Cover Corp, the Japanese entertainment company behind VTuber agency hololive Production, reported a 50% jump in first-quarter revenue driven primarily by its trading card game, though profit growth trailed significantly as the company ramped up investments in research and international expansion.
The Tokyo-based firm posted revenue of ¥9.93 billion ($67.1 million) for the three months ended June, with operating profit rising a more modest 16.5% to ¥972 million ($6.6 million). Net income increased 11.9% to ¥693 million ($4.7 million), according to the company’s earnings statement released Monday.
Merchandising dominated the results, with segment revenue nearly doubling to ¥5.84 billion ($39.5 million) thanks to continued demand for the “hololive Official Card Game” launched in the prior year’s second quarter. The trading card business has become a key revenue driver for Cover, which operates virtual YouTubers who livestream entertainment content to millions of followers globally.
However, the company’s aggressive spending on technology development, logistics improvements and overseas business expansion weighed on profitability. Cover has been investing heavily in motion capture studios and establishing operations in North America as it seeks to capitalize on growing international interest in Japanese virtual entertainment.
The streaming and content division, Cover’s original business, grew at a slower 6.9% pace to ¥2.18 billion ($14.7 million), while live events revenue jumped 24% to ¥433 million ($2.9 million) despite limited large-scale concerts during the quarter. The licensing segment added ¥1.18 billion ($8.0 million), up 7.4%.
Cover maintained its full-year revenue forecast of ¥52.5 billion ($354.7 million), representing 21% growth from the previous fiscal year. The company projects operating profit of ¥8.2 billion ($55.4 million) and net income of ¥5.7 billion ($38.5 million) for the period ending March 2026.
The results underscore Cover’s transformation from a technology startup focused on virtual reality software into a major entertainment company. The firm went public in 2021 and has been expanding its roster of virtual performers while diversifying revenue streams through merchandise, music production and corporate partnerships.
