tripla Co.,Ltd. Q3 FY2025 earnings call

Company Updates

• Employee count now exceeds 100 standalone, 182 consolidated; new Philippine subsidiary established as an additional sales hub. Total installed properties across the group reached 9,155, with 79.7% foreign-owned properties. Two new senior executives joined the management team: CTO Hakim and VPoP/Product Management Executive Aude, bringing the total management team to 9 members with 3 foreign and 2 female members.
• New service launches: Launched Amazon Pay integration for pre-payment; enabled credit card pre-payment in Thailand via Opn Payments partnership; launched TikTok ad management for tripla Boost advertising service; launched tripla Nexus, which enables small overseas OTAs to send bookings to Japanese hotels, expanding inbound distribution.
• Business development: Hosted the tripla Conference for existing customers with positive feedback; exhibited and spoke at WiT Japan & North Asia conference; won 2 new DMO (Destination Management Organization) projects based on the successful Fukushima DMO case, launched tripla Success consulting service for small regional properties that lack capacity to manage booking system settings.

Core Strategic Priorities

• Payment Solution Enhancement & Diversification: Target to increase pre-payment penetration from ~20% (end of FY2024) to 35% by FY2027, to reduce hotel cancellation leakage, improve cash flow, and increase tripla's volume-based revenue. Expanding payment methods to include bank transfer, convenience store payment, and QR code payments; added a feature that automatically falls back to on-site payment after two failed credit card attempts to reduce booking abandonment. Optimizes payment costs by partnering with trusted local payment providers across regional markets.
• Customer Acquisition & Conversion Improvement: Expanded the customer success team to 5 members to upsell additional products to existing customers, driving growth in tripla Bot, tripla Connect, and average revenue per account (ARPA).
• AI & Big Data Utilization: Plans to leverage tripla's dataset from 8,000 properties and nearly 30 million users combined with AI to improve hotel profitability, automate operations, and enhance user experience; AI will be a core strategic pillar starting from next fiscal year.
• Asia-Pacific Focused Global Expansion: Pursues organic growth, agency partnerships, and M&A for overseas expansion. Completed global system integrations with leading channel manager partners; ongoing post-acquisition integration (PMI) for acquired subsidiaries, replacing local legacy booking engines with tripla Book to capture synergies.
• Inbound-focused New Customer Growth: Expands tripla Nexus inbound distribution and multi-lingual ad operations via tripla Boost.
• Regional Development Support: Expands tripla's DMO and consulting services to support regional tourism, aligned with SDG 12.
• **Global-local Talent Strategy: Local management teams in each regional subsidiary gather local market demand and set development priorities to adapt to local needs.

1. Tripla Standalone Segments:

• tripla Book: Total revenue of 1.121 billion yen, 35% YoY growth. Reported 3Q revenue (after MCP impact) was 367 million yen; adjusted for the MCP API configuration error, revenue would have been 432 million yen. Fixed revenue reached 111 million yen, up from 91 million yen YoY. 3,645 installed properties, +276 properties quarter-over-quarter. GMV grew to 42.9 billion yen from 31.9 billion yen YoY, with QoQ growth.
• tripla Bot: Revenue of 291 million yen, 6% YoY growth, +14 million yen QoQ. Installations surpassed 2,000 properties after adding 64 new contracts in the quarter. Contributed 16% of total standalone segment revenue.
• tripla Connect: Revenue of 53 million yen, 54.2% YoY growth, reaching 20 million yen QoQ revenue. 1,163 installed properties, +190 QoQ. Over half of new tripla Book customers also add tripla Connect, contributing 2.9% of total standalone segment revenue.

1. Acquired Subsidiaries:

• BookandLink (Indonesia): Revenue of 122 million yen vs target 197 million yen; operating profit of 17 million yen vs target 38 million yen. Includes 43 million yen of goodwill amortization, so pre-amortization operating profit was 60 million yen. Added 251 contracted properties to reach 3,557 total.
• Surehigh (Taiwan): Revenue of 196 million yen vs plan 281 million yen; operating loss of 14 million yen vs expected loss of 17 million yen. Includes 28 million yen of goodwill amortization, so pre-amortization operating profit was 13 million yen. Contracted properties decreased slightly by 11 to 1,439; migration of the legacy EZ Hotel system to tripla Book is underway, with expected profitability improvements.

