Analysis of Operating Results (Full Year)

Consolidated Results

Revenue

  • For the fiscal year ended March 31, 2024, revenue increased by ¥172.0 billion (2.9%) year on year to ¥6,084.0 billion. Revenue increased by ¥90.5 billion in the Financial segment, mainly due to the consolidation of PayPay Corporation in October 2022, by ¥56.6 billion in the Distribution segment, mainly due to a solid increase in revenue from ICT (Information and Communication Technology) related products and subscription services, by ¥52.4 billion in the Media & EC segment, mainly due to increased commerce revenue associated with the growth of the ASKUL Group (ASKUL Corporation and its subsidiaries) and the ZOZO Group (ZOZO, Inc. and its subsidiaries), as well as increased media revenue associated with the growth of account advertising, and by ¥37.2 billion in the Enterprise segment, mainly due to an increase in demand for solutions associated with digitalization. On the other hand, revenue decreased by ¥59.1 billion in the Consumer segment due to a decrease in electricity revenue, while there were increases in revenues from sales of goods and others, broadband revenue, and mobile revenues. For the fiscal year ended March 31, 2024, mobile revenue in the Consumer segment increased by ¥8.3 billion year on year, marking a turnaround from a year-on-year decrease of ¥94.5 billion in the previous fiscal year mainly due to the reduced impact of the mobile service price reduction in spring 2021 and an increase in smartphone subscribers.

Operating income

  • For the fiscal year ended March 31, 2024, operating income decreased by ¥184.1 billion (17.4%) year on year to ¥876.1 billion. This mainly reflected the absence of ¥294.8 billion associated with a gain on step acquisition in connection with the consolidation of PayPay Corporation that had been recorded in the previous fiscal year. On the other hand, operating income increased by ¥38.2 billion in the Media & EC segment, by ¥33.1 billion in the Consumer segment, by ¥26.5 billion in the Enterprise segment, by ¥7.4 billion in the Financial segment, and by ¥2.0 billion in the Distribution segment. Excluding the impact of the aforementioned gain on step acquisition, operating income for the fiscal year ended March 31, 2024 increased by ¥110.7 billion (14.5%) year on year.

Net income attributable to owners of the Company

  • For the fiscal year ended March 31, 2024, net income attributable to owners of the Company decreased by ¥42.3 billion (8.0%) year on year to ¥489.1 billion. This mainly reflected a decrease in operating income due to the aforementioned factors. On the other hand, the decrease was partly offset by, among other factors, the absence of losses on valuation of investment securities held that had been recorded in the previous fiscal year, a reversal of provisions for litigation that had been recorded in the previous fiscal year, and the recording of a gain on changes in equity interest associated with the change in the LY Group (LY Corporation and its subsidiaries)'s equity interest in Webtoon Entertainment Inc. in the fiscal year ended March 31, 2024. Excluding the impact of the aforementioned gain on step acquisition that had been recorded in the previous fiscal year, net income attributable to owners of the Company for the fiscal year ended March 31, 2024 increased by ¥152.9 billion (45.5%) year on year. Net income attributable to non-controlling interests decreased by ¥21.6 billion (17.6%) year on year to ¥101.2 billion, mainly due to a decrease in net income at the LY Group.

Adjusted free cash flow*1

  • In the fiscal year ended March 31, 2024, adjusted free cash flow was positive ¥390.0 billion, a decrease of ¥630.6 billion year on year. This decrease reflected an increase in net cash outflow from investing activities of ¥772.8 billion year on year, while there were increases in net cash inflow from operating activities of ¥83.9 billion and cash inflow from securitization of installment sales receivables year on year. The increase in net cash outflow from investing activities mainly reflected the absence of a one-time cash inflow of ¥397.3 billion from the acceptance of the balance of cash and cash equivalents resulting from the consolidation of PayPay Corporation that had been recorded in the previous fiscal year, as well as an increase in a cash outflow associated with purchase of investment securities in banking business in the fiscal year ended March 31, 2024. The increase in net cash inflow from operating activities mainly reflected an increase in adjusted EBITDA and an increase in cash inflow associated with changes in deposits and loans in banking business, while there was an increase in cash outflow associated with an increase in trade and other receivables.

[Notes]
  1. *1
    Free cash flow = net cash inflow from operating activities + net cash outflow from investing activities
    Adjusted free cash flow = free cash flow + (proceeds from the securitization of installment sales receivables - repayments thereof)
  2. *2
    Excluding adjustments for free cash flow of the LY Group and PayPay, etc., and loans to board directors, etc., and including dividend payments received from A Holdings Corporation. PayPay, etc. includes A Holdings Corporation, B Holdings Corporation, PayPay Corporation, PayPay Card Corporation, PayPay Securities Corporation, and PPSC Investment Service Corporation.

Revenue by segment

Revenue by segment
Revenue by segment

Consumer segment

  • Revenue

  • Segment income

Consumer segment revenue decreased by ¥59.1 billion (2.1%) year on year to ¥2,823.9 billion. Mobile revenue increased by ¥8.3 billion (0.6%) year on year. The increase mainly reflected a slowdown of the decline in ARPU due to the mobile service price reduction implemented in spring 2021, as well as an increase in smartphone subscribers mainly led by the Y!mobile brand. The decline in ARPU due to mobile service price reduction was mainly because of the penetration of price plans introduced in spring 2021 under the SoftBank and Y!mobile brands and further switching of subscribers from the SoftBank brand to the Y!mobile brand. Broadband revenue increased by ¥8.3 billion (2.1%) year on year. This increase was mainly due to an increase in subscribers of the SoftBank Hikari fiber-optic service. Electricity revenue decreased by ¥131.5 billion (33.5%) year on year. This decrease was mainly due to a decrease in transactions in the electricity market. Revenues from sales of goods and others increased by ¥55.7 billion (9.6%) year on year to ¥635.4 billion. This increase was mainly due to an increase in unit prices of smartphones, etc. and an increase in the number of units sold.

