Is that the start? The LY Corporation earnings briefing for fiscal year 2024, full year and Q4. Is that the start? The LY Corporation earnings briefing for fiscal year 2024, full year and Q4. [Foreign Language] Thank you very much indeed for your participation. [Foreign Language] 。 During today's briefing, we'll be using the presentation material that you can find in our website. [Foreign Language] From LY Corporation. First, we have Mr. Takeshi Idezawa, CEO. [Foreign Language] Mr. Ryosuke Sakaue, CFO. [Foreign Language] Mr. Yuki Ikehata, the CEO of Marketing Solution Company. [Foreign Language] Mr. Makoto Hide, the CEO of Commerce Company. [Foreign Language] First, Mr. Idezawa will present the FY 2024 full year and Q4 results. [Foreign Language] We take questions. [Foreign Language] We plan to spend about 60 minutes for the whole briefing session. [Foreign Language] We are live streaming this session. [Foreign Language] If you have any technical difficulties, please use the link at the bottom of the screen and move to another server. Let us get started. [Foreign Language] Thank you, this is Idezawa, the CEO of LY Corporation. Thank you for taking a time out of your busy schedule to attend the FY 2024 full year and Q4 business results briefing. I'd like to present a summary of business results. First, this shows the fiscal year 2024 business results. Adjusted EBITDA grew 13.5% year-on-year to JPY 470.8 billion. In fiscal year 2025, we will focus on three areas. First is to transform LINE Official Account and LINE Mini App into the business platform. Second is to transform PayPay from the payment app into the digital financial platform. We'll try to expand the ecosystem so that we can realize the corporate value and prepare for the IPO. Number three is to deploy AI agents in consumer-facing services in full scale. High single-digit increase in revenue and profit planned for fiscal year 2025, including investments. Today we announced up to JPY 150 billion share repurchase to improve the capital efficiency. Please go to next page. Here, this is the agenda that I'd like to go through. Next page. Starting with the entire group consolidate the business results. In FY 2024, revenue and profit increased in media, commerce, and strategic segments. Entire group adjusted EBITDA increased 13.5% year-on-year. Adjusted EPS increased 11.7% year-on-year. From FY 2025, we changed or redefined the adjusted EPS. For the FY 2024 number, based on both definitions are shown. The new definition includes the non-recurring gains and losses below the operating profit and PPA amortization as new adjustment items with the aim of showing normal profitability without one-off gains and losses or the impact of the past M&A. After the merger, this shows the trend of the performance. In all segments, we saw the growth of the businesses, and after the merger, we focused on the lean operation of organization. As a result, we realized the double-digit adjusted EBITDA and margin expanded to 24.6%. This shows the factors of change in adjusted EBITDA of the entire company. In FY 2024, each business's higher revenue contributed to the higher profit. We realized the double-digit profit growth. This shows the entire group total advertising revenue. In media ads, mainly account ads, increased and stable growth was realized. In commerce ads, the revenue declined, but since the second half of FY 2023, we executed disciplined sales promotion investment, which led to a major growth. This is the entire group e-commerce transaction volume. Domestic shopping transaction volume grew by 5.1% year-on-year. In Yahoo! JAPAN Shopping, we had a campaign to improve the UI and UX, and as a result, the transaction volume grew by 6.7% year-on-year. In we use transaction volume, the Yahoo! Frima showed a double-digit growth year-on-year. Yahoo! Auction, the number of the users did not grow so much, and the year-on-year decline was booked. Domestic service transaction volume with the sales promotion of the Yahoo! JAPAN Travel and the Ikyu with the higher reservation travel grew by 24.5% year-on-year. Next is the share repurchase and cancellation of the treasury shares. In order to improve the capital efficiency, we will execute up to JPY 150 billion share repurchases. With this, the dividend per share in FY 2026 will increase in proportion to the number of the shares repurchased. This will be the tender offer. The price is that of the 2nd of May, the ending price, JPY 533 per share. We plan to cancel the majority of the repurchased shares. Next is capital allocation and the trend of the adjusted ROE. Buffer for the additional investments and the capital policy is updated to reflect the new share repurchase and ZOZO's acquisition of Lyst. We will work on the improvement of the capital efficiency so that we can realize the positive spread between the stable adjusted ROE and cost of equity. Next, this is the business results by segment. Starting with media business. In FY 2024, highly profitable account ads showed strong growth. Adjusted EBITDA grew 11.6% year-on-year. With the changes of the revenue mix and cost control, adjusted EBITDA margin increased to 38.8%. Next page. This shows the breakdown of the media business revenue. The account advertising grew significantly by 18.9% year-on-year and drove overall media business. As for search advertising, partners' website revenue declined. However, for LY Corporation's website, we continued to improve the functions, and revenue increased. Display advertising, although the number of impressions increased, the demand decreased in some industries. Revenue declined by 1.4% year-on-year. In others, LINE Stickers grew. We look at the performance attribution of the media business. Due to revenue growth and reduced SG&A through cost control, we achieved double-digit profit growth. Next, let me now explain account ads. For the third consecutive year, we maintained year-on-year growth exceeding positive 18%, with revenue reaching JPY 125.1 billion. Next, the performance trend of the commerce business. Despite the impact of de-consolidating ValueCommerce and IPX, revenue and profit increased primarily driven by growth in shopping and service EC. Profits grew despite the absence of a one-time gain