4477.T

• Full Year 2025 Overall Performance

  • Consolidated full year net sales reached 20.729 billion yen, in line with plan. Gross profit reached 9.989 billion yen, above plan, growing 39.4% YoY. Operating profit reached 1.686 billion yen, growing 118.2% YoY and significantly beating forecast, thanks to controlled selling, general and administrative expenses. Net income reached 1.826 billion yen, also significantly beating forecast.
  • Group quarterly GMV reached 138.054 billion yen, bringing full year group GMV to approximately 500 billion yen following the addition of Estore Shop Serve's GMV. Group gross profit margin rose to 51.9% after the consolidation of Estore, and operating profit achieved four consecutive quarters of profitability, with Q4 2025 operating profit of 541 million yen. The company maintains a strong financial foundation, with 26.8 billion yen in cash and cash equivalents as of December 2025, of which approximately 10 billion yen is available for growth investments and shareholder returns.
  • 13 billion yen in goodwill and 1.1 billion yen in customer-related intangible assets were recorded following the consolidation of Estore.

• Business Model & Mid-Term Management Strategy

  • The company classifies its products into two core categories: products that grow group GMV, and products that generate incremental value and higher take rates from existing GMV. Management pursues parallel strategies to expand GMV and increase take rates, with all initiatives (existing business, new business, M&A) tracked and managed against these two core goals.
  • The mid-term plan targets more than 20% annual net sales growth, alongside improvements in EBITDA margin and operating profit margin. Existing businesses will pursue organic growth, with inorganic growth via M&A and partnerships targeted from 2027 onwards.

• AI Strategy

  • The company launched BASE AI VISION this year with the theme "AI to the People", aligned with its core mission of "Payment to the People, Power to the People", and views AI as the core enabler of empowerment in the coming AI era. The company leverages 13 years of accumulated user data, combining AI with its commerce interface to expand the total volume of monetization opportunities via payment and finance (the company's core monetization advantage, rather than monthly product subscription fees).
  • For the BASE business, the company aims to fully AI-native the entire merchant EC value chain, evolving beyond an AI-enhanced EC platform to an AI-first EC product that allows merchants to focus on product development and sales, with all other operations handled by BASE. One current example is the AI-powered cross-border EC feature, developed via synergy with group company want.jp, that automatically determines international shipping eligibility, calculates package size/weight and shipping rates, and handles shipping forwarding -- allowing small merchants to offer cross-border sales with the same effort as domestic sales, with no fixed fee for access to the feature.

• Group Synergy

  • Cross-business group synergy is a core strength of the company, and successful features will be rolled out across all group products. For example, the AI-powered cross-border selling feature developed for BASE will be expanded to Estore Shop Serve merchant partners in the coming period. Many cross-group synergy projects are currently in progress and will be launched sequentially starting in 2026. Strong synergy capabilities also improve the value of M&A targets and enable unique M&A opportunities for the company.

• M&A & Inorganic Growth

  • Post-merger integration of Estore (acquired in 2025) is progressing smoothly, with a clear path to synergy realization and positive impacts on financial performance already visible. The company prioritizes M&A that delivers strong group synergy: ideal targets are either firms with large existing merchant bases and GMV that can gain incremental value (especially payment services) from joining the BASE group, or firms that can add new value to BASE's existing merchant and GMV base.
  • GMV expansion is the top priority for M&A, as organic growth alone cannot meet the company's GMV expansion goals. The company primarily targets EC operators in the physical goods space, with additional consideration for service and digital content EC providers. The company will not pursue size for size's sake, and will only pursue M&A that aligns with its mission, delivers strong synergy, is mutually beneficial, and creates positive social impact.

• Shareholder Return

  • For the 2025 full year, the company plans to pay an inaugural dividend of 5 yen per share, based on a target 30% payout ratio aligned with the stronger-than-expected net income result.

