Key Positives From The 2Q Results
Cost structure improvements continued, with operating income up 161.6% against revenue growth of +14.3% — clear evidence of operating leverage. GPV expansion to JPY 1,128.9B (+15.2% YoY) also lifted recurring profit through higher interest income, and every profit line came in ahead of company plan.
- Operating income of JPY 154M (+161.6% YoY) and recurring profit of JPY 243M (+61.0% YoY). Both beat company plan by JPY 13M and JPY 5M, respectively
- SG&A of JPY 1,731M (+6.6% YoY) grew more slowly than revenue. Personnel expenses of JPY 881M rose just +0.6% YoY
- Standalone 2Q GPV of JPY 579.2B was a record for a second quarter. Cumulative GPV of JPY 1,128.9B drove company-wide growth
- DX/mini-app revenue of JPY 183M (+32.0% YoY) was the only line to beat plan, at +1.5%. The Yokohama Motomachi and Yokohama Chinatown gift certificate program contracts contributed
- Interim net income of JPY 203M (+59.5% YoY) represents 41.3% progress toward the full-year plan of JPY 493M (our estimate)
Key Concerns From The 2Q Results
Revenue missed plan by JPY 225M (-8.4%), the second consecutive quarterly shortfall after 1Q. GPV was also 4.2% below plan, as higher crude prices weighed on average ticket sizes at retail chains and gas stations, compounded by soft Chinese inbound spending. These are key items to watch for full-year plan achievement.
- Revenue of JPY 2,467M was 8.4% below the JPY 2,692M plan. GPV of JPY 1,128.9B was JPY 50.1B below plan
- Payment-related revenue (excluding terminal sales) was JPY 1,952M, up just +4.7% YoY — well below GPV growth of +15.2% (our estimate)
- Gross profit margin of 76.4% (-1.6pt YoY), mainly reflecting higher cost of sales from the elevated terminal mix in 1Q
- Standalone 2Q terminal sales of JPY 12M were JPY 28M below the normal run-rate of JPY 40M. New terminals are slated for September launch, creating a gap period
- Operating cash flow of JPY 1,181M (vs. JPY 2,624M a year earlier). The increase in deposits received narrowed to JPY 1,220M from JPY 2,457M
Focus Areas / Items To Monitor Going Forward
- The sales ramp of the new "SUNMI P3H" terminal launching in September, and whether replacement wins from competing gateway providers drive both terminal sales and new GPV
- Of the JPY 500M full-year operating income target, JPY 359M (71.8%, our estimate) is planned for 2H. Timing of large new account go-lives from 3Q onward
- Commercialization progress of "Stablecoin Pay". Merchant rollout pace following the Lawson pilot and the timing of earnings contribution
- Why payment-related revenue (excluding terminal sales) grew more slowly than GPV, and whether there has been a structural change in take rates
- Assumptions embedded in the full-year GPV plan of JPY 2,547.4B given 1H progress of only 44.3%, and 2H assumptions for inbound tourism and crude price impacts
- Unit sales targets for the new SUNMI P3H terminal and the impact of terminal gross margins on company-wide gross profit margin
- Criteria for initiating a dividend following the newly established shareholder benefit program, and capital allocation policy between growth investment and shareholder returns
- Monetization roadmap for each partnership under the StarPay-X initiative (Canton, Startale, Bitget Wallet, etc.)
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 2,467M | +14.3% |
| └ Payment-related | JPY 2,179M | +12.2% |
| └ DX/mini-app | JPY 183M | +32.0% |
| └ Other | JPY 104M | +36.7% |
| Cost of Goods Sold | JPY 581M | +22.3% |
| Gross Profit | JPY 1,886M | +12.1% |
| Gross Profit Margin | 76.4% | -1.6pt |
| SG&A | JPY 1,731M | +6.6% |
| └ Personnel expenses | JPY 881M | +0.6% |
| └ Depreciation & amortization | JPY 109M | -11.2% |
| Operating Income | JPY 154M | +161.6% |
| └ Interest income | JPY 95M | +31.8% |
| Recurring Profit | JPY 243M | +61.0% |
| Interim Net Income Attributable to Owners of Parent Company | JPY 203M | +59.5% |
| EPS | JPY 12.06 | +57.6% |
| Diluted EPS | JPY 11.90 | +58.5% |
| Gross Payment Volume (GPV) | JPY 1,128.9B | +15.2% |
| Cash Flow from Operating Activities | JPY 1,181M | -55.0% |
Cost of Goods Sold grew faster than revenue primarily because terminal sales were concentrated in 1Q. Of cumulative terminal sales of JPY 226M, only JPY 12M came in standalone 2Q (our estimate, derived from company-disclosed service mix).
Performance By Business Segment
The company operates a single fintech segment, so no segment information is disclosed. By service line, payment-related revenue accounted for 88.3% of total revenue, while DX/mini-app rose to 7.5% of the mix. Payment-related revenue excluding terminal sales represented 79.1% of company-wide revenue.
