Mercari Inc

It is time, so we would like to begin Mayor Kari's FY2025 second quarter. Sorry about that. We would like to begin FY2025 second quarter earnings briefing for Mayor Kari. My name is Kamei Kyoko. I'm an announcer, and I'll be your emcee today. Thank you for having me. Today, our Executive Officer, SVP of Corporate and CFO, Sayaka Eda, will be taking you through the second quarter results of FY2025. Afterwards, we will have a Q&A session for the media, and the session will end at 4.35. Please refrain from recording today's session in its entirety. Without further ado, Ms. Zeta, please go ahead. Good afternoon. Thank you for taking time out of your busy schedule to attend the earnings briefing for Merakari FY2025 second quarter. So CFO Eda, myself, will be introducing the earnings results today. First of all, this is our group mission. Circulate all forms of value to unleash the potential in all people. So each group, each business is striving to achieve this group mission every day. Now jumping right into the financial overview. First, starting with the consolidated results. These are the forecasts that we announced at the beginning of the fiscal year. In principle, we want to aim for top line growth that will lead to increased profits. And of course, we want to grow each business, but we want to expand our businesses centered around group synergy and also We were expecting a build-up of core operating profit towards the end of the year. So revenue forecast was 200 to 210 billion yen. Core operating profit is 22 to 25 billion yen. With this in mind, here are the second quarter highlights. So we achieved... Recruiting King consolidated core operating profit of $7 billion, up 79% year-on-year. So we achieved high profitability for all three business pillars, namely market, fintech, and U.S. Core operating profit grew year-on-year and queue-on-queue. On the other hand, marketplace and U.S., GMV growth rates for these two businesses fell below our initial expectations. However, They began to improve in the latter half of the second quarter, and we also saw steady progress in high-growth areas that we identified and introduced at the beginning of the year. Working towards sustainable growth in the mid to long term, we are prioritizing the establishment of a safer and more secure usage environment across the entire group. Here are the consolidated results for each quarter. As I mentioned before, so the revenue grew by 2% to 49.2. Core operating profit grew 79% year-on-year and landed at 7 billion. This is the second quarter KPI summary. First, starting with marketplace, the GMV was 296 billion. Year-on-year growing by 5%. Merkari Hello, the on-demand work, we are disclosing these performance as part of the marketplace, but we are not charging any usage fee right now. So the GMV does not include any revenues from Merkari Hello at the moment. And the adjusted core operating margin was 39%. If we exclude Mercari Hello investments to Mercari Hello, the adjusted core operating margin would be 46 percent. Moving on to fintech, credit balance year-on-year grew by 38 percent, landing at 213.3 billion yen. The core operating profit, we saw three consecutive quarters of profits landing at 1.2 billion. And for the U.S. business, GMV year-on-year, unfortunately, declined significantly by 27 percent year-on-year, finishing at 175 million U.S. dollars. On the other hand, core operating profit, we landed at negative 100 million yen, so we significantly improved the operating losses. Now moving on to each business. I would like to share some color for each business, starting with marketplace. So we wanted to achieve stable growth of the C2C business and also add the cross-border transaction and B2C business. So with all these three businesses, we wanted to aim a GMV growth rate of around 10% year-on-year and just a core operating margin of 37% to 42%. So this is the range that we introduced at the beginning of the fiscal year. GMV, October and November, we saw high temperatures, so we didn't see much movement in these two months of heavier items, fall winter items. So GMV was off to a slow start, and we also saw impact from fraudulent use of our services.

Thank you.

But we also changed the home screen and the product improvements were made as well in the second quarter as we introduced at the beginning of the year. So as a result of these efforts, GMV started to grow very positively. So the GMV growth has returned to normal levels in the second half of the quarter.