| Metric | Current Period | Previous Period | YoY |
|---|---|---|---|
| Revenue | ¥2292.9B | ¥1926.3B | +19.0% |
| Operating Income | ¥439.1B | ¥278.4B | +57.7% |
| Profit Before Tax | ¥441.9B | ¥291.2B | +51.7% |
| Net Income | ¥354.3B | ¥261.8B | +35.3% |
| ROE | 25.8% | 26.3% | - |
The Company achieved profit growth exceeding revenue growth (+19.0%), resulting in a revenue and profit increase supported by operating leverage. Revenue was ¥2,292.9B (¥1,926.3B in the previous period, YoY +19.0%), Operating Income was ¥439.1B (¥278.4B in the previous period, YoY +57.7%), Profit Before Tax was ¥441.9B (¥291.2B in the previous period, YoY +51.7%), and Net Income attributable to owners of the parent was ¥354.0B (¥261.1B in the previous period, YoY +35.6%). The Operating Income margin improved to 19.1% from 14.5% in the previous period, an improvement of 4.6pt, primarily due to increased profitability in the core Japan Business and controlled growth in SG&A expenses. The reason Net Income growth was below Operating Income growth was that income taxes increased to ¥87.6B (¥29.4B in the previous period), causing the effective tax rate to rise to 19.8% (10.1% in the previous period).
【Revenue】Revenue was ¥2,292.9B (YoY +19.0%), led by the Japan Business at ¥1,808.6B (78.9% of total, YoY +20.7%), followed by the US at ¥407.8B (17.8% of total, YoY +12.0%) and Other Businesses at ¥76.5B (YoY +19.4%). Within Japan, the Marketplace generated ¥1,295.3B and Fintech (payments, financial services, and crypto-asset-related businesses) generated ¥512.0B. The expansion of the Fintech area, including revenue from other sources (such as interest income) of ¥404.4B, contributed to the increase in revenue.
【Profit and Loss】Operating Income was ¥439.1B (YoY +57.7%), and the Operating Income margin improved to 19.1% from 14.5% in the previous period, an improvement of 4.6pt. Gross profit was ¥1,689.1B, with the gross margin maintained at 73.7% (71.8% in the previous period), while SG&A expenses were ¥1,247.2B (YoY +12.7%), below revenue growth (+19.0%), resulting in positive operating leverage. By segment, Japan Business Operating Income was ¥513.2B (YoY +47.2%, margin 28.4%), serving as the core pillar of company-wide earnings, while the US also expanded its profitability, with Operating Income of ¥16.6B (YoY +125.8%). Profit Before Tax was ¥441.9B (YoY +51.7%), and Net Income attributable to owners of the parent was ¥354.0B (YoY +35.6%). The increase in income taxes (¥87.6B versus ¥29.4B in the previous period) somewhat restrained Net Income growth relative to Operating Income and Profit Before Tax growth. The Company posted increases in both revenue and profit.
The reporting segments comprise Japan Business and US. Against company-wide Operating Income of ¥439.1B, total segment profit was ¥533.6B, with an adjustment for headquarters and other items of △¥94.5B (△¥81.4B in the previous period) deducted. Japan Business was the primary driver of the increase in both revenue and profit, with revenue of ¥1,808.6B (78.9% of total) and Operating Income of ¥513.2B (margin 28.4%, improved from 24.4% in the previous period). The US generated revenue of ¥407.8B (17.8% of total, YoY +12.0%) and Operating Income of ¥16.6B (YoY +125.8%, margin 4.1%, compared with 2.0% in the previous period), indicating continued expansion of its profit. Other Businesses (including the sports business) generated revenue of ¥76.5B (YoY +19.4%) and Operating Income of ¥3.8B (YoY -1.6%), remaining nearly flat and making only a limited contribution to company-wide earnings.
【Profitability】The Operating Income margin was 19.1%, improving by 4.6pt from 14.5% in the previous period, while the Net Income margin (based on Net Income attributable to owners of the parent) also increased by 1.8pt to 15.4% from 13.6% in the previous period. The gross margin was 73.7% (71.8% in the previous period), and the SG&A expense ratio declined to 54.4% (57.5% in the previous period). The improvement in profitability was supported by efficiency gains in both the cost of revenue and SG&A expenses.【Cash Flow Quality】Operating Cash Flow (OCF) was △¥95.1B, substantially below Net Income of ¥354.0B, resulting in a divergence between OCF and Net Income.【Investment Efficiency】ROE was 30.0%, slightly down from 30.5% in the previous period. The sharp expansion of equity (¥996.4B → ¥1,374.7B) offset ROE growth through a decline in total asset turnover. Basic EPS was ¥214.74 (YoY +35.0%), and BPS was ¥829.62 (¥603.28 in the previous period, YoY +37.5%).【Financial Soundness】The Equity Ratio improved to 18.9% from 18.3% in the previous period. However, total liabilities of ¥589.2B are primarily composed of highly liquid customer deposits (¥2,641.6B) and bonds and borrowings (current ¥1,432.4B, non-current ¥1,228.9B), leaving the absolute level of the Equity Ratio low.
