BASE,Inc. Q3 FY2025 earnings call

• Corporate Mission and Strategic Structure

  • BASE Group's mission is "Payment to the People, Power to the People", focused on empowering individuals and small teams through fintech, payments, and e-commerce products focused on online financial transactions.
  • The group's business model is structured around generating GMV from platform users, then earning take rates from cross-group value-added services to drive top-line and bottom-line growth.
  • Following the acquisition of Eストアー in July 2025, total group annual GMV has reached 500 billion yen.

• M&A and Eストアー Integration Progress

  • Management pursues M&A to expand either GMV or take rate capacity, prioritizing deals that deliver clear synergy benefits aligned with the group's existing cross-selling strengths.
  • Eストアー, a 100 billion yen annual GMV e-commerce platform, was acquired for a total transaction value of 3.3 billion yen, with a provisional goodwill value of 2.205 billion yen, annual amortization of 0.157 billion yen, and 0.034 billion yen amortization expected for FY2025.
  • A new management team led by a former BASE COO was installed at Eストアー to accelerate integration. Short-term synergy work focuses on cost cutting, including replacing Eストアー's existing payment processing with PAY.JP. Long-term synergy will focus on cross-group take rate growth and top-line expansion.

• Product Updates

  • The Pay ID shopping app (a shared shopping mall for independent BASE e-commerce stores) introduced paid fees starting July 1, 2025, which successfully lifted BASE segment take rate as expected.
  • PAY.JP will add PayPay as a new payment method for merchants starting in early 2026, to support new merchant acquisition through product expansion and improved marketing.

• Q3 2025 Consolidated Performance (excluding Eストアー P/L)

  • Consolidated Q3 revenue grew 23.6% YoY, 9-month cumulative revenue grew 24.4% YoY.
  • Consolidated Q3 gross profit grew 31.9% YoY, 9-month cumulative gross profit grew 29.9% YoY, with consolidated gross profit margin rising to 48% driven by the higher contribution and margin of BASE segment.
  • Selling, general and administrative (SG&A) expense came in below plan in Q3, leading to operating profit that exceeded consensus and internal plan, while operating profit remained positive (consistently profitable).
  • As of end-Q3, total headcount reached ~400 people following the Eストアー acquisition, cash holdings stood at 22.007 billion yen, with ~12 billion yen of dry powder available for future M&A and shareholder returns.

1. BASE segment: Q3 2025 GMV grew 9.1% year-over-year (YoY), with growth in both store count and average GMV per store. Following the July 2025 paywall introduction for the Pay ID app, the segment's take rate rose to 7%. Revenue increased 20.8% YoY, gross profit increased 28.1% YoY, and gross profit margin reached 64.4% (up from the prior quarter). Pay ID app transactions accounted for 12.8% of BASE segment GMV in Q3, with additional fees applied to this volume. 2. PAY.JP segment: Q3 2025 GMV grew 9.9% YoY, with steady overall performance (moderate slowdown driven by slower growth from top-tier merchants, while small and medium merchants remained solid). Take rate held stable from the prior quarter, revenue grew 10.7% YoY, and gross profit grew 20.3% YoY due to cost reductions that improved gross profit margin. 3. YELL BANK segment: The factoring service for BASE shops continues to grow, with revenue up 20.9% YoY and gross profit up 21.8% YoY, in line with management expectations, after the outsized YoY growth from 2024's product upgrade cycle normalized. 4. Eストアー: Not yet included in Q3 2025 P/L consolidation (only balance sheet consolidation completed in Q3). For Q3 2025, Eストアー posted GMV of 22.384 billion yen, revenue of 1.038 billion yen, and gross profit of 0.671 billion yen, and will be included in P/L starting in Q4 2025.

• Full-year FY2025 (December 2025) guidance has been upwardly revised to incorporate the P/L consolidation of Eストアー starting in Q4 2025; guidance for existing business remains unchanged.
  • Revenues revised from 19.6 billion yen to 20.836 billion yen
  • Gross profit revised from 9.085 billion yen to 9.843 billion yen
  • EBITDA revised from 1.034 billion yen to 1.233 billion yen
  • Eストアー is expected to contribute ~1.2 billion yen in revenue and ~0.75 billion yen in gross profit for FY2025.
  • Goodwill amortization for Eストアー is expected to be 0.034 billion yen for FY2025 (provisional value, subject to adjustment at year-end).
• Management expects SG&A spending to increase in Q4 2025 for planned mass marketing and year-end promotional campaigns, so full-year FY2025 results are expected to land in line with the revised plan despite the higher Q3 year-to-date operating profit progress.
• The company announced its first ever dividend for FY2025, with a planned 4 yen per share dividend, targeting a 30% payout ratio going forward. The company will maintain a balance between growth investment and ongoing shareholder returns moving forward.

• The want.jp business is facing headwinds from external factors and is underperforming relative to plan.
• Provisional goodwill for the Eストアー acquisition may change when final valuation is completed at year-end.
• The company's large cash holding is subject to execution risk for future M&A, as management relies on identifying attractive synergetic targets to deploy capital for non-organic growth.

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