LY Corporation Fiscal 2025, First Quarter Earnings Briefing. Thank you very much for taking the time to join us today. In this session, we will use the earnings presentation materials available on the LY Corporation website. Joining us today from LY Corporation are President, Representative Director and CEO, Takeshi Idezawa, Executive Corporate Officer and CFO, Ryosuke Sakaue, Executive Corporate Officer and Corporate Business Company CEO, Yuki Ikehata, Executive Corporate Officer and Commerce Company CEO, Makoto Hide. These are the officers attending today. First, Sakaue will explain the earnings results for the first quarter of Fiscal 2025. This will be followed by a Q&A session. Today's session is scheduled to last approximately one hour. This session is being live streamed. If you experience technical difficulties such as disrupted audio or video, please try switching to an alternate server from the link at the bottom of the screen.
Let us now begin the presentation.
[Foreign language]
Sakaue from LY Corporation. Thank you so much for taking the time out of your busy schedules to join us for the Fiscal 2025 First Quarter Earnings Presentation. I'll first provide an overview of our first quarter results. Next page, please.
This is the overview. Our consolidated performance tracked the full year guidance with both revenue and profit increasing. Revenue and adjusted EBITDA both reached record highs for the first quarter. As for mid-to-long-term growth initiatives, the phased LINE app revamp began in July, starting with some tabs. We are upgrading LINE MINI App functionality and sales capabilities as well to encourage greater usage. AI features are being rolled out across our services, aiming to drive the GenAI take-up in Japan. Next page. I will explain in the order shown in the agenda here. First, the consolidated results. The progress against the full year guidance did not reach 25%, but our revenue tends to be higher in the second half due to the year-end shopping season and fiscal year-end demand. Our Q1 results, therefore, are within internal expectations. Consolidated performance trends.
Revenue and profit growth were mainly driven by account ads and PayPay-consolidated. While we continue to invest to implement AI into services and grow our commerce business, ongoing optimization of fixed costs resulted in an adjusted EBITDA margin of 25.7%. Consolidated EBITDA comparison. The biggest contributor to revenue was the strategic business, but media and commerce also grew. Although SG&A increased, revenue growth absorbed these cost increases. Excluding the one-time gain from the de-consolidation of ValueCommerce, excluding the one-time gain from the de-consolidation of ValueCommerce in the previous fiscal year, adjusted EBITDA grew by 7.1% year-on-year. This talks about the commerce and the media together, consolidated total advertising revenue. In addition to account ads, commerce ad revenue continues double-digit growth driven by increased transaction value due to promotional investments and product improvements. This is consolidated e-commerce transaction value. Domestic shopping transaction value was up 5.9% year-on-year. Yahoo!
Shopping saw a 6.9% year-on-year increase, with growth also seen from Zozo and Asko. Domestic service-related transaction value grew by 7% year-on-year, supported by an increase in travel bookings. Reuse transaction value achieved positive growth driven by the growth of Yahoo! Flea Market and the consolidation of VNOS. Now, the transaction volume for VNOS reflects only the month of June, not so large. It's the Yahoo! Flea Market that drove the GMV growth. Share repurchase and cancellation situation. In line with our capital allocation policy, we executed share repurchase and cancellation of treasury shares. Through a tender offer announced on May 25, we repurchased shares worth approximately JYN 116.2 billion, which were canceled effective July 1. In June 25, we announced a plan to repurchase up to JYN 38.5 billion of shares through market purchases.
The period of purchase runs through the end of September, with cancellation scheduled for the end of October. We remain committed to enhancing shareholder returns and improving capital efficiency. As for capital allocation, reflecting the share repurchases conducted in the first half, we have updated our outlook. We will continue to focus on improving capital efficiency and further expanding positive spread. LINE revamp situation. Left, you see the tab structure. The shopping tab has been added. With the revamp, the shopping tab will be rolled out to some users in a phased manner from September 2025. The wallet tab was released at the end of July 2025 from Android OS, and new features are being added progressively. Other tabs are also scheduled to be renewed sequentially during the second half of the year. The shopping and the wallet tabs, which are to be revamped.
