LY Corporation Posts 23% Profit Growth, Announces $690B Kakaku.com Tender Offer
The Japanese internet giant beat internal projections in Q1 while expanding its AI agent platform and unveiling a major acquisition play in the price comparison market.
Strong Q1 Performance Exceeds Internal Targets
LY Corporation reported first-quarter results that surpassed internal projections, with consolidated revenue reaching ¥53.9 billion, up 13.1% year-on-year, and adjusted EBITDA of ¥154.8 billion, representing 23.1% growth (earnings call, 2026-08-03). The adjusted EBITDA margin expanded to 28%, marking what CFO Ryosuke Sakaue characterized as a "major improvement" in profitability levels.
The results reflected contributions across all business segments, with PayPay consolidation playing a significant role alongside improved gross profit from LY Corporation's core operations. Notably, the company's Media segment achieved 14.2% adjusted EBITDA growth despite modest 2.6% revenue growth, driven by successful cost management initiatives and AI-powered productivity improvements.
AI Agent Platform Reaches 12 Million Daily Active Users
LY Corporation expanded its AI agent platform to 25 domains during the quarter, with daily active users reaching 12 million (earnings call, 2026-08-03). The company emphasized enhanced user navigation between LINE and Yahoo! JAPAN, along with new long-term memory features for user preferences designed to drive daily engagement.
The company's mini apps ecosystem continued rapid expansion, reaching 35,000 monthly active users representing 22.18 million accounts, maintaining growth above 50% (earnings call, 2026-08-03). New monetization initiatives included the June launch of "restaurant options" for digital transformation services and CRM options for LINE official accounts at a monthly fee of ¥5,000.
Strategic Moves: 7-Eleven Partnership and Kakaku.com Acquisition
The company announced a collaboration with 7-Eleven designed to connect Yahoo's 100 million digital customers with the convenience chain's 20 million daily physical customers. The initiative will offer enhanced rewards and coupons for LYP premium members while expanding digital touchpoints through mobile ordering and digital membership programs (earnings call, 2026-08-03).
In a major strategic development, LY Corporation unveiled plans for a tender offer to acquire Kakaku.com, valued at approximately ¥690 billion. The joint proposal with Bain Capital would give LY Corporation a 49.9% economic ownership stake, while Bain holds 50.1% (earnings call, 2026-08-03).
Management cited Tabelog's official account functionality as the highest-priority synergy opportunity, describing it as "something that we must do" and "the most important domain" (earnings call, 2026-08-03). Additional synergies are expected from integrating Kakaku.com's product and word-of-mouth data into LY's Agent i platform to enhance shopping navigation.
Financial Services and Commerce Growth
The Strategic business segment, which includes PayPay, posted 34.9% revenue growth year-on-year, with adjusted EBITDA reaching ¥35 billion. PayPay's registered users expanded beyond 74 million, with gross merchandise volume growing 23% year-on-year (earnings call, 2026-08-03).
In Commerce, the segment achieved 12.5% revenue growth and 10.2% adjusted EBITDA growth despite ongoing pressure from ASKUL. Shopping transaction value rose 9.1% while the reuse business saw particularly strong performance with 18.4% growth (earnings call, 2026-08-03).
Management reaffirmed that the Kakaku.com acquisition would not impact previously announced dividend increases or the three-year capital allocation plan.
This article was generated by MarginX from the earnings call on 2026-08-03. It is not investment advice.