Commerce One Holdings Inc. Q2 FY2026 earnings call

• Core Business Positioning and Evolution

  • The group focuses on total e-commerce support for domestic mid-sized and small-sized EC merchants, with core business futureshop evolving into a "Master Integrator" model that natively implements key EC strategy functions, handles niche trends via API-linked alliance services, and provides end-to-end hand-holding support to help merchants build independent self-operable EC sites and reduce operational complexity.
  • The group differentiates itself from competitors by offering end-to-end support covering front-end sales/marketing, back-end operation management, and capital financing, which most competitors only focus on one single segment.

• New Product and New Business Launches

  • Social Strategy: Released UGC solution future Review to automatically collect customer reviews, which is proven to increase product sales by 45% when 10+ reviews are available; continues developing live commerce solution Live cottage and added support for TikTok Shop; acquired VTuber marketing business PINES to expand social commerce capabilities, with differentiation built on respecting independent micro VTubers to cultivate high-loyalty fan communities.
  • Capital Support: Launched factoring service One Credit to address EC merchants' urgent working capital needs, with a maximum limit of 30 million yen, faster approval than bank loans, and lower default risk via real-time sales data from existing EC platform customers.
  • Back-end Optimization: Developing multi-channel OMS Commerce Connect to unify data across channels/systems, enabling real-time inventory tracking and operational efficiency, planned for launch in Q3-Q4 of next fiscal year. Long-term plans to add AI-powered demand forecasting.
  • Strategic Growth Pillars: The three core strategic pillars are social commerce, cross-border EC, and multi-channel OMS, with One Credit positioned as the foundational enabler for merchant growth. The group also pursues M&A of complementary businesses and expansion into new adjacent areas including carbon credit certification linked to its existing third-party certification business.

• Financial Performance Overview

  • Consolidated revenue for the 1H period: 1.91 billion yen, up 90 million yen (5.2%) year-over-year. Consolidated operating profit: 205.538 million yen, down 115.122 million yen (35.9%) year-over-year, due to higher upfront investment for new businesses, talent recruitment, R&D, and marketing. Consolidated ordinary profit increased 34.5% year-over-year, and net profit attributable to parent shareholders increased 103% year-over-year, driven by the absence of the prior year's one-time equity method investment loss and non-operating gains.

1. futureshop: Revenue of 1.4 billion yen, up 50 million yen year-over-year; operating profit of 350 million yen, down 50 million yen year-over-year; accounts for over 70% of total group revenue and profit. GMV grew 16.4 billion yen year-over-year to 100.4 billion yen, ARPU increased 5,627 yen year-over-year to 84,085 yen. 2. Softel (ソフテル) (通販する蔵): Revenue of 455 million yen, up 26.3 million yen year-over-year; operating profit of 51 million yen, up 12.9 million yen year-over-year; operating margin of 11.2%, up 2.3pp year-over-year; accounts for ~20% of total group revenue and profit. Development revenue grew 19.6 million yen to 204 million yen, stock revenue from system maintenance grew 9 million yen to 238 million yen. 3. Other segments (PINES, One Credit, future Review, etc.): Accounts for ~10% of total group revenue and profit. One-time consolidation and management costs from newly acquired PINES increased expenses in the half-year period.

• The full-year revenue target remains 4.387286 billion yen, with 1H revenue reaching 43.6% of the full-year target, slightly behind schedule due to slower-than-expected monetization of new businesses and M&A integration.
• The full-year operating profit target remains 665.327 million yen, with 1H operating profit reaching 30.9% of the full-year target, behind schedule due to larger-than-expected upfront investment in talent and new business development. Management maintains the full-year target and expects to catch up in the second half.
• The full-year ordinary profit target remains 673.092 million yen, with 1H reaching 41.4% of the target. Management expects project progress to accelerate from Q3 onward and remains on track to hit the full-year target.
• Management will continue aggressive share repurchases from November 25, 2025 to May 14, 2026 when the stock is considered undervalued, continuing the existing shareholder return policy.
• Price increases: Softel will raise 通販する蔵 maintenance fees starting from Q3, which is expected to increase total Softel stock revenue by approximately 5%. The group is also evaluating additional price increases for other existing services to maintain profitability.

• Upfront investment in new business development, talent recruitment, and M&A integration has been larger than initially planned, pushing 1H results behind budget and increasing pressure to deliver growth in the second half.
• Monetization of new businesses and integration of newly acquired M&A targets are progressing slower than initially expected.
• The VTuber marketing market is already highly competitive and perceived as near saturation, requiring clear differentiation to gain market share.
• Mid-sized and small-sized EC merchants face structural challenges including over-reliance on large EC malls, fragmented tool stacks leading to high operational complexity, and labor shortages that limit growth.
• Higher than expected investment needs for AI tool adoption and new product development may pressure short-term profitability.

Q: What are the main competitors for Commerce One, and what is your key competitive differentiator? / A: Key competitors include Air (CROSS MALL), NE (Next Engine), makeshop, Eストアーショップサーブ, and Shopify. Unlike most competitors that specialize only in cart systems or only in back-end management tools, Commerce One offers end-to-end support covering the entire EC business lifecycle from front-end marketing to back-end operations and capital financing, with a specific focus on domestic mid-sized and small-sized EC merchants. This full-stack integration enables smoother data flow and overall EC business optimization, which is the company's core advantage. The company's mission is to help these merchants build self-sustainable, profitable independent EC operations.

Q: What is the market outlook for VTuber marketing, and what are your mid-term growth goals for this business? / A: The VTuber marketing market is expected to continue high growth, driven by high-loyalty fan communities where 1 in 5 fans spend over 100,000 yen per year on fandom activities, making it a high-engagement marketing channel for EC. The company leverages its existing EC merchant customer base to specialize this offering for the EC sector, and aims to grow it into one of the company's core revenue pillars within a few years, with specific targets to be released in a future mid-term management plan.

Q: When will Commerce Connect launch, and who is the target customer? / A: Commerce Connect is scheduled to launch in winter (Q3-Q4) of next fiscal year. The target customers are the company's core segment of domestic mid-sized and small-sized EC merchants. The offering will leverage Softel's 20 years of back-end EC operation experience to provide an easy-to-use, low-cost solution that integrates tightly with futureshop to unify structured data for the AI era, further strengthening the company's competitive differentiation.

Q: With 1H operating profit only reaching 30.9% of full-year target, what steps will you take to get back on track in the second half? / A: For existing businesses, the company will implement price increases (already planned for Softel's maintenance fees) to maintain profitability, while continuing necessary investment in technology development aligned with market trends. For new businesses, the company will prioritize improving profitability for One Credit and newly acquired PINES, with targeted initiatives to be rolled out in the second half. The company also recognizes talent acquisition and AI adaptation as key priorities that will continue to be addressed to support long-term growth.