The newly introduced shopping tab serves as a portal for LINE commerce services. Initially, the main offerings will include LINE Gift and the LINE Shopping service launched in May. We plan to enhance personalization through data utilization and introduce AI-based product recommendations. LINE Shopping is a recommendation-driven e-commerce mall tailored to each user. The concept is casual discovery shopping, like discovering items while browsing a magazine. Through the shopping tab, we aim to grow transaction value and boost Japan's e-commerce penetration, which remains still very low. The wallet tab will have been revamped, and this will function as an entry point for mini-apps. By combining merchant-focused sales efforts and user campaigns, we aim to expand mini-app usage. Additional wallet functionalities are planned to be added in the future. In this fiscal year, by the end of July, LY Corporation has launched 14 services leveraging GenAI on Yahoo!
JAPAN, with services such as AI Assistant, AI Topic, and Review Summary. We enhanced user experiences in information search, news comprehension, and shopping support. Online, AI has been integrated into daily usage with services such as LINE AI, which enables users to ask questions conversationally, and Talk Suggest, which generates context-aware reply suggestions. We will continue accelerating AI deployment across our services to promote usage and drive GenAI adoption in Japan. PayPay's planned listing. We received some questions since the announcement, so we'd like to respond to that. We intend to maintain our current capital structure with PayPay even after the company's IPO, ensuring that PayPay remains a consolidated subsidiary. We will continue to support PayPay's business development and corporate value growth as its parent company.
Next, I will explain segment results and topics. Next slide, please. This is the performance trend of the media business. Account advertising continued to drive the growth of the media business and the overall business. Although revenue increased, SG&A also rose, resulting in a year-on-year decrease of 7.4% in adjusted EBITDA. Next slide, please. This is media business revenue. Search advertising revenue decreased, but advertising revenue increased by 1.4% Y/Y. Display advertising is showing its first positive growth in three quarters, indicating a bottoming out. Next page, please. This is media business performance analysis. Profit decreased due to increased SG&A expenses. There are two major factors for this increase of SG&A. One is sales promotion costs increased due to increased point costs for LYP Premium members.
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Premium members increased, and linked to that, the sales promotion costs increased. The second factor is costs related to the integration of advertising platforms and the development of AI infrastructure, which have risen. Next page, please.
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This is on search advertising. Let me add some more information on search advertising. Revenue decreased due to slowdown of ad placements from some advertisers. The slowness is not due to the penetration of AI search, but changes in ad demand. Additionally, revenue from partner sites has also decreased. Going forward, we will explore diverse monetization methods, including the growth of search-linked shopping ads. Next page, please.
カウント広告です。
This is on account advertising. In the first quarter, the number of paid accounts continued to increase steadily. Pay-as-you-go billing accounts also increased, with revenue growing at a high rate of 18.3% year-on-year. Next page, please. This is online mini-apps. The number of LINE MINI App and MAU have grown significantly, with usage expanding. In terms of functionalities, we plan to implement features in stages, such as payments using payment information from app stores and the ability to register payment information within the mini-app for payments. We are also strengthening our sales force, establishing a sales subsidiary LINE Yahoo Business Partners, which is focused on the food and beauty sector. We will increase the number of sales offices in the future. This is on commerce business performance trend. Revenue increased primarily due to growth in Yahoo!
Shopping and travel, but operating profit decreased due to higher SG&A expenses and the impact of one-time gains recognized in the previous fiscal year. The margin remained at the high teens range. Next page, please. This is on commerce business revenue and the breakdown.
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For LINE Yahoo, it increased year-on-year by 5%. Shopping saw a slight decrease in revenue due to the impact of the de-consolidation of IPAX, despite strong performance of Yahoo! Shopping. Reuse saw an increase in users of Yahoo! Flea Market, and VNOS was consolidated, resulting in a year-on-year revenue increase of 14%. Service EC saw a year-on-year increase of 10% due to continued strong performance in travel. Zozo and Asko also grew. Next page, please. This is commerce business EBITDA. Revenue was, as shown on the slide, with cost of sales slightly increasing, mainly due to Asko. Within SG&A, the business commission increased. This is due to the cost related to Zozo's acquisition of List and the operation of Asko's new logistics centers. As a result, the adjusted EBITDA, excluding last year's one-time gains, remained largely flat year-on-year. Next page, please. This is strategic business performance trend.
