Rebase,Inc. Q3 FY2025 earnings call

10th Anniversary and Shareholder Return

• Rebase is celebrating its 10th anniversary since founding in April 2014, and management thanked shareholders, investors, and users for their continued support.
• To commemorate the anniversary, the company will issue a 35 yen per share special commemorative dividend, plus 5,000 Instabase points for shareholders holding 200+ shares. Combined, this represents a 4.1% yield based on the closing price as of January 31, 2025.
• The company's long-term shareholder return policy remains prioritizing growth investment, balanced with retained earnings, with return policy reviewed on an ongoing medium-to-long term basis.

Operational Performance Highlights

• The rental space market has strong seasonality: the Q3 (October-December) period is the peak season with the highest demand and awareness, so revenue is naturally skewed to the second half of the fiscal year. Rebase successfully captured this seasonal uptick in party-related demand, driving strong growth in usage and transaction value.
• The company prioritizes growing usage volume as the core driver of total transaction value growth. In Q3, efficient allocation of advertising spend based on ROAS metrics maximized online customer acquisition efficiency, increasing overall site traffic. Search experience improvements also drove usage growth to a new all-time high.
• A new per-person pricing feature was launched, complementing the existing per-hour pricing function. This feature allows hosts to combine all space listings for different group sizes into a single page, reducing duplicate listings and leading to slower sequential growth in the raw count of listed spaces compared to prior periods.
• Rebase partnered with Domino's Pizza Japan to run co-branding awareness activities aligned with the peak Q3 party demand season, further boosting customer acquisition.
• M&A activity and investment has increased fixed assets on the balance sheet compared to the end of the prior fiscal year.

Growth Strategy and Market Outlook

• The company will continue focusing on four core strategic priorities to drive further growth: strengthening customer acquisition, optimizing UI/UX, increasing average transaction value, and maximizing the number of listed spaces. In Q3, the company focused particularly on the first two priorities, which delivered the strong growth in usage volume.
• Rebase's M&A and investment strategy prioritizes targets with clear synergy with the Instabase business, and also includes companies that enable expansion into adjacent business areas to improve prospects for entry into new future segments.
• The shared rental space market is expected to see rapid long-term growth driven by both demand and supply side factors: 1) Demand is growing due to diversification of work styles and hobbies, creating new use cases for rental spaces; 2) Supply of vacant/underutilized space is growing due to population decline, aging demographics, and ongoing issues with unoccupied residential and commercial real estate, creating need for flexible space sharing alternative to traditional long-term leasing.
• As of 2022, Rebase held approximately 2% market share, and the company aims to grow market share alongside overall market expansion to achieve its long-term mission and vision.

Rebase operates a single core product segment, the Instabase rental space platform. For the third quarter cumulative period: Total revenue is 1.416 billion yen, a 30% increase year-over-year; Selling, general and administrative expenses are 993 million yen, a 26% increase year-over-year; Operating profit is 377 million yen, a 47% increase year-over-year. The core metric gross transaction value (usage total) exceeded 1.8 billion yen, a 30% increase year-over-year, with an 81% progress rate against full-year guidance. Space usage volume hit a new all-time high of 386,000 transactions, a 33% increase year-over-year, with an 81% progress rate against full-year guidance. Average transaction value was roughly flat year-over-year, as continued growth in higher-priced business usage offset growth across all price segments. Number of listed spaces reached 39,200, a 22% increase year-over-year. The standalone third quarter operating profit was 34% higher than the prior year, with an operating margin of 30%.

• Due to better-than-expected performance across all key metrics through the third quarter, management upward revised the full-year 2025 March fiscal year guidance.
• Full-year revenue is now expected to reach 1.92 billion yen, representing a 29% increase compared to the prior fiscal year.
• Full-year operating profit was revised sharply upward: management originally forecast 14% year-over-year growth, and now forecasts 34% year-over-year growth to 450 million yen.

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