Yappli,Inc. Q3 FY2025 earnings call

Core Financial Performance

• All core metrics hit all-time record highs: total revenue, operating profit, and ARR all grew both year-over-year (YoY) and quarter-over-quarter (QoQ).
• Third quarter gross profit reached 1.022 billion yen, up 5.1% YoY; gross margin held steady around 66% as server cost efficiencies offset growing personnel expenses.
• Third quarter operating profit hit 274 million yen, up 30% YoY, with an operating margin of 17.8%, well above 15%. Higher profit was driven by advertising spend efficiency gains versus original budget.
• Net contracted app growth was 12 QoQ, average monthly usage fee reached 460 thousand yen, up steadily YoY.

Operational Efficiency & Resource Allocation

• Advertising and promotion expenditure was 145 million yen in Q3, below original budget; mass marketing spend was reduced from a steady 15 million yen per quarter to 10 million yen, with plans for further gradual reductions.
• Customer acquisition cost (CPA) improved despite lower spend, meaning the quarter delivered advertising efficiency gains rather than just cost cuts.
• Hiring was stronger than planned: full-time headcount already reached 283 versus an initial full-year target of 280, with a projected 290 total by year-end, leading to higher personnel costs.
• Selling, general & administrative (SG&A): S&M spend share fell significantly due to advertising efficiency, while R&D spend increased substantially to fund high-impact feature enhancements for core products like the Yappli platform.
• The company plans to invest ~200 million yen in marketing in Q4 to drive growth for the remainder of the full year and 2026.

Strategic & Product Updates

• Completed acquisition of Fukuoka-based startup 株式会社チューズモンスター, which offers LINE mini app-based mobile ordering solutions for restaurants. The acquisition supports Yappli's multi-product strategy, adds LINE mini app market entry, and brings food industry expertise to improve Yappli's sales and marketing.
• Strengthened third-party integrations: Launched integration with Braze to enable real-time personalized push notifications and email based on in-app behavior data, supporting advanced 1:1 marketing for Yappli clients.
• Completed full brand and product refresh for UNITE by Yappli, including adding enhanced in-app point features to improve internal employee engagement, following the product passing the 100-client milestone.
• Announced multiple new feature upgrades across the full product portfolio (Yappli, Yappli WebX, Yappli CRM) at the annual Yappli Summit customer event, covering user experience, notifications, analytics and more.
• Secured new prominent enterprise clients: Workman (leading apparel retailer) adopted Yappli for Marketing as a core B2C customer touchpoint; Japan Post Bank adopted UNITE for internal employee communication and benefits delivery. Noted a case study for Marui Group Union that combined Yappli and Yappli WebX to enable multi-channel access for employee information, demonstrating the value of the company's multi-product, cross-channel strategy.

1. UNITE (internal employee app): Achieved 11 net new apps quarter-over-quarter, growing from 106 to 117 total contracted apps, marking the first double-digit net increase. It led overall contracted app growth and average monthly fee increases. 2. Yappli for Marketing (retail/EC customer-facing app): Grew slightly to 583 total contracted apps, also contributing to average monthly fee increases. 3. Professional Services (initial app development, app marketing): Revenue was strong driven by strong order intake in the prior quarter, which increased app development-related revenue. 4. Stock-type Platform Revenue: Grew steadily to achieve a record-high quarterly revenue. Total contracted apps across all segments reached 908, passing the 900 unit milestone. ARR (Annual Recurring Revenue) reached over 5 billion yen (50亿円) driven by steady growth in app count and average per-app pricing.

• Full-year revenue guidance is maintained at 6.2 billion yen, following a 72% progress rate through Q3 which is 2 percentage points behind last year's pace. Management is prioritizing aggressive sales activity in the remaining November and December to hit the full-year target.
• All full-year profit metrics are upwardly revised: Operating profit increased from 750 million yen to 830 million yen; net income increased from 830 million yen to 920 million yen; adjusted EBITDA increased from 810 million yen to 890 million yen. Profit progress against the revised guidance is already strong, at 87.2% for operating profit, 77.7% for net income, and 88.2% for adjusted EBITDA.
• Full-year annual dividend per share is upwardly revised from 12 yen to 13 yen, with a planned 7 yen per share dividend for the December record date.

• Revenue is slightly behind the full-year guidance pace, creating uncertainty for end-of-year results that requires aggressive sales action in the final two months of the fiscal year.
• LTM (last twelve months) churn increased slightly to 0.87%, driven by higher average churned contract value for Yappli for Marketing, even as total churn volume fell. Management notes the situation remains uncertain and requires improvement.
• LTV/CAC ratio decreased slightly to 4.8x due to the churn increase, partially offset by improved customer acquisition costs. Management assesses the 4.8x level remains within acceptable range.

No question and answer section was included in the provided transcript.