CTW (NASDAQ: CTW) revenue falls 9% as segment profits edge higher

What happened

CTW (NASDAQ: CTW) reported FY26 revenue of $82.5 million on October 15, 2026, down 9% from FY25. Gross in-game purchases fell 10% to $96.8 million, while segment profits rose 3% to $32.3 million. Revenue from users outside Japan rose 8% to $29.7 million, or 36.0% of total revenue. Japan revenue fell 16% to $52.8 million.

CTW launched 15 new games in FY26 and ended the year with 42 active games. The company said High School of the Dead Day 0 generated about $6.0 million from launch through July 31, 2026. It also ended FY26 with $14.4 million in cash and cash equivalents and no debt. Net loss was $4.1 million, compared with net income of $3.8 million in FY25, and Adjusted EBITDA was $3.5 million, down from $8.0 million.

Key numbers

Metric	Latest	Change	Source
Revenue	$82.5 million	from $90.4 million, -9%	SEC 6-K
Gross in-game purchases	$96.8 million	from $107.0 million, -10%	SEC 6-K
Segment profits	$32.3 million	from $31.3 million, +3%	SEC 6-K
Monthly active users	2.26 million	from 3.38 million, -33%	SEC 6-K
Adjusted EBITDA	$3.5 million	from $8.0 million, -56%	SEC 6-K
Cash and cash equivalents	$14.4 million	from $12.2 million, +18%	SEC 6-K

Read more: CTW (CTW) stock analysis and investment case

Why it matters

OptimistFi's case is that FY2025 revenue acceleration must prove repeatable and flow through to restored GAAP operating profit and cash generation. This filing weakens that case. Revenue fell about $7.9 million from FY25 while segment profits rose about $0.9 million, so lower sales still outweighed margin gains.

The user trend points the same way. Monthly active users fell 33% to 2.26 million, while paying monthly active users rose 0.6% to 89,053. Paying monthly active users made up 3.95% of monthly active users, up from 2.62% in FY25, but overall traffic still shrank.

CTW also said advertising expense fell $11.4 million to $41.0 million. That helped keep segment profits at 33.4% of in-game purchases, up from 29.3% in FY25. Cash rose to $14.4 million and the company had no debt, so CTW still has room to test launches and international expansion.

Even so, gross in-game purchases fell 10%, ROAS slipped to 105.8% from 116.4%, and Adjusted EBITDA stayed positive at $3.5 million, or 4.2% of revenue.

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What's next

Management will host an earnings webinar on Friday, October 16, at 8:30 a.m. ET. The next test is whether newer titles and international revenue can support a steadier top line. Another period of lower revenue would hurt that case.

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