Kakaku.com Inc

TSE:2371

Q3-2025 Earnings Call

[村上 敦浩, executive]

Hello. This is Murakami from Kakaku.com, Inc. Thank you very much for joining us today. I would like to quickly explain the financial results for the third quarter of the fiscal year ending March 31, 2025.

Please see Page 3 for our consolidated operating results. Revenue for the third quarter were JPY 20,324 million, up 17.9% year-over-year, and operating profit was JPY 8,032 million, up 14.7% year-over-year for an operating margin of 39.5%. Progress against the earnings forecast reported in May of last year is also on track, with revenue at 76.6% and operating profit at 77.4%.

Quarterly trends of these results are shown on Page 4. And on Pages 5 and 6, we have provided graphs of the breakdown and trends of expenses. Please review these as well.

Continuing on to Page 7, we have the operating results by segment. In this third quarter, Kakaku.com revenue increased by just under 10%, Tabelog revenue by over 20% and Kyujin Box revenue increased by just under 45%. I will now report on the details of each segment on the following pages.

First, on Page 9 are the details for Kakaku.com. As in the second quarter, all businesses, including shopping, services, advertising and insurance, reported an increase in sales, resulting in an overall increase of 9.5% in revenue and 8.8% in segment income.

Next, on Pages 10 and 11, we provided the breakdown of each of Kakaku.com's businesses. The shopping business remained positive for both durables and consumables. In the service business, the strong factors in the personal finance category have run their course and the growth rate as a whole is slowing down. In the advertising business, sales activities during the year-end sales season proceeded smoothly, and we were able to achieve good results for the first time in a long time. The pace of growth in the insurance business has slowed slightly.

Next, on Page 12, we have Tabelog. Sales for both restaurant advertising and restaurant reservation increased, resulting in an overall increase of 21% and a 19.4% increase in segment income. The slight decrease in profit margin was due to a onetime expense from a point campaign for online reservations made for the year-end party season. Furthermore, since Tabelog is celebrating its 20th anniversary this March, we are preparing a brand promotion to coincide with the anniversary at the end of March. For this, we are expecting to spend an additional JPY 300 million.

Continuing on Page 13 are the quarterly trends of various KPIs. The number of restaurants contracted increased steadily for both restaurant advertising and restaurant reservations. The number of online reservations has also increased steadily due to an increase in all relevant KPIs, restaurants contracting the online reservation service, ratio of online reservations and number of persons per reservation.

On Page 14, we have details for Kyujin Box. Here, sales per user grew significantly, resulting in an overall revenue increase of 44.5%. On the other hand, segment income increased by just 9.5% due to a decline in the efficiency of acquisition ads, the enhancement of our sales structure as well as production costs related to mass advertising deployed in the fourth quarter and other costs. Despite a slight decline in the efficiency of acquisition ads, we continue to maintain a high ROAS, and we plan to continue to grow our top line by enhancing both marketing and our sales structure.

Please also see the graphs on Page 15, showing the quarterly trends of the main KPIs for Kyujin Box. Finally, on Page 16, we have the Incubation segment. Unfortunately, the real estate domain and the travel and transportation domain saw lower revenue growth rates, resulting in lower overall revenue and segment income. Currently, we recognize that although this segment is able to secure a certain level of profit, we currently do not see any business that could become a major pillar of our business following Kyujin Box. We intend to grow this segment by adding new businesses, for instance, through M&A.

Finally, we have some topics. Please see Page 18. In order to strengthen marketing and branding for Kyujin Box, we are conducting a large-scale mass advertising campaign in the fourth quarter. For this, in addition to costs related to our regular service operations, we will spend approximately JPY 900 million as a strategic investment.

Finally, Page 19. In addition to the year-end dividend forecast of JPY 25 per share announced in May, we have now announced plans to pay a special dividend of JPY 30 per share. We have stated that after retaining the necessary funds for business operations and conducting regular dividends, we will return excess reserves to shareholders in a flexible manner. This time, taking into account our consolidated financial results, business development and feedback from investors, we have decided to provide a special dividend.

We will continue to strive to manage our business with capital efficiency in mind. This concludes my brief explanation of our financial results for the third quarter of the fiscal year ending March 31, 2025.

The rest of this document is for reference only, and I hope you will take a look at it when you have time. Thank you very much for your attention.