tripla Co.,Ltd. Q1 FY2025 earnings call

• Corporate Purpose & Direction

  • The company's purpose is to support the sustainable growth of accommodation facilities and the development of local communities around the world through best-in-class travel solutions. The vision is to innovate the travel industry by providing digital solutions that improve customer experience and enable labor savings, with a focus on market-in customer satisfaction.
  • As of end-1Q, the consolidated group has 162 total employees, 21.5% Japanese, with expanded operations in Hong Kong, the U.S. and other markets, with total installed properties across all segments reaching 8,266.

• Recent Business Events

  • Hosted the first Hotel DigitalMarketing MasterClass in South Korea, with 80 local hotel industry attendees, to build regional business relationships.
  • Exhibited at the 27th National Convention of the All-Japan Ryokan Association Youth Division, connecting with multiple Japanese ryokan operators.
  • Announced a partnership with Fukushima City DMO to provide tripla's services including booking functionality, segmented marketing automation, and AI chatbot support to the local tourism website, with plans to expand this model to other local governments.

• Core Strategic Priorities

  1. Product Multi-functionalization aligned with market demand
     • Accelerate the shift from on-site payment to pre-payment: Target to increase pre-payment penetration from ~20% to 35%, which improves hotel cash flow and eliminates missed cancellation fee revenue, while growing tripla's own usage-based revenue from payment services. Continue promotional activities and already achieved strong progress on pre-payment for inbound guests.
     • Diversify payment methods: Expand beyond credit cards to add PayPay, Amazon Pay, LINE Pay, WeChat Pay, convenience store payment, and bank transfer via partnerships with payment service providers, while continuously optimizing costs.
     • Enhance features to improve customer acquisition and conversion: Provide end-to-end solutions to optimize direct website sales, including dynamic pricing adjustments, advertising via tripla Boost, expanded OTA channel distribution via tripla Link, review management via tripla Review, and co-created segmented marketing automation with hotel teams.
     • Integrate big data from 8,000+ properties and ~30 million monthly active users with AI to improve accommodation facility profit, automate operations, and enhance end-user experience.
  2. Accelerate Asia-Pacific focused global expansion
     • Use multiple market entry models including local subsidiary establishment (Taiwan, South Korea, Philippines), reseller partnerships (Egypt, ~30 properties already), and M&A (Indonesia, Thailand, Singapore, Taiwan) to find the optimal entry approach for each market.
     • Build out global connectivity with a new connectivity hub to integrate with multiple channel managers, OTA and wholesale partners, and complete post-M&A integration (PMI) to unify services across the group. Strengthen inbound acquisition by partnering with overseas local OTAs to drive bookings for Japanese hotels, and add multi-language support for tripla Boost advertising.
  3. Support local community development (aligned with SDG 12)
     • Expand tripla's IT solutions to regional tourism organizations, which often lack in-house digital expertise, by offering end-to-end support via tripla Success to make digital adoption easier for regional stakeholders.
  4. Glocalized talent strategy
     • Recruit and hire local talent for each market, with local sales teams responsible for client needs gathering, and a centralized group development process to prioritize projects based on local needs, with development teams spread across multiple regional hubs.

1. Consolidated (1Q 2025): Operating revenue of 642 million yen, up 86.6% YoY, with operating profit of 125 million yen, up 19,262% YoY. The large growth is driven by the addition of newly acquired subsidiaries BookandLink and Surehigh to the consolidation scope. Net profit attributable to parent shareholders hit 114 million yen, with a 28.5% progress rate against the full-year revised plan.
2. Parent entity standalone (1Q 2025): Operating revenue of 502 million yen, up 45.8% YoY, with operating profit of 112 million yen, up 339.5% YoY.
3. tripla Book (parent standalone segment): 1Q operating revenue of 386 million yen. While GMV decreased by ~500 million yen quarter-over-quarter due to seasonality, revenue grew strongly driven by a rising take rate. Installed properties increased by 128 to 3,081, exceeding 3,000 for the first time. Take rate rose to 1.23%, up 6 basis points QoQ and 28 basis points YoY. Full-year 2025 plan for Japanese tripla Book: 17.68 billion yen operating revenue, 157 billion yen GMV, 3,409 installed properties (80+ property upward revision from original plan), and maintained planned take rate of 1.34%.
4. tripla Bot (parent standalone segment): Installed properties increased by 32 to 1,855. ARPU continues to decline slightly as the segment shifts from high-cost full operator service to fully AI-automated service, which has reduced overall costs and improved operating profit. A new popular feature comparing official site and OTA prices (for customers using both tripla Bot and tripla Book) was launched.
5. BookandLink (subsidiary): 1Q operating revenue of 46 million yen, 23.8% progress against full-year plan of 197 million yen. 1Q operating profit of 24 million yen, against a full-year plan of 38 million yen.
6. Surehigh (subsidiary): 1Q operating revenue of 93 million yen, ~30% progress against full-year plan of 281 million yen. 1Q operating loss of 12.1 million yen, against a full-year operating loss plan of 21 million yen. After accounting for non-operating government subsidies, 1Q ordinary profit is positive 5 million yen, with full-year ordinary profit planned to be break-even after goodwill amortization.

• Full-year 2025 consolidated operating revenue was revised upward 7.3% from 2.582 billion yen to 2.77 billion yen.
• Full-year 2025 consolidated operating profit was revised upward 20.7% from 438 million yen to 528 million yen. The upward revisions are driven by the stronger-than-expected performance of tripla Book.
• The 1Q 2025 operating profit of 125 million yen already achieved the original full first-half operating profit plan of 97 million yen. The 1Q progress against the revised full-year plan is 23.2% for operating revenue and 23.7% for operating profit, consistent with historical seasonality, so management expects full-year results to hit the revised targets.
• Standalone full-year 2025 operating revenue was revised upward from 2.123 billion yen to 2.291 billion yen, with 1Q progress of 21.9% against the revised plan, in line with historical seasonal sales patterns.

• Illegal fraudulent travel (including unauthorized use of stolen credit cards for inbound bookings) is an ongoing industry-wide cat-and-mouse risk: new fraud patterns emerge continuously, and unaddressed fraud will grow exponentially over time.
• Small independent and regional accommodation facilities rarely have the in-house expertise and resources to implement effective anti-fraud measures on their own.

Q: Fraudulent credit card use by inbound travelers is a known publicized social issue tied to your pre-payment growth strategy. Can you explain your current approach to mitigating fraudulent travel? / A: tripla uses a multi-layered approach, combining AI screening, development of custom rule sets for new fraud patterns, and final manual review for suspicious bookings. The company partners with payment gateways and specialized anti-fraud vendors to identify new fraud patterns and quickly implement new countermeasures. Any bookings that pass automated screening but are identified as fraudulent are manually canceled, and partner hotels are notified immediately. Management notes anti-fraud is an ongoing cat-and-mouse game, and the key capability needed is fast iteration to respond to new fraud methods, which tripla provides as a scalable solution for small and regional hotels that cannot implement these measures independently. Currently, this approach blocks the large majority of fraudulent bookings.