Operating expenses*3 were ¥2,328.4 billion, a decrease of ¥92.2 billion (3.8%) year on year. This decrease was mainly due to a decrease in the cost of service of electricity and a decrease in depreciation and amortization, while there was an increase in the cost of goods of smartphones, etc.

As a result, segment income increased by ¥33.1 billion (7.2%) year on year to ¥495.5 billion.

[Note]
  1. *3
    Operating expenses include cost of sales, selling, general and administrative expenses, and other operating income and other operating expenses.

Enterprise segment

  • Revenue

  • Segment income

Enterprise segment revenue increased by ¥37.2 billion (5.0%) year on year to ¥787.5 billion. Within Enterprise segment revenue, mobile revenue increased by ¥4.9 billion (1.5%) to ¥324.9 billion, fixed-line revenue decreased by ¥6.7 billion (3.7%) to ¥175.4 billion, and business solution and others revenue increased by ¥39.0 billion (15.7%) to ¥287.1 billion. The increase in mobile revenue was due to increases in mobile device sales and telecommunications revenue. The decrease in fixed-line revenue was mainly due to a decrease in the number of subscribers to telephone services. The increase in business solution and others revenue was from increased revenue mainly from cloud services and security solutions as a result of capturing enterprise customers' demand for digitalization.

Operating expenses were ¥625.9 billion, an increase of ¥10.7 billion (1.7%) year on year. This increase mainly reflected an increase in costs following the abovementioned increase in business solution and others revenue and the absence of a gain on step acquisition in connection with the consolidation of HEALTHCARE TECHNOLOGIES Corp. that had been recorded in the previous fiscal year, while there was a reversal of provisions for litigation that had been recorded in the previous fiscal year.

As a result, segment income increased by ¥26.5 billion (19.6%) year on year to ¥161.5 billion.

Distribution segment

  • Revenue

  • Segment income

Distribution segment revenue increased by ¥56.6 billion (9.6%) year on year to ¥646.6 billion. This increase was mainly due to solid growth in ICT (Information and Communication Technology) related products for enterprise customers and subscription services such as cloud and SaaS, which are also for enterprise customers and have been strategic areas of focus.

Operating expenses were ¥620.4 billion, an increase of ¥54.6 billion (9.7%) year on year. This increase was mainly due to an increase in cost of sales associated with the increase in revenue.

As a result, segment income increased by ¥2.0 billion (8.1%) year on year to ¥26.2 billion.

Media & EC segment

  • Revenue*4

  • Segment income

Media & EC segment revenue increased by ¥52.4 billion (3.4%) year on year to ¥1,614.1 billion. Within Media & EC segment revenue, media revenue increased by ¥13.5 billion (2.0%) to ¥699.9 billion, commerce revenue increased by ¥28.7 billion (3.6%) to ¥819.7 billion, strategy revenue increased by ¥9.1 billion (11.6%) to ¥87.6 billion, and other revenue increased by ¥1.2 billion (20.6%) to ¥6.9 billion. The increase in media revenue mainly reflected an increase in revenue from account advertising. The increase in commerce revenue is mainly due to an increase in revenue of the ASKUL Group and the ZOZO Group. The increase in strategy revenue mainly reflected an increase in revenue in the FinTech field.

Operating expenses were ¥1,416.2 billion, an increase of ¥14.2 billion (1.0%) year on year. This increase mainly reflected an increase in cost of sales at the ASKUL Group and an increase in depreciation and amortization, while there was a decrease in sales promotion expenses and advertising expenses.

As a result, segment income increased by ¥38.2 billion (23.9%) year on year to ¥198.0 billion.

[Note]
  1. *4
    In the three months ended June 30, 2023 and the three months ended December 31, 2023, the LY Group revised its management categories and reclassified the categories of certain services of Media and Other. Accordingly, the breakdown of all service categories in the Media & EC segment revenue for the fiscal year ended March 31, 2023 has been restated to reflect these changes.

Financial segment

  • Revenue

  • Segment income

Financial segment revenue increased by ¥90.5 billion (63.6%) year on year to ¥232.8 billion. This increase was mainly due to the consolidation of PayPay Corporation in October 2022 and an increase in its revenue.

Operating expenses were ¥237.8 billion, an increase of ¥83.1 billion (53.7%) year on year. This increase was mainly due to the effects of the abovementioned consolidation of PayPay Corporation.

As a result, segment income increased by ¥7.4 billion year on year to negative ¥5.0 billion.

[Notes]
  1. *
    On October 1, 2023, Z Holdings Corporation, as the surviving company, completed an intra-group reorganization involving mainly itself and two of its core wholly owned subsidiaries, LINE Corporation and Yahoo Japan Corporation, and changed its trade name to LY Corporation.
  2. *
    From FY2023, segment name of Yahoo! JAPAN/LINE has been changed to Media & EC. Accordingly, the five reportable segments became Consumer segment, Enterprise segment, Distribution segment, Media & EC segment, and Financial segment. This change only pertains to the segment name, and there are no changes to the segment classification, scope, or measurement methods.

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