LY Corporation reports second quarter results

LY Corporation reported strong FY2024 Q2 results on November 5, 2024, revising its full-year guidance for adjusted EBITDA and adjusted EPS upwards.

Progress is being made on addressing group-wide issues, including achieving continued listing requirements for the Prime Market through share buyback/cancellation of treasury shares and implementing security measures.

The company is focusing on enhancing LINE Official Account/LINE MINI App, increasing transaction value through LINE GIFT and LINE revamp, and accelerating the growth of the financial business through service linkage with PayPay.

FY2024 Q2 Business Results Summary

• Record Q2 Performance: The company achieved its highest ever Q2 results for both revenue (JPY462.2 billion, +4.7% YoY) and adjusted EBITDA (JPY112.6 billion, +9.1% YoY).
• Guidance Revision: Upward revision for consolidated business results guidance, including adjusted EBITDA and adjusted EPS.

Group-Wide Issues Progress

• Prime Market Listing: The share buyback/cancellation of treasury shares is expected to fulfill the continued listing requirements for the Prime Market.
• Security Measures: Security measures are being implemented as planned.

Product Reinforcement Measures

• Enhanced Monetization: Focus on enhancing LINE Official Account/LINE MINI App to support digital transformation and enrich customer experience, leading to improved monetization.
• Increased Transaction Value: Initiatives to increase transaction value include leveraging LINE GIFT and LINE revamp.
• Financial Business Growth: Accelerating growth of financial business through service linkage with PayPay.

Business Results — Media Business

• Performance Highlights: Revenue and profit growth driven by account advertising, maintaining a high margin (over 30%).
• Revenue Drivers: Growth in account advertising and slowdown in the decrease of search advertising revenue from partners’ websites.
• Profit Drivers: Revenue growth and cost control measures.
• Account Advertising Growth: Steady growth in the number of paid accounts.

Business Results — Commerce Business

• Performance Highlights: Revenue growth in shopping and travel businesses offset the impact from the deconsolidation of subsidiaries.
• Transaction Value Growth: Travel business showed significant growth, while shopping business maintained positive growth despite the absence of last year’s demand from the hometown tax reform.
• Profit Drivers: Revenue growth and continued cost discipline.

Business Results — Strategic Business

• Performance Highlights: PayPay Consolidated drove revenue and profit growth.
• Revenue Drivers: Growth across all businesses, including PayPay Consolidated, PayPay Bank, and other Fintech services.
• Profit Drivers: Revenue growth contributed to profit increase despite increased point-reward expenses.
• PayPay Consolidated Overview: Consolidated GMV exceeded +20% YoY growth, and profit increased significantly through profitability management and fixed cost reduction.

Post-Merger Review

• Merger Purposes Achieved: The company has steadily accomplished its merger purposes of “reinforcement of profitability” and “enhancement of product development capabilities.”
• Key Achievements: Exceeding FY2023 adjusted EBITDA target, achieving profitability for Strategic Business and PayPay Consolidated, introduction of in-house companies, and numerous new services/features.

Future Initiatives

• Official Account/MINI App: Reinforce LINE MINI App to increase user touchpoints and monetization, leveraging LINE’s unique strength to improve profitability.
• LINE Commerce: Aim for significant growth in annual transaction value of LINE GIFT and boost user engagement through the LINE revamp.
• PayPay Finance: Further accelerate growth in the financial business through service linkage with PayPay, including PayPay Card and PayPay Bank services.

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