LY Corporation一季度营收5539亿日元、调整后EBITDA同比增长23.1%

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Introduction & Market Context
LY Corporation (TSE:4689) presented its fiscal first-quarter 2026 earnings on August 3, 2026, showcasing accelerating profit growth and significant progress in its artificial intelligence initiatives. The Japanese digital services company reported consolidated revenue of JPY 553.9 billion, up 13.1% year-over-year, while adjusted EBITDA climbed 23.1% to JPY 154.8 billion. The results exceeded internal projections across all major segments, with the company making steady progress toward full-year guidance at 24.7% for revenue and 26.5% for adjusted EBITDA.
The stock showed minimal reaction to the results, trading at $446.5, down just 0.07% from the previous close of $446.8. Shares remain positioned roughly midway in their 52-week range of $365.1 to $563.9, suggesting investors are balancing solid execution against lingering questions about advertising trends and the company’s ability to monetize new AI services at scale.
Quarterly Performance Highlights
As shown in the following consolidated performance overview, LY Corporation delivered broad-based improvement across all three major business segments during the first quarter.
The company’s adjusted EBITDA margin expanded to 28.0%, up from 25.7% in the prior-year quarter, reflecting improved operating leverage as profit growth significantly outpaced revenue gains. Adjusted earnings per share surged 60.3% to JPY 9.70, demonstrating the compounding effect of margin expansion on bottom-line results.
The quarterly revenue and profit trends illustrate the acceleration in LY Corporation’s financial performance over the past five quarters.
Revenue growth of 13.1% represented the strongest year-over-year increase since at least Q1 2025, while the 23.1% adjusted EBITDA growth marked a significant inflection point after several quarters of more modest profit expansion. The 28.0% EBITDA margin in Q1 2026 stands as the highest achieved during the five-quarter period shown.
The drivers behind the adjusted EBITDA improvement reveal contributions from multiple business units and the impact of recent acquisitions.
LY Corporation’s core operations contributed JPY 14.8 billion to EBITDA growth, with gross profit gains of JPY 13.7 billion partially offset by a JPY 1.0 billion increase in selling, general and administrative expenses. PayPay’s consolidation added JPY 14.0 billion, while newly consolidated subsidiaries including BEENOS, LINE Bank Taiwan, and LINE MAN contributed JPY 3.9 billion, offsetting a JPY 5.2 billion decline from ASKUL.
AI and Digital Innovation
LY Corporation’s AI-powered service Agent i reached 12 million daily active users as of June 2026, expanding across 25 specialized domains as the company pushes deeper into artificial intelligence applications.
The platform’s growth was driven by enhanced user navigation that enables seamless transitions from LINE and Yahoo! JAPAN apps, along with long-term memory features that personalize the experience based on user preferences. Domain agents now span categories including shopping, weather, career advice, recipes, entertainment, and image generation, among others. Management framed the 12 million user milestone as "a pretty good beginning" while maintaining a long-term target of 100 million users.
The company’s strategic partnership with Seven-Eleven Japan demonstrates how LY is leveraging its digital infrastructure to create value for both consumers and retail partners.
The collaboration has generated over 100 million cumulative digital customers as of March 2026, combining Seven-Eleven’s approximately 20 million daily physical customers with expanded digital touchpoints. LYP Premium members receive enhanced benefits at Seven-Eleven locations, including higher point reward rates and exclusive coupons. The LINE Official Account and LINE MINI App provide additional engagement channels, with the MINI App reaching 28.97 million monthly users as of March 2026.
LY Corporation is also monetizing its digital infrastructure through new DX (digital transformation) solutions for restaurants and beauty salons, with commercial deployment beginning in June 2026.
The Restaurant Option and Beauty Option centralize reservations, customer engagement, and promotions on LINE, while Advanced LINE Official Accounts offer enhanced CRM capabilities including customer data management, attribute-based messaging, and improved chat functionality. The Advanced LINE Official Accounts service is priced at JPY 5,000 per month, representing an early step in converting the company’s massive user base into recurring revenue streams.