Segment Performance Table
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Fintech (single segment) | JPY 2,467M | +14.3% | JPY 154M | +161.6% | 6.3% |
- DX/mini-app: +32.0%. Beyond continued rollout of self-checkout and municipal wallet solutions, newly won secretariat contracts for the Yokohama Motomachi premium digital gift certificate and Yokohama Chinatown coupon programs contributed
- GPV (total): +15.2%. Solid domestic demand centered on retail, growth in large merchants, and new merchant acquisition tracked to plan
- Payment brands: Four brands added in 1H, including stablecoins such as USDT and JPYC. "Stablecoin Pay" launched in July, opening applications to general merchants
- Overseas expansion: Merchant count in Qatar exceeded 3,000 stores, +112.2% vs. 2023. JPQR Global connected to Cambodia and Indonesia
- Terminal sales (standalone 2Q): JPY 12M, JPY 28M below the normal run-rate of JPY 40M. The certification transition period from legacy to new terminals eliminated sales opportunities
- Overseas QR (inbound): The decline in Chinese inbound consumption was weaker than expected. Although limited at 7.3% of GPV for FY2025, it contributed to the plan shortfall
- GPV from retail chains and gas stations: Slightly below plan on higher crude prices — the main driver of the 4.2% GPV shortfall versus plan
Progress Versus Full-Year Guidance
Revenue progress of 42.8% trailed the 45.1% recorded a year earlier, but operating income progress of 30.9% exceeded the prior-year 20.2%. The company's quarterly plan allocates JPY 359M of operating income to 2H (71.8% of the full year, our estimate), with large new account go-lives and the September terminal launch underpinning this 2H-weighted profile.
| Item | Value (1H Cumulative) | Full-Year Forecast | Progress Rate |
|---|---|---|---|
| Revenue | JPY 2,467M | JPY 5,760M | 42.8% |
| Operating Income | JPY 154M | JPY 500M | 30.9% |
| Recurring Profit | JPY 243M | JPY 707M | 34.4% |
| Net Income Attributable to Owners of Parent Company | JPY 203M | JPY 493M | 41.3% |
| Gross Payment Volume (GPV) | JPY 1,128.9B | JPY 2,547.4B | 44.3% |
- The company plan is 2H-weighted. The quarterly plan assumes 4Q revenue of JPY 1,600M and GPV of JPY 709.1B, the highest levels of the year
- FY2025 actuals followed the same pattern, with 4Q revenue of JPY 1,420M the highest quarter. Cumulative new merchant additions structurally expand GPV in the back half of the year
Changes To Guidance
No change from the full-year guidance announced on February 12, 2026. While all profit lines beat plan in 1H, revenue and GPV missed; the company left full-year guidance unchanged.
Commentary On Shareholder Returns
The dividend forecast remains JPY 0.00 per annum, unchanged from the prior year. Alongside the results, the company announced a new shareholder benefit program: shareholders holding 100 shares or more as of the December 31 record date each year will receive a digital gift worth JPY 2,000 (a 2.9% benefit yield against the July 2026 average share price of JPY 684, per company disclosure). No holding-period requirement applies in the first year; from the second year onward, continuous holding of at least one year is required. Management stated it will consider a dividend based on the balance between financial position and growth investment.
Financial Position
The company carries no borrowings and remains effectively debt-free. Cash and deposits account for 94.1% of total assets, but the bulk corresponds to deposits received — settlement funds pending remittance to merchants. The equity ratio of 19.9% was flat versus the prior year-end.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Cash Equivalents | JPY 37,425M | +3.4% vs. prior year-end |
| Total Assets | JPY 39,775M | +3.7% vs. prior year-end |
| └ Software | JPY 427M | -13.6% vs. prior year-end |
| Deposits received | JPY 31,351M | +4.0% vs. prior year-end; 98.4% of total liabilities |
| Interest-Bearing Debt | - | No borrowings recorded |
| Shareholders' Equity | JPY 7,918M | +3.7% vs. prior year-end |
| └ Retained earnings | JPY -4,482M | Improved by JPY 203M on interim net income |
| EBITDA | JPY 264M | Operating income 154 + D&A 110 (our estimate) |
News Released Alongside The Earnings Announcement
Major Announcements During The Quarter
- 2026/06/04Basic agreement to partner with Bitget Wallet, a self-custody wallet with over 90 million users, advancing multi-wallet support under the StarPay-X initiative NETSTARS Reaches Basic Agreement on Partnership with Bitget Wallet
- 2026/06/15MOU signed with Startale Group, which is developing a JPY-denominated stablecoin, to jointly explore multi-coin digital currency support NETSTARS Reaches Basic Agreement with Startale Group on Partnership to Promote Web3 Payments
- 2026/07/07Basic agreement with the Canton Foundation of Canton Network on real-world implementation of Web3-based payments, to be reflected in the technology foundation for the StarPay-X initiative NETSTARS Reaches Basic Agreement with Canton Foundation on Partnership for Real-World Implementation of Web3 Payments
- 2026/07/13Full launch of "Stablecoin Pay," supporting multiple stablecoin payments. Supports USDC, USDT, and JPYC at a 0.98% fee Japan's First*: Full Launch of "Stablecoin Pay" Supporting Stablecoin Payments
- 2026/08/03Announced an August 17 pilot of POS-integrated Stablecoin Pay settlement at the Lawson Osaki Atrium store, testing real-world implementation at a physical convenience store In-Store Payment Pilot of "Stablecoin Pay" at a Lawson Store to Be Conducted on August 17
Large-Shareholding Filings / Material Proposals Over The Past Year
- LUN Partners Capital Limited (including joint holders): 9.38%→6.80% (2026/05/22) - Purpose of holding stated as "pure investment to capture returns from the issuer's growth"; no material proposal actions applicable
- LUN Partners Capital Limited (including joint holders): 6.80%→5.27% (2026/06/17) - Pure investment purpose. Breakdown: LUN Partners Capital Limited 2.85%, LUN Partners Japan Investment 2.41%
- LUN Partners Capital Limited: Amended report filed (2026/06/17) - Corrected the reason for filing Change Report No. 3 to a decrease in shareholding of 1 percentage point or more
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