Net Protections Holdings,Inc. Q2 FY2026 earnings call

Overall Company Performance

• Total company GMV reached 367.5 billion yen for the half-year period, up 20.6% year-over-year. Operating profit reached 1.54 billion yen, approximately 1.8x the year-ago level, performing better than expected. Operating revenue increased 8.2% year-over-year, while gross profit grew 11.9% year-over-year, supported by cost reduction across business lines from improved unpaid receivable control.
• Selling, general and administrative (SG&A) expense for the second quarter was 2.33 billion yen, with SG&A as a percentage of GMV at 1.25%, a 0.12 percentage point improvement year-over-year. All SG&A categories came in roughly in line with plan, and all categories saw a year-over-year reduction in their ratio to GMV, confirming sustained operating leverage.

New Partnerships & Launches

• B2C: NP後払いair will be launched as a white-label solution for Osaka Gas Finance, supporting its in-home repair services for gas appliances and plumbing. Partial testing is underway, with full launch across the Osaka Gas service chain planned for December. The company will target similar service providers after this implementation.
• B2B: NP掛け払い has been integrated into Tanomail Advance, operated by Otsuka Shoji, a web-based end-to-end B2B IT solution contracting and management service. Phased launch began in November, and the company expects this partnership to increase transaction volume and industry awareness for the product.

Organizational Updates

• The company won the Benchmark Innovator Award at the Haier-sponsored ZeroDX Award 2025, marking the second consecutive year it has received this honor. It also won the Employee Success Award at the Funai Soken Sustainability Growth Company Award 2025, reflecting growing recognition of its unique organizational model.
• The company has published a book documenting its teal organization practices, which it adopted in 2012 when it eliminated all management positions to operate as an autonomous decentralized organization structured around roles rather than job titles. The book compiles over 10 years of practical experience and systems, and frames the unique organizational model as the core source of the company's competitive advantage.

1. B2C atone: GMV grew 65.1% year-over-year, contributing 11.2 billion yen to total year-over-year GMV growth. The new atone Plus product launched in August 2025 has delivered user behavior broadly in line with expectations, though its GMV contribution remains limited. It is one of the company's core growth drivers.
2. B2C NP後払い (NP Afterpay) and other B2C services: GMV has remained stable. It posted 4.0 billion yen in gross profit, driven by cost control from unpaid receivable management and the addition of late payment administrative fees. The revenue lift from newly added late fees has already cycled through after one year, but stable profit generation is expected going forward.
3. B2B NP掛け払い (NP Invoice Payment): Reported 164.3 billion yen in half-year GMV, up 46.1% year-over-year, contributing 50.8 billion yen to total year-over-year GMV growth. Growth is driven by higher transaction volume at existing member merchants and contributions from large new merchant partners. It is the other core growth driver alongside atone.

• Full-year 2026 March fiscal year guidance has been upward revised on the back of stronger-than-expected first half performance and solid second half outlook. GMV guidance is raised to reflect continued outperformance from NP掛け払い and atone in both the first half and projected second half.
• Gross profit guidance is increased by 0.32 billion yen, driven by continued expected cost improvement in the second half even as operating revenue guidance is adjusted slightly down due to a higher mix of large enterprise merchants with lower fee rates.
• After allocating an extra 0.3 billion yen in SG&A investment for long-term growth in the second half, full-year operating profit guidance is set at 2.90 billion yen. Without the incremental investment, full-year operating profit would have reached 3.2 billion yen.
• The incremental 0.3 billion yen in SG&A will be used to hire specialized talent to support growth beyond the current medium-term plan, strengthen enterprise sales for atone and NP掛け払い to drive GMV expansion 2 to 3 years out, fund product updates and alliance building to support future business scale. The company does not currently plan to extend this accelerated mid-career hiring policy to the next fiscal year.
• Management expects NP掛け払ie's year-over-year GMV growth rate to decline from the first half level starting in the third quarter, as large new merchants that launched in the prior year will cause lapping to soften year-over-year growth comparisons.

No specific risk or operational failure items were explicitly discussed in the provided transcript.

No full question and answer section transcript was provided for this 2nd quarter earnings call, so no key exchanges can be summarized.