of JPY 9.4 billion recorded last year. Profitability improved with adjusted EBITDA margin reaching 17.5%. Next, here is the performance attribution for the commerce business. While SG&A expenses increased due to active sales promotion, revenue growth outpaced the cost increase, resulting in a plus 3.6% year-on-year rise in adjusted EBITDA. Next, this shows the trends in strategic business. Revenue exceeded JPY 300 billion driven by growth in PayPay consolidated. Adjusted EBITDA also grew significantly to JPY 51.5 billion, supported by revenue growth. With this sharp increase in profit, the margin improved significantly to 15.1%. Next, breakdown of revenue in the strategic business. Throughout the year, both PayPay consolidated and fintech businesses showed steady growth. PayPay consolidated achieved 17.7% year-on-year growth driven by increased GMV as a result of marketing campaigns and higher interest income from growing revolving payment balance. PayPay Bank increased revenue due to steady growth in account numbers and deposit balances, as well as expansion in housing loans, which led to higher loan balances. Other financial businesses, including LINE Pay Taiwan and LINE Credit, performed well, achieving 22.6% year-on-year growth. Performance attribution of the strategic business. In addition to higher revenue of PayPay consolidated, reductions in SG&A expenses, especially outsourcing costs, led to a significant profit increase. Next, PayPay continues its high growth trajectory. Thanks to strong performance of events like the PayPay Festival and municipal point-back campaigns, total consolidated GMV rose by 23.4% year-over-year, and consolidated revenue also grew by 17.6%. Consolidated EBITDA surged to JPY 45.5 billion, driven by more efficient marketing spend and reduced outsourcing costs. Efficient marketing spend and reduced outsourcing costs. As a result, margin expanded to 18.3%. Next, let us present our earnings guidance for fiscal 2025. Before we present our earnings guidance for fiscal 2025, we'd like to first explain PayPay's IPO as it will impact the format in which our guidance is disclosed. PayPay has begun preparations for its initial public offering IPO. We're exploring the U.S. market as a potential listing destination. Even after the IPO, LY Corporation remains fully committed to PayPay's business and enterprise value growth. Next, once again, this is our consolidated earnings guidance for fiscal 2025. We expect entire group revenue to grow by approximately 9%. Entire group adjusted EBITDA to grow by 6.2%-8.3%, and adjusted EPS to increase by 4.0%-7.9%. Thus, we anticipate high single-digit growth in both revenue and profit. As mentioned, since PayPay has started preparations for IPO, we will refrain from disclosing financial forecast numbers for PayPay consolidated in fiscal 2025. Given that PayPay consolidated accounts for the majority of both revenue and profit within the strategic business segment, disclosing its forecast could effectively imply a projection for PayPay's performance. To avoid this, we are presenting the outlook by combining the strategic business segment with the others and adjustments category. Now, let us explain our capital efficiency improvement policy. Our basic policy is to strike a balance between profit growth and growth investment while working to improve operational efficiency. As for shareholder returns, we aim for a cumulative total payout ratio of over 70% over the next five years through flexible share buybacks and stable dividends. In terms of maximizing profit and free cash flow, we aim to maintain high single-digit profit growth in adjusted EBITDA and adjusted EPS over the medium term. We're also working on balance sheet management to ensure the appropriate size and structure of capital and liabilities. Next, finally, let me outline our management policy for fiscal 2025. Next, first a look back of fiscal 2024. We steadily executed the policies and goals set at the beginning of the fiscal year. We were able to achieve such goals. While strengthening our products, we also improved profitability, resulting in adjusted EBITDA exceeding the initial guidance by JPY 30 billion-JPY 40 billion. Security measures also progressing according to plan. Future policies and positional businesses in fiscal 2025 and onwards. We will focus on the official account and Mini App, PayPay and AI. Those are the three areas of the focus. We try to realize a sustainable growth even in the rapidly changing market environment. LINE Official Account and Mini App will try to enhance the features and try to improve the linkage between the two to introduce this to the companies and stores to realize the continuous high growth. We are trying to transform PayPay not as a payment app, but to become the digital financial platform to build the ecosystem to improve the revenue and to introduce all the AI agents to all the services that we have. We would like to introduce the AI products, which can be provided only by us who have many users, physical contact, and content. We will build a solid user base and revenue base in the AI era. I'd like to talk about those three basic principles. First is about the LINE Official Account and LINE Mini App. First of all, about the potential market. The Official Account and Mini App, they can be divided into the sales promotion market and digital transformation market. Each is the size of the market is JPY 15 trillion and JPY 7.7 trillion each. The total is exceeding JPY 20 trillion as a potential market. The latest account at sales or revenue is about JPY 120 billion. There is a big room for growth. On the basis of the standalone official account, we will try to aim for the double-digit growth of this official account up to 20%. With the monetization of the Mini App starting from the next fiscal year, we expect a stronger growth. By fiscal year 2028, we aim to achieve JPY 100 billion annual sales with the Mini App. This will be the major driver. Next page. As a foundation for the future revenue growth, I'd like to talk about the business platform. From this fiscal year, we will introduce the cross-functional business platform to centrally manage our services to companies. Our corporate service IDs will be integrated