ENVALITH
LINEヤフー株式会社 logo

LY Corporation

4689・Prime Market・Information & Communication

Official website
LINEヤフー株式会社 logo
LY Corporation4689

Business

LY Corporation is one of Japan's largest comprehensive internet services groups, built around the communication app "LINE" (domestic MAU of approximately 96 million) and the portal site "Yahoo! JAPAN," with advertising, e-commerce, and Fintech as its three core pillars. The company comprises three segments: Media Business (advertising), Commerce Business (e-commerce including ZOZO (ZOZOTOWN), Askul (BtoB / LOHACO), Ikkyu, and others), and Strategic Business (Fintech including PayPay, PayPay Card, and PayPay Bank). In FY2026 (ending March 2026), revenue reached a record high of ¥2,036,366 million. The company is a subsidiary of A Holdings, itself under SoftBank Group, and has more than 150 consolidated subsidiaries both domestically and internationally.

Business Model

The structure combines media revenue from advertisements placed on the massive user bases of LINE and Yahoo! JAPAN, fee revenue linked to e-commerce transaction volume from Yahoo! Shopping, ZOZOTOWN, and other services, and merchant fees, credit card revenue, and bank lending revenue based on PayPay's payment transaction volume (¥19.4 trillion in FY2026 (ending March 2026)), maximizing user LTV through cross-use across the three touchpoints of LINE, Yahoo!, and PayPay. The LYP Premium paid membership program promotes engagement across the group.

Company Strengths

PayPay accounts for approximately two-thirds of Japan's code payment (QR code payment) market, with consolidated transaction value reaching ¥19.4 trillion in FY2026 (ending March 2026), up 23.4% year on year. PayPay Bank's loan balance also continued its high growth, reaching ¥1,238,600 million (up 33.6% year on year). As an integrated financial platform spanning payments, banking, cards, securities, and insurance, the company has built a scale and customer base that would be difficult for competitors to replicate in the short term.

LINE maintains a high DAU/MAU ratio as Japan's largest communication app, while Yahoo! JAPAN functions as one of the country's largest portal sites. Building on both platforms, the company operates Account Ads (LINE Official Account) (up 15.3% year on year), Display Ads (LY Ads Display Ads), and Search Ads (LY Ads Search Ads), recording Media Business revenue of ¥735,197 million in FY2026 (ending March 2026). Continued growth in the number of paid LINE Official Account subscriptions is supporting sustained revenue expansion.

The Commerce Business encompasses ZOZO (ZOZOTOWN), Askul (BtoB / LOHACO), Ikkyu (luxury hotel reservations), Yahoo! Shopping, and Yahoo! Auctions / Flea Market, among others. In FY2026 (ending March 2026), e-commerce transaction value reached ¥4,672.9 billion (up 7.1% year on year), and domestic merchandise transaction value reached ¥3,316.1 billion (up 6.3% year on year). Overseas expansion is also growing through the new consolidation of BEENOS (cross-border e-commerce) and LINE MAN (Thailand food delivery).

ENVALITH's Perspective

Revenue in the Strategic Business grew 30.6% year on year to ¥442,277 million, and adjusted EBITDA expanded sharply, up 85.0% year on year. In addition to a 22.9% increase in PayPay's consolidated transaction volume, the consolidation of LINE Bank Taiwan Limited and the reversal of the prior period's LINE Pay withdrawal costs combined to substantially improve profit levels. For FY2027 (ending March 2027), adjusted EBITDA is projected at ¥585,000 million (up 17.8% year on year), indicating continued high growth, and it can be assessed that the monetization of the Fintech business has entered a phase of structurally lifting company-wide profit growth.

Regarding the information leakage caused by the unauthorized access incident in November 2023, the company has a history of receiving administrative guidance from the Ministry of Internal Affairs and Communications and a recommendation from the Personal Information Protection Commission, and completed system separation from NAVER Corporation at the end of March 2026. Meanwhile, a ransomware attack occurred at Askul in October 2025, resulting in the recording of ¥5,490 million in system failure response costs. There is a risk that costs to address cyber threats will continue to arise, and the effectiveness of the group-wide security governance framework continues to be called into question.

Adjusted EBITDA in the Commerce Business declined 12.8% year on year to ¥129,900 million, as profitability deteriorated due to the impact of Askul's system failure, increased promotional expenses, and the reversal effect from the loss of control over Value Commerce. In addition, the consolidation of BEENOS, LINE MAN, and LYST LTD has caused goodwill to accumulate to ¥2,191,690 million and intangible assets to ¥1,309,654 million, presenting a latent risk of future impairment. While total assets expanded 22.3% year on year to ¥11,205,191 million, the ratio of equity attributable to owners of the parent declined from 32.7% to 26.8%, and attention should also be paid to the rise in financial leverage.

Growth Strategy

Expanding the group ecosystem through the integrated three-pillar strategy of LINE, Yahoo, and PayPay, along with deepening Fintech capabilities

Operating PayPay, PayPay Card, PayPay Bank, and PayPay Securities as an integrated whole, providing comprehensive financial services spanning payments to banking, securities, and insurance. International expansion is also accelerating through the Nasdaq ADS listing in March 2026 and strengthened collaboration with Visa Inc. PayPay's consolidated transaction volume is expanding, reaching ¥19.3 trillion in FY2026 (ending March 2026), up 22.9% year over year.

Promoting "Connect One," a platform that seamlessly connects customer touchpoints—both online and offline—by linking LINE Official Account with Yahoo Japan's corporate services. LTV maximization is being pursued through strengthened integration of reservations, ordering, payments, and membership via LINE Mini Apps. Account Ads (LINE Official Account) continues to grow strongly, up 15.3% year over year.

A shopping tab will be added to the LINE app in stages starting in the second half of FY2025, providing a purchasing experience originating from the messenger app. The LYP Premium membership program is being used to promote cross-usage across the group, linking e-commerce transaction volume growth with growth in PayPay membership. E-commerce transaction volume reached ¥4,672.9 billion in FY2026 (ending March 2026), up 7.1% year over year.

The company has successively brought BEENOS (cross-border e-commerce, consolidated May 2025), LINE MAN CORPORATION (Thailand food delivery, consolidated September 2025), LINE Bank Taiwan Limited (internet-only bank, consolidated June 2025), and LYST LTD (global fashion e-commerce, consolidated April 2025) into the group, expanding the group's business scale and geographic diversity. Under the FY2026-2028 capital allocation policy, more than approximately 30% of the cumulative growth investment envelope is planned to be allocated to M&A and similar initiatives.

Following the information leakage incident in November 2023, system separation and private network separation from NAVER Corporation and NAVER Cloud Corporation were completed by the end of March 2026. Key measures established as recurrence prevention have been completed, aiming to restore trust and strengthen business continuity. Ransomware countermeasures are also being pursued as a priority in coordination with group companies.

Last updated: July 19, 2026