Segment Performance Analysis
The Media Business segment demonstrated improving profitability despite modest revenue growth, as the company shifts its revenue mix toward higher-margin products.
Media segment revenue increased 2.6% to JPY 182.0 billion, while adjusted EBITDA grew 14.2% to JPY 76.1 billion. The EBITDA margin expanded 4.2 percentage points year-over-year to reach 41.8%, the highest level in at least five quarters. This margin expansion occurred despite ongoing structural pressure in search and display advertising, which management expects to remain roughly flat for the full year.
The revenue composition within the Media segment reveals a strategic pivot away from traditional advertising formats toward account-based advertising and subscription services.
Account advertising revenue grew 13.3% to JPY 38.3 billion, while user subscriptions and related services increased 12.5% to JPY 42.0 billion. These gains offset declines in search advertising (down 6.8% to JPY 43.0 billion) and display advertising (down 2.5% to JPY 58.7 billion). The company attributed lower search volumes to AI-driven changes in user behavior, with consumers making fewer repeated queries as AI provides more comprehensive answers.
Paid LINE Official Accounts continued their steady expansion, reaching 500,000 globally as of Q1 2026.
The account base grew from 454,000 in Q1 2025 to 500,000 in Q1 2026, with plan-based revenue accounts comprising 454,000 and pay-as-you-go billing accounts totaling 46,000. Account advertising revenue has maintained double-digit year-over-year growth for at least five consecutive quarters, demonstrating the durability of this revenue stream.
The LINE MINI App platform showed particularly strong momentum, with both the number of apps and monthly active users growing more than 50% year-over-year.
The number of LINE MINI Apps reached 35,000, up 50.4% from 23,000 in Q1 2025, while monthly active users grew 50.6% to 22.18 million. The Q4 2025 spike to 28.97 million MAU reflected temporary traffic increases from tab launches and promotional campaigns, with the metric normalizing in Q1 2026 while maintaining strong year-over-year growth.
LYP Premium, the company’s subscription service, continued expanding its member base while preparing to launch new pricing tiers designed to broaden appeal.
Direct subscribers reached 6.82 million as of Q1 2026, up 36.8% year-over-year, as the company works toward its goal of 10 million subscribers. New offerings launching in July and fall 2026 include a Lite Plan at JPY 290 per month focused on frequently used benefits, and a bundled LINE MUSIC plan at JPY 1,080 per month. Enhanced benefits including premium block, message editing, message scheduling, and call recording are scheduled to roll out from August 2026 onward.
Commerce and Strategic Segments
The Commerce Business segment delivered double-digit revenue and profit growth, with margins improving from prior quarters.
Commerce revenue increased 12.5% to JPY 242.8 billion, while adjusted EBITDA rose 10.2% to JPY 42.0 billion, bringing the EBITDA margin to 17.3%. The performance represented a significant improvement from the margin compression experienced in Q3 and Q4 of fiscal 2025.
The revenue composition within Commerce reflects the impact of recent acquisitions, particularly BEENOS and LINE MAN.
LY Corporation’s commerce operations grew 83.8% year-over-year to JPY 75.6 billion, though excluding BEENOS and LINE MAN, organic growth was 11.2%. ZOZO and ASKUL combined contributed JPY 167.2 billion, down 4.3% year-over-year, with ASKUL’s adjusted EBITDA declining JPY 5.2 billion during the quarter.
Transaction value trends across commerce categories showed particular strength in the reuse business, which sustained robust growth momentum.
Reuse transaction value increased 18.4% year-over-year to JPY 296.4 billion, or 10.8% excluding BEENOS. Shopping transaction value grew 9.1% to JPY 349.8 billion, while services transaction value rose 10.2% to JPY 204.0 billion. ZOZO and ASKUL combined generated JPY 235.1 billion in transaction value, up 4.8% year-over-year.
The company attributed reuse growth to strategic initiatives including shipping fee rebates and coupon distribution, while shopping growth benefited from the introduction of PayPay Points and enhanced AI-powered features.
