Net Protections Holdings, Inc.

Business Details

Provides credit-risk-guarantee-type BNPL (Buy Now Pay Later) settlement services. Offers a one-stop outsourced settlement solution covering credit screening, invoicing, payment confirmation, collections/dunning, and bad-debt handling. Provides multiple services for BtoC (NP Atobarai, NP Atobarai air, AFTEE, atone) and BtoB (NP Kakebarai) in Japan, Taiwan, and Vietnam. The number of member merchants spans tens of thousands, resulting in low dependence on any specific merchant, while the business structure remains susceptible to the impact of macroeconomic changes on the EC and settlement markets.

Recent Overview

GMV and profit exceeded forecasts while operating revenue fell short; declining NP Atobarai fee rates remain a challenge

In FY2026 (ending March 2026), GMV increased 19.1% year on year to ¥764,384 million (exceeding the forecast), and operating profit rose sharply by 35.4% year on year to ¥2,848 million. On the other hand, operating revenue of ¥25,214 million fell short of the forecast, primarily due to reduced transaction volume at some NP Atobarai member merchants and a decline in fee rates amid intensifying competition. atone (GMV +55.4%) and the B2B service (GMV +38.5%) drove strong growth. Gross profit increased 14.3% year on year, with profitability improving partly due to reduced bad-debt-related expenses. For FY2027 (ending March 2026 [sic]), the company forecasts operating revenue of ¥27,800 million (+10.3%), GMV of ¥890,000 million (+16.4%), and operating profit of ¥3,600 million (+26.4%).

Key Products

Growth Drivers

• High growth in the B2B service (NP Kakebarai): Capturing DX demand for settlement operations driven by a shrinking labor force and workstyle reform, GMV increased 38.5% year on year to ¥343,868 million. Continuing to drive acquisition of large merchants through partner company collaboration
• Rapid expansion of atone: GMV increased 55.4% year on year to ¥62,090 million, driven by new merchant onboarding in the digital-content and non-physical-goods EC space and expanded transactions with existing merchants. Aiming for further expansion through strengthened PSP partnerships
• Growth of NP Atobarai air and AFTEE: New merchant acquisition driven by billing-operation DX demand progressed smoothly, supporting gross profit in the BtoC services (NP Atobarai and others) category
• Improvement in bad-debt-related and billing-related expenses: Improved receivables collection status and earlier collection timing improved the gross profit margin of NP Atobarai, lowering the ratio of bad-debt-related expenses to GMV
• Advancement of operational efficiency: As a result of GMV growth and operational efficiency gains, the ratio of SG&A expenses to GMV declined, improving the operating profit margin from 9.1% in the prior period to 11.3%
• Medium-term management plan (FY2026–FY2028, ending March 2026–2028): Targets GMV exceeding ¥1 trillion and operating profit of ¥4.0 billion in FY2028 (ending March 2028), with a planned three-year operating profit CAGR of 25%

Risks

• Impact of macroeconomic changes on the EC and settlement markets: While the number of member merchants is diversified at tens of thousands, business performance remains susceptible to overall EC market trends
• Downward pressure on NP Atobarai fee rates: Fee rates have been trending downward amid intensifying competition, making it apparent that GMV growth does not directly translate into operating revenue growth. Operating revenue in FY2026 (ending March 2026) fell short of the performance forecast
• Decline in the ratio of operating revenue to GMV: The ratio of operating revenue to GMV has continued to decline due to a rising share of B2B services with relatively lower fee rates and declining fee rates for NP Atobarai
• Bad debt risk: For B2B services whose primary users are small and micro businesses, there is a risk that the rate of payment delays will rise during an economic downturn, potentially requiring increased allowance for doubtful accounts. The balance of the allowance for doubtful accounts stood at ¥6,771 million (as of the end of March 2026)
• Goodwill impairment risk: Goodwill of ¥11,608 million is recorded on the consolidated balance sheet, and impairment losses could arise from a decline in future cash flows or an increase in the discount rate
• Information security risk: As the company handles substantial amounts of important information assets including personal data, security incidents such as information leaks or unauthorized access pose a risk of material impact on the business