Operating Cash Flow (OCF) was △¥95.1B, with the deficit narrowing from △¥119.5B in the previous period (improvement +20.4%), but it remained substantially divergent from Profit Before Tax of ¥441.9B. The primary factors were an increase in trade and other receivables of △¥1,087.3B and an additional △¥565.0B investment in money trusts. The expansion of working capital associated with the marketplace and payments platforms is placing pressure on cash conversion. Investing Cash Flow was △¥292.4B. Tangible capital expenditures (approximately ¥51.0B in total for property, plant and equipment and intangible assets) remained limited, while time-deposit placements (△¥400.0B) and purchases of investment securities (△¥43.0B) were the main uses of funds. Financing Cash Flow was positive at ¥734.7B, with funding through a net increase in short-term borrowings of ¥519.6B and the issuance of bonds and long-term borrowings of ¥559.0B covering the expansion of working capital and investment activities. As a result, Free Cash Flow (OCF + Investing Cash Flow) was △¥387.5B. Cash and cash equivalents increased to ¥1,840.7B at period-end (¥1,470.3B in the previous period), but the primary driver of the increase was funding through financing activities.
The increase in profit for the current period resulted from an improvement in the recurring earnings structure, without one-time factors affecting either Operating Income or Profit Before Tax. Other income of ¥5.0B and other expenses of ¥7.7B were both limited in scale, and their impact as extraordinary items was limited. Financial income of ¥12.9B and financial expenses of ¥10.0B left non-operating income and expenses nearly balanced. Comprehensive income was ¥364.1B (¥363.8B attributable to owners of the parent), with the difference from Net Income of ¥354.0B limited to ¥9.8B. Items within other comprehensive income, including foreign currency translation adjustments for foreign operations (+¥4.8B) and fair-value changes in financial assets measured through other comprehensive income (+¥4.2B), were modest. On the other hand, OCF subtotal before changes in working capital was △¥735.4B, substantially divergent from Profit Before Tax of ¥441.9B. The significant accruals—such as increases in trade receivables and trust assets—that create a gap between accounting profit and cash should be noted when assessing earnings quality.
The Company paid ¥0 in both the interim and year-end dividends, continuing its suspension of dividends from the previous period, resulting in a Payout Ratio of 0%. Share repurchases remained at only ¥0.0B in cash flow terms (less than ¥1 million), meaning that shareholder returns were effectively not conducted. The decision to limit shareholder returns despite recording Net Income of ¥354.0B and transitioning retained earnings from △¥30.1B to ¥324.3B appears to reflect a policy of prioritizing the allocation of funds to working capital and investments, as well as the negative Free Cash Flow of △¥387.5B.
Weak cash conversion: Operating Cash Flow (OCF) was △¥95.1B, substantially below Net Income of ¥354.0B. The primary factors were the increase in trade receivables (△¥1,087.3B) and the additional investment in money trusts (△¥565.0B), resulting in a time lag between the recognition of profit and cash generation.
Concentration by region and business segment: Japan Business accounts for 78.9% of revenue, and the Company’s Operating Income is also heavily dependent on this segment. The US business has lower profitability than Japan, with Operating Income of ¥16.6B and a margin of 4.1%, limiting its contribution to company-wide earnings.
Liability composition and financial leverage: Against an Equity Ratio of 18.9%, total liabilities were ¥589.2B, with customer deposits of ¥2,641.6B and bonds and borrowings (current ¥1,432.4B, non-current ¥1,228.9B) comprising the main components of liabilities. Debt-to-equity (D/E) was approximately 4.3x, a high level, making monitoring of the liability structure important.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 30.0% | 11.1% (4.5%–18.2%) | +18.9pt |
| Operating Income Margin | 19.1% | 8.1% (3.7%–16.1%) | +11.0pt |
| Net Income Margin | 15.5% | 5.9% (2.2%–11.8%) | +9.5pt |
ROE, Operating Income margin, and Net Income margin all substantially exceed the industry median, placing the Company among the top performers in the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year-on-Year) | 19.0% | 10.1% (1.8%–20.2%) | +8.9pt |
The Revenue growth rate also exceeds the industry median but remains within the upper bound of the industry IQR (20.2%).
※Source: Compiled by the Company
The Operating Income margin was 19.1%, improving by 4.6pt from 14.5% in the previous period. This represents a structural improvement in profitability accompanied by efficiency gains in both the cost of revenue and SG&A expenses, centered on the increase in the Japan Business margin to 28.4% from 24.4% in the previous period.
The divergence between OCF and Net Income (OCF of △¥95.1B and Net Income of ¥354.0B) continues, with the expansion of working capital items such as trade receivables and trust assets structurally determining cash flow quality.
The Company continues to pay no dividends and has conducted virtually no share repurchases. With Free Cash Flow negative at △¥387.5B, the fact that liquidity is being supported by funding through financing activities (¥734.7B) is an important point to monitor in evaluating capital allocation.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility and, where necessary, after consulting with a professional.
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