‭FY2024.6 Q4 Financial Results FAQ‬
‭ onsolidated‬
C‭Q1. Why did your results diverge from the full-year financial forecast disclosed in‬‭your financial results for FY2024.6 Q3?‬
‭A1. For revenue, the main reason is that GMV slowed more than anticipated due to the‬‭effects of product and marketing initiatives for Marketplace being weaker than expected. For‬
‭core operating profit, we strengthened our investment discipline across the group given‬‭Marketplace’s top-line situation, which led to a higher core operating profit than we had‬‭anticipated. For profit attributable to owners of parent, this was mainly due to the increase in‬‭core operating profit.‬‭ 2. Why did your number of employees decrease QoQ in Q4? What is your current‬Q‭outlook?‬‭A2. This is mainly due to carrying out a restructuring of the organization in the US, including‬‭reductions to the workforce. In FY2025.6, we will continue hiring in mainly areas of high‬‭growth, and we expect the number of employees to increase across the Group.‬‭ 3. Why is there a large difference between core operating profit and IFRS operating‬Q‭profit for FY2024.6 Q4?‬
‭A3. This is because we recorded temporary expenses caused by the restructuring of the US‬‭organization as “Other expenses” in FY2024.6 Q4.‬

‭ arketplace‬M‭Q4. Why did your GMV growth rate for Q4 land at +6 YoY, a number far lower than the‬‭outlook disclosed in FY2024.6 Q3?‬
‭A4. In FY2023.6 Q4, GMV grew significantly, with a growth rate of +15% YoY, due to surges‬‭in prices as a result of the boom in popularity of the trading card industry. This raised the bar‬‭for GMV for FY2024.6. In FY2024.6 Q4, we planned to grow GMV through both marketing‬‭and product improvements, such as the Safe Appraisal feature, which should have had a‬‭positive effect on AOV. However, due to factors such as the features being unfamiliar to‬‭users, we were not able to see the effects that we hoped for within the quarter. As a result,‬‭GMV growth rate landed significantly lower than the outlook we had previously disclosed in‬‭Q3.‬‭ 5. How likely are you to achieve your FY2025.6 target GMV growth rate of around‬Q‭+10%?‬‭A5.‬‭A GMV growth rate of around +10% is a high target,‬‭but we will aim to achieve it with‬‭high growth areas such as crossborder and B2C, both of which have already shown‬‭significant growth in FY2024.6, as drivers. We will also activate C2C transactions by‬‭redesigning UI/UX using AI/LLM and strengthening high-price categories.‬‭ 6. How much do you expect to invest in‬‭Mercari Hallo‬‭in FY2025.6?‬
Q‭A6. We do not plan to disclose the amount of investment in‬‭Mercari Hallo‬‭, but it is included in‬‭Marketplace’s FY2025.6 guidance of an adjusted operating margin of 37–42%.‬‭ intech‬F‭Q7. What was the cause behind achieving a core operating profit of 0.9 billion JPY in‬‭FY2024.6 Q4?‬
‭A7. In the Fintech business, we have been working to establish a revenue base centered‬‭around our credit services. As credit balance has steadily accumulated, mainly through‬‭Merpay Smart Payments‬‭(fixed-amount payment), the‬‭collection rate has achieved a high‬‭level of 99.2% as of FY2024.6 Q4 as a result of enhancing the accuracy of our unique credit‬‭logic utilizing AI credit and taking stronger collection actions. This has significantly enhanced‬‭our profitability. Additionally, we placed strong emphasis on investment discipline across the‬‭Group, enabling us to record a core operating profit of 0.9 billion JPY.‬‭ S‬U‭Q8. In FY2024.6 Q4, why did revenue continue to drop, and why did adjusted‬‭operating losses increase?‬‭A8. With regard to revenue, external factors, such as the extended period of inflation,‬‭continue to have a large impact. Additionally, in late March 2024, we changed our fee model‬‭from one in which sellers pay a 10% fee to one in which the buyer pays fees that fluctuate‬‭depending on category, brand, and other factors, and we are still in the process of finding‬‭appropriate fee rates; this change in take rate also had an impact on revenue. The decrease‬‭in revenue caused adjusted operating losses to increase. The temporary expenses caused‬‭by the restructuring of the organization in Q4 are recorded as “Other expenses” and have no‬‭impact on operating profit.‬‭ 9. How will you drive the business going forward to break even in FY2025.6?‬Q‭A9. By carrying out a restructuring of the organization, including reductions to the workforce,‬‭in FY2024.6 Q4, we minimized fixed costs and believe our organization is prepared to break‬‭even. In FY2025.6, we will continue robust management while carrying out product‬‭initiatives, such as crossborder transactions with‬‭Mercari‬‭in Japan and enhancing the‬‭accuracy of the new fee model, to aim to get back on track for growth.‬‭ isclaimer‬
D‭This material has been prepared based on information gathered at the time of its‬
‭preparation and is not in any way intended as a commitment to future implementation.‬