LY Corporation (4689): FY2025 Results Summary — Revenue and Profit Rise Despite ASKUL System Outage Impact

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LY Corporation reported FY2025 consolidated revenue of JPY2,036.3 billion (+6.2% YoY) and consolidated Adjusted EBITDA of JPY496.6 billion (+5.5% YoY), with growth achieved despite a temporary impact from ASKUL’s system outage. Excluding ASKUL, revenue grew 13.3% YoY and Adjusted EBITDA grew 12.6% YoY. Adjusted EPS rose 15.3% YoY to JPY28.7. For FY2026, the company plans to significantly increase its dividend to JPY11 per share and is accelerating the rollout of AI agents across its services, targeting ROE of 8% or more in FY2030.

Consolidated Results (Full-Year Actual)

Consolidated revenue increased JPY191.8 billion YoY, driven by growth in the Strategic segment (+JPY104.5 billion, including +JPY77.6 billion from PayPay Consolidated and +JPY15.8 billion from LINE Bank Taiwan) and the Commerce segment (+JPY82.0 billion, including +JPY68.5 billion from LY Corporation’s own business and +JPY14.7 billion from ZOZO). Cost of goods sold rose JPY49.7 billion and SG&A expenses rose JPY87.7 billion YoY. Adjusted EBITDA margin was 24.4%, broadly in line with 24.6% in FY2024.

Item	FY2025	FY2024	Change
Revenue	JPY2,036.3 B	JPY1,917.4 B	+6.2%
Adjusted EBITDA	JPY496.6 B	JPY470.8 B	+5.5%
Adjusted EPS	JPY28.7	JPY24.9	+15.3%
Adjusted EBITDA (Excl. ASKUL)	JPY486.6 B	JPY432.3 B	+12.6%

Segment Results

Media Business revenue was roughly flat at JPY735.1 billion (+0.4%), as account advertising growth (+JPY19.3 billion) and display advertising growth (+JPY3.5 billion) offset a decline in search advertising (-JPY20.7 billion). Media Adjusted EBITDA fell 2.2% to JPY280.6 billion due to increased generative AI costs and sales promotion expenses related to the LINE Official Account and MINI App. Commerce Business revenue rose 1.1% to JPY857.6 billion, but Adjusted EBITDA fell 12.8% to JPY129.9 billion, mainly because ASKUL’s Adjusted EBITDA declined JPY28.4 billion following its system outage, and due to higher sales promotion expenses in shopping and reuse; this was partially offset by a JPY4.8 billion increase from LINE MAN and BEENOS. Within Commerce, ASKUL revenue declined 15.3% to JPY402.3 billion, ZOZO revenue grew 7.1% to JPY222.7 billion, and LY Corporation and others grew 40.7% to JPY232.5 billion. Strategic Business was the strongest performer, with revenue up 30.6% to JPY445.7 billion and Adjusted EBITDA up 85.0% to JPY93.9 billion, driven mainly by PayPay Consolidated, whose revenue within the segment grew 26.1% to JPY375.1 billion. On a standalone basis, PayPay’s own consolidated Adjusted EBITDA reached JPY111.1 billion in FY2025, exceeding JPY100.0 billion for the first time, with GMV of JPY19.4 trillion and 73.36 million registered users.

Segment	Metric	FY2025	FY2024	Change
Media	Revenue	JPY735.1 B	JPY732.1 B	+0.4%
Media	Adjusted EBITDA	JPY280.6 B	JPY287.0 B	-2.2%
Commerce	Revenue	JPY857.6 B	JPY848.4 B	+1.1%
Commerce	Adjusted EBITDA	JPY129.9 B	JPY149.0 B	-12.8%
Commerce – ASKUL	Revenue	JPY402.3 B	JPY475.2 B	-15.3%
Commerce – ZOZO	Revenue	JPY222.7 B	JPY207.9 B	+7.1%
Commerce – LY Corporation and others	Revenue	JPY232.5 B	JPY165.2 B	+40.7%
Strategic	Revenue	JPY445.7 B	JPY341.2 B	+30.6%
Strategic	Adjusted EBITDA	JPY93.9 B	JPY50.7 B	+85.0%
Strategic – PayPay Consolidated	Revenue	JPY375.1 B	JPY297.5 B	+26.1%
Strategic – Other	Revenue	JPY70.5 B	JPY43.6 B	+61.6%
Other/Adjustments	Adjusted EBITDA	-JPY7.9 B	-JPY15.9 B	–

