GMO Financial Holdings,Inc. Q4 FY2025 earnings call

• Overall Full-Year FY2025 Performance

  • Consolidated operating revenue decreased 7% year-on-year, driven by lower revenue from OTC FX, CFD, and crypto assets, but operating profit and net profit hit all-time records, with net profit exceeding 10 billion yen. The large profit growth was primarily due to the absence of the 9.5 billion yen bad debt provision recorded in the prior year for the Thailand securities business.
  • Thailand securities business outstanding claim balance decreased from approximately 11 billion yen in January 2025 to 7.9 billion yen via scheduled repayments; the 400 million yen yen-denominated increase compared to Q3 2025 is solely due to current yen depreciation, with the balance decreasing by approximately 58 million Thai baht in Thai baht terms.

• Core Existing Business Initiatives

  • OTC FX: Focused on expanding customer base via improved service convenience and strengthened marketing to build competitive advantage; organic share growth has been steady after a 2023 dip, with key KPIs (active user count, margin balance) growing steadily as prioritized by management.
  • CFD: Strengthened cross-selling from securities and OTC FX businesses and carried out marketing to boost product awareness; strong performance in Q4 2025 driven by concentration of trading in high-margin gold and silver commodities.
  • Crypto Assets: Worked to stabilize revenue via strengthening non-transaction recurring products (staking, crypto lending) and expanded services for institutional and VIP clients; account count grew steadily by 80,000 year-on-year year-end, though customer assets under custody decreased 8.6% due to lower crypto asset market prices; the large Q4 2025 drop in staking revenue is a one-off operational special factor that will not continue into FY2026, with no change to underlying staking asset balances.

• New Business Development

  • Virtual Office Business: Expanded to 19 locations across Japan, cumulative user count grew 15,000 year-on-year year-end; management aims to grow ARPU via additional value-added services to build a stable recurring revenue stream.
  • Medical Platform Business: Launched AI-integrated cloud electronic medical record service ("AI Chart byGMO") in December 2025, part of the broader "HealthTech ONE byGMO" platform; the AI supports automatic transcription of consultation conversations and chart entry to improve clinician operational efficiency, with flexible service options for full or partial adoption by medical institutions.

• New Strategic Initiatives

  • Approved full share acquisition of LASHIC Small Amount Short Term Insurance to enter the insurance sector; regulatory approval discussions with authorities are ongoing.
  • Launched the "1 Account" unified ID platform in December 2025, aiming to build an open cross-service ecosystem enabling cross-company/cross-brand service access via a single ID; supports Google Account integration for seamless access, offers point rewards for user activity, and is open to external partner companies to enable joint user acquisition and shared reward programs, creating mutual value for both users and participating service providers.

• Corporate Governance and Capital Strategy

  • Current Status Analysis: ROE currently exceeds the company's 8.5% cost of equity capital, but PER remains below the industry average.
  • Targets and Initiatives: Aims to sustainably achieve ROE of 20% or above (above the 8.5% cost of capital) to drive corporate value growth. Key initiatives include:
    • Profitability Improvement: Establish market leading position in core high-competence businesses and expand customer base; consolidate shared group operations to improve efficiency and optimize costs; leverage the 1 Account unified ID to improve internal and external marketing efficiency.
    • Capital Allocation Optimization: Restructure, downsize or exit unprofitable businesses; prepare GMO Coin for listing on the Tokyo Stock Exchange to strengthen and diversify group funding capacity; actively invest in high-growth new business areas.
    • Cost of Capital Reduction: Expand disclosure of growth strategy and financial policy, strengthen engagement with equity markets, and introduce a DOE floor target to stabilize shareholder returns.

• GMO Coin Listing Preparation

  • The domestic crypto industry market is growing steadily, with ongoing regulatory changes including approval of crypto ETFs, tax reform, inclusion in investment trusts, and a regulatory shift from the Funds Settlement Act to the Financial Instruments and Exchange Act, which has strengthened crypto assets' status as formal financial instruments. GMO Coin is preparing for listing to improve its public credit standing and funding capacity, with the goal of becoming a leading player in a healthy, open crypto market. An organizational change is scheduled for March 19, 2026, with COO Ishikawa (the presenter) transitioning to focus full-time on serving as GMO Coin's representative.

1. Securities/FX Business: Accounts for just over 80% of total operating revenue. Overall, OTC FX and CFD saw a year-on-year revenue decrease, but underlying business KPIs showed strong performance: OTC FX domestic trading volume share reached 21.7%, quarterly active user (QAU) share exceeded 15%, and margin deposit balance increased 7.4% year-on-year year-end. For Q4 2025, CFD transaction value increased 123.7% year-on-year and revenue increased 33.8% year-on-year, driven by a boom in gold and silver commodity markets, with CFD margin deposit balance up 3.6% year-on-year year-end. Equity transaction value increased 45.9% year-on-year after the implementation of zero stock commission for the company's 20th anniversary, and financial income increased 76.5% year-on-year driven by rising market interest rates. 2. Crypto Asset Business: Accounts for 13.5% of total operating revenue. Transaction value decreased 22.8% year-on-year in Q4 2025 due to a cooling market after the 2024

• Shareholder Return Guidance: For the FY2026 (December 2026) period, maintain the target payout ratio of 65% or higher, and add a new target of a 10% minimum dividend on equity (DOE), setting a floor of 42.08 yen annual dividend per share paid quarterly; this dividend floor is higher than the annual dividend levels of 2022, 2023, and 2024.
  • Cost Guidance: The company expects selling, general and administrative expenses for Q1 FY2026 to be approximately 8.1 billion yen, which includes incremental costs for expanded securities promotional campaigns; normal recurring core costs are expected to remain around 7.5 billion yen, consistent with historical steady levels.
  • Long-Term Strategic Guidance: The company will continue to actively invest in high-growth sectors with large potential for technology application, aiming to build a leading platform ecosystem centered on the 1 Account unified ID. It will maximize revenue from existing core businesses (securities, crypto assets) to generate stable cash flow, then reinvest that cash into new business development to drive long-term growth.

• OTC FX and crypto asset revenue is heavily exposed to market conditions: lower volatility and range-bound trading in the second half of FY2025 led to reduced revenue profitability for both segments.
  • Crypto asset customer custody asset values are directly exposed to crypto market price fluctuations, which can lead to decreases in reported custody asset balances even when account count is growing.
  • The entry into the insurance sector and launch of new platform businesses (medical platform, unified ID ecosystem) are unproven new initiatives with uncertain market acceptance and revenue generation outcomes.
  • The timing of GMO Coin's listing on the Tokyo Stock Exchange is still undetermined, and listing is subject to regulatory approval and market conditions with no guarantee of completion on expected terms.

No question and answer section content was included in the provided earnings call transcript.