Giftee Group FY2026 Q2 Earnings Deep Dive Report

Giftee Group (Securities Code: 590A) has announced its financial results for the second quarter of the fiscal year ending December 2026. This report extracts 10 key topics from the disclosed financial materials to provide a comprehensive analysis of performance progress, cost structure, strategic M&A, capital policy, and mid-to-long-term growth strategies.

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1. FY2026 Q2 Earnings Summary and Full-Year Progress

Performance for the first half (H1) of the fiscal year ending December 2026 showed extremely robust growth, significantly exceeding the same period last year in both revenue and various profit metrics. This was driven by the acquisition of demand from local governments, expansion in the corporate sector, and the growth of group companies, particularly overseas subsidiaries.

【H1 Results and Progress Against Full-Year Forecasts】

• Revenue : 8,186 million JPY (48% progress against the 16,949 million JPY full-year forecast)
• EBITDA : 2,685 million JPY (60% progress against the 4,500 million JPY full-year forecast)
• Operating Profit : 2,093 million JPY (60% progress against the 3,484 million JPY full-year forecast)
• Net Income (Non-GAAP) : 1,009 million JPY (64% progress against the 1,570 million JPY full-year forecast)
• Gross Transaction Volume (GTV) : 90,288 million JPY (58% progress against the 155,895 million JPY full-year forecast)

【Why this slide is important and the background of the data】

The slide above summarizes the key financial indicators for Q2 FY2026 and the progress against full-year plans. Generally, the e-gift business tends to see GTV and profits skewed toward the second half of the year (particularly due to Q4 events and Christmas demand). Despite this, the fact that EBITDA and operating profit progress reached 60% by the end of H1 is noteworthy. This is attributed to the efficient acquisition of projects related to local government inflation relief measures in H1 and the maintenance of a high-margin service mix. It demonstrates that the company has built a very solid foundation for achieving its full-year earnings forecasts.

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2. Quarterly Performance Trends and Growth Momentum

Looking at quarterly trends, the growth momentum becomes even more apparent. The growth rates for each indicator in Q2 (April–June) are as follows:

• GTV : 49,596 million JPY ( +47% YoY )
• Revenue : 4,463 million JPY ( +30% YoY )
• EBITDA : 1,588 million JPY ( +57% YoY )

In addition to the significant growth driven by the acquisition of local government demand (regional currencies, premium gift certificates, inflation relief projects, etc.) by Giftee Inc. on a standalone basis, the subsidiary group, led by the overseas subsidiary YouGotaGift, also showed steady expansion. Furthermore, the standalone EBITDA margin remained high at 42.3%, demonstrating the profitability gained through economies of scale.

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3. Cost Structure and Human Capital Investment

While cost of sales and SG&A expenses are on an upward trend due to business expansion, this is the result of proactive investment for future growth .

• Standalone Cost of Sales : +33% YoY (due to an increase in direct costs related to certain transactions, etc.)
• Standalone SG&A Expenses : +21% YoY (mainly due to increased personnel costs and operating expenses associated with higher GTV)
• Subsidiary Cost of Sales & SG&A : +7% YoY

Regarding personnel planning, the number of employees at Giftee Inc. reached 363, an increase of 59 compared to the same period last year (+18 from the previous quarter). The company is focusing particularly on hiring for sales (43.5%) and engineering (23.1%) roles, balancing the strengthening of frontline project acquisition capabilities with the technical development power that supports platform construction.

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4. Strategic M&A: Making DIRIGIO Inc. a Wholly Owned Subsidiary

One of the key topics in these financial results is the full acquisition of DIRIGIO Inc. , which operates a mobile ordering platform.

【Overview of the Transaction】

• Investment Amount : Approx. 440 million JPY (220 million JPY cash-out, 220 million JPY stock swap)
• Equity Stake : 100% (Previously an equity-method affiliate since November 2023; now a wholly owned subsidiary through additional acquisition)
• Total Goodwill : 941 million JPY (estimated)
• Goodwill Amortization : Approx. 156.8 million JPY/year (straight-line amortization over 6 years)

The scheme follows a two-step approach: acquiring 67% to make it a consolidated subsidiary at the end of August 2026, followed by a stock swap at the end of September 2026 to make it a 100% wholly owned subsidiary.

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5. Purpose of the DIRIGIO Acquisition and Synergies: Improving CP Stickiness

The primary objective of bringing DIRIGIO into the group is to diversify the value provided to e-gift issuers (Content Providers - CPs) and improve platform "stickiness."

By leveraging DIRIGIO's mobile ordering construction technology, the company can now provide a one-stop solution for retention and store-visit promotion functions , such as "mobile ordering," "coupon distribution," and "stamp card functions," in addition to the traditional "e-gift issuance and redemption." This is expected to deepen engagement with CPs, reduce churn rates, improve ARPU, and serve as a powerful weapon for acquiring new CPs.

