Cover Corporation, the Japanese entertainment company behind popular virtual YouTuber agency Hololive, expects sales to surge 21% to ¥52.5 billion ($350 million) this fiscal year, though profit growth will moderate significantly as the company ramps up investment spending.
The Tokyo-based firm projects operating profit will rise just 2.5% to ¥8.2 billion ($55 million), a sharp deceleration from the triple-digit growth rates it posted in recent years. Net income is forecast to increase 2.5% to ¥5.7 billion ($38 million), with earnings per share reaching ¥86.82.
Cover’s revenue growth has been driven by merchandising expansion, particularly its trading card game venture, alongside overseas market penetration and major corporate partnerships. The company cited strengthened brand recognition across streaming, music and gaming as key revenue drivers.
However, Cover warned that extensive advance investments will temporarily pressure margins. First-half profits are expected to fall below prior-year levels due to increased fixed costs and seasonal sales patterns that favor the second half.
The investment push spans multiple areas including research and development for content technology, supply chain optimization, overseas operations expansion, and development of games including its “HoloEarth” project. The company is also strengthening management infrastructure to support rapid growth.
Cover expects logistics improvements and structural reforms under new management to enhance profitability in the second half, including personnel reorganization and administrative cost optimization. The company, which went public in 2023, has seen its market capitalization reach $949 million as investor interest in virtual entertainment grows.
Despite recent talent departures that have concerned fans, Cover continues expanding globally with its U.S. subsidiary Cover USA established in Los Angeles last year.