into the LINE Official Account. The companies and stores will be able to use the multiple services based on the official account. As a result, from the perspective of the users or the companies, the users' status of the services can be seen. Based on the deeper understanding of the users, they can distribute the ads and do the sales promotion across different services. We expect the combined use of other services and others. In addition to the business platform, we will be also taking measures to boost service foundations. On the left-hand side, we are showing our plan to strengthen our sales of the DX solutions. Mainly in the dining and beauty services, we will be introducing the promotion of the Mini App. As for the measures to increase the user usage, we would enhance the function so that the Mini App can be searched and found easily. The companies have been requesting for the in-app billing feature of the Mini App. We would also make progress in terms of introduction of the option functions for the LINE Official Account. Through those initiatives, we will further grow the Official Account as well as Mini Apps. Next is the second pillar that is to build the digital financial platform centering around PayPay. First, let's look at the external environment surrounding PayPay. The cashless payment ratio in Japan is steadily growing, and in 2024, it exceeded 40%. There is still growth potential in comparison to other countries. In this quickly growing cashless payment market in Japan, PayPay has been increasing its share steadily. In terms of the number of the payments, the PayPay share is now close to 20%. In terms of the profitability, the revenue increased in FY 2024, and now we are ready to expand this. In April, the PayPay Bank was transferred under PayPay, and we have now completed the reorganization of the financial businesses within the group so that we are ready to realize the synergy of this. We will try to utilize the tailwind of the increasing cashless payment market to realize the further. About the concrete items on the left, PayPay Card example, PayPay and PayPay Card will be linked. It will make it more convenient. In terms of the interface, compared to the red screen, you can just slide to the blue screen, and you can switch to the payment. This should, or this has led to more transactions or GMV and the number of cards issued, and that has led to the growth of PayPay itself. This past April, PayPay Bank has become a subsidiary of PayPay. At PayPay Bank, various initiatives are starting from April 25. From the PayPay Bank app, PayPay payments have now become possible. Going forward, as we have done with the card, we will make PayPay Bank balance payments from the PayPay apps. We shall achieve the high growth that we have achieved in cards at the PayPay Bank as well. These initiatives are not limited to cards and banking. We will execute across our securities and insurance businesses as well. Going forward, we will use PayPay's broad user base and strengthen integration with the PayPay app to further grow our financial services, including banking, securities, and insurance. PayPay is evolving from a simple payment app into a comprehensive digital financial platform, and we will build a robust ecosystem and drive further monetization. Next, lastly, I will explain our initiative to implement AI agents. Next, LY Corporation has grown by capturing past paradigm shifts in the IT industry. We believe that the paradigm shift brought about by generative AI is the most significant of them all. How we respond to that is going to be the key. Amidst such transformation or paradigm shift, we are already implementing various AI initiatives to date. We have launched 44 AI-powered services for consumers and undertaken over 35 internal operational efficiency projects. We have strengthened the user service and enhanced the efficiency of our internal operations. For example, LINE AI, which was launched in April, you see those numbers, it's already being used by a large number of users. In our internal operational efficiency projects, we've made steady progress. About 90% of certain customer support tasks has been automated, and the time spent gathering information in response to ad sales increase has been reduced by 70%. This fiscal year, in addition to advancing these initiatives, we will fully accelerate the transformation of our consumer-facing services into AI agents. Next, the key to our customer-facing AI agents is deep user understanding, extensive merchant touchpoints, and the richness of our content and data. We think those are quite important. With a user base of about 100 million, over 10 million merchant and payment touchpoints, and more than 100 types of content. A lot of data is being accumulated, and we will leverage the unique strengths of LY Corporation to deliver AI agents in a way that only we can offer. There are three key points we think. First is personalization. The AI will autonomously analyze all kinds of information, including reviews and feedback, to provide optimal suggestions for each user. Second, end-to-end coverage of daily life. Our wide-ranging services allow our AI agents to accompany our users in all aspects of their lives. Third, conversion completion. The AI agent will complete the cycle to conversion seamlessly, including booking, purchasing, and payment. These three we think are our strengths. Next page. Going forward, we will evolve our various services into AI agents. Not only our core services like LINE and Yahoo!, but also local shopping and messaging services will transform into AI agents. These services will go beyond providing information and analysis to offer optimal suggestions and assist with actions like reservations and purchases. We will prioritize the implementation of services that implement generative AI, aiming to build a solid user base and a revenue foundation in the Gen AI era. An image video of our AI agent is available on the IR section of our website, so please take a look. To summarize our full-year business results in fiscal 2024, we've grown our businesses by strengthening our products and by a lean operating structure that we have since the merger and have seen improved profitability, realizing stronger-than-expected