FY2026 Forecast

For FY2026, LY Corporation forecasts consolidated revenue of JPY2.24 trillion (+10.0% YoY) and Adjusted EBITDA of JPY585.0 billion (+17.8% YoY), with growth expected across all segments. Adjusted EPS is forecast at JPY30.0 (+4.4% YoY), a temporary deceleration attributed to the reversal of the reduced income tax impact recorded in FY2025. Media revenue is expected to grow 3.4% on account advertising growth and increased MINI App investment, while display and search advertising are expected to be flat on a combined basis. Commerce revenue is expected to grow 4.9%, helped by the recovery of ASKUL and steady growth in other services. Strategic revenue is expected to grow 32.1%, led by growth in PayPay.

Item	Forecast (FY2026)	FY2025 (Actual)	YoY
Consolidated Revenue	JPY2.24 T	JPY2,036.3 B	+10.0%
Consolidated Adjusted EBITDA	JPY585.0 B	JPY496.6 B	+17.8%
Consolidated Adjusted EPS	JPY30.0	JPY28.7	+4.4%
Media Revenue	JPY760.0 B	JPY735.1 B	+3.4%
Media Adjusted EBITDA	JPY290.0 B	JPY280.6 B	+3.3%
Commerce Revenue	JPY900.0 B	JPY857.6 B	+4.9%
Commerce Adjusted EBITDA	JPY159.0 B	JPY129.9 B	+22.3%
Strategic Revenue	JPY589.0 B	JPY445.7 B	+32.1%
Strategic Adjusted EBITDA	JPY129.0 B	JPY93.9 B	+37.3%
Other/Adjustments Revenue	-JPY9.0 B	–	–
Other/Adjustments Adjusted EBITDA	JPY7.0 B	-JPY7.9 B	–

Shareholder Returns

LY Corporation is shifting its dividend policy from stable dividends to dividends aligned with profit growth. FY2026 dividend per share is planned to increase significantly to JPY11.00 from JPY7.30 in FY2025, reflecting sustained profit growth since the March 2021 business integration. The total payout ratio is expected to rise to approximately 40% in FY2026 from 26% in FY2025. As a medium-term target, the company aims for a five-year cumulative (FY2025-FY2029) total payout ratio of 70% or more.

Item	FY2024	FY2025	FY2026 (Forecast)
Dividend per share	JPY7.00	JPY7.30	JPY11.00
Total payout ratio	33%	26%	Approx. 40%

Medium-Term Plan / Topics

LY Corporation’s medium-term targets for FY2030 are ROE of 8% or more, high single-digit growth or higher in Adjusted EBITDA and Adjusted EPS, and a total payout ratio of 70% or more. For the FY2026-FY2028 period, the company plans to allocate operating cash flow (JPY1,060.0 billion, plus a JPY100.0 billion carryover, totaling JPY1,160.0 billion) approximately 30% or more to CAPEX, approximately 40% to shareholder returns, and approximately 30% to growth investments such as M&A, while utilizing financial leverage as needed. A key strategic focus for FY2026 is the rollout of AI agents, branded “Agent i” and “Agent i for Business,” across existing services including LINE’s Home tab, scheduling, shopping, travel, finance, and other domains, alongside AI features for corporate customers such as an AI staff, AI sales rep, and AI concierge. New AI-era monetization models planned for FY2026 include User Billing via LYP Premium, Agent-Based Ads, and Client Billing via LINE Official Account AI mode. LYP Premium direct subscribers reached 6.37 million as of the most recent quarter (+28.3% YoY).

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.