Analysis of Operating Results (Full Year)

Consumer segment revenue increased by ¥62.2 billion (2.1%) year on year to ¥3,015.1 billion. Mobile revenue increased by ¥17.3 billion (1.1%) year on year. The increase mainly reflected year-on-year growth in smartphone subscribers, led primarily by the Y!mobile brand, amid a stable trend in average revenue per user. Broadband revenue increased by ¥10.6 billion (2.6%) year on year. This increase was mainly due to a year-on-year increase in subscribers of the SoftBank Hikari fiber-optic service^*3. Electricity revenue decreased by ¥45.4 billion (17.8%) 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 ¥79.7 billion (11.2%) year on year. This increase was mainly due to an increase in unit prices of mobile devices.

Operating expenses^*4 were ¥2,464.3 billion, an increase of ¥41.8 billion (1.7%) year on year. This increase was mainly due to increases in sales promotion expenses and the cost of goods of smartphones, etc., while there was a decrease in the cost of electricity.

As a result, segment income increased by ¥20.4 billion (3.8%) year on year to ¥550.8 billion.

[Notes]

1. *3
   Includes subscribers of SoftBank Air
2. *4
   Operating expenses include cost of sales, selling, general and administrative expenses, and other operating income and other operating expenses.

Enterprise segment revenue increased by ¥80.5 billion (8.7%) year on year to ¥1,002.9 billion. Within Enterprise segment revenue, mobile revenue increased by ¥24.8 billion (7.8%) to ¥340.6 billion, fixed-line revenue decreased by ¥2.1 billion (1.2%) to ¥167.3 billion, and business solution and others revenue increased by ¥57.8 billion (13.2%) to ¥495.0 billion. The increase in mobile revenue was mainly due to an increase in mobile device sales from a growth in the number of mobile service subscribers, as well as an increase in telecommunications revenue. The decrease in fixed-line revenue was mainly due to a decrease in the number of telephone service subscribers. The increase in business solution and others revenue was mainly due to increased revenue mainly from cloud and security solutions as a result of capturing enterprise customers'demand for digitalization.

Operating expenses were ¥810.5 billion, an increase of ¥58.4 billion (7.8%) year on year. This increase was mainly due to an increase in costs following the abovementioned increase in business solution and others revenue.

As a result, segment income increased by ¥22.1 billion (13.0%) year on year to ¥192.4 billion.

Distribution segment revenue increased by ¥166.8 billion (18.8%) year on year to ¥1,056.3 billion. This increase was mainly due to solid growth in ICT related products for enterprise customers and recurring revenue products such as cloud and SaaS, which have been strategic areas of focus, as well as increased sales of PCs due to GIGA School Program Phase 2 and migration from Windows 10, which is reaching the end of its support, and solid growth in products for consumers.

Operating expenses were ¥1,021.1 billion, an increase of ¥162.0 billion (18.9%) 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 ¥4.8 billion (15.9%) year on year to ¥35.3 billion.

Media & EC segment revenue increased by ¥39.1 billion (2.4%) year on year to ¥1,668.0 billion. Within Media & EC segment revenue, media revenue increased by ¥4.8 billion (0.7%) to ¥728.7 billion, commerce revenue increased by ¥8.4 billion (1.0%) to ¥855.2 billion, strategy revenue increased by ¥22.7 billion (44.4%) to ¥73.8 billion, and other revenue increased by ¥3.2 billion (44.8%) to ¥10.2 billion. The increase in media revenue mainly reflected an increase in revenue from account advertising, despite a decrease in revenue from search advertising. The increase in commerce revenue was mainly due to the consolidation of LINE MAN CORPORATION PTE. LTD. and BEENOS Inc., as well as an increase in transaction value of the ZOZO Group (ZOZO, Inc. and its subsidiaries), despite a decrease in transaction value affected by the system outage at ASKUL Corporation in October 2025. The increase in strategy revenue mainly reflected the consolidation of LINE Bank Taiwan Limited.

Operating expenses were ¥1,427.6 billion, an increase of ¥57.5 billion (4.2%) year on year. The reasons for variance are as follows:

• Operating expenses decreased by ¥15.7 billion due to the absence of gains on loss of control over subsidiaries and the recognition of remeasurement gains on step acquisitions.
• Operating expenses at the ASKUL Group (ASKUL Corporation and its subsidiaries) decreased due to the abovementioned system outage.
• Operating expenses increased mainly due to the consolidation of LINE MAN CORPORATION PTE. LTD., LINE Bank Taiwan Limited, and BEENOS Inc.
• Operating expenses increased due to an increase in sales promotion expenses.

As a result, segment income decreased by ¥18.4 billion (7.1%) year on year to ¥240.4 billion.

[Notes]

1. *5
   From the three months ended June 30, 2025, PayPay Bank Corporation, which was previously classified under the "Media & EC segment," has been transferred to the "Financial segment." As a result, the figures for the fiscal year ended March 31, 2025 have been retrospectively adjusted.
2. *6
   From the three months ended June 30, 2025, in addition to the LY Group revising its management categories, PayPay Bank Corporation, which was previously classified under the "Media & EC segment," has been transferred to the "Financial segment." As a result, the revenue breakdown of all service categories in the "Media & EC segment" for the fiscal year ended March 31, 2025 has been retrospectively adjusted.

Financial segment revenue increased by ¥79.0 billion (24.3%) year on year to ¥404.5 billion. This increase was mainly due to an increase in gross merchandise value of QR code payments and credit card services provided by PayPay Corporation and PayPay Card Corporation.

Operating expenses were ¥318.2 billion, an increase of ¥34.4 billion (12.1%) year on year. This increase was mainly due to an increase in sales promotion expenses related to point rewards, etc., driven by the aforementioned increase in gross merchandise value, as well as an increase in expenses associated with the listing.

As a result, segment income increased by ¥44.6 billion (107.1%) year on year to ¥86.3 billion.

[Note]

1. *7
   From the three months ended June 30, 2025, PayPay Bank Corporation, which was previously classified under the "Media & EC segment", has been transferred to the "Financial segment". As a result, the figures for the fiscal year ended March 31, 2025 have been retrospectively adjusted.