profit growth. In fiscal 2025, we will continue operating under this structure while steadily executing our mid-to-long-term growth strategies centered around three pillars: Official Accounts and Mini Apps, PayPay, and AI agents. We'd like to make this a start of the next growth phase, capitalizing on our strengths. We will also maintain a balance between stable profit growth and growth investments, actively pursue shareholder returns and BS management, and continue focusing on improving capital efficiency, one of our key management issues. We will aim to be a company appreciated not just for its financial performance, but for a multitude of reasons by the stock market. We appreciate your continued support. That concludes the fiscal 2024 full-year and Q4 earnings presentation. Thank you very much for joining us today. [Foreign Language] Now I would like to take questions. If you have any questions, please use the raise hand function of the Zoom. Once again, if you have any questions, please use the raise hand function of the Zoom. [Foreign Language] please start asking your question. We would like to limit the number of questions to two questions per person at one time. Please ask one question at a time. If you are asking questions in English, that will be consecutively translated, so it would take some time. The answer from the management side will be simultaneously interpreted. Now we are taking questions. [Foreign Language] From SMBC Nikko Securities, we have Mr. Maeda. Please unmute and ask your question. Thank you. This you. This is Maeda from SMBC Nikko. I have two questions. First is about the PayPay IPO and preparation. In the long term, your investment and about the structure of the investment, what do you think would be the ideal? As of now, I think that as a LINE/Yahoo group, the profit of the PayPay, pickup is limited. Through the IPO, is this going to be diluted? At the time of the IPO or listing as a shareholder, what are the advantages that you will expect? That is my first question. Yes. Sakaue would like to respond to your question. For us, PayPay's listing means that PayPay's corporate value can be realized. That is the biggest advantage. In addition, PayPay itself, through the IPO, the market discipline and others will improve their management and will accelerate their growth. Those are the expectations that we have in preparation for IPO. Our equity toward the IPO, we will be studying the different structures. As of now, nothing has been decided. For us, selling PayPay and others, we are not thinking about that right now. We will be studying the offering structure from now on. Thank you. My second question. This time, the briefing session on page 24, you talked about the guidance. In each segment, the revenue, we should look at it and also the cost. If you can give us the by-product or by-sub-segment additional explanation. Yes, Sakaue, I'd like to respond to that. First of all, starting with media, this is the high single-digit revenue growth is expected. Account advertising, we think we can grow in double digit. As for the display, it's still difficult, but single digit, low single digit is what we like to realize in full year. For the search ads, it's going to be a little bit tougher than the display ads that are being factored in. The revenue is growing low single digit, but it's flat in terms of the profit. This is related to the cost for generative AI. EBITDA is flat as a result. More specifically, LINE AI and the Search AI or AI Search and LLM will be using other companies' LLMs, so that would incur some cost. That is reflected. Also, the AI Search, the monetization has not been established, so only the expenses are emerging. That is why the profit looks flat. As for commerce, the BEENOS is going to be consolidated, and that would be JPY 10 billion-20 billion add-on expected in terms of revenue. The high single-digit growth of the revenue is expected. Yahoo! JAPAN Shopping, gradually and steadily, we are trying to expand our ecosystem. The high single-digit growth is expected for that. Adjusted EBITDA is lower in terms of the expected growth than the revenue in the Gen AI era. How do we do the monetization? One is through conversion. We need to generate the revenue. Within commerce, there are different conversion services. Throughout the Gen AI era, we need to improve our capability to convert. Promotion, sales promotion, so a certain level of the growth investment is included. That is why the revenue growth and adjusted EBITDA growth are a bit different. As for the strategic area, it is difficult for me to comment, but the PayPay and LINE financial services, the revenue growth is lower 20% range. The EBITDA in the strategic area, we would like to maintain the curve that we realize and to improve the profit from now on steadily. That is all. Thank you. Thank you very much. [Foreign Language] please unmute and ask your question. [Foreign Language] Thank you for the presentation. [Foreign Language] I also have two questions. [Foreign Language] First, about AI agents. [Foreign Language] FY2026 and onwards, you are looking to monetize. That is what you said. The method of monetization, what are you thinking? What are your thinking? There was mention of enhancing conversion to the previous question. With AI agents, in order to grow revenue in a large way, what is going to be important? Is it going to be user traffic or GMV, growth of those things that will lead to profit? Is that the image we should have? You say you have a broad range of contents, more than 100. By introducing AI agents and also in trying to monetize that, what are the contents that's going to be the key? Also, LINE App renewal timing, so second half of this fiscal year, unchanged? What about the surprising experience? Are you progressing toward a very positive surprise for the users in terms of that update? Thank you. I will explain about monetization of AI agents. Globally, this is something that's being discussed. We have to think as we walk, and that is our basic approach. The basic direction, there are three major parts. Conversion model that is in line with the GMV. With AI agents, GMV can increase in various services. From there, we would like to create a model where