Earnings release
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Exhibit 99.1 1 PayPay Corporation Reports First Quarter Ended June 30, 2026 Financial Results Another strong quarter, with Total Revenue up 27% year-on-year, Profit for the period reaching ¥19.7 billion (up 83%) and Adjusted EBITDA margin of 34%, exceeding guidance Raised guidance for the fiscal year ending March 31, 2027, expecting Total Revenue of ¥465 to ¥473 billion and Adjusted EBITDA of ¥149 to ¥155 billion TOKYO, Japan, July 31 (July 30 EDT), 2026 – PayPay Corporation (NASDAQ: PAYP) ("PayPay" or the "Company") today released its unaudited financial results for the first quarter ended June 30, 2026, prepared in accordance with IFRS Accounting Standards, as well as managerial results. Financial Highlights First Quarter ended June 30, 2026 • Total Revenue - Total Revenue grew 27% year-on-year to ¥109.8 billion, demonstrating our self-sustaining flywheel in full motion. By becoming an integral part of our users' daily and lifetime infrastructure, we unlocked compounding growth in payment engagement and financial services adoption. o Payment Segment - Our Total Revenue reached ¥88.6 billion, representing a 25% year-on-year increase and continuing its high-velocity growth. GMV (Gross Merchandise Value) reached ¥5.39 trillion—a 23% year-on-year increase fueled by growth in online channel GMV, PayPay Credit GMV (payments made by linking a PayPay Card to the PayPay app) and PayPay Card GMV (payments made using a physical PayPay Card), which increased by 44%, 30%, and 28% year-on-year, respectively. In particular, the increased use of the PayPay Card alongside PayPay Credit contributed to GMV growth, supported by our continued execution of promotional initiatives such as "Super PayPay Festival" and collaboration with SoftBank mobile plans. Furthermore, credit card financing balances built up steadily, led by revolving and installment payment balances (up 25% year-on-year on a combined basis) and cash advances (up 57% year-on-year). Take Rate continued to expand to 1.64%—an increase of 0.02 percentage points year-on-year—underpinned by a favorable shift in the GMV mix of online and offline. Specifically, the ratio of high- margin online payments within the combined PayPay Balance and PayPay Credit GMV rose to 18%, up 3 percentage points year-on-year. As outlined in the “Business Updates,” performance following our comprehensive review of point reward programs in June has been broadly in line with expectations. While the impact on user retention and GMV has remained contained, the resulting cost reduction has also contributed to improved profitability overall. • PayPay MTU (Monthly Transacting Users) - Reached 41.7 million. This 10% year-on-year growth (an increase of 4 million) outpaced the 7% year-on-year growth in registered users, which totaled 74.6 million, signaling a steady increase in the active rate—calculated as PayPay MTU divided by PayPay registered users—standing at 56%, up 1.7 percentage points year-on-year. • Payment Segment Monthly GMV per MTU - Stood at ¥43,261, representing an 11% year-on-year increase. This expansion was driven by two factors: increased transaction frequency and a higher average ticket size, fueled by deepening customer engagement as our cross-use strategy for PayPay Credit and PayPay Card alongside PayPay Balance makes steady progress. o Financial Service Segment - Total Revenue grew by 44% year-on-year to ¥22.5 billion. The number of PayPay Bank Deposit Accounts hit 10.2 million, reflecting effective cross-use within the ecosystem. Balance of Deposits grew 17% year-on-year to ¥2.3 trillion. Building on this solid funding base, the balance of loans stood at ¥1.3 trillion, up 37% year-on-year. This growth was steadily driven by a robust increase in mortgages that outpaced the broader market, as well as growth in consumer and business loans. Consequently, we achieved a strong 78% year-on-year increase in interest income, driven by this business growth as well as increased interest income from securities and other investments amid rising interest rates. Furthermore, Gains on Financial Instruments surged to ¥3,293 million, representing a 65% year-on-year increase. This rapid growth was primarily supported by fee income driven by increased
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2 trading activity at our securities brokerage business amid favorable market condition. The number of PayPay Securities accounts expanded to 1.82 million, up 29% year-on-year. Additionally, during the first quarter, PayPay Bank Corporation transitioned to a new management structure, including a change in its Representative Director and President. Through the revamping of its next-generation system plans and a comprehensive review of business strategies encompassing UI/UX, products, and pricing, the bank will accelerate initiatives aimed at rapid business expansion. • Total Transaction Cost - Total Transaction Cost (comprising the sum of settlement-related costs, provision for loss allowance, and interest expenses) as a percentage of Total Revenue rose slightly to 23%, up from 22% in the same period of the previous fiscal year. • Structural Margin Expansion - Profit for the period reached ¥19.7 billion, representing an 83% increase year-on-year. Adjusted EBITDA surged 59% year-on-year to ¥37.4 billion, with margins expanding to 34% as a result of the operating leverage in both segments.
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3 Business Updates Evolution into a Leading Digital Financial Platform • Expansion of eKYC (electronic Know-Your-Customer)-Verified User Base and Revision of Our Point Reward Programs - The number of eKYC-verified users reached 42.5 million as of the end of June 2026—one of the largest digital customer bases in Japan. Promoting eKYC is positioned as a major strategic initiative aimed at preventing fraudulent activities and reinforcing Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures. Furthermore, eKYC acts as a critical enabler for seamless cross-use across our expanding financial ecosystem. By leveraging verified identity information, the friction typically associated with onboarding for new services—such as bank account opening or securities brokerage—is reduced, offering users a streamlined and frictionless experience. Reflecting the fundamental importance of eKYC within the PayPay ecosystem, we comprehensively revised our point reward programs on June 2, 2026, by making identity verification a prerequisite for point rewards and benefit increases, discontinuing point rewards for payments made using PayPay Points, and transitioning from the "PayPay Card Gold +0.5% point benefit on transaction volume" to an "Annual Usage Benefit", which awards 11,000 PayPay Points to members with an annual transaction volume of ¥1 million or more. To foster understanding, we thoroughly communicated the benefits of eKYC to our users, including enhanced conveniences such as higher transaction limits and a full reimbursement for fraudulent transactions, subject to applicable terms and conditions. Following the implementation of this program, the growth of eKYC-verified users has accelerated, yielding a quarter-on-quarter increase of 1.9 million. Importantly, the impact on user retention and GMV remained well within our expectations, while the resulting cost reductions improved profitability by ¥1 billion for the month of June. Acquisition of T&D Financial Life Insurance Company On June 4, we announced the planned acquisition of a 70.2% stake in T&D Financial Life Insurance Company, expected to close in October 1, 2027, subject to regulatory approval. We are enthusiastic about expanding our customer touchpoints through life insurance and entering the ¥45 trillion Japanese life insurance market(1), a vast total addressable market with significant untapped potential for digitalization. Strategically, incorporating a life insurance balance sheet accelerates our evolution into a resilient hybrid model that balances flow-based payment revenues with recurring, balance-sheet-driven revenue from financial services. This allows us to capture the benefits of the current rising interest rate environment while ensuring sustainable growth opportunities regardless of future changes in the external environment. While our current strength is anchored in daily payment touchpoints with users across all generations (especially those in their 20s and