Coincheck Group NV Q1 FY2027 earnings call

Strategic Transformation Progress

• The company is transitioning from a holding company of independent businesses to a unified synergistic platform built on a "three-legged stool" strategy focused on unlocking the Japanese crypto market, with integration of prior acquisitions progressing faster than planned
• A new unified name and brand for the combined platform will be revealed and rolled out later in the 2026 calendar year
• Coin Check has held the number one downloaded crypto app position in Japan for seven consecutive years, building an unrivaled market position ahead of expected regulatory-driven market growth

Crypto as a Service Segment Updates

• The Mercari partnership, live since June 2026, already provides millions of existing marketplace users access to 15 cryptocurrencies directly within the Mercari app, operating exactly as the partnership model was designed
• Following KDDI's 14.9% equity investment in May 2026, the company is moving forward with mutual customer referrals across KDDI's 40 million user AU mobile ecosystem, a major potential consumer on-ramp for crypto
• A new partnership was added with Credit Saison, a top Japanese financial institution with 33 million customers, to develop crypto access for Saison card members via points, loyalty programs, and integrated payments
• The company does not compete with partners' core businesses, enabling easy collaboration and increasing platform value as new partner channels are added

Asset Management Segment Updates

• 3iQ, the company's acquired asset management arm, was appointed sub-advisor to Dynamic Funds (a Scotiabank subsidiary) for an active multi-crypto ETF listed in Canada, demonstrating institutional credibility at scale
• 3iQ was also selected to manage a portion of Bhutan's sovereign Bitcoin treasury, a high-profile mandate that signals the firm's global institutional trust and opens new global market opportunities
• 3iQ is a fully diversified crypto asset manager with capabilities spanning ETFs, hedge funds, and separate managed accounts, with global distribution licenses across multiple jurisdictions

Custody Segment and Regulatory Progress

• Japan is developing one of the clearest, most robust institutional crypto custody frameworks globally, with new supervisory guideline revisions this quarter that deepen standards for key management, operations, and third-party risk aligned with international norms
• The company has operated a licensed, security-first exchange in Japan since 2019, already built to meet the higher segregation and key management standards being implemented, putting it at a competitive advantage
• Japan is transitioning crypto regulation from the Payment Service Act to the Financial Instrument and Exchange Act (FIEA), reclassifying crypto from a payment instrument to a regulated financial product aligned with the national goal of encouraging household asset formation
• The regulatory transition follows a three-stage roadmap: 1) enabling traditional financial institution participation via updated rules, 2) opening institutional product channels including spot crypto ETFs and investment trust inclusion, 3) implementing more favorable tax treatment aligned with other financial assets that is expected to boost overall market trading volumes

Coin Check Group reports total revenue of 11.43 billion yen (114.3 billion yen original = 11.43 billion yen after conversion) in Q1 FY2027, a 36% year-over-year increase from 8.4 billion yen in Q1 FY2026. Adjusted revenue increased 19% year-over-year to 0.292 billion yen (292 million yen) from 0.2445 billion yen (244.5 million yen) in the prior year quarter. The adjusted revenue growth is driven by a 176 million yen increase in staking revenue and a 404 million yen increase in investment management revenue, both from a full quarter of 3iQ acquisition results. Assets under management reached 10.55 billion yen (105.5 billion yen original = 10.55 billion yen after conversion) as of June 30, 2026, up from 0 yen a year prior, reflecting the 3iQ acquisition closed in March 2026. Total selling, general and administrative expenses increased to 0.43 billion yen (430 million yen) from 0.36 billion yen (360 million yen) year-over-year, mostly due to including a full quarter of 3iQ operating costs. The company reported a net loss of 0.118 billion yen (118 million yen), improved from a 0.137 billion yen (137 million yen) net loss in Q1 FY2026. Adjusted EBITDA loss widened to 51.6 million yen from 39.8 million yen year-over-year. Verified user accounts grew 12% year-over-year to 2.63 million, while total customer assets fell 37% to 63.16 billion yen (631.6 billion yen original = 63.16 billion yen after conversion) due to broad declines in crypto asset market prices. Cash and cash equivalents ended the quarter at 1.61 billion yen (1610 million yen). No separate revenue contribution percentages are provided for the three strategic business segments: Crypto as a Service, Asset Management, and Custody.

