Back-to-back record-breaking projects push GMV past JPY 6.2B; new growth scenario in the works as mid-term plan on track for one-year-early achievement

Summary

3Q standalone GMV reached JPY 6,216M (+27.2% YoY), revenue JPY 1,579M (+21.6% YoY), and operating income JPY 276M (+74.3% YoY), with both GMV and revenue hitting quarterly all-time highs. The all-time record for backer purchase amount was broken twice consecutively—first by Rokid AI glasses (JPY 640M), then by XGIMI Elfin Flip (JPY 930M)—underscoring the company's exceptional ability to generate blockbuster projects in the AI gadget / premium home appliance space. CEO Nakayama indicated that one-year-early achievement of the mid-term plan (FY09/2027: revenue JPY 5.2B, operating income JPY 700M) is now within sight, and work has begun on formulating the next mid-term plan. In 4Q, the company plans to concentrate upfront investments for growth from FY2026 onward, with operating income expected to come in roughly in line with 4Q of the prior year.

Key Points (Earnings Takeaways And Growth Actions)

• Business Strategy And Market Assessment
  • Prolonged yen weakness and elevated raw material costs are accelerating SMEs' shift toward higher-value-added products, sustaining robust demand for Makuake as a low-risk platform for new product launches
  • While consumers remain cost-conscious, selective spending on products that deliver genuine satisfaction ("sharp-contrast consumption") is advancing, underpinning the company's GMV growth
  • Geopolitical risk impacts on the business are recognized as more modest than initially feared
• Current Business Progress And Drivers
  • Strategic focus on the home appliance / gadget category is paying off, with the number of projects exceeding JPY 100M roughly doubling YoY; GMV excluding the two mega-projects also grew YoY
  • Take rate of 27.9% (−1.2pt QoQ) is primarily attributable to pricing adjustments aimed at cultivating mega-projects, rather than a deterioration in overall service profitability
  • Monthly active project count of 1,055 (+5.0% QoQ), suggesting improvement in organic fundamentals
• Strategic Initiatives And Inflection Points
  • Launched an AI chatbot feature on Makuake Insight, enabling businesses without dedicated analytics staff to enhance the precision of consumer insight analysis
  • Partnered with SB C&S to host Makuake GINZA TOUCH LOUNGE at SoftBank Ginza, advancing a new distribution model designed to maximize offline experiential value
  • Began listing Makuake STORE products on Diggly, Rakuten Ichiba's dedicated feature page; also won Rakuten Shop of the Month (April, Outdoor/Leisure category)

Outlook And Strategy

• Full-year guidance already revised upward: revenue JPY 5,400M (+18.0% YoY), operating income JPY 670M–800M (+49.8%–+78.9% YoY), GMV JPY 20,700M (+17.3% YoY)
• In 4Q, upfront investments (data infrastructure, new features, new services, brand enhancement, security reinforcement) will be concentrated, with operating income expected to approximate prior-year 4Q levels (JPY 27M)
• The mid-term plan (FY09/2027: revenue JPY 5.2B, operating income JPY 700M) is on track for one-year-early achievement; a new medium-term growth blueprint is being formulated
• The CEO stated that the top priority is establishing a virtuous PDG cycle (Plan/Debut/Growth), and once this is in place, the company aims for step-change growth in earnings scale
• Revenue contribution from the Plan/Growth areas remains below 5% of the total, but progress is on track when including synergies with the core Makuake platform
• Share buybacks and other shareholder returns are on the discussion table, though priority is being given to investment in establishing the new commercial distribution model

Positive Factors

• GMV of JPY 6,216M and revenue of JPY 1,579M set quarterly all-time highs; operating income was JPY 276M (+74.3% YoY). Cumulative 9M operating income of JPY 844M represents +101.0% YoY
• XGIMI Elfin Flip set a new all-time record with JPY 930M in backer purchase amount, reaching JPY 50M within one hour and JPY 200M within 24 hours of launch—demonstrating the platform's powerful audience-drawing capability
• Access UU reached 11,873,511 (+32.6% YoY), while membership grew to 3,544,401 (+11.4% YoY), expanding the supporter base
• Makuake STORE on Rakuten Ichiba has grown to several tens of times its initial revenue level with 400+ products listed, making steady progress in building a recurring revenue base
• SG&A growth (+8.2%) significantly trailed revenue growth (+21.6%), demonstrating clear operating leverage in the earnings structure
• Advertising agency service revenue continued to increase, with expanding earnings contribution from ancillary services

Concerns And Risks

• High earnings dependency on mega-projects (Rokid JPY 640M, XGIMI JPY 930M); sustained generation of projects of comparable scale is uncertain. The CEO himself candidly acknowledged this point
• Take rate declined to 27.9% due to pricing adjustments for mega-projects; further downward pressure is possible as the share of large-scale projects rises
• Backer purchase transactions declined to 332,336 (−6.5% YoY); while higher average ticket size compensated in monetary terms, broadening the user base remains a challenge
• Creator repeat rate of 60.9% (−1.1pt YoY) and repeat backer purchase rate of 71.6% (−2.4pt YoY) indicate slight softening in retention metrics; full impact of improvement initiatives is not expected until FY2026 onward
• Concentration of upfront investments in 4Q is expected to result in a sharp decline in operating income to approximately prior-year 4Q levels (JPY 27M)
• Dividend policy continues to prioritize internal reserves; no concrete shareholder return measures have been determined

Performance Highlights

9M cumulative revenue of JPY 4,392M (+31.1% YoY) and operating income of JPY 844M (+101.0% YoY), delivering double-digit growth in both top-line and bottom-line. Full-year guidance has already been revised upward to revenue of JPY 5,400M and operating income of JPY 670M–800M; the 9M cumulative operating income progress rate reached 126% against the lower bound of revised guidance.

