Q1 FY2026
Filed Jul 30, 2026Total Revenue grew 27% year-on-year to ¥109.8 billion, Profit for the period reached ¥19.7 billion, up 83% year-on-year, and Adjusted EBITDA margin expanded to 34%; the Company raised fiscal-year guidance.
Revenue, operating profit, profit for the period, Adjusted EBITDA and key payment and financial-services operating metrics increased year-on-year. The Company also raised guidance for the year ending March 31, 2027.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total Revenueother | ¥109,788 million | – | 27% |
| Transaction and service incomeother | ¥69,961 million | – | – |
| Interest incomeother | ¥35,144 million | – | 78% |
| Gains (losses) on financial instrumentsother | ¥3,804 million | – | – |
| Other operating incomeother | ¥879 million | – | – |
| Total Transaction Costother | ¥25,044 million | – | – |
| Total Transaction Cost as a percentage of Total Revenueother | 23% | – | – |
| Settlement related costsother | ¥13,190 million | – | – |
| Provision for loss allowanceother | ¥8,314 million | – | – |
| Interest expensesother | ¥3,540 million | – | – |
| Total operating expensesother | ¥79,923 million | – | – |
| Point expensesother | ¥16,041 million | – | – |
| Employee benefit expensesother | ¥11,766 million | – | – |
| Professional and outsourcing services expensesother | ¥6,518 million | – | – |
| Depreciation and amortizationother | ¥6,125 million | – | – |
| License feesother | ¥5,395 million | – | – |
| Advertising and promotion expensesother | ¥2,241 million | – | – |
| Tax and chargesother | ¥1,173 million | – | – |
| Amortization of contract costother | ¥522 million | – | – |
| Other operating expensesother | ¥24,094 million | – | – |
| Operating profitother | ¥29,865 million | – | – |
| Operating profit marginother | 27% | – | – |
| Profit before taxother | ¥29,805 million | – | – |
| Profit for the periodother | ¥19,749 million | – | 83% |
| Profit for the period marginother | 18% | – | – |
| Profit for the period attributable to owners of the parent companyother | ¥18,428 million | – | – |
| Basic earnings per share attributable to owners of the parent companyother | 27.21 | – | – |
| Diluted earnings per share attributable to owners of the parent companyother | 27.02 | – | – |
| Adjusted EBITDAnon-GAAP | ¥37,395 million | – | 59% |
| Adjusted EBITDA Marginnon-GAAP | 34% | – | – |
| Consolidated Total GMVother | ¥5.49 trillion | – | 23% |
| Payment Segment GMVother | ¥5.39 trillion | – | 23% |
| PayPay Balance GMVother | ¥2.98 trillion | – | – |
| PayPay Credit GMVother | ¥1.40 trillion | – | 30% |
| PayPay Card GMVother | ¥1.01 trillion | – | 28% |
| Take Rateother | 1.64% | – | an increase of 0.02 percentage points year-on-year |
| Cost Rateother | 1.23% | – | – |
| PayPay MTUother | 41.70 million users | – | 10% |
| PayPay Number of Transactionsother | 2,544 million transactions | – | – |
| Payment Segment Monthly GMV per MTUother | ¥43,261 | – | 11% |
| PayPay registered usersother | 74.6 million | – | 7% |
| Active rateother | 56% | – | up 1.7 percentage points year-on-year |
| PayPay Bank Balance of Depositsother | ¥2,342.3 billion | – | 17% |
| PayPay Bank Balance of Loansother | ¥1,334.8 billion | – | 37% |
| PayPay Securities accountsother | 1.82 million | – | 29% |
| eKYC-verified usersother | 42.5 million | an increase of 1.9 million | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| PaymentGMV reached ¥5.39 trillion, supported by online channel GMV, PayPay Credit GMV and PayPay Card GMV, as well as promotional initiatives and SoftBank mobile-plan collaboration. The ratio of high-margin online payments within combined PayPay Balance and PayPay Credit GMV rose to 18%. | ¥88,583 million | – | 25% |
| Financial serviceInterest income rose 78% year-on-year, supported by loan growth, increased interest income from securities and other investments amid rising interest rates, and growth in mortgages, consumer loans and business loans. Gains on financial instruments were ¥3,293 million. | ¥22,463 million | – | 44% |
For the year ending March 31, 2027 and the three-month period ending September 30, 2026 outlook
- RevenueFor the year ending March 31, 2027: ¥465,000 to ¥473,000 million; for the three-month period ending September 30, 2026: ¥114,000 to ¥116,000 million
- NoteAdjusted EBITDA for the year ending March 31, 2027: ¥149,000 to ¥155,000 million
- NoteAdjusted EBITDA for the three-month period ending September 30, 2026: ¥37,500 to ¥39,500 million
Capital returns
- Dividends paid to non-controlling interests: ¥1,379 million for the three months ended June 30, 2026.
- No share repurchases were reported.
What drove it
- Payment Segment GMV reached ¥5.39 trillion, with online channel GMV up 44% year-on-year, PayPay Credit GMV up 30% year-on-year and PayPay Card GMV up 28% year-on-year.
- The ratio of high-margin online payments within combined PayPay Balance and PayPay Credit GMV rose to 18%, up 3 percentage points year-on-year.
- Revolving and installment payment balances increased 25% year-on-year on a combined basis, while cash advances increased 57% year-on-year.
- Balance of deposits grew 17% year-on-year to ¥2.3 trillion and the balance of loans grew 37% year-on-year to ¥1.3 trillion.
