BASE,Inc. Q2 FY2025 earnings call

• Core Overall Performance

  • Consolidated second quarter revenue grew 22.5% YoY, gross profit grew 25.9% YoY, and operating profit has remained positive (in the black) as planned.
  • Cumulative first half revenue grew 24.8% YoY, cumulative gross profit grew 28.8% YoY, and operating profit exceeded plan due to controlled selling, general and administrative (SG&A) expenses.
  • Group GMV from BASE and PAY.JP exceeded 400 billion yen annually, reaching a quarterly run rate of over 100 billion yen; adding E Store's 100 billion yen annual GMV will bring total group annual GMV to approximately 500 billion yen.

• Completed Strategic Initiatives

  • Completed full acquisition of Eストアー (E Store) as a wholly owned subsidiary on July 18, 2025, with a former BASE COO appointed as E Store's new CEO to drive synergy realization.
  • Implemented monetization of the Pay ID shopping app starting July 1, 2025, charging a 9.5% + 40 yen fee per transaction for Pay ID-originated sales, which currently account for 15% of BASE business GMV.
  • Launched official API integration with TikTok Shop, enabling seamless end-to-end product discovery and purchase within the TikTok app to expand sales channels for small business merchants.

• Financial and Capital Strategy

  • Completed a 1 billion yen share repurchase in April 2025. The company will continue shareholder returns alongside M&A growth, making decisions based on share price for repurchases and profit levels for dividends.
  • Maintains a strong balance sheet with 19 billion yen in cash and cash equivalents as of the end of June, with approximately 9 billion yen in available capital for future M&A and shareholder returns.

1. BASE Business: GMV increased 11.5% YoY, with growth in both total store count and average GMV per store. Revenue increased 17.3% YoY, gross profit increased 19.4% YoY, and gross profit margin remained stable sequentially. It accounted for the largest share of total group revenue, with its revenue contribution percentage increasing compared to the previous quarter.
2. PAY.JP Business: GMV increased 10% YoY, with slower growth driven by moderated expansion from previously high-growth top-tier merchants, while overall performance including mid-sized and larger merchants remains solid. Revenue increased 9.1% YoY, gross profit increased 19.5% YoY, and gross profit margin improved sequentially due to lower cost ratios. Take rate remained stable sequentially.
3. YELL BANK Business: This factoring service for BASE shops saw revenue increase 20.5% YoY, and gross profit increase 21.3% YoY. Growth rate moderated from the sharp expansion seen after 2024 functional improvements, but continues to grow steadily. Outstanding factoring receivables increased to 1.3 billion yen as the business grows.

• Full-year 2025 guidance does not yet include consolidated results from E Store, which will begin consolidation in the fourth quarter. Updated guidance including E Store will be disclosed when the third quarter earnings are released.
• Costs are expected to remain weighted to the second half of the fiscal year, in line with historical trends, so the higher-than-expected operating profit progress in the first half is not expected to change full year cost projections.
• Management maintains a target of sustainable long-term GMV growth to expand the group's core revenue base, and will continue pursuing synergistic M&A to drive discontinuous growth.

• Mr. Maki's extended public tender offer for BASE shares has been extended to August 14, 2025 with an increased offer price. The BASE board of directors maintains opposition to the tender offer but has not enacted defensive measures as of August 5, 2025.
• While management has spent significant time on the tender offer issue, the company confirms that core business operations remain on track due to on-the-ground team efforts, though there is some distraction risk for leadership.
• The transaction cut from Pay ID only applies to 15% of BASE GMV, but merchant acceptance of the new fee structure is still unproven, which could impact future GMV growth if it leads to reduced merchant participation.

Q: What is the expected quarterly contribution of Pay ID's monetization to gross profit for this fiscal year, and was this impact included in the original full-year plan? / A: The call transcript provided cuts off before the full answer, but management confirms the new 9.5% + 40 yen fee applies only to the 15% of BASE GMV that originates through the Pay ID app. The existing base fee for direct sales through merchant-owned BASE sites remains unchanged.

Q: What are the main drivers of the increase in 'other SG&A expenses' compared to last year? / A: The main YoY increase comes from the consolidation of the want.jp business, which was added to the group after last year's second quarter. There was also a sequential increase from higher third-party contractor fees and professional service payments. The increase was in line with internal expectations.

Q: What has caused the improvement in PAY.JP's gross profit margin, and is this improvement sustainable? / A: Gross margin improved due to targeted reductions in underlying service costs for payment processing. The stable take rate and growing GMV have allowed operating leverage to improve margin, and management expects this trend to continue as the business scales.

Q: What are the primary user acquisition channels for the core BASE service currently? / A: The transcript cuts off before the full answer, but management notes that BASE has active integrations with major digital platforms including Instagram, Google, and now TikTok Shop to drive new merchant acquisition and expand sales channels for existing users.