Digital Garage (4819) Q4 2025 earnings summary

Executive summary

• Achieved strong growth in core payment business, with PS segment profit up 22% year-over-year, meeting full-year guidance targets.

• Revenue increased 1.2% year-over-year to ¥38,306 million, but a net loss of ¥7,476 million was posted, reversing a prior-year profit.

• Losses were driven by higher expenses, increased finance costs, and significant valuation losses on investment securities.

• LTI segment saw record performance at Kakaku.com, though overall profit declined due to software asset impairment.

• GII segment recorded ¥8.1B in investment business income, progressing with off-balance sheet shift and fund-type investments.

Financial highlights

• Consolidated profit before tax fell to -¥10.2B due to a significant valuation loss on Blockstream in Q2.

• Operating cash flow turned positive at ¥31,726 million, up from negative ¥11,032 million the previous year.

• PS segment profit rose to ¥8.76B (+22.2% YoY); LTI segment profit at ¥969M (-32.5% YoY, but +50% excluding one-off losses).

• Dividend per share increased to ¥53.00 (including a ¥10.00 special dividend), up from ¥40.00 last year.

• Basic business revenue increased 21.6% YoY to ¥37.3B; basic business profit up 3.6% to ¥4.36B.

Outlook and guidance

• FY26.3 PS segment profit before tax expected to grow 20% YoY, with payment transaction volume forecast to exceed ¥10T.

• Platform Solutions segment is expected to deliver over 20% profit before tax growth in FY2026, driven by payment business expansion and strategic partnerships.

• Upfront investments in 1H FY26.3 to support future growth; profits expected to cluster in 2H.

• No consolidated financial forecast disclosed due to difficulty in estimating fair value of startup investments.

• Dividend per share forecasted at ¥47, with a progressive dividend policy and payout ratio of 30% of base business cash flow.