Net Protections Holdings,Inc. Q4 FY2025 earnings call

• Core Financial Performance Outcomes

  • The company exceeded its full year initial operating profit plan, even after allocating 300 million yen in additional marketing investment in H2. Only operating revenue was slightly behind plan due to increased low-fee large merchant transactions and higher electronic invoice utilization.
  • EBITDA grew 261% YoY, and the business has built a more stable profit-generating structure compared to the prior two years. The one-time increase in selling, general and administrative (SG&A) ratio to 1.48% of GMV was caused by planned additional H2 marketing investment, and will return to historical trend levels starting from Q1 2026 March fiscal year.
  • Pre-tax profit exceeded operating profit due to IFRS-related reversal of financial asset impairment losses.

• Recent Operational Updates

  • BtoC: atone launched on the DMM digital content website, and NP After Payment air launched for Kyudenko's consumer-facing services, with full rollout across all sales offices completed in April 2025. System integration with major EC platforms is underway to lower atone adoption barriers for small and medium EC merchants and accelerate merchant acquisition.
  • BtoB: NP Invoice Payment launched for Indeed Recruit Partners' services, with operation starting in May 2025. Growing demand for outsourcing low-value, high-volume billing and collection (including non-payment risk) from large enterprises is increasing, and the company will target additional similar large enterprise clients using the Indeed partnership as a reference case.

• Three-Year Medium-Term Strategic Direction

  • The rolled updated three-year plan targets 1 trillion yen GMV and 4 billion yen operating profit by the 2028 March fiscal year, representing 25% CAGR for operating profit and 19% average annual GMV growth.
  • NP After Payment will maintain its stable profit-generating structure built from credit improvement measures, and target conversion of merchants from in-house after-payment services.
  • NP Invoice Payment will continue targeting large enterprise clients to sustain high growth, and will expand complementary financial services for over 700,000 buyer companies on its platform. The company believes its end-to-end service covering billing, collection and non-payment risk for low-value high-volume transactions is unique with almost no direct competitors.
  • atone will maintain its current strong growth trajectory per the three-year plan, with unplanned upside growth initiatives in preparation: "atone plus" with no monthly fees, 1.5% point rewards on EC spending, and installment payment options is planned for mid-2025 launch, with over 1,000 beta testers already participating. By mid-2027 March fiscal year, atone will be available at most NP After Payment merchants to rapidly expand its merchant base, with increased user outreach to 15 million existing NP After Payment users and expansion of the atone shops referral platform planned by 2028 March fiscal year.

1. BtoC atone: Full year GMV grew 47.8% YoY, adding approximately 13 billion yen (130 billion yen in total incremental GMV) to full year results. Q4 GMV grew 51% YoY, with campaign-adjusted gross profit up 43.5% YoY. It contributed ~20.3% of total company GMV as a core growth driver. 2. BtoC NP After Payment (Other BtoC Services): Full year GMV declined 0.3% YoY after corrective actions for problematic merchant sales practices. Gross profit grew 32.4% YoY driven by improved non-payment control, cost reduction, and added late payment administrative fees. It contributed ~32.7% of total company GMV. 3. BtoB NP Invoice Payment: Full year GMV grew 32.5% YoY to 248.2 billion yen, adding over 60 billion yen (600 billion yen in total incremental GMV) to full year results, with Q4 GMV growing 35.7% YoY to 68.1 billion yen. Gross profit grew 71.5% YoY after strengthened credit control recovered from temporary non-payment rate deterioration in the prior year. It contributed ~38.7% of total company GMV and is on track to exceed 50% of total GMV by 2028 March fiscal year. Overall company full year GMV grew 13.4% YoY to 641.9 billion yen, with operating profit reaching 2.1 billion yen, exceeding the Q3 upward revised guidance of 2.0 billion yen. Total operating revenue grew 10.5% YoY, and total gross profit grew 34.5% YoY.

• 2026 March fiscal year (full year): Management guidance calls for 15.6% YoY GMV growth to 742 billion yen, and 23.6% YoY operating profit growth to 2.6 billion yen. High 40% range growth is forecast for atone, and high 30% range growth is forecast for NP Invoice Payment to continue as core growth drivers.
• SG&A expenditure is projected to grow only 5.3% YoY: technology and development costs will increase to support new functions and expanded operations, while sales & marketing and other SG&A growth will be held below target due to achieved efficiency gains. The company will prioritize reducing SG&A as a percentage of GMV while growing GMV and controlling costs to grow profit steadily.
• The updated three-year medium-term plan (rolled forward to 2028 March fiscal year) is a substantial upward revision from the prior plan, with the company projecting BtoB NP Invoice Payment will maintain 25-30% annual growth and come to represent over 50% of total GMV by the end of the period. Operating profit is targeted to hit 4 billion yen with a 25% CAGR over the plan period.
• No direct impact from U.S. tariffs is expected, as the company only provides payment services for domestic Japan transactions, so no tariff-related adjustments are included in guidance.

No explicit material operational or financial risks were discussed in the available transcript. The company noted past temporary deterioration in NP Invoice Payment non-payment rates following the end of zero-zero COVID-19 emergency loans, but this issue had already been addressed via tightened credit control, resulting in 71.5% YoY gross profit growth for the segment in the 2025 March fiscal year. The temporary deviation from the long-term SG&A ratio downward trend was explicitly flagged as a one-time effect of planned additional marketing investment, with the ratio expected to normalize in the next fiscal year.

Q: What is the background for the large upward revision to the three-year financial policy targets? / A: Management notes that current performance across core high-growth segments (atone and NP Invoice Payment) has outperformed original plan projections. Stronger-than-expected demand from large enterprise clients for BtoB billing and risk outsourcing, and better-than-forecast adoption growth for atone allowed the company to confidently raise medium-term targets. The existing cost structure and operational infrastructure are already in place to support this higher growth trajectory, so the company does not expect disproportionate cost increases to hit margins.

Q: When will the company begin shareholder returns via dividends or share buybacks? / A: Management confirms the company's view that returning sufficient profits to shareholders is a core management responsibility. At this stage, all excess profit is still allocated to high-return growth investments to scale the business. The company will begin implementing shareholder return policies once it has built up a stable sufficient profit base to support both growth investment and consistent returns.

Q: Will atone plus maintain its no monthly fee policy after the full official launch? / A: Management confirms that the core structure of no monthly fees, 1.5% point rewards for EC purchases, and installment payment access is the permanent planned offering for atone plus. Final details will be shared at the full commercial launch, which is still on track for mid-fiscal 2026.

Q: What is the update on NP Finance, the company's small business loan segment? / A: The small loan business is still in a steady early-stage development phase. It is positioned as a complementary offering to the company's core existing platform of over 700,000 BtoB buyers, aligned with the medium-term plan to expand adjacent financial services, and no material changes to its development trajectory were reported.