• Management did not issue specific numerical financial guidance for the full fiscal year or upcoming quarters, but outlined a clear strategic timeline to capture Japan's expected crypto market unlock over the next 18 months:
• Phase 1 (currently active): Crypto as a service partnerships are now live following the completion of the FIEA regulatory shift, with user growth already underway and expected to deliver positive financial impact in coming quarters
• Institutional product preparations are ongoing currently, with partnership discussions and operational buildout happening weekly to be ready for product launches when the second regulatory stage unlocks around the end of 2027
• Longer-term, management expects tax reform will drive higher trading volumes and enable new non-spot crypto product offerings through retail partner channels, creating a multi-year tailwind for growth
• Management reaffirmed confidence in the strategic positioning to capture the expected reallocation of Japanese household assets from cash and deposits to crypto, with a total potential inflow on the order of 1 trillion yen

• Forward-looking statements are not guarantees of future performance, and actual results may differ materially due to regulatory, market, and operational factors disclosed in the company's SEC filings
• Broad crypto market price declines reduced the company's reported customer asset value in the quarter, and ongoing low global crypto market volumes may impact near-term financial performance
• The full benefits of regulatory reform in Japan, including institutional product access and favorable tax changes, will not be realized until the end of 2027 at the earliest, creating extended timing risk for projected growth
• Crypto trading volumes and revenue are inherently dependent on overall industry market conditions and price volatility, which are outside of the company's control

Q: Are there active asset management partnership discussions in Japan, and will these opportunities extend beyond just ETFs to include other structures like trust products launched before ETFs are approved? / A: Management confirms there are ongoing unannounced discussions with key Japanese partners for asset management opportunities beyond ETFs. 3iQ is a fully diversified crypto asset manager with existing capabilities spanning ETFs, hedge funds, and separate managed account platforms, so the firm is positioned to pursue multiple types of opportunities in Japan. The company has also signed unannounced private asset management distribution partnerships in Switzerland, Canada, Europe, and Abu Dhabi, with future AUM growth expected from these deals. (348 characters)

Q: How do the overall take-rate economics of B2B2C crypto as a service partnerships compare to current retail economics and low-margin pure infrastructure models? / A: The end customer take rate for B2B2C partnerships is closer to the company's retail take rate than to the very low basis point margins of pure back-end infrastructure models. The economics are structured to be mutually beneficial for both Coin Check and its partners, though the specific split of revenue between parties is not disclosed publicly for individual deals. (269 characters)

Q: Can you outline the business impact of each stage of Japan's regulatory transition roadmap? / A: The first stage, the shift to FIEA licensing completed in 2026, has already unlocked crypto as a service partnership activities including user referrals, API integration, custody, and trading, with positive user growth already visible. The second stage, the institutional asset management unlock, is expected around the end of 2027, and the company is already proactively building partnerships and operations to be ready for product launches when that stage goes live. The final tax reform stage is expected to drive higher trading activity and enable new non-spot product offerings through retail partner channels. (436 characters)

Q: What gives Coin Check confidence that crypto will capture meaningful share of Japanese households' massive cash holdings as they shift to investments? / A: Japanese policymakers are actively pushing regulatory reform and policy incentives to encourage household shifting from cash to investments, similar to the successful prior push for retail investment savings accounts. As a digital-first native platform with a leading existing brand and partner ecosystem, Coin Check is positioned to capture demand from younger Japanese investors who prefer digital-first investment experiences. The company will expand beyond spot crypto to offer tokenized products, on-chain derivatives, and other digital assets as regulation allows, creating a long-term growth tailwind. (418 characters) Total characters (excluding field headers): 1471