we can enjoy fees from that. At our company, we do not just do media, but we have very large numbers of users. We are sort of a portal, and we have many conversion points. For example, commerce is one, travel is another, and restaurants as well. Payment is also within our same group. We are very unique in that aspect. Conversion in those places is one pillar of our monetization. There is LYP Premium that we have. Amongst the subscriptions, or within that subscription, we can perhaps integrate that. That is another possibility we're thinking about. Something very useful, if that is created, and then that could be one item in the LYP. That's something we can think about. There could be some completely new model. Whether it be search or chat or PayPay, we have this history of creating something very new. I think that there will be something fundamentally new. Also, your other question about the LINE app, we're on schedule. Fiscal 2025 is when we plan to announce that update. As you mentioned, we want to provide the convenience to the users. Element of AI or Gen AI probably be incorporated. We'll make due preparation for that. That would be my response to you. Thank you very much. Second question. Looking at this fiscal year's guidance, I also have a question. Entire company EBITDA margin, it seems that it's about the same as fiscal 2024. That seems to be the assumption. What will be the positioning of this fiscal year? The cost optimization has run its course. Now you're going to focus on top-line-driven growth phase. Is that the right understanding of your approach? Also, maybe difficult for you to say, but the strategic business monetization, if that should progress further, EBITDA margin, can we see an upside for that as a result of that? Please. For this fiscal year, it's not about cost reduction. Fiscal 2024, we have worked on cost reduction, and we increased the profit by increasing the profitability. For AI agent, we would be doing mid to long-term strategic investment and also grow the top line as well. Top line growing, not really in this year, but next, we're sowing the seeds for the next fiscal year onwards when it will be the AI era. Still, we want to maintain a profit growth of higher single digit. For the strategic segment, it's difficult to talk about the projections. Please forgive me for that. Understood. Thank you very much. Thank you. [Foreign Language] We have Mr. Okumura. Please unmute and ask your question. [Foreign Language] [Foreign Language] Okumura from Okasan Securities. I hope you can hear me. Yes, if you can speak up a little bit. Yes. [Foreign Language] Two questions. First is about the media business, the business results and guidance. Now, search and display, you mentioned were weak, so I'd like to check the reasons. For this fiscal year, Yahoo! and LINE ad platform integration was planned. That is not something that I can find in the presentation material. How did you include that into the guidance? Also, the media guidance cost, Crystal-related cost, is not included. Is that right? I would like to confirm those points. Sakaue, I would like to respond. Maybe there is an additional comment from Ikehata on the Q4. The search ads, part of the major clients, so among the clients, they are going through a kind of trials and errors. Because of that, Yahoo website, the search ad, faced some difficulty. That is continuing in Q1. When I talked about the guidance of the media, the search is flat because of that same reason that we expected the continued impact. As for the display, Q4, Q3, Q2, the revenues were down, and the demand side, the tech side display is not yet coming back. It is not really the tariff or the impact of the tariff, but it was the situation that existed before. As for the platform, it was integrated in fiscal year 2025, and Ikehata can make some additional comments. As for the Crystal specific, no, we do not have any budget for that. I would like to invite Ikehata-san to comment. Yes, Ikehata speaking. As for the guidance and the latest results, those were already reported by Sakaue. One additional comment from my side, the ad platform integration and others, there are various initiatives starting this fiscal year. The ad platform itself, LINE and Yahoo! ad, the integration will be in the second half of this fiscal year. Gradually, we are starting to provide that to the market. Of course, when the platform becomes one single platform, then the advertisers can more seamlessly use the LINE site and the Yahoo to have a more efficient ad distribution. That would be the environment. This is the major integration of the major ad platform. In our guidance, revenue upside is not included. Rather, we will start to see the effect of it in the medium term, in FY2026 and onwards. The platform integration will start to show the effect in the advertising. That was the additional comment that I wanted to make. One follow-up question. Platform integration is not delayed. Is that correct? You also mentioned search, and you talked about some clients. Is it related to the budget of the client? That is not going to have any impact on the platform. Thank you. About the integration of the ad platform, no, we do not have any delays. Looking at the situation of the customers, and we are working closely on how we can do this. That is how we are working on this. Search, as your understanding, is correct. Thank you. Thank you very much. My second question is about the PayPay IPO. The PayPay is a domestic business, and potential listing in the U.S. market. Why is that? Simply, in the case of IPO in Japan, there could be some conglomerate discount. Is that the reason? Could you explain the background? About the PayPay, by listing, the capital that they can procure will change. Where would you be spending that? Through the IPO, the business value of the PayPay, how would it expand? As of now, if you can comment on that. Thank you. PayPay, considering the listing in the U.S. market, it doesn't mean that we are making any specific preparation, but eventually, we would like to do the global business. That's one of the ideas that we have. That's a background. The second is that the U.S. market for the fintech company listing, there are more companies being listed, and