Net Protections (7383) Q2 2025 earnings summary

Executive summary

• Upward revision to FY3/25 full-year earnings forecast driven by strong H1 results and stable outlook for H2, with operating profit now expected to reach JPY1.7bn, up 57.3% from the previous forecast.

• H1 operating profit surged to JPY866mn, an increase of JPY1.47bn year-over-year, with GMV up 11.3% to JPY304.7bn.

• Operating profit in H1 exceeded expectations, driven by over JPY200 million in higher administrative fees for late payments and about JPY700 million from improved delinquency rates compared to the initial plan.

• Growth in both BtoC and BtoB segments, with atone GMV up 44.7% and NP Kakebarai GMV up 28.4% year-over-year.

• Internal controls and business unit efforts, rather than macroeconomic factors, were credited for the improved delinquency rate.

Financial highlights

• H1 gross profit rose 33.2% year-over-year to JPY4,904mn, driven by improved credit screening and the introduction of late payment administrative fees.

• Administrative fees for late payments and improved delinquency rates contributed a combined JPY900 million positive swing versus the original forecast.

• SG&A expenses decreased 6.2% year-over-year, with the SG&A to GMV ratio improving to 1.37%.

• EBITDA for H1 reached JPY1,678mn, up 1,076.7% year-over-year.

• Profit attributable to owners of parent for the full year is forecast at JPY1,039mn, up 57.9% from the previous forecast.

Outlook and guidance

• Full-year operating profit forecast revised upward to JPY1.7bn, with gross profit expected at JPY10.26bn.

• Additional JPY300mn investment in H2 marketing to drive future GMV growth, with effects expected from FY3/26 onward.

• GMV and revenue plans for H2 remain unchanged, as marketing effects are anticipated in subsequent years.

• Management expects continued solid GMV and gross profit growth in line with the medium-term plan, with profit increases anticipated next fiscal year.

• Shareholder returns remain a key focus, with future returns to be balanced against profit and investment needs.