BuySell Technologies Co.,Ltd. Q4 FY2025 earnings call

• Overall FY2025 Financial Results

  • Consolidated net sales: 100.614 billion yen, operating profit: 9.044 billion yen, operating margin 9% (up 1.1 percentage points year-over-year), pre-goodwill amortization operating profit: 10.441 billion yen, net income: 5.27 billion yen. Results were almost entirely in line with the revised FY2025 plan.
  • Q4 FY2025 net sales: 26.97 billion yen (+70.9% YoY), operating profit: 1.53 billion yen (+49.5% YoY), both hitting all-time records. The slight Q3 operating profit decline was intentional strategic control to hit full-year targets, and the full-year result was in line with plan.
  • Inventory increased 3 billion yen from the prior year-end to 12 billion yen, driven by strong Q4 purchases and strategic inventory carrying for FY2026 growth. This is a temporary change with no material issues.

• Strategic Updates & Corporate Actions

  • Announced the full acquisition of DelightZ, operator of the "Yukichi" specialty purchase store chain in the Kyushu region. DelightZ has 14 stores centered in Nagasaki Prefecture, annual net sales of ~4.1 billion yen, EBITDA of ~400 million yen, gross margin over 40% and EBITDA margin of ~10%. The acquisition will strengthen BuySell's footprint in the underpenetrated Kyushu region. The acquisition uses a two-step structure of cash consideration and share swap, with total consideration of 2.4 billion yen, an EV/EBITDA multiple of ~6x, and only 0.2% share dilution. P/L consolidation will start from Q2 FY2026, and DelightZ results are not included in current guidance. Management expects operating profit add-on from DelightZ to exceed goodwill amortization starting in the first full consolidation year.
  • Will start segment performance disclosure from Q1 FY2026, replacing prior company-by-company disclosure to improve transparency following organizational restructuring and brand integration.
  • Implemented a new board director structure: Takayuki Nakamura was promoted to internal Director CSO, and Taichi Hattori (former CFO of SHIFT and Indeed) joined as external director to strengthen strategic planning and corporate governance.
  • Approved a 1-for-2 stock split, effective April 1, 2026, with a record date of March 31, 2026.

• Long-Term Strategic Objectives (unchanged, good progress achieved):

  • Establish a dominant position for on-site visiting purchase business under the Baicel and Fukuchan brands; post-acquisition PMI has progressed very well and strengthened this position further.
  • Reach over 650 total group stores, cementing a top industry position for store purchase business and driving synergies with the on-site visiting business.
  • Develop new overseas sales channels as a new profit base, with ongoing feasibility work and a planned update by FY2027.
  • Strengthen organization and human resources, combined with technology to improve productivity and profit margin: reduced turnover, improved organizational loyalty, stronger sales enablement, and higher purchase unit prices have all delivered visible improvements to operational execution.
  • Completed development of the core "Cosmos" technology platform, which is now fully operational. Management is expanding data linkage and AI application in call centers and on-site appraisal, and has already delivered profit margin improvements from higher productivity, with further acceleration planned.
  • Continue executing serial M&A to roll up the reuse market and drive inorganic growth, with the DelightZ acquisition as the latest step in this strategy.

Formal segmented financial performance disclosure is scheduled to start from Q1 FY2026 (December period) following organizational restructuring. For FY2025, operational performance by business line is as follows: 1. Group On-site Visiting Purchase Business (covering BST, REGATE, Nikkodo): Q4 FY2025 purchase volume increased ~2.2x year-over-year, driven by rising number of visits and growing gross profit per visit. The revisit rate hit record highs in December 2025: 21.7% for BST (Baicel) and 17% for REGATE, both exceeding the initial first-year target for the medium-term plan. Gross profit per visit has consistently exceeded year-ago levels every month, with January 2026 gross profit per visit reaching 159% of the prior year level. 2. Group Store Purchase Business: Total store count grew 72 stores year-over-year to 490 stores by end-FY2025, in line with plan. Purchase volume increased 70% year-over-year, driven by new store openings, cross-group synergies that improved repeat customer acquisition and increased high-value product purchases.

• FY2026 (December period) guidance:

  • Consolidated net sales: 130 billion yen (+~30% YoY), operating profit: 12.5 billion yen (+38.2% YoY), operating margin 9.6%, pre-goodwill amortization operating profit: 13.897 billion yen, net income: 7.5 billion yen (+42.3% YoY). This guidance does not include the DelightZ acquisition. Store purchase business targets organic growth to 570 total stores. Operating profit is expected to be weighted slightly to the first half of FY2026, as the strategically carried over inventory from FY2025 will be sold primarily in the first half, with sequential profit growth planned across all four quarters. The plan includes strategic investments for long-term growth and has high probability of achievement.