- The June revision of point reward programs improved profitability by ¥1 billion for the month of June, according to the Company.
Concerns
- Total Transaction Cost as a percentage of Total Revenue rose to 23% from 22% in the same period of the previous fiscal year.
- Provision for loss allowance was ¥8,314 million, compared with ¥5,240 million for the three months ended June 30, 2025.
- Interest expenses were ¥3,540 million, compared with ¥2,203 million for the three months ended June 30, 2025.
- Net cash used in operating activities was ¥54,252 million, reflecting increases in loans and advances to customers and securities, among other working-capital movements.
- The planned acquisition of a 70.2% stake in T&D Financial Life Insurance Company is expected to close on October 1, 2027, subject to regulatory approval.
What to watch
- Second-quarter execution against Total Revenue guidance of ¥114,000 to ¥116,000 million and Adjusted EBITDA guidance of ¥37,500 to ¥39,500 million.
- Retention and GMV following the June 2, 2026 point reward-program revision.
- Payment take rate, cost rate and the mix of high-margin online payments.
- Growth in PayPay Bank deposits, loans and interest income amid rising interest rates.
- Regulatory approval and closing of the planned T&D Financial Life Insurance Company acquisition.
Balance sheet and cash flow
- Cash and cash equivalents: ¥491,087 million as of June 30, 2026, compared with ¥363,083 million as of March 31, 2026.
- Total assets: ¥5,493,719 million as of June 30, 2026, compared with ¥5,176,012 million as of March 31, 2026.
- Deposits: ¥3,112,287 million as of June 30, 2026, compared with ¥2,952,495 million as of March 31, 2026.
- Borrowings: ¥757,093 million as of June 30, 2026, compared with ¥564,956 million as of March 31, 2026.
- Total liabilities: ¥5,043,792 million as of June 30, 2026, compared with ¥4,745,251 million as of March 31, 2026.
- Total shareholders’ equity: ¥449,927 million as of June 30, 2026, compared with ¥430,761 million as of March 31, 2026.
- Net cash used in operating activities: ¥54,252 million, compared with net cash provided by operating activities of ¥86,991 million for the three months ended June 30, 2025.
- Net cash used in investing activities: ¥9,157 million, compared with ¥138,072 million for the three months ended June 30, 2025.
- Net cash provided by financing activities: ¥191,404 million, compared with ¥201,680 million for the three months ended June 30, 2025.
- Increase in cash and cash equivalents: ¥128,004 million, compared with ¥150,553 million for the three months ended June 30, 2025.
Analysis
PayPay reported a strong first quarter ended June 30, 2026 under IFRS Accounting Standards. Total Revenue was ¥109,788 million, compared with ¥86,154 million in the prior-year quarter and ¥102,184 million in the prior quarter. Operating profit increased to ¥29,865 million from ¥15,964 million, while profit for the period increased to ¥19,749 million from ¥10,809 million. Adjusted EBITDA, a non-IFRS measure, increased to ¥37,395 million from ¥23,506 million, and its margin was 34%, compared with 27% in the prior-year quarter.
The Payment segment generated revenue of ¥88,583 million, up 25% year-on-year. Payment Segment GMV reached ¥5.39 trillion, while PayPay MTU reached 41.70 million users and PayPay Number of Transactions reached 2,544 million transactions. Management cited growth in online channel GMV, PayPay Credit GMV and PayPay Card GMV. Take Rate was 1.64%, versus 1.62% in the prior-year quarter, while Cost Rate was 1.23%, versus 1.29%.
Financial services were the faster-growing revenue segment, with revenue of ¥22,463 million, up 44% year-on-year. Interest income was ¥35,144 million, up 78% year-on-year, supported by lending growth and higher income from securities and other investments amid rising interest rates. PayPay Bank Balance of Deposits was ¥2,342.3 billion and PayPay Bank Balance of Loans was ¥1,334.8 billion. Gains on financial instruments in the Financial service segment were ¥3,293 million.
Margins expanded despite Total Transaction Cost as a percentage of Total Revenue increasing to 23% from 22% in the same period of the previous fiscal year. Operating profit margin was 27%, compared with 19%, and profit for the period margin was 18%, compared with 13%. The Company stated that its point reward-program revision improved profitability by ¥1 billion for June. Provision for loss allowance increased to ¥8,314 million from ¥5,240 million and interest expenses increased to ¥3,540 million from ¥2,203 million.
Cash and cash equivalents increased to ¥491,087 million at June 30, 2026 from ¥363,083 million at March 31, 2026, while borrowings increased to ¥757,093 million from ¥564,956 million. Net cash used in operating activities was ¥54,252 million. Following the quarter, the Company raised guidance for the year ending March 31, 2027 to Total Revenue of ¥465,000 to ¥473,000 million and Adjusted EBITDA of ¥149,000 to ¥155,000 million, and set second-quarter guidance for Total Revenue of ¥114,000 to ¥116,000 million and Adjusted EBITDA of ¥37,500 to ¥39,500 million.
Not in the filing
stated, not guessed- Gross profit and gross margin were not reported.
- Free cash flow was not reported.
- GAAP or IFRS earnings guidance reconciliation for Adjusted EBITDA guidance was not provided.
- Guidance for gross margin, operating expenses and tax rate was not provided.
- Prior-quarter comparisons for earnings per share were not reported.
- Prior-quarter comparison for segment revenue was not reported.
- Prior-year and prior-quarter comparisons for several operating expense line items were not reported as percentage changes.
- Share repurchase activity was not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.