁷. For the year ended July 31, 2025, capital expenditures were approximately US$1.2 million ⁵⁸, including US$0.6 million for property and equipment and US$0.3 million for investments in films and television programs ⁵⁹. The company does not intend to pay dividends for the foreseeable future, preferring to retain future earnings to finance the operation and expansion of its business ⁶⁰.

Management explicitly flagged several structural headwinds and execution risks. The company operates in an intensely competitive landscape where player acquisition and retention depend on a diverse and appealing portfolio of high-quality games ⁶¹. Securing licenses for high-quality intellectual property is costly and competitive, with larger competitors potentially having greater resources ⁶². The free-to-play business model relies on attracting and retaining end-users who make in-game purchases, and the majority of players do not contribute to revenue, making the company highly sensitive to changes in player spending behavior ⁶³. Dependence on a few flagship games and related developers, such as Vivid Army and Queen's Blade Limit Break, poses a risk if their popularity declines ⁶⁴. The company may be unable to fully recover advances to game developers if a game fails to launch or generate sufficient in-game purchases ⁶⁵. Technology upgrade risks, including substantial costs and potential delays, are also present, as the company must continually adapt its platform to remain competitive ⁶⁶. Reliance on a limited number of data storage and cloud infrastructure providers exposes the company to service disruptions or fee increases ⁶⁷. Furthermore, the company faces risks from its international expansion, including compliance with complex and evolving local labor laws, tax regulations, and geopolitical tensions ⁶⁸.

CTW Cayman faces material risks across several categories. Macroeconomic risks include reductions in discretionary consumer spending due to economic downturns, inflation, and global pandemics, which could reduce demand for the platform and increase operating costs ⁶⁹. Geopolitical conflicts, such as the Russia-Ukraine and Israel-Hamas conflicts, can influence operating results and inflationary trends ⁷⁰. Competitive risks are significant, with the industry being intensely competitive, characterized by a limited number of commercially successful games and larger competitors with greater financial, technical, and personnel resources ⁷¹. The company competes with global entertainment and digital media platforms for user attention and discretionary spending ⁷². Regulatory risks are complex and evolving globally, including laws related to age appropriateness, sensitive content, consumer protection, privacy, and data security, with potential for substantial fines or restrictions for non-compliance ⁷³. Specifically, content policies or regulations adopted by regulators, consumer opposition, and litigation could negatively affect the distribution of Japanese animation-based games, and the inclusion of random digital item mechanics may become subject to further regulations ⁷⁴. Operational risks include the reliance on a small percentage of end-users for all in-game purchases, making the company highly sensitive to changes in player spending behavior ⁷⁵. The business depends on the ability of third parties to develop commercially viable games and appealing content, and the failure to secure or renew key IP licenses or partnerships with game developers on favorable terms could adversely affect the business ⁷⁶. The company may be unable to fully recover advances to game developers if a game underperforms or fails to launch, leading to financial losses ⁷⁷. Technology upgrade risks, including substantial costs and delays in adapting to new web-based technologies, network infrastructure, and payment systems, could render the platform obsolete ⁷⁸. Security breaches or other disruptions could compromise information, leading to loss of players, increased costs, and significant liability ⁷⁹. The company also faces risks from the inherent challenges in measuring operating metrics, which could lead to inaccurate business decisions ⁸⁰.

Management's message to shareholders emphasizes a commitment to consistent year-over-year growth and enhancing market position, particularly through strategic investments in high-quality IP content and collaboration with top-tier developers to deliver games appealing to a wider global audience ⁸¹. The company aims to expand its presence in global markets beyond Japan and increase its market share in the mobile game segment ⁸². Management also highlights dedication to exploring new opportunities presented by advanced technologies, including artificial intelligence and data analytics, to drive future growth ⁸³. Specific forward-looking statements include the expectation that overall profitability will increase in the long run ⁸⁴, and that cost of revenues will decrease as a percentage of revenues in the long run through economies of scale and improved operational efficiency ⁸⁵. Management expects general and administrative expenses and sales and marketing expenses to increase in absolute amounts and as a percentage of total revenues in the foreseeable future due to business expansion and marketing initiatives ⁸⁶. Research and development expenses are also expected to increase as a percentage of total revenues due to continued investment in technology and content ⁸⁷. The three strategic priorities emphasized are: (1) investing in high-quality IP content and collaborating with top-tier developers for global audience appeal and market share growth ⁸⁸, (2) expanding into global markets beyond Japan ⁸⁹, and (3) exploring new opportunities with advanced technologies like AI and data analytics ⁹⁰.