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6. Share Buyback of "Up to 1 Billion JPY" to Improve Capital Efficiency

To improve shareholder returns and capital efficiency (ROE/EPS), the company announced a share buyback (acquisition of treasury stock) of up to 1 billion JPY and 1.11 million shares .

• Acquisition Period : August 17, 2026 – November 13, 2026
• Method : Market purchase on the Tokyo Stock Exchange

The company has determined that the current stock price level does not fully reflect its mid-to-long-term growth potential and has clearly stated its stance on utilizing financial flexibility to allocate capital dynamically.

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7. Proper Management of Share Dilution Through Dynamic Capital Strategy

While the company is accelerating growth by utilizing M&A (including stock swaps) and incentives for officers and employees (stock-based compensation), it has adopted a policy of suppressing the resulting share dilution through share buybacks .

While new share issuance (dilution rate of approx. 0.7%) will occur due to the full acquisition of DIRIGIO, the current share buyback of up to 1 billion JPY is expected to have a dilution-offsetting effect of approximately 3% . Combined with the elimination of dilution from past convertible bond (CB) redemptions (7.4%), the company is thoroughly committed to preventing the erosion of value per share while appropriately controlling the total number of issued shares.

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8. Mid-Term Financial Goal of "10 Billion JPY EBITDA" and EPS Impact

The company has set a mid-term financial goal of "achieving 10 billion JPY in EBITDA." This is a roadmap aimed at achievement through organic growth of existing businesses, M&A, and the profitability of subsidiaries.

【Why this slide is important and the background of the data】

This slide shows a simulation of Non-GAAP net income and EPS (earnings per share) at the stage when the 10 billion JPY EBITDA target is achieved . While the Non-GAAP EPS forecast for FY2026 is 53.9 JPY, the outlook shows that Non-GAAP EPS will jump to the 190 JPY level upon achieving 10 billion JPY in EBITDA. By combining appropriate management of the number of shares through buybacks with profit expansion through business growth, the story of exponentially increasing shareholder value is visualized with figures, making it the most important strategic chart for evaluating the company's mid-to-long-term growth potential.

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9. Abundant Cash on Hand and a Solid Balance Sheet (BS)

Supporting proactive growth investment and shareholder returns is an extremely sound and abundant financial buffer .

Key data from the balance sheet (BS) as of the end of June 2026 is as follows:

• Cash and Deposits : 18.4 billion JPY
• Interest-bearing Debt (Borrowings) : 8.8 billion JPY
• Net Assets : 10.0 billion JPY
• Overdraft Facility : 8.0 billion JPY (including unused lines)

Even after executing the 1 billion JPY share buyback, cash and deposit levels exceeding 17 billion JPY will be maintained. Including the use of overdraft facilities, there is sufficient financial buffer to handle working capital and additional large-scale M&A.

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10. Network Effects of the Platform and the Full Picture of Growth Strategy

The core strength of the Giftee Group lies in its "circular platform" that handles everything from e-gift issuance to distribution in a one-stop manner .

【Why this slide is important and the background of the data】

This slide shows the full picture of the company's business model and its powerful network effects (positive cycle) . In the "issuance area" on the left, 302 Content Providers (CPs) such as restaurants and retailers issue e-gifts. In the "distribution area" on the right, the company generates 147.2 billion JPY in annual GTV through distribution partners (DPs), including consumer services (2.52 million members) and the corporate service "giftee for Business" (2,276 corporate users). A synergistic effect is at work where more content (CPs) increases the appeal to corporate and individual users, and more corporate users (DPs) increase the benefits of adoption for CPs, which is the source of a competitive advantage that others cannot easily follow.

【Three Pillars of Future Growth Strategy】

1. Expansion of the e-gift platform : Cultivating both CPs and DPs, and expanding new services (functions like DIRIGIO).
2. Geographic horizontal expansion : Expansion into the ASEAN region, centered on Malaysia and Vietnam, and other overseas markets.
3. Dynamic M&A/Alliances : Strategic investments to accelerate platform construction.

Furthermore, regarding its shareholder return policy, the company maintains a "30% dividend payout ratio" and "progressive dividends." The dividend forecast for FY2026 is 16 JPY per share , an increase of 3 JPY from the previous year (following consecutive increases from 10 JPY in 2024 and 13 JPY in 2025), demonstrating a stable return stance.

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Conclusion

Giftee Group's Q2 FY2026 earnings achieved a high progress rate of 60% against the full-year profit target , driven by the reliable capture of local government demand and the growth of subsidiaries. The simultaneously announced "full acquisition of DIRIGIO" for service enhancement and the "share buyback of up to 1 billion JPY" for dilution suppression and capital efficiency improvement demonstrate that the company is powerfully promoting both business growth and the maximization of shareholder value. Leveraging its solid financial foundation and platform strengths, the company is on a steady growth trajectory toward its mid-term goal of 10 billion JPY in EBITDA.