• 2026 (ending December 2026) is expected to be a year of stable growth for existing businesses and realization of group synergy benefits. Management forecasts 36.9% YoY net sales growth and 40.9% YoY gross profit growth, with continued growth in EBITDA alongside top-line expansion.
  • Key growth drivers for 2026 include: contribution from the BASE and want.jp cross-border sales feature to top-line and profit growth, and gross profit improvement from cost reductions after moving Estore Shop Serve card processing to the existing PAY.JP infrastructure.
  • For 2026, the company maintains a shareholder return policy of 5 yen per share dividend, plus a 1 billion yen share repurchase program for flexible, opportunistic shareholder return.
  • For the mid-term plan, the company revised the operating profit increase range lower than the prior mid-term plan, which reflects adjusted forecasts after accounting for varied top-line growth across segments and the addition of the newly consolidated Estore business. No large unexpected increases to selling, general and administrative expenses for headcount or marketing are planned.

For the full year 2025 (ended December 2025):

1. BASE事業 (BASE Business):
   • Q4 2025 GMV grew 11.7% YoY, driven by promotional support for the year-end shopping season. Take rate increased 6.9% YoY following the paid launch of the Pay ID shopping app starting in Q3 2025. Full year sales grew 22% YoY, gross profit grew 30% YoY, and gross profit margin steadily improved YoY alongside the rising take rate. This segment contributed approximately 60% of total consolidated sales.
2. PAY.JP事業 (PAY.JP Business):
   • Q4 2025 GMV grew 3.2% YoY, with a stable take rate. Full year sales grew 4.1% YoY, and gross profit grew 11% YoY driven by gross profit margin improvements.
3. YELL BANK事業 (YELL BANK Business):
   • Full year sales grew 16.6% YoY, and gross profit grew 17.4% YoY, in line with management expectations.
4. Eストアーショップサーブ事業 (Estore Shop Serve Business):
   • Consolidated into results starting in Q4 2025. Q4 2025 sales were approximately 1.3 billion yen, gross profit was approximately 700 million yen. This segment contributes approximately 20% of total consolidated sales.

No explicit discussion of material operational risks or failures was included in the provided transcript.

Q: Why has the operating profit growth target for 2026 been reduced compared to the previous mid-term plan?

A: First, profitability across all business segments has not deteriorated, and performance improvements in 2025 have proceeded largely as planned. The downward adjustment reflects uneven top-line growth across segments, with some segments growing in line with plan while others have underperformed initial expectations. The adjustment also incorporates the addition of the newly consolidated Estore Shop Serve business into the mid-term plan. There have been no unexpected large increases to selling, general and administrative expenses for personnel or marketing investments.

Q: What is the outlook for the equity ratio after the recent decline?

A: The company has not set a specific target equity ratio at this time. Profit will continue to accumulate steadily under the current business structure, and the company still has excess cash available. The company plans to allocate excess cash to inorganic growth investments like M&A, while retaining a portion of excess cash for continued shareholder returns, and will proceed with capital structure management that balances these priorities.

Q: Why has BASE business GMV growth slowed, and what is the trend in merchant churn?

A: The slower GMV growth compared to previous years is primarily driven by a broader slowdown in overall EC market growth, especially for physical goods EC, which now is growing at a single-digit pace overall. BASE has maintained double-digit GMV growth, outpacing overall market growth and peer performance, even if it has not reached the higher growth rates of earlier periods. Regarding churn, there has been no meaningful deterioration in churn rates, and the total number of active merchant stores continues to grow, reflecting the positive results from strengthened marketing initiatives over the past year.

Q: Will purchased receivable growth for YELL BANK accelerate starting from Q1 2026?

A: YELL BANK is expected to deliver planned growth in 2026, with growth exceeding the GMV growth rate of the BASE business. There are no specific factors that will drive acceleration in Q1 specifically; growth will be spread evenly across the full year. Over the past two years, YELL BANK has expanded its product offering beyond future receivable purchasing for BASE merchants. While the new product lines have not yet had a material impact on the P&L, the company will continue expanding the business's product portfolio in 2026.