PayPay consolidated, continued to grow, with revenue increasing by 22.1% year-on-year to JYN 96.6 billion. Adjusted EBITDA, driven by revenue growth and continued cost control, surpassed JYN 20 billion for the first time in a quarter. As a result, the margin reached 21.7%. Next page. This is on strategic business revenue. PayPay consolidated, started consolidation with PayPay Bank and PayPay Securities, starting from the first quarter, resulting in a year-on-year increase of 23.2%. PayPay and PayPay Card continued to grow in GMV, and interest income increased due to the expansion of revolving loan balances. PayPay Bank saw increased revenue due to growth in loan balances. Other financial services also remained strong, growing at 15.1% year-on-year. Next page, please. This is on strategic business performance analysis. Cost of sales increased at PayPay Bank due to the increase of the procuring cost.
For SG&A, it decreased due to a reduction in other SG&A expenses, primarily due to the absence of cost related to the withdrawal of LINE Pay domestic services in the first quarter of the previous fiscal year.
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Significant increase in profit was achieved due to substantial growth in revenue. Next page, please. This is PayPay business overview. PayPay's consolidated GMV increased by 24% year-on-year, driven by growth in the number of transactions per user and the average payment amount. Consolidated revenue and EBITDA now include PayPay Bank and PayPay Securities, reflecting the new consolidation scope starting this quarter. Revenue increased by 24.6% due to growth in payment and banking, and EBITDA expanded to JYN 218 billion. Next page. In summary, the first quarter results marked a solid start in line with the guidance. We are steadily advancing initiatives aimed at mid-to-long-term growth, such as the LINE app renewal, expansion of LINE MINI App, and implementation of GenAI in services. We will strengthen this momentum in the second half and beyond to lay the groundwork for growth in the future.
Additionally, we are working to enhance capital efficiency and strengthen shareholder returns through share repurchases and cancellations to sustainably enhance corporate value. That concludes our presentation. Thank you for your attention.
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Now we will start a Q&A session. Please use the Zoom raise hand function if you have a question, and when your turn comes, I will call your name. Please ask the question at that time. If you wish to ask a question, please use the raise hand function in Zoom. You will be prompted, your name will be called, and then it will be your turn to ask the question. Please limit yourself to two questions per person, and please ask one question at a time. For questions asked in English, there will be consecutive interpretation into Japanese, so it will require some time. The response will be delivered through simultaneous interpretation in English. Let's begin the Q&A session. Are there any questions?
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Maeda-san. Please unmute and ask your question, please.
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Nikko Securities, my name is Eiji Maeda. I have two questions. First question:
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Search ads.
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I think the market itself is slowing, but your revenue has fallen even more than I expected. You say some clients, but to the extent possible, explain what is happening. In the second half onwards, is the impact going to continue? Was that reflected in the plan to begin with? This search ads, why is it sluggish? Can you explain? That's the first question.
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About the search ads? Let me explain, and maybe Ikehata may supplement from a sales perspective.
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In terms of demand from advertisers, HR, travel, and temp service, these large clients internally have made system updates to enhance productivity of ads.
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There has been lower demand, placement of ads.
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If the placement goes down for the top client, that impacts others, and the bidding price tends to come down. That's why we have an overall negative figure. From the second half of last fiscal year, we have seen that kind of a trend. We've been focusing on this, watching carefully. The slowing of demand for the search ad was stronger than expected in this quarter. For the second quarter, in the second half, we cannot be optimistic, is what we are thinking. The negative rate in Q1, I don't know if it will be the same, but we should expect this kind of decline in demand for this business.
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Ikehata, if there is anything to add?
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Thank you for the question. This is Yuki Ikehata.
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Sakaue has laid out the main points about this.
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We have received large sums from this one particular company, and they have changed the standards for ad placement. That has directly impacted our business.
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We will continue to discuss with this particular client, and we need to maintain communication so that there will be a restart of their business. The system update and the placement standard change is the reason. We think it might take a little time.
