LY Corp Q1 FY2027: Revenue, Adjusted EBITDA Hit First-Quarter Records

LY Corp announced consolidated results for the first quarter of FY2027 (April–June) on August 3, 2026. Revenue climbed 13.1% to ¥553.9 billion, operating profit rose 6.4% to ¥101.1 billion, and net profit attributable to shareholders reached ¥58.0 billion, up 19.2%. Both revenue and adjusted EBITDA set new highs for the first quarter, extending a run of top- and bottom-line growth from the previous year.

The revenue increase stemmed from consolidation of BEENOS, LINE MAN CORPORATION, and LINE Bank Taiwan, as well as strong performance in the strategic segment led by PayPay, account advertising (up 13.3% year on year), user billing and other (up 12.5%), and steady expansion in commerce from Yahoo! Shopping and ZOZO.

Higher selling, promotion, and personnel costs were fully absorbed by the revenue gains, lifting adjusted EBITDA 23.1% to ¥154.8 billion. Adjusted quarterly net profit surged 54.3% to ¥66.5 billion, and adjusted EPS jumped 60.3% to ¥9.70.

Starting this quarter, LY Corp reports under three segments: Media Business, Commerce Business, and Strategic Business.

### Media Business
Revenue rose 2.6% to ¥182.0 billion, and adjusted EBITDA grew 14.2% to ¥76.1 billion. Account advertising maintained high growth at 13.3%, driven by more paid LINE Official Accounts and expanded pay-as-you-go billing. Display ads (both programmatic and reservation) and search ads declined year on year, reflecting soft ad market conditions. User billing and other revenue increased 12.5%, helped by the popularity of “LYP Premium with Netflix.” Efficiency gains in generative AI-related costs also improved segment margins.

### Commerce Business
Revenue expanded 12.5% to ¥242.8 billion, with adjusted EBITDA up 10.2% to ¥42.0 billion. Contributions from the newly consolidated BEENOS and LINE MAN CORPORATION, along with growth at Yahoo! Shopping and ZOZO, drove the top line. Higher selling expenses and personnel costs were offset by the revenue increase.

### Strategic Business
The strategic segment delivered standout growth: revenue jumped 34.9% to ¥130.2 billion and adjusted EBITDA soared 64.4% to ¥35.0 billion. PayPay’s consolidated handling value reached ¥5.5 trillion, up 23.0%, and PayPay Bank’s loan balance hit ¥1,334.8 billion, up 37.5%. The consolidation of LINE Bank Taiwan in June 2025 and expansion at LINE Pay Taiwan further boosted fintech earnings.

LY Corp left its FY2027 full-year forecast unchanged, targeting revenue of ¥2,240.0 billion (up 10.0% year on year), adjusted EBITDA of ¥585.0 billion (up 17.8%), and adjusted EPS of ¥30.0 (up 4.4%). The company said it will continue “disciplined investment in areas critical to future growth” while strengthening products to drive revenue and profit.

First-quarter revenue reached 24.7% of the full-year target, putting the company on solid footing to meet its annual plan.

At quarter-end, total assets stood at ¥11,612.4 billion (up 3.6% from the prior fiscal year-end), mainly due to growth in loans at the banking business and cash equivalents. Interest-bearing debt rose 16.4% to ¥2,283.1 billion, reflecting funding for strategic investments and working capital.

Cash flow from operating activities showed a net outflow of ¥25.2 billion, driven by increased banking loans. Investing activities consumed ¥64.1 billion (including purchases of securities), while financing activities generated an inflow of ¥218.1 billion (borrowings and CP issuance). Cash and cash equivalents increased to ¥1,200.9 billion.

The company plans a significant dividend increase to ¥11.00 per share for the full year, up from ¥7.30 last year. The entire amount is scheduled for the year-end payment; no interim dividend is planned. No new share buyback program was announced.

On July 31, 2026, PayPay Corporation, jointly with its parent SoftBank Corp., entered into a strategic business alliance agreement with Seven & i Holdings Co., Ltd. and Seven-Eleven Japan Co., Ltd. Under the arrangement, PayPay will acquire ¥100.0 billion of Seven & i shares through a third-party allotment (48,309,178 common shares, representing 2.13% of outstanding stock).

The alliance envisions integration of 7iD with PayPay ID, rollout of PayPay points at Seven-Eleven stores, development of the Seven-Eleven app by LY Corp, and mutual data utilization. The aim is to enhance convenience for member stores and expand the PayPay ecosystem. The investment will increase “Other financial assets” by ¥100.0 billion on the consolidated balance sheet from the second quarter onward.

The ¥100 billion investment marks a decisive step to accelerate retail partnerships, with future synergy effects drawing close attention.

While explicit risk disclosures are limited in the earnings report, several issues stand out:

• Advertising weakness: Display and search ad revenue contracted year on year. A prolonged economic slowdown or intensified competition could keep ad pricing under pressure.
• Fintech dependence: The profitability of PayPay’s fast-growing payments business may be squeezed by rising merchant management costs and system investments.
• Regulatory environment: Changes in financial regulations (banking, securities) and strengthened data-privacy laws could affect operations.
• M&A integration: Realizing full benefits from recent acquisitions like BEENOS and LINE Bank Taiwan remains a key execution challenge.

To mitigate these risks, LY Corp is pursuing revenue diversification through generative AI-driven efficiencies and expansion of user subscription services.