there is a depth in the market. The valuation or multiple from those perspectives, there could be higher evaluation. That's one of the reasons why we keep this as one of our options. U.S., the regulation preparation for the IPO, of course, there is more burden or load. We are going to start the preparation even in this burdensome market. Finally, where do we list? That's something that we would like to decide as we prepare. Of course, there will be more options in funding after the IPO. What do we do in the future? Not just procuring the fund from the capital market, but debt capacity or procuring the funding through the debt or fixed income. There is more reliability or the trust. This is a financial business. The money is something that we need to procure in the financial business. When we consider that, with more reliability with the debt, securitization, or bank loans and others, there will be wider options in funding or financing. Thank you very much for your detailed answer. That's all. Thank you very much. Jefferies, Sato-san, please unmute and ask a question, please. [Foreign Language] Sato from Jefferies. Can you hear? [Foreign Language] Yes. [Foreign Language] I have two questions. [Foreign Language] Last 2 years, [Foreign Language] In terms of the profit, you have seen upside. [Foreign Language] against the guidance. [Foreign Language] recent guidance from your company, there's this image that it's quite conservative. This time, EBITDA it's flat from the previous year. [Foreign Language] Because there is AI investment. Should we consider this to be conservative as well, or this time you're spending money, so you're actually thinking that this is where it will land? Are you conservative on the sales or on the profit side? What's your sense internally, if you can give us some clues? [Foreign Language] past 2 years, in terms of profit, we've seen some relatively large upsides. What's the sense for this fiscal year? That's the first question. Sakaue will respond. For this fiscal year, earlier we talked about the AI, that we're making business investments, that's being reflected here. Maybe there will not be right ROI, or when you call LLM, the users have to actually use AI search, or that the cost will not be incurred. We really can't say for sure what will happen. This is the best effort plus alpha. That's what is in the guidance. Rather than revenue, the EBITDA or the cost side is where there is that reflection. There may be some additional communication in terms of how we progress in the growth investments. Also, another thing, cybersecurity. The JPY 15 billion budget you had for the term just ended, and you would use that full amount. Related to the Ministry of Internal Affairs and Communication, this is completed relative to the MIC. This fiscal year, you were saying, I think you would have JPY 10 billion. Is that in the budget? Right here. [Foreign Language] it's in the appendix. In our guidance, we have JPY 10 billion that's included. Fiscal year 2024, for LY Corporation, there was the security measures. Naver system we were using, we had to separate that. That was the focus for fiscal year 2024. The unconsolidated LY Corporation, we're seeing that completed. Fiscal year 2025, this will be for the group companies domestically and overseas. Still, Naver system is used by some of those entities. There is what we will do, the separation. We expect about JPY 10 billion for fiscal year 2025. Each quarter, are you reporting the progress, or are you mandated to deliver a report to the MIC by quarter? As of end of March, we haven't been told to do so. Of course, we think it's better to maintain the communication. No set frequency, but we will maintain communication with the MIC. You will voluntarily declare. Like last time, you had to answer questions. This time you will just make a voluntary statement, like a status check. It is our response. We have disclosed this separation plan. Some of that will take until fiscal 2026. For that, we will, of course, make reports. A large part of the separation has been completed, but overseas subsidiaries, still some separation work remains. We want to do that within fiscal 2025. It is something that we will submit to the MIC and will publicly disclose. To the MIC or on our corporate site, we will disclose the progress. Thank you very much. Going forward, it is JPY 10 billion this year, but for fiscal 2026, is the same amount of budget planned to be secured for this effort, or is it going to be eliminated? Sakaue will respond. Fiscal 2026 onwards, JPY 10 billion. We will not continue at JPY 10 billion. Security measures, of course, we always have to do it, but it will not be as large as this JPY 10 billion. It will be only up until fiscal 2025 that we will be spending this amount of money. Very clear. Thank you very much. Next from Nomura Securities, Matsuno-san. Please unmute and ask your questions. Matsuno from Nomura. I have two questions as well. The first is about the AI agent. Your definition or important functions, what are, for example, the search or operability or better efficiency in development? Is it for the consumers or for the businesses? Your definition of the AI agent. Of course, you have to invest in order to get the return. If you depend on the other company's LLM, not at the LLM expenses, but you really have to spend all the development on your own to get the return. Excluding LLM, what is the size of the investment that you plan to make? Idezawa would like to respond first. Our AI agent, what we talked about was for consumers, for the users, AI agent. As for LLM, as you pointed out, one of the Google was updated, and there are more options for us. About the pricing, pricing will come down. Rather than LLM itself, I would like to use it well so that we can have a better interface for the consumers. That is more important. For all the users, we will like to provide the AI agent functions. To differentiate in terms of the contact of the users, we have so many users. Also, the GenAI, the chat, the LINE, and the Yahoo! search, we have both. There could be an easy access on the part of the users. We have many conversion points. The users can take the actions, purchase, reserve, and so forth. From now on, the