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Q2 onwards, throughout this fiscal year, relatively speaking, this kind of situation may continue, as Sakaue also mentioned.
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At the beginning of this fiscal year, this kind of drop, to be honest, we did not expect this magnitude of a drop.
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In terms of the ad revenue projection, how much have we reflected this? The search ads, we have to be very cautious. For official account ads, it's growing more than we had anticipated at the outset. For display ads, as we explained in the presentation, we're catching up to YOY flat level. In terms of the impact to the ad business as a whole, we're trying to control it so that there is no impact by combining various different types of ads.
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Thank you. Second question about LINE MINI App. What's the progress to date?
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Quantitatively, what's been the acceptance? At what timing and in what way are you going to try to monetize this?
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I think it's now usable on the web. The application, I think, are spreading. I think there's a lot of potential for monetization. Please talk about what you see in terms of its potential and talk about the current situation of the LINE MINI App.
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We'll mainly respond. As we showed on the slides, the mini-apps, third party are now developing them.
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We refrain from disclosing, but on the MAU basis, it is growing steadily. That's the current situation. About the monetizing and the concept, Ikehata will explain.
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Thank you for the question. This is Yuki Ikehata.
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About the mini-app penetration, as Sakaue just mentioned.
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It is in the presentation material.
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Grew by 55%.
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This kind of growth, this kind of speed...
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Indicates strong growth.
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I think you can interpret it that way. It's not just the number of the LINE MINI Apps. How much is it used? I think that is very important.
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Is it the app or service that is used well? In that aspect as well, it's growing close to 50% year-on-year. In terms of MAU...
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The mini-app services that we're providing, therefore, offline restaurants or beauty parlors, and for retail...
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Many are for brick-and-mortar stores. In terms of the frequency, there is still room for improvement.
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In addition to the number of apps, increase in MAU, that increase in MAU part is a little bit delayed, and I think we need some tuning of the service. It's growing and it's spreading.
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In terms of how to monetize this, maybe we talked about this last time, three major ways that we are currently preparing and starting to provide. One is to place ads within the apps. That's the service. With more ads, with more apps, the LINE Yahoo will increase more opportunities to show them, and there's direct impact with the number of ads. The other is the payment. When you have an e-commerce application that is released, if a product is bought, then we will receive certain commissions. That's another business model we have in mind. Third is the charging to digital contents. I think it's easy to imagine with games. In a game, if there is a subscription or some kind of charge...
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Would provide us with some commission. That's another model that we have in mind. In terms of the number of apps in this world and how widespread they are, I think you can see it's 23,000 mini-apps. The number of application services in the broader society is much larger. If we're able to increase, the ad inventory will increase, and the number of services that will lead to payments will increase. We think that there is a big business potential. As we explained in the presentation, there should be flow from the wallet tab. There's that perspective of making apps, and there will also be a secondary effect in terms of routing users. There's a lot of room for growth, is what we think. Thank you very much.
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Next from Goldman Sachs Securities, Ms. Minami Munakata, please unmute and ask your question.
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Hi, Minami Munakata from Goldman Sachs Securities. Thank you for giving me the opportunity to ask questions. I have two questions. First question is also related to search advertising. AI search was not the background of the slowdown. That's how you explained. In terms of AI search, how are they being used, and can you compare with the AI search? SG&A has been increasing ¥5.8 billion, to be specific. How much impact is coming from AI? Can you describe that? Also, can you update on the future forecast? That is my first question. This is Ryosuke Sakaue. Let me reply.
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On Yahoo! JAPAN, sir?
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AI mode switching is also possible, and the utilization rate is a mid-single digit. That is the portion out of the total AI search and related license fee.
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The Q1 booking was single billion.
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Is the breakdown, how they are being used.
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How to related demand...
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Usage is flowing into AI search.
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Our company...
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We do not plan to block use of AI search, but rather promote proactive use. We have launched PC version, and we are thinking of further promoting the use of AI search. Monetizing method, we are not certain yet, but generally speaking, once the internet user number increases, there will be room for monetization. We are not going to go against the shift to AI search. Thank you very much. My second question is line renewal.
