Net Protections Holdings: Q1 FY2027 Earnings Deep Dive Report

This report provides a comprehensive analysis of the Q1 FY2027 financial results for Net Protections Holdings (Securities Code: 7383), covering key performance highlights, progress across business segments, cost trends, and future growth strategies.

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1. Executive Summary

In the first quarter, company-wide performance exceeded initial expectations , driven by steady growth in the Gross Merchandise Volume (GMV) of core services.

• Company-wide GMV : ¥207.1 billion (+14.9% YoY)
• Net Sales : ¥6.582 billion (+6.8% YoY)
• Gross Profit : ¥3.228 billion (+10.6% YoY)
• Operating Profit : ¥840 million (+9.5% YoY)
• Quarterly Profit Attributable to Owners of Parent : ¥599 million (+26.4% YoY)

In terms of progress against full-year forecasts, net sales and profit metrics are tracking at approximately 23% , representing a strong progress rate of over 50% against the first-half targets. While the profit attributable to owners of the parent appears high due to one-time factors at overseas subsidiaries, the company expects to meet its full-year earnings targets as planned.

[Significance and Context of the Slide Above]

This slide is a crucial overview of the company's total performance and the growth trends of its three core services (NP Atobarai, atone, and NP Kake-barai). Of the ¥207.1 billion in total GMV, the growth drivers— "B2C atone" (+43.9% YoY) and "B2B NP Kake-barai" (+20.9% YoY)—achieved double-digit growth, demonstrating a highly balanced portfolio. It also confirms that the expansion of GMV across each service is directly translating into growth in gross profit.

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2. Service-by-Service Performance Breakdown

The company's business is divided into three main segments: "B2C NP Atobarai and others," "B2C atone," and "B2B NP Kake-barai."

(1) B2C NP Atobarai and others

• GMV : ¥91.5 billion (+5.0% YoY)
• Gross Profit : ¥1.97 billion (-3.6% YoY)

GMV increased across all three businesses—"NP Atobarai," "NP Atobarai air," and "AFTEE"—marking a return to positive growth for the NP Atobarai business as a whole . The slight year-on-year decline in gross profit is due to a reactionary drop following one-time factors that boosted performance in Q1 of the previous fiscal year. The gross profit margin relative to GMV has remained largely consistent with the past year's average (approx. 2.16%), indicating solid underlying performance.

(2) B2C atone (Growth Driver)

• GMV : ¥19.2 billion (+43.9% YoY)
• Adjusted Gross Profit : ¥280 million (+63.1% YoY)

[Significance and Context of the Slide Above]

This slide highlights the explosive growth and improved profitability of "atone," the primary growth engine in the B2C segment . A surge in transaction volume from non-physical e-commerce merchants, such as digital content providers, drove significant GMV growth. Furthermore, successful ongoing cost-reduction measures have established a structure where the growth rate of gross profit (+63.1% / +66.6% adjusted) significantly outpaces the GMV growth rate (+43.9%) . This slide visually captures the economies of scale and rising profitability resulting from this growth.

(3) B2B NP Kake-barai

• GMV : ¥96.3 billion (+20.9% YoY)
• Gross Profit : ¥970 million (+39.0% YoY)

[Significance and Context of the Slide Above]

This slide illustrates the recovery in performance and profitability of "NP Kake-barai," the cornerstone of the B2B segment . A key highlight is the complete resolution of collection issues that had temporarily worsened in the previous quarter . Additionally, strengthened collection efforts improved the cost of sales, allowing the gross profit margin to recover significantly from 0.87% in the same period last year to the 1.00% level , resulting in a substantial profit increase (+39.0%).

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3. SG&A Expenses and Cost Structure Trends

Selling, General, and Administrative (SG&A) expenses for the first quarter totaled ¥2.52 billion .

• SG&A-to-GMV Ratio : 1.22% (-0.07pp YoY)

While Tech & Development (T&D) costs related to systems increased slightly due to the expansion of transactions across all businesses, the SG&A-to-GMV ratio continues to trend downward as a result of overall operational efficiency. This confirms that operational leverage is functioning effectively as the revenue base expands.

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4. Management Strategy and Future Growth Topics

The company is pursuing strategic initiatives across all business segments to accelerate future growth.

① atone Growth Pipeline and H2 Concentration Scenario

Although Q1 GMV maintained high growth at +43.9% YoY, it was impacted by timing shifts in the launch of certain projects. However, the large-scale sales pipeline (including entertainment companies A-C, digital content providers D-E, and C2C marketplace F) remains extremely robust, with projects concentrated for launch in the second half (particularly Q4) . Sales efficiency through partnerships with Payment Service Providers (PSPs) is also on track, with the company aiming for a GMV growth rate in the mid-60% range YoY for Q4 .

② Diversification and Expansion of "NP Atobarai air"

"NP Atobarai air" has introduced a "Bill Payment by Card" feature for Kinliser, a major water heater retailer. This eliminates the need for field staff to carry payment terminals, improving operational efficiency while offering customers a wider range of payment options. Similar horizontal expansion is expected in industries facing comparable challenges, such as housing equipment and renovation.

③ Strengthening B2B Partnerships

• Collaboration with Sumitomo Mitsui Card : Since July 2026, the company has begun receiving specific projects through Sumitomo Mitsui Card’s "NP Kake-barai" intermediary scheme. Moving forward, the company will accelerate synergy creation, including integration with the corporate digital financial service "Trunk."
• Collaboration with Daiwabo Information System (DIS) : The company has begun offering "NP Kake-barai" to sales partners using the subscription management portal "iKAZUCHI." This reduces the burden of billing and collection tasks associated with recurring/usage-based billing and mitigates non-payment risks, marking a full-scale entry into the IT distributor industry.

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5. Conclusion

The Q1 FY2027 results mark a strong start, exceeding initial expectations for both company-wide GMV and profit, driven by the high growth of B2C atone and the profitability recovery of B2B NP Kake-barai .

With structural efficiencies such as improved gross profit margins and lower SG&A ratios taking hold, and progress in the pipeline for large-scale projects and alliances with major financial institutions and IT vendors, the company is successfully building a foundation for mid-term growth.