official account, the Mini App, or PayPay, we will have more of those. We would like to link those, and to do it seamlessly, that would be our strength. As for the cost or expenses, Sakaue-san will make some additional comment. Yes, the expenses for the LLM, about JPY 10 billion or so, that is what we expect. Also, in the wider sense, when we consider the monetization in the future, we need to enhance the conversion. For that, another JPY 10 billion, the various service enhancement on the part of the conversion, JPY 10 billion is included. As for the development for the AI agents, of course, it's necessary to develop and the personnel cost and the consignment cost and so forth. I think we can continue to use our talent. We are not thinking about increasing the recruitment for that purpose. Thank you. I see. You are making quite a bit of investment, and that's a good thing. You have to really invest in order to get the return. About the strategic business, you mentioned that it's difficult to talk about the future. I'd like to ask about the actual credit card, the net asset increase. You have made the big increase. I'd like to know the reason behind that and background. For the bank, the asset side, when you look at other companies' ecosystem, you can grow further. There is a lot of buffer for growth. What is the reason why you're not really growing that much based upon your analysis? About the card, the Blue PayPay, or on the PayPay app, you can use the card. That is something that is recognized very well, and it's growing. Also, both cards, and to have multiple cards for one person. There are various new characteristics that we are launching with this new credit card. 20%-30% growth is something that we can realize. As for the bank, yes, that's something that we need to work on from now on. PayPay Bank, from the PayPay Bank account, to make a direct payment from the PayPay outstanding amount, you needed to move money from the bank to the app. There was one process there. If you seamlessly connect that, the PayPay Bank can be used as a kind of a debit card. If you do not want to use it as a credit card, if you want to use the amount that you have in the account, we would like to enable that. For example, the housing loan and the mortgage, we are coming up with different levels and so forth. We plan to accelerate the banking services. Thank you. [Foreign Language] Thank you very much. [Foreign Language] BofA Securities, Nagawa-san, unmute and ask your question, please. [Foreign Language] Nagawa from BofA Securities, can you hear? Yes, we can. [Foreign Language] the movie is uploaded, you said? [Foreign Language] I want to ask. [Foreign Language] To reduce the user pain of consumers with your AI agent. What kind of a product is it going to be as a user? If we can make a restaurant booking from LINE, or make hotel bookings from LINE, that would be great. That's what I would feel. That kind of use case is what you envision for the future. The monetization would be more realistic. I think you're in the era of investment, but talk about the timing of monetization. On the 2C side, what are the potential service deployments, please? [Foreign Language] Thank you. [Foreign Language] Please look at the page on the screen. It is not just one single AI agent, but we have diverse services. We have multiple AI agents that will be running. Each of the services will shift to AI agents. That's the key. To integrate all that, there will be an AI agent to bring them all together. In terms of user pain, LINE is maybe the portal, and maybe if you use OpenAI Operator. When you do the booking, then you have to log in again. As of now, it's already very convenient, but in the future, we can have even more seamless service. I think that's what the consumers want. In that regard, various conversion points can be envisioned, and various local contents, Japanese contents, we have a huge amount of that. Understand the users, and we can guide the users to the final destination very smoothly. That will be our strength. In terms of the LLM, I think it will become commoditized to some extent. We will choose whatever matches our services, and we will compile, combine those services. Our strength is that we have a chat and the search, which has good affinity in terms of user contacts. I think that will be the unique characteristics that we have. Also, about the timing of monetize, you asked about that, or so that will be my response to your questions. If possible, your initiatives. When we will be harvesting, can you talk about the timing? Yes, for this fiscal year, various AI agents being introduced, and next year, fiscal 2026 and onwards, we will be thinking about monetization. We will be going through trial and error phase. After that, it will be harvest time. Thank you very much. Second question, maybe difficult question for you to respond, but for PayPay IPO, LY, you have a 30% economic interest, and so there will be outflow. I'm sure that there are many things you can't talk about, but in the future, can you expect or there's not the possibility of a big capital gain? As a shareholder, in order to enhance corporate value, how is the PayPay IPO going to contribute? How is it going to contribute to corporate value enhancement of LY Corporation? Because you have PayPay, media or commerce will grow, and you have this virtual cycle. Do you have that kind of story other than just the capital strategy? What is that synergy effect that you have in mind? Sorry for the long question. [Foreign Language] about the AI agent concept, for that, finance and payment, very important fields. The most important is to construct the ecosystem. In preparing for the IPO, we're just trying to shift from just a simple payment platform. We're making PayPay grow into a digital platform, and the strong ecosystem will grow out of that. That will combine with the current ecosystem, and we'll have a strong ecosystem that will be chosen by the user. I think that's what we'll be able to realize. PayPay growth, that's going to be our strategic core. Around that, we're going to provide user benefits. That's what we are thinking. Thank you very much. [Foreign Language] Ms. Jai, please unmute. [Foreign Language] Jai from UBS Securities, thank