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Will be replaced in stages in the future. You talked about magazine-like shopping behavior.
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You need to encourage users to push this tab and open this tab.
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Are the appealing points to users to promote this service. While the tabs will be replaced, rather than major marketing campaign, shall we have the image of gradual change? Let me reconfirm that again. Also, the Zoom tab will be removed. Video ad positioning, what is your concept in the future for video advertising?
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Shopping tab. Hide will reply. I will first answer to your question on Zoom. Zoom will be replaced with the shopping tab. The Zoom content...
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timeline is yet to be determined, but the Home tab will be converted into a new media, and Zoom will be integrated or merged into the Home tab. We are making preparation right now.
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Hide will reply to the first part of your question.
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This is Makoto Hide of Commerce.
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From this fiscal year in LINE, we're going to add this shopping service.
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As you have commented.
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Yahooショッピング...
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Conventional...
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Mall is different from this new service. The conventional Yahoo! Shopping, the number of products listed is tens of millions of products, and customers will do the search and also proactively search on the product they want and compare the prices. That was the behavior. In LINE, the service that is suitable in LINE Shopping is to focus on the most popular product and provide them at a reasonable price or a combination with the social service. As a functionality, we are thinking of social buying. Also, gift is already growing and successful. There is already 10 million or more users or purchasers who are using fine gifts. We are going to differentiate this service from the conventional service. The launch timing will be from this fiscal year, and we will develop for the next two to three years. Merchants, the Yahoo! Shopping merchants can easily apply to LINE commerce.
We are to provide convertibility between the two services so that the service will be easily used. That is the enhanced value we plan to provide. That is it. Thank you very much.
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Thank you from Okasan Securities, Yusuke Okumura-san. Please unmute and ask your question.
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Thank you.
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Okumura from Okasan Securities. Do you hear me?
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Yes, we hear you.
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Two questions, please.
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About the LINE app renewal or the revamp, I want to ask about that as well. On page 12, you explain about this, and you talk about the wallet tab.
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repurchases and cancellations as appropriate.
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Is that PayPay will be implemented here from the next fiscal year?
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PayPay is included here. How would the user's UX change? On your media center top line, what would be any positive change? Instead of the short term, I want to ask what you intend to do next year and what kind of changes you expect from the next fiscal year onwards. On the wallet, we will make it easier for users to use PayPay. Concrete dates have not been set yet. We are making preparations. PayPay will make it possible to use them. Online, we have 90 million users who visit. PayPay, we have expanded the number of users to 70 million. There's still the gap of 20 million or a difference of 20 million. PayPay consolidation through this is one major pathway. In the LINE app, there's shopping and existing digital contents, mini-apps. PayPay payment should be usable in a more seamless manner so that people can earn points.
I think that will enhance the LINE app user experience. That will be a positive for the LINE app as well. Within the wallet, it will connect with PayPay. We're making preparations for that.
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Thank you.
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Second question.
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About the listing of PayPay.
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From the previous session.
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No major updates in terms of timing or the size.
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Looking at the materials that you have provided, you will maintain consolidation after listing. You have clearly indicated that in your explanation.
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You're intending to negotiate so that your ownership ratio does not go down. Is that what this indicates?
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For the minority shareholders, what kind of message do you want to send in adding this kind of explanation?
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In terms of IPO timing and magnitude, it's undecided. We're making preparations. As soon as they are decided, we will communicate that to you. The point of this is, as we explained in the previous meeting, some investors...
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Asked about whether it's no longer going to be consolidated, and there's going to be one-off impact to the profit loss.
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There were those questions.
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Therefore...
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We wanted to indicate that we're going to maintain consolidation.
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growth for LY Corporation.
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It is not that we expect any profit loss by change in ownership. That is what we wanted to make clear with this message. In terms of the % of our ownership, it will depend on how we will do the IPO of PayPay and how we're going to generate liquidity. That's still something understandable. We have no intention of reducing in a dramatic way, but there might be some things that we will consider.
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In any case, we will make sure that it will remain a consolidated subsidiary.
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Thank you. Thank you for the detailed explanation.