Yahoo! JAPAN Shopping transaction value grew 8.6% year-over-year in Q1 2026, accelerating from 6.3% in Q4 2025, driven by PayPay Points integration, reinforced frequently purchased product categories, and AI feature enhancements. The reuse business, encompassing Yahoo! JAPAN Auction and Flea Market, posted 18.4% growth (10.8% excluding BEENOS) as the company stimulated demand in an expanding entertainment market.
The Strategic Business segment, which includes PayPay and other fintech initiatives, delivered the strongest growth across all segments.
Strategic segment revenue surged 34.9% to JPY 130.2 billion, while adjusted EBITDA jumped 64.4% to JPY 35.0 billion. The EBITDA margin expanded to 26.9%, up from 22.1% in the prior-year quarter, demonstrating improving unit economics as the PayPay ecosystem scales.
PayPay’s consolidated operations accounted for the majority of Strategic segment revenue, growing 28.4% year-over-year to JPY 108.6 billion, while other fintech services surged 81.7% to JPY 21.5 billion.
The comprehensive PayPay metrics illustrate the payment platform’s continued expansion across all key performance indicators.
Registered users reached 74.56 million, up 6.8% year-over-year, while gross merchandise value (GMV) grew 23.0% to JPY 5.5 trillion. PayPay’s consolidated revenue increased 27.4% to JPY 109.7 billion, and EBITDA surged 59.1% to JPY 37.3 billion, reflecting improving monetization as the user base matures and transaction frequency increases.
Strategic Initiatives
LY Corporation announced plans to launch a tender offer for Kakaku.com, Inc., the operator of price comparison and restaurant review services, in partnership with private equity firm Bain Capital.
The tender offer is structured with two pricing scenarios totaling approximately JPY 690 billion: JPY 3,520 per share if all shares are acquired through the tender offer, or JPY 3,640 per share if Kakaku.com first acquires treasury shares from KDDI. The minimum acceptance threshold is set at 66.05% of shares, with no upper limit. Bain Capital and LY Corporation will hold 50.1% and 49.9% economic ownership, respectively, combining Bain’s capital provision and management support capabilities with LY’s business infrastructure, data assets, and product development expertise.
Management outlined four key synergy areas expected from the Kakaku.com acquisition, with Tabelog restaurant reviews identified as the primary opportunity.
The proposed synergies include user referrals to Kakaku.com’s businesses, integration of Kakaku.com’s assets into Agent i, combined restaurant solutions leveraging Tabelog and LINE, and expanded HR solutions. The company emphasized that the alliance will be pursued on an arm’s-length basis, with benefits to Kakaku.com recognized from Kakaku.com’s perspective. Management stressed that "speed is very important at this juncture" given rapid AI-related market changes.
Forward-Looking Statements
Management expressed confidence in achieving full-year guidance, noting that first-quarter performance exceeded internal projections and provided a cushion for potential challenges later in the year. Chief Financial Officer Ryosuke Sakaue stated, "The full year guidance, I think especially about the consolidated numbers, we are more confident that we can achieve them. In the shorter term, maybe we can exceed the guidance."
The company acknowledged that some costs will normalize from the second quarter onward, potentially moderating the pace of margin expansion. In the Media segment, management maintained its expectation that search and display advertising will be roughly flat for the full year, with the first half remaining difficult for display ads before recovery measures take effect in the second half through the launch of LINE Home and a more integrated advertising platform.
Key forward-looking priorities include expanding Agent i toward its 100 million user target, growing LYP Premium from 6.82 million direct members toward 10 million subscribers including new plan users, launching additional DX services for restaurants and salons, continuing to scale PayPay and related financial services, and executing the Kakaku.com tender offer. Chief Executive Takeshi Idezawa framed Agent i’s current 12 million users as "a pretty good number" for a beginning stage, positioning the AI platform as a long-term growth engine central to the company’s strategy.
The company faces several execution risks, including structural pressure on traditional advertising from AI-driven search behavior, the need to prove a scalable revenue model for Agent i, potential integration challenges with the Kakaku.com acquisition, and increasing advertiser selectivity on return on investment. Management’s ability to navigate these challenges while maintaining margin expansion and revenue growth will determine whether the company can sustain its current momentum through the remainder of fiscal 2026.
Full presentation:
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