Q1 2027 LY Corp Earnings Call Transcript
Key Points
- Consolidated revenue grew 13.1% year on year to JPY553.9 billion, with adjusted EBITDA up 23.1% to JPY154.8 billion, exceeding internal projections.
- Agent i's domain agents expanded to 25, with DAU reaching 12 million, showing strong progress in the shift to AI agents.
- Media business achieved double-digit adjusted EBITDA growth of 14.2% year on year, with margin expanding to 41.8% due to successful cost management and AI-driven productivity improvements.
- Commerce business returned to profitable growth with adjusted EBITDA up 10.2% year on year and margin improving to 17.3%, driven by strong performance in Shopping and Reuse.
- Strategic businesses, including PayPay, saw revenue grow 34.9% year on year, with PayPay's GMV up 23% and EBITDA up 59.1% year on year, supported by high take rates.
- LYP Premium direct members grew 36.8% year on year to 6.82 million, with plans to reach 10 million subscribers through new plan offerings.
- Partnership with 7-Eleven is expected to enhance LYP Premium membership value and expand digital touchpoints through MINI Apps and Official Accounts.
- The tender offer for Kakaku.com is expected to create synergies by combining user touchpoints, data, and payment platforms, with a clear focus on high-priority domains like Tabelog.
- Yahoo! Shopping transaction value grew 8.6% year on year, driven by PayPay points promotions and AI-powered features, while Reuse transaction value grew 18.4%.
- Management expressed confidence in surpassing full-year guidance, with Q1 performance exceeding internal plans and no major risks identified for Q2.
- Search and display ads continued to decline year on year, with search ad revenue facing structural challenges due to AI-driven reductions in user queries.
- Media and Strategic revenue progress was below 25% of full-year guidance in Q1, relying on seasonality and expected second-half concentration.
- Display ad market remains tough, with advertisers becoming more selective and a structural shift to video media, which the company lacks sufficient inventory for.
- The Kakaku.com tender offer carries execution risks, including potential failure, which could force the company to pursue a backup plan involving organic development or alternative partnerships.
- SG&A expenses are expected to normalize from Q2, potentially slowing profit growth compared to Q1's exceptional performance.
- The company faces uncertainty in monetizing Agent i, with no specific monetization strategies yet implemented, only validation and preparation underway.
- The tender offer for Kakaku.com involves significant debt leverage, and the 10% IRR target includes synergies, which may be uncertain.
- Commerce business faced pressure from ASKUL, which offset some gains, though the impact was mitigated by new consolidations.
- The number of search queries is not expected to increase, and the company must rely on higher unit prices to offset this decline, which may not be sustainable.
- The partnership with 7-Eleven is still in early stages, with concrete impacts on KPIs like LYP Premium members and MINI App usage yet to be fully realized.
We will now begin the LY Corporation FY 2026 first-quarter financial results briefing. Thank you very much for joining us today. For this briefing, we will be using the presentation materials available on the LY Corporation website. '
Attending today's briefing is LY Corporation President and Representative Director, CEO, Takeshi Idezawa; Director and Chief Financial Officer, Ryosuke Sakaue; Executive Corporate Officer, Media Search Domain Lead, Hiroshi Kataoka; Executive Corporate Officer, Commerce Domain Lead, Makoto Hide; Executive Corporate Officer, Corporate Business Domain Lead, Yuki Ikehata are in attendance. First, Sakaue will present the financial results for the first quarter of fiscal year 2026. This will be followed by a Q&A session.
The briefing is expected to last approximately one hour. Please take note that this briefing is also being live streamed. We will now start the briefing.
This is Sakaue of LY Corporation. Thank you very much for taking the time out of
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