Segment Performance

• GMV: JPY 6,216M (+27.2% YoY)
• Monthly Active Projects: 1,055 (+2.5% YoY)
• Monthly Project Unit Price: JPY 1.88M (+22.2% YoY)
• Monthly Backer Purchase Amount: JPY 1,991M (+25.2% YoY)
• Take Rate: 27.9% (prior quarter: 29.1%)
• Access UU: 11,873,511 (+32.6% YoY)
• Membership: 3,544,401 (+11.4% YoY)
• New Project Listings: 1,357 (+1.1% YoY)
• Repeat Backer Purchase Amount: JPY 4,275M (+21.1% YoY)

Q&A List

• Q: The presentation materials state that 4Q operating income is expected to be roughly in line with the prior year due to upfront investment. Does this figure incorporate revenue from the projector booked in 4Q or the large high-pressure washer project? Also, given the strong 3Q results, will investment be ramped up beyond initial plans, or will spending remain within the scope envisioned at the time of the guidance revision?
  A: On the top line, it is difficult to bake in mega-projects of JPY 600M–900M per single project, so we have not specifically incorporated any. We envision top-line coming in somewhere between 1Q and 2Q levels—not as strong as 3Q. Given the inherent volatility, please think of it within that range. On investment, we are largely in line with what was envisioned at the time of the guidance revision. That said, we categorize investments into "must-haves" and "want-to-haves," and the upside performance has made it easier to execute on the want-to-have bucket. We intend to deploy investment that drives growth, enhances security, and strengthens our platform foundation, but we do not expect to significantly exceed the investment scope contemplated at the time of the upward revision.
• Q: Profitability has recovered, but what originally caused the sharp earnings deterioration several years ago? Now that some time has passed, can you reflect on the root causes and any misjudgments at the time?
  A: In a word, we misjudged our organic fundamentals. On external factors, GMV roughly tripled in just over a year during COVID, and both we and the market attributed this to a structural digital shift. In reality, however, consumer spending that would have gone to travel and dining out flowed into physical goods, compounded by stimulus payments distributed to the entire population—effectively doubling the consumer goods market. When that normalized and halved, we were caught off guard. Meanwhile, having misjudged the digital shift as irreversible, we aggressively ramped up headcount and associated investment, inflating our cost base. The double hit on top-line and costs pushed us into the red. We have been working on this turnaround, and this fiscal year we are finally reaching a top-line level that surpasses the COVID-era tailwind.
• Q: We understand the company is in an investment phase, but cash on the balance sheet appears underutilized. As a listed company, shouldn't you be considering more effective use of this cash, and if there are no compelling uses, shouldn't you return it to shareholders through buybacks?
  A: That is a fair point. However, we believe it would be inappropriate to deploy large amounts of capital without a clear strategic thesis—sequencing matters. Once we have solidified the PDG foundation and identified where to go on offense, we will consider options including M&A, which of course requires a counterparty, as well as development spending, where simply throwing money at the problem does not immediately produce results. We are currently laying the groundwork—reducing technical debt, reinforcing security—so that we can deploy cash effectively against a future scenario. If after all that there is still no compelling use, share buybacks and shareholder returns are certainly an option. Once we fully establish this new commercial distribution model, we believe we can double down and scale our market position, so we would ask for patience to prioritize that step for now. We are always weighing the balance and keeping this on the decision table.
• Q: The two mega-projects account for JPY 1.5B in backer purchase amount, so stripping those out, 3Q GMV would fall below JPY 5B. Is the narrative that home appliance/gadgets drove growth really accurate?
  A: While it appears the two projects total JPY 1.5B, roughly half of the Rokid smart glasses amount was actually booked in 2Q, so the impact on 3Q standalone is not as large as it may seem. Even adjusting for that, large home appliance/gadget projects were the key growth driver—the number of projects exceeding JPY 100M roughly doubled compared to the same period last year, and the majority of those were in the home appliance/gadget category. So we believe the characterization that the home appliance/gadget segment drove growth is accurate.
• Q: Is it fair to say the company has exited the loss-making phase that followed COVID? Is the probability of a net loss going forward low?
  A: This is not something we can declare as an absolute guarantee, but given our current revenue structure and cost structure, we believe it is fair to say we have organically established a solidly profitable posture. We cannot rule out the possibility of a loss with 100% certainty in the event of extraordinary circumstances, but under normal operating conditions, we believe it is accurate to say we have shifted to a structurally profitable company.
• Q: You mentioned that the Growth area accounts for less than 5% of total revenue. Does that imply roughly JPY 70M–80M for 3Q? And is that still on plan?
  A: We do not disclose specific figures, so it is difficult to confirm a particular number, but on the question of whether we are on plan—the answer is yes. The share of total revenue is still small and we will work to build it up, but there are also significant synergies to consider, such as Makuake Insight itself driving revenue for the core Makuake platform. Taking into account these spillover effects beyond standalone revenue, we view progress as being on track with our plan.