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Thank you very much.
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Kishimoto-san of Mizuho Securities, please unmute and ask your question.
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I'm Kishimoto of Mizuho Securities. Thank you for the opportunity to ask a question. I have one question. The media segment margin. This time, there is a cost incurred for the integration of advertising platform. Is it only for the first quarter, or will it be booked for the second quarter and beyond? In the explanation, you said that this integration will take place throughout this fiscal year. Please let me know the progress. Also, top line, we expect that the... What is your expectation on top line contribution of this integration of the platform? On the integration of the ad platform, the process will take for the full year. For SG&A, some amount will be incurred from second quarter and beyond as well. That is factored in. The synergy or add-on effect of this integration is not factored into the plan. If there's any comments to add...
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This is Yuki Ikehata. Thank you for the question. Platform integration will be done throughout the year. This is something we need to proceed very carefully. As was explained, the top line of this fiscal year, rather than impact of the platform integration in each platform's function development and sales activities and other areas...
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Success will be the driver for the YOY single-digit growth. The top line contribution of the integration will start from next fiscal year. In terms of the scale, as of today, it's rather difficult to say that the particular amount will be the contribution from platform integration, but single-digit or low single-digit YOY growth. In order to achieve that, this integration is one of the important initiatives.
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Thank you very much.
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Please unmute and ask your question. Masuno-san from Nomura.
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Can you hear?
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Yes, we hear you.
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About account ads.
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New sales company?
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That you created.
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And...
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All the offline companies, you said you want to increase the number of such clients all around Japan. That was established in July. In this second half, I think you have not reflected that in the plans. How much effect do you see for the mid...
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For the mid-range.
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Ikehata will supplement, but in July, LINE Yahoo Business Partners was established.
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That will increase personnel cost. In the guidance that has already been incorporated, reflected, so it's not going to increase the personnel cost further. Anything Ikehata would like to add?
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Just a small supplement to that comment. In July, it was established as a company. We've just started. For this fiscal year, in terms of headcount, we are going to gradually increase and expand activities. In terms of the account ads, in terms of the business structure that we currently have, the SMB or the local...
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Medium-sized companies, we're trying to increase the number of cases and increase sales. We occasionally comment on this in the presentation. For the account ads...
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We want to provide functions and/or expand functions, solutions that are easy to use by those shops. We are going to try to enhance our activities and sales. We should have better communication with these local players as we conduct sales. Yahoo! JAPAN Business Partners is going to play that role.
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The product itself should be constructed and updated steadily. The sales personnel and organization should be developed. For the second half of this fiscal year, there should be a gradual impact to revenue.
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On that point...
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What revenue, what sales, what kind of sales are going to increase with this?
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Account ad sales will first increase. In addition to that, mini-app sales will also be conducted. If there is a monetization of mini-apps, mini-app sales should also increase. Those two areas are where we see increases. In June, the number of account ads was strong. July onwards, maybe even stronger or better.
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I think we will be prepared to improve it further. It's just been established in July. For the second half, our sales capability should be strengthened. For the short term, August, September, October, in that kind of a short term, we shouldn't expect too big a change. Understood. Second question about PayPay consolidated.
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PayPay's payment number...
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Compared to the credit card number and new bank opening, the number was as expected, but EBITDA performer basis increased substantially. In terms of cost efficiency and sales efficiency...
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There must have been some improvement because just the numbers would not have increased the profits so much. What has been the improvement in the efficiency that led to better margins?
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This is Ryosuke Sakaue.
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Like to respond?
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The PayPay Matsuri or PayPay Festival that
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We do regularly was shorter in this quarter. That's why acquisition cost was a little low. This is a one-time thing. We sold card credit, and there has been a reversal of the non-performing reserve. EBITDA increased as a result of that.
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If that's the case...
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That will not happen. It will disappear from Q2. The promotion time was shorter, but you still had sales. You didn't have to use so much money to acquire business. Is that going to continue?
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Yes, you can understand it that way.
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Sales of...
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We do several times a year as a credit. Q2 onwards will not happen so much.