• Management maintains the full-year 2025 October fiscal year guidance, with no revision as of the 3Q report. It expects full-year results to land within a range of +/-10% for operating revenue and +/-30% for operating profit/ordinary profit/net income, which includes the 64 million yen negative 3Q impact and projected 20 million yen negative 4Q impact from the MCP error. No material revision is required under current Tokyo Stock Exchange rules.
• Targets 1.65% take rate for tripla Book by FY2027, supported by growing pre-payment penetration to 35%.
• Expects the 4th quarter to follow the historical trend of heavier revenue concentration, which is consistent with prior years.
• Management sees the 2026 October fiscal year mid-term target of 34 billion yen operating revenue and 760 million yen operating profit as having high probability of achievement, and will publish an updated mid-term plan in December.
• The MCP configuration error has been fully corrected, with no impact on future new bookings; only pre-July 11 bookings will impact 4Q results, with negligible impact beyond FY2025.

• A configuration error occurred in the MCP multi-currency pricing feature launched March 27: the Sell (TTS) and Buy (TTB) exchange rate APIs were connected in reverse, leading to a 64 million yen revenue loss in 3Q 2025 and an expected 20 million yen revenue loss in 4Q 2025. The error was not caught during internal development review and QA processes, leading to 3.5 months of incorrect operation before detection.
• The root cause was an incorrect specification assignment during initial development that slipped through internal review processes. Management has acknowledged the gap in quality control, and is implementing a new cross-departmental checking process including the business team for all critical new feature deployments to prevent recurrence.
• Macro risks: Inbound travel demand volatility, exchange rate fluctuations, and interest rate changes can impact hotel occupancy and overall results, with both upside and downside risk to mid-term plans.
• Surehigh saw a small net reduction in contracted properties in 3Q, though the ongoing migration to tripla Book is expected to improve long-term profitability.
• BookandLink missed 3Q revenue and profit targets, though organic growth of contracted properties remains on track.

Q: Given two major technology-related incidents (delayed payment system launch and the MCP configuration error) in the past year, what is the core issue with tripla's management and how will you improve it? / A: Management states that global development does not inherently increase management difficulty, as tripla has operated with global teams since founding. It acknowledges the need for stronger organizational structure, and has recently hired two senior industry executives (CTO from Paidy/PayPal, product head from TableCheck) to deepen the technical and product management teams, strengthening governance and quality control. The new hires add depth to the leadership team that previously had one executive covering both CTO and CPO roles.

Q: Is the current full-year guidance achievable given the required 4Q revenue growth that looks like a high hurdle after the MCP loss? / A: Management confirms that excluding the MCP impact, 3Q operating profit reached 73.7% of the full-year target, which is very strong given historical seasonality. All core products are performing well, and the company maintains the existing guidance range, with results expected to land within the stated +/- ranges with no need for revision at this time.

Q: What is tripla's take rate target and how will you achieve the 1.65% 2027 target? / A: The 1.65% take rate target for 2027 is anchored on reaching 35% pre-payment penetration, up from ~25% current. Management will continue to implement initiatives to drive pre-payment adoption, including adding new payment methods, rolling out the automatic fallback to on-site payment feature, and adding BNPL payment options that are popular on major OTAs. Management believes hitting the 35% pre-payment target will make the 1.65% take rate achievable, with upside potential if penetration exceeds target.

Q: How do you plan to expand tripla Book to smaller properties like independent hot spring ryokans without hurting efficiency? / A: Management will continue to leverage industry association connections, and is focusing on partnerships with DMOs to acquire groups of small properties efficiently. The successful Fukushima DMO deal delivered 30 contracted properties in one partnership, and tripla plans to add features like furusato tax donation integration to strengthen these DMO partnerships. It is also exploring collaborations with regional banks to reach more small regional properties efficiently, maintaining acquisition efficiency while expanding into this segment.

Q: Is M&A still on the table for long-term growth? / A: Management is always open to discussions with potential targets, and will approve an M&A if it meets criteria for profitability, growth, and cultural fit. There is always a possibility of completing an M&A in coming periods if the right opportunity arises.