LY Corporation

Consolidated revenue was JPY 553.9 billion, up 13.1% year over year. Adjusted EBITDA was JPY 154.8 billion, up 23.1% year over year, and margin improved to 28%. In Media, revenue rose 2.6% year over year and adjusted EBITDA rose 14.2%, with margin at 41.8%. Commerce revenue increased 12.5% and adjusted EBITDA rose 10.2%, with margin improving to 17.3%. Strategic revenue grew 34.9% year over year and adjusted EBITDA reached JPY 35 billion, up nearly JPY 14 billion year over year. Management said Q1 progress was ahead of internal projections and that the company remains on track for full-year guidance, though Q2 profit growth may be less pronounced as spending normalizes.

CEO Takeshi Idezawa emphasized the strategic shift toward Agent i and AI-enabled navigation, saying the company aims to make it a core daily-use platform and ultimately grow it to 100 million users. He also highlighted the Kakaku.com tender offer and the 7-Eleven collaboration as examples of using LY’s user touch points, data, and payment infrastructure to deepen engagement. His tone was confident and strategic, repeatedly stressing speed, ecosystem building, and the importance of high-quality conversion points in the AI era.

CFO Ryosuke Sakaue said gross profit exceeded internal expectations and that the profitability improvement was driven not only by PayPay consolidation but also by higher gross profit at LY Corporation. He cited the main financial outcomes: revenue of JPY 553.9 billion, adjusted EBITDA of JPY 154.8 billion, and margin of 28%, and noted all major segments posted gross profit growth. On capital allocation, he said the Kakaku.com deal is being evaluated with an IRR standard of 10%, that the current dividend increase should not be affected, and that the three-year capital allocation plan would not change under current assumptions.

Analysts pressed management on why Kakaku.com is strategically important and how LY would meet its 10% IRR threshold; management answered that the key value lies in Tabelog and other high-quality conversion businesses that fit the AI-agent era, and said debt leverage and synergies are being considered in the assumptions. On media, analysts asked about search ad weakness and whether first-quarter margin strength was temporary; management said search declines are expected as AI reduces re-queries, but monetization per search is improving, and SG&A was unusually light in Q1, so second-quarter profit growth may normalize. On commerce, management said growth was helped by PayPay points promotions, category mix, and cost efficiencies, while reuse was driven by entertainment products, including trading cards and higher-priced items.