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This trend of increased profit we think will continue without major change. Finally, a request. Adjusted EBITDA was increasing 3%. Excluding ¥4.2 billion one-time event last year, it was 7% increase. It's adjusted EBITDA. You're adjusting that again. I think that's confusing that you're doubly adjusting. You should adjust all of that together. Also, operating profit, 11% decline. There was 3.1% last term, ¥70.1 billion one-time impact this year. If you exclude all of that, it's 22% increase. That's very confusing. Please adjust all of those things.
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Together. Yes. Understood. We take your opinion. EBITDA, there is the adjustment and there's the cash basis profit and the value of commerce. There was a cash in. This resulted in this. I understand fully your point that this may be confusing. We cannot change during the term, but it's something we'd like to consider for next fiscal year onwards. Thank you. That's all from myself.
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Thank you very much. Next.
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Ms. Zhai of UBS Securities, please unmute and ask your question. I'm Yijia Zhai of UBS Securities. Can you hear my voice?
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Yes, we can. I have two questions. First question related to PayPay. This time, GMV, YOY growth was larger than the number of payments. Last fiscal year, you also implemented PayPay Matsuri Festival. What are the factors of the increase? Can you explain in more details? Is it sustainable for the next several quarters? Slightly related to the previous question, the operating profit and adjusted EBITDA between them, what were the adjustments being made? Usually, adjusted EBITDA is higher than operating profit, but this time it seems to be lower. Can you explain that point in more details?
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The reason for the increased profit is...
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Sorry, increase of the GMV. The average payment amount increased, and we are using points or coupons to try to increase the average payment amount. Also,
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Former PayLater payment style, or which is currently called credit, we are enhancing the linkage. Those were the factors that drove GMV higher than the growth of the number of payments. The adjusted EBITDA should be larger.
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If there is any additional explanation needed, IR will get back to you. Basically, depreciation and LOI consolidation adjustment items are adjusted. That is how adjustments are made. My second question is on commerce.
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The commerce, GMV, and shopping ad-related take rate, it seems like it is gradually rising. Is it just a quarterly fluctuation that we don't need to be concerned about? Or are there any special initiatives that are bringing about this trend, which we're likely to continue? Hide of Commerce will answer your question.
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On a quarterly basis, there is some volatility, but on a full-year basis, gradually, take rate is rising. The bottom was two years ago when GMV was also down year on year. After that, the overall activities have risen. There are competitive pressures, and sellers' appetite to place ads has increased. From two years ago, take rate has gradually come up. We do expect this to further increase in the future.
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It's close to closing time, so next will be the last question.
セキュリティー証券の...
CLSA Securities Japan. Ms. Oliver Matthew, please unmute and ask your question.
Hello. My first question, could you just clarify, when people select AI search in Yahoo! JAPAN, are you paying extra costs to Google for that? Is it separate from your existing contract with Google?
Is there another separate contract for AI payment? Yes, there is. We are paying to Google for that AI search.
Okay. Hopefully, you could renegotiate that in your next contract with them. It seems a bit unfair. Second question, could you tell us more about the LINE Official Account? How big do you think the total market is for that? How much do you think you can grow LINE Official Account over the next two to three years? Thank you.
Ikehata will respond.
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Ikehata here. Thank you for the question.
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Account ads themselves.
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What is the addressable market for that in Japan?
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A very big market is the addressable market.
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On the other hand, within that, there's digital.
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Part of CRM, if you break it down in that way, realistically, what we can address...
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Hundreds to JYN 500 billion. How much presence we can...
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Establish there. In the next one to three years, for that kind of a market, what can we achieve?
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We'd like to refrain from giving you concrete numbers. A high growth rate, we have already shown to you, and we're going to work hard to realize that or maintain that.
Okay. Thank you.
Thank you very much.
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It's time to close the session. With this, we would like to close the Q&A session. Lastly, Mr. Sakaue will give a few words of closing. Thank you very much for participating in our session this term as well. There are some strengths and weaknesses in the segment, but we have broad services. Overall, we do expect that we can achieve the full-year guidance, and we would like to ask for your continued support.
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We would like to close the FY 2025 Q1 financial results briefing for LY Corporation. Thank you very much.