Mercari (4385) Q1 2025 earnings summary

Executive summary

• Q1 revenue was ¥44.9B, up 1.5% year-over-year, with core operating profit in line with expectations and profit attributable to owners up 4.4%.

• Japan Region revenue grew 7.2% YoY to ¥34.1B, but segment profit declined 4.6%; US segment revenue fell 15.3% to ¥9.4B, with a segment loss of ¥857M.

• Marketplace GMV in Japan grew 5% YoY to ¥257.6B, while US GMV declined 16% to $193M.

• Fintech's credit business and Mercari Hallo showed strong growth, with Mercari Hallo surpassing 8M users and 120,000 partner locations.

• CEO Shintaro Yamada will assume US CEO role in January 2025 to address US business challenges.

Financial highlights

• Q1 consolidated revenue was ¥44.9B (+1.5% YoY); core operating profit was ¥3.9B (–13% YoY); profit attributable to owners was ¥2.9B (+4.4% YoY).

• Gross profit for the quarter was ¥31.3B; gross margin was 69.7%.

• Basic EPS rose to ¥17.90; diluted EPS was ¥17.44.

• Total assets at end of Q1: ¥484.6B; total equity: ¥74.5B.

• Cash and cash equivalents decreased by ¥29.9B during the quarter to ¥162.1B.

Outlook and guidance

• Full-year revenue guidance: ¥200.0–210.0B; core operating profit: ¥22.0–25.0B.

• Marketplace aims for ~10% GMV growth and adjusted core operating margin of 37–42%.

• Fintech targets core operating profit of ¥3.0B or higher; US segment aims to break even.

• No dividends are planned for the fiscal year.

• Expect core operating profit buildup to be larger in H2.