• FY2027 Medium-Term Management Plan guidance (upward revised, organic only, excluding new M&A):

  • Upward revised consolidated net sales to 165 billion yen, with a 28.1% CAGR; upward revised operating profit from 11 billion yen to 17 billion yen, with a 37.1% CAGR; upward revised pre-goodwill amortization operating profit from 12.3 billion yen to 18.3 billion yen, with a 32.5% CAGR; upward revised operating margin from 7.9% to 10.3%; upward revised parent company attributable net income from 6 billion yen to 10 billion yen. The previous operating profit target for the final year of the medium-term plan has been pulled forward by one year.
  • The guidance already reflects an investment budget of 6.5 billion yen in total strategic investment over the two years FY2026-FY2027. The top priority for investment remains accelerating serial M&A for inorganic growth, with M&A planned to be funded via borrowing, and management estimates that up to 20 billion yen in additional borrowing capacity is available for M&A investment.

• The upward revision is driven by better than expected operational efficiency improvement, stronger management execution, higher employee retention and growth, and faster than planned synergy realization across the group.

• The China business expansion project still has pending regulatory uncertainty: final detailed regulations on zero-tariff treatment for used branded goods at Hainan Island have not been published, with negotiations ongoing.
• The store purchase business operates in a highly competitive market, requiring continuous operational improvement to maintain differential advantages.
  • Sudden changes in commodity prices such as gold prices have minimal impact due to the company's business model of purchasing inventory and selling at a consistent steady pace, so the business is not sensitive to short-term price fluctuations.
• Strategic inventory carrying has slightly extended inventory turnover compared to normal levels, but management notes this is temporary and not a material issue.

Q: What are the points of differentiation and profit advantages for the group's store purchase business, given that the store purchase space is widely seen as a red ocean?

A: The main differentiator is operational strength. We have extended the enablement organization that we refined in the on-site visiting purchase business to the store purchase business, and we focus heavily on faster employee training, knowledge sharing, and increasing purchase unit prices. This is our core advantage.

Q: Are the planned 5.5 billion yen in marketing investment and 1 billion yen in overseas sales channel investment included in the FY2027 17 billion yen operating profit target, or are they a separate pool?

A: All of these investments are already included as costs in the 17 billion yen FY2027 operating profit plan.

Q: What is the background for the large increase in the FY2027 operating profit target from the FY2026 planned 12.5 billion yen to 17 billion yen?

A: The increase reflects organic growth drivers for on-site visiting purchase: growing visit count from efficient marketing expansion, increasing unit price from expanding product categories (including higher contribution from revisit purchases), and pure growth in store count for the store purchase business.

Q: Which factor contributes the most to the expected growth in gross profit per visit, given the double-digit growth target for this KPI?

A: All the factors you mentioned contribute, but the biggest impact is from improving revisit rates. Revisits have higher purchase unit prices than first-time visits and do not require incremental marketing cost, making them the largest driver of growth.

Q: Can you update on the progress of the China business, and how is it included in FY2026 plans?

A: From late 2024 through 2025, we have repeatedly conducted feasibility tests repairing lower-grade (C/D rank) damaged goods in China and selling them via live commerce. Tests show that this channel delivers significantly higher gross profit than existing channels, and it is confirmed to be a very good sales channel. The main barriers to full launch are setting up local repair workshops, building a live sales studio, hiring streamers, and finalizing shipping routes with tax benefits. Almost all barriers are expected to be cleared now. The only remaining pending item is that China released new Hainan Island port regulations in December 2025, which include zero-tariff goods, but detailed regulations for used branded goods are still pending publication. We are negotiating privately on this issue, and once resolved, we will be able to sell large volumes of our inventory in China. We have also tested that selling unrepairable high-grade (S/A rank) goods via TikTok live commerce in China and North America can deliver significantly higher unit prices than domestic e-commerce. We are currently building out this overseas to-C sales channel, and we expect to announce a formal business plan to the market soon. No material revenue from this business is included in current FY2026 plans yet.

Q: Have you seen any impact from the recent sharp drop in gold prices?

A: You can assume there is almost no impact. Our business model is not based on timing sales to gold price movements; we purchase inventory and sell at a steady consistent pace, so we are not exposed to short-term price fluctuations.

Q: Previously you mentioned a 30% target for revisit rate, but the new target is set at 25% for FY2027. Is 25% the upper limit, and will you target 30% after FY2027?

A: 25% is not the upper limit; it is set as an intermediate milestone. Internally we are still working to grow revisit rate to 30% or even higher, so that remains the long-term goal.

Q: How has the organizational restructuring and brand integration that started in January progressed so far? Are there any major issues?

A: While there are always some challenges with any restructuring, overall progress is broadly in line with expectations. January store business performance is in line with plan, especially the integration of the entire marketing organization under Baicel has gotten off to a good start, which is expected to drive marketing cost optimization and improved personnel mobility going forward.

Q: What is your outlook for growth after FY2028? Can investors expect continued high growth?

A: Management estimates that only 6% of domestic target households have used our on-site visiting purchase service. Brand recall of the Baicel Group when consumers are looking to dispose of items remains low, so there is significant room to grow penetration via branding and awareness building. Total inquiry volume (which drives future visit growth) continues to increase rapidly, so we expect to deliver strong growth even after FY2027. From our perspective, the on-site visiting purchase market remains a large blue ocean, and we are the leading operator in the space. As gross profit per visit grows consistently, we can afford to spend more on advertising per visit, which allows us to enter new advertising channels that we could not access previously. We are confident that we can continue growing at the current pace by investing steadily in marketing and branding to drive conversion to customer inquiries over the coming years.