you very much for this opportunity. I also have two questions. First of all, about the Mini Apps. Specifically, what kind of monetization methods would you be taking? The timing of the monetization you mentioned in FY2026 and onwards. The monetization revenue increase or accumulation from now on, if you can comment on that. Also, the AI agent, would there be some linkage to the AI agent? If you can also talk about that, I'd be very happy. Thank you. [Foreign Language] Thank you for your question. Ikehata speaking. I would like to respond to your question. First of all, about the Mini App itself, our business model, there are many things that we are considering right now. For example, the Mini App itself, the EC service, the purchase, reservation, making orders, or games and subscription services, the billing of the users, and also in the app, there could be some advertising. Advertising revenue is also one of the things. Application app monetization, it's very close to the monetization method of apps. In addition, the LINE Mini App, one of the characteristics is that the Official Account, it can be people can use and share together with the official account. Already, if you look at some of the examples, the account ads itself, the frequency of the use can be activated. The unit price of the account ads will grow together. We have confirmed that. Concerning Mini Apps, in addition to the direct revenue, there will be a contribution to the account ads. That is the indirect revenue. In total, as Zawa-san said, we can expect that kind of size of the contribution that would be possible. Monetization and also the timing in fiscal year 2026 and onwards is what we said. About the AI agent, the linkage to the AI agent, if I may comment on that, with the current AI, there are various content in the digital space, and you can call them up, and based on that, you can make a recommendation, or you can do the conversions, and AI can support that. That would be the kind of our world. Still, in the digital space, there are not so many local content in the business model of the local physical store and so forth. There are many companies who have that kind of situation. Using the LINE Official Account and Mini App to all the major stores and services, we would like to bring them to the LINE app platform so that our AI agent will be able to introduce many things. Mini App itself can do the conversion on top of the platform. AI agent will introduce the various content, and the volume will be increasing. The various reservations and placing an order and the payment up to the conversion, you can do it in the app. That is something that we would like to expand using the official account as well as Mini App. Thank you. My second question about the PayPay IPO, as much as you can answer. The timing of the IPO and the market cap that you aim for, and you mentioned that the U.S. market is one of the options, and you mentioned that the multiple could be higher there. For example, in terms of multiple, what do you think would be the reasonable multiple? [Foreign Language] It might be difficult for you to make a comment, but if you can give some hints. I'm sure that you want to ask those questions, but those are the things that we are still making preparation for. We cannot respond to all the questions that you asked. Sorry. Okay, understood. Thank you. [Foreign Language] This will be the final question. CLSA Securities. Mr. Oliver Matthew, please unmute and ask your question. Hello, thank you for your question. I mean, the presentation, I have three questions, two maybe we can fit in. One on the buyback, can you explain the background here and the specifics of the transaction? For the future buybacks, would they be similar to this or will they just be simple buybacks in the market? That's the first question. [Foreign Language] Sakaue will respond. [Foreign Language] the background of the buyback is that we have presented the capital allocation policy since before, and the buffer part we have been allocating to shareholder return. That's the basic background. The fiscal 2024 results were strong, and for fiscal 2025 we expect higher revenue and profits. We thought this would be a good timing to announce a buyback. For the future, the structure that will be used, that's something we will consider for the future, but we will be discussing with Holdings. The structure like we use this time, maybe this could be the format for future buybacks as well. Okay. The final question. OpenAI, SoftBank is making a very big investment. I don't think you've mentioned them, but what kind of discussions have you had, or how do you see OpenAI fitting into your AI structure in the future? Thank you. [Foreign Language] Thank you for the question. OpenAI is facing consumers. We are utilizing for some of those applications, and SoftBank has announced the Crystal Project. In the preparation phase, we had a lot of discussions working on that. We are moving forward with holding a lot of deliberations with them. That will be my response. Okay, just to clarify, when you are talking about launching new AI agents, some of those could be powered by OpenAI technology? [Foreign Language] Of course. [Foreign Language] on the other hand, we have multiple LLMs that will select what is appropriate for the users. We will utilize various kinds of LLMs, and of course, we plan to use OpenAI extensively as well. Okay, great. Thank you very much, and congratulations on your good results. [Foreign Language] Thank you very much. [Foreign Language] Finally, I would like to invite Zawa-san to say a few words. Thank you very much for staying until the end. FY2024 was a very good year, and FY2025, as we mentioned, we will be focused on the three areas: the official account, Mini App, shift the PayPay to the platform, and also deploy AI agents in the services. Also, the return to the shareholders is something that we will be doing so that we can build a better financial structure. We want to grow in both areas. I hope you will continue to support us. Thank you very much indeed. [Foreign language] so with that, we'd like to end LY Corporation's earnings briefing for FY2024 full year and Q4. Thank you very much indeed for staying until the end. Good.