tripla Co.,Ltd. Q2 FY2025 earnings call

Corporate Purpose and Vision

• Purpose: Support the sustainable growth of accommodation facilities and the development of local communities worldwide through best-in-class travel solutions
• Vision: Innovate the travel industry by providing digital solutions that improve customer experience and enable labor savings

Recent Operational Milestones

• Total installed facilities across all services reached 8,631, with total employee count at 173
• Added a new Philippines office and launched commercial sales in the market, holding a local conference with 40 participating hotel clients
• Participated in the International Hotel & Restaurant Show in Tokyo, generating large volumes of new sales leads
• Launched integrated tripla Book service for Fukushima City's DMO (Destination Management Organization), which eliminates redundant setup for hotels to supply inventory to both their official site and DMO channels, with horizontal expansion to other DMOs planned
• Secured a full fleet installation with Meitetsu Hotel Management for tripla Bot, driving segment growth
• Added a new product management executive to the leadership team, expanding the executive group to 8 members
• Progressed post-merger integration (PMI) at Taiwan's Surehigh, migrating legacy Surehigh reservation system clients to tripla Book on an ongoing basis

Core Strategic Priorities

1. Payment Solution Enhancement and Diversification
   • Target to increase the share of prepayment from 20% to 35% over the medium term, shifting from the current 80% on-site payment majority
   • Expand payment methods beyond credit cards to include bank transfer, convenience store payment, QR codes, Amazon Pay, and Alipay, partnering with global and APAC regional local partners to optimize costs
2. Traffic and Conversion Improvement
   • Leverage tripla Connect's marketing automation tools (segmented targeting, email/LINE outreach, promotional offers) to increase booking conversion for installed properties, with installed properties now exceeding 1,000
3. AI and Big Data Utilization
   • Combine accommodation big data from over 8,000 facilities and ~30 million monthly active users with AI to develop new DX solutions that maximize property profit, automate operations, and improve user experience
4. APAC-Focused Global Expansion
   • Currently operates in 10 markets across APAC and Australia, with entry via local subsidiary establishment, agency partnerships, or M&A, with 50 properties already installed in Egypt via agency partnerships
   • Build a global connectivity hub to integrate with local channel managers and site controllers in each market to enable scalable local sales
   • Standardize PMI processes for M&A targets to reduce integration timelines from 12 months to 6 months, creating scale benefits for future acquisitions
5. Inbound-Focused New Customer Acquisition
   • Act as an intermediary for small/regional overseas OTAs (e.g. Indian, Taiwanese OTAs) to secure inbound traffic for Japanese hotels, providing full contract, setup, and inventory consulting support
6. Local Community Development Support
   • Provide combined tripla product solutions to DMOs aligned with SDG 12, with 3 additional inquiries already received after the Fukushima launch
   • Offer tripla Success consulting services to small regional hotels and ryokan that lack internal capacity for OTA/official site and inventory setup, to support smoother digital sales

Consolidated: Total operating revenue is 1.23 billion yen, up 61.7% YoY, 96.5% of the half-year plan, 44.4% full-year progress. Consolidated operating profit is 238 million yen, up 335.2% YoY, 97.5% of the half-year plan, 45.2% full-year progress. Profit attributable to parent shareholders is 232 million yen, up 782.2% YoY, 116.6% of the half-year plan, 57.6% full-year progress.
Japan standalone: Operating revenue is 996 million yen, up 37.1% YoY, 43.5% full-year progress, 35 million yen below plan, primarily due to missed volume revenue at tripla Book from payment development delays. Standalone operating profit is 228 million yen, up 157.7% YoY, 42.4% full-year progress.
Subsidiaries:

• BookandLink: Operating revenue of 85 million yen (vs 94 million yen plan), operating profit of 19 million yen (vs 26 million yen plan). Total properties grew from 3,306 to 3,407.
• Surehigh (Taiwan): Operating revenue of 148 million yen (near 149 million yen plan), 90 million yen net loss after goodwill amortization (better than the projected 200 million yen loss), operating income of 14.4 million yen driven by 23.6 million yen in non-operating income.
  Standalone product segments:
• tripla Book: 367 million yen in total operating revenue. Fixed revenue grew to 104 million yen, with installed properties increasing from 3,081 to 3,369 in line with plan. GMV rose from 38.2 billion yen (1Q) to 38.8 billion yen (2Q). Combined take rate was 1.14% in 2Q, down from 1.23% in 1Q, which would match 1Q levels after adjusting for the 35 million yen revenue impact from delayed payment development.
• tripla Bot: 95 million yen in operating revenue (quarter-over-quarter increase), with installed properties at 1,993 (near 2,000, an all-time high).
• tripla Connect: 17 million yen in operating revenue, with 973 installed properties as of 2Q, growing to 1,072 by end-May. Approximately one-third of tripla Book customers have added this add-on CRM/marketing automation service.

Management maintained the full-year consolidated guidance of 2.77 billion yen in operating revenue and 528 million yen in operating profit. The company noted that its revenue is historically skewed to the second half of the fiscal year, and the 2Q results are in line with expected seasonal progression. The delayed payment development was fully completed in April, and operations returned to planned levels starting in May, with no expected material impact on full-year results from the 2Q revenue miss.

• Development of tripla Book's new payment functionality was delayed from its planned March completion to April, resulting in an estimated 35 million yen in missed 2Q volume revenue, contributing to a 44 million yen miss against tripla Book's 2Q revenue plan
• 2Q GMV growth was softer than expected due to seasonal factors: 2Q includes February, which has fewer operating days, and the 2025 Chinese New Year fell in January (rather than February), reducing inbound travel volumes in 2Q

Q: What was the impact of the payment development delay, and what is the current status of the project? / A: The delay pushed completion from early March to early April, resulting in approximately 35 million yen in forgone volume revenue in 2Q. The development is now fully complete, and operations have returned to planned performance starting in May, with no expected residual impact on results from the third quarter onward.

Q: Why did the aggregate take rate decline quarter-over-quarter in 2Q? / A: The 0.09 percentage point decline is almost entirely explained by the missing 35 million yen in payment-related volume revenue from the development delay. After adjusting for this impact, the underlying take rate remains consistent with 1Q levels. Seasonal factors including the shifted Chinese New Year holiday and fewer February operating days also contributed modestly to the quarterly decline.

Q: What is the timeline and progress for PMI at acquired subsidiary BookandLink? / A: Integration of BookandLink's existing property base onto the tripla Book platform is progressing steadily, with approximately 100 new properties added to tripla Book during 2Q. The company is building out standardized PMI processes from this and the Surehigh integration that will reduce future integration timelines for new M&A targets by half.