GMO Financial Gate (4051) Q2 2025 earnings summary

Executive summary

• Operating profit surged 48.5% year-over-year in Q2 FY2025, driven by recurring and software development revenue, despite a 2.1% YoY decline in total revenue due to lower SME demand and absence of last year's large project.

• Recurring revenue and transaction volume grew strongly, with active terminals up 19.3% YoY and GMV up 28.0% YoY.

• Profit attributable to owners of parent increased 66.4% year-over-year to ¥1,034 million.

• Strategic focus on expanding TAM through payment-related business DX, supporting increased payment activity, and aiming for ¥10bn operating profit by 2033.

• ESG initiatives advanced, with SBT application for net-zero GHG emissions by 2050 and a B CDP score for two consecutive years.

Financial highlights

• Q2 FY2025 revenue: ¥9.04bn (▲2.1% YoY); operating profit: ¥1.38bn (+48.5% YoY); gross profit: ¥3.40bn (+25.9% YoY); net profit: ¥1.03bn (+66.4% YoY).

• Initial revenue: ¥5.02bn (▲17.1% YoY); recurring revenue: ¥4.02bn (+26.4% YoY).

• Transaction volume: 0.236bn (+38.7% YoY); GMV: ¥1.92tn (+28.0% YoY); active terminals: 411K (+66K YoY).

• Gross profit margin improved, driven by recurring revenue and high-margin terminal sales.

• Basic earnings per share rose to ¥125.09 from ¥74.97 year-over-year.

Outlook and guidance

• Full-year FY2025 forecast unchanged: revenue ¥22.2bn (+18.7% YoY), operating profit ¥2.02bn (+31.9% YoY), net profit ¥1.32bn (+29.9% YoY).

• Progress toward 1H forecast: revenue 93.5%, operating profit 126.8%; full-year progress: revenue 40.7%, operating profit 68.5%.

• Recurring revenue expected to maintain 25% YoY growth by FY2026; spread revenue targeted for 15–20% YoY growth.

• Strategic focus on acquiring high-ARPU merchants and expanding solution assets to raise ARPU ahead of schedule.

• Continued investment in human resources, governance, and system infrastructure aligned with profit progress.