GPV reached JPY 2.1T (+33.2% YoY), achieving first-ever operating profitability; FY2026 operating income guidance of JPY 500M puts growth sustainability to the test

Key Positives From The Results

Gross payment volume (GPV) surged to JPY 2,122.8B (+33.2% YoY), with revenue up +22.7% and operating income of JPY 293M, marking the company's first full-year operating profit. Recurring profit came in at JPY 443M, aided by JPY 142M in interest income, while net income swung to JPY 485M thanks to a JPY -144M income tax adjustment from deferred tax asset recognition.

• GPV Of JPY 2,122.8B (+33.2% YoY):
  Driven by large merchant acquisitions and rising cashless penetration
• Operating Income Turnaround From JPY -84M To JPY 293M:
  Gross margin held at 76.6% (+0.3pt YoY) while revenue growth of +22.7% outpaced the +10.1% increase in SG&A
• Interest Income Of JPY 142M (vs. JPY 7M Prior Year):
  Investment returns on JPY 30.1B in payment-related deposits boosted recurring profit
• Deferred Tax Asset Of JPY 150M Newly Recognized:
  Tax effect enabled net income of JPY 485M
• Operating Cash Flow Of JPY 2,377M Secured:
  Effectively debt-free balance sheet maintained

Key Concerns From The Results

Revenue growth accelerated to +22.7% from +4.9% in the prior year, but COGS rose +21.5%, with the cost ratio essentially flat at 23.4%.

• Take Rate Structural Decline Risk:
  GPV grew +33.2% YoY but revenue lagged at +22.7%, implying a structural compression in the take rate
• Persistently High Cost Structure:
  SG&A of JPY 3,372M (+10.1% YoY) represents 70.4% of revenue; OPM of 6.1% indicates profitability is still a work in progress
• Office Closure Losses Of JPY 40M Booked As Extraordinary Loss:
  Site consolidation costs incurred
• Operating Cash Flow Declined From JPY 7,510M To JPY 2,377M:
  Primarily due to a slowdown in deposit inflow growth (JPY 7,381M → JPY 2,015M)
• Accumulated Deficit Of JPY -4,685M Remains Unresolved:
  No visibility on dividend initiation

Focus Areas / Items To Monitor Going Forward

• Achieving FY2026 guidance of revenue JPY 5,760M (+20.3%) and operating income JPY 500M (+70.8%) hinges on further GPV expansion and accelerating DX-related revenue growth. Monitor the take rate trajectory and the large merchant pipeline closely
• Revenue contribution timing and scale of the alternative app payment business (subsidiary StarPay-Entertainment established) following enforcement of Japan's new smartphone legislation. Assess the degree of synergy with the existing payments business from entry into the entertainment vertical
• Commercialization progress in emerging areas such as stablecoin payments (Haneda Airport USDC proof-of-concept). Evaluate the impact of payment method diversification on GPV and revenue

Key Financial Highlights

Performance By Business Segment

Progress Versus Full-Year Guidance

This announcement covers full-year results; new full-year guidance for FY12/2026 was simultaneously disclosed. The company targets revenue of JPY 5,760M (+20.3% YoY) and operating income of JPY 500M (+70.8% YoY). Continued GPV expansion and DX-related service growth are expected to drive top- and bottom-line gains, though containing SG&A growth will be critical to achieving the operating income target.

• GPV tends to increase during peak inbound tourism periods (Chinese New Year, Golden Week, summer holidays, year-end/New Year)
• DX-related revenue may fluctuate quarter-to-quarter depending on the timing of large project bookings

Changes To Guidance

This announcement covers full-year results; no guidance revision applies. New FY12/2026 guidance was issued: revenue of JPY 5,760M, operating income of JPY 500M, recurring profit of JPY 707M, and net income of JPY 493M. Net income growth is projected at a modest +1.7% YoY, likely reflecting the roll-off of the deferred tax asset benefit recognized in FY12/2025.

Commentary On Shareholder Returns

The FY12/2025 year-end dividend was JPY 0.00 (no dividend); the FY12/2026 forecast is also JPY 0.00 (continued no-dividend policy). With an accumulated deficit of JPY -4,685M, dividend initiation remains contingent on eliminating the accumulated losses.

Financial Position

The company maintains an effectively debt-free balance sheet, with the equity ratio holding steady at 19.9% YoY. The majority of liabilities comprise payment-related deposits (JPY 30.1B), while interest-bearing debt is zero. Excluding deposits, the underlying financial position is exceptionally sound.

News Released Alongside The Earnings Announcement

Major Announcements During The Quarter

Large-Shareholding Filings / Material Proposals Over The Past Year

• Asset Management One: >5% (filed 2024/10/7) — Investment management purpose
• Li Gang (Representative Director, President & CEO): >5% (filed 2024/10/3) — Management shareholding
• LUN Partners Capital Limited: >5% (filed 2024/10/3) → Increased holding (amendment report No.2 filed 2025/3/21) — Strategic investment purpose
• KJP2 LP: >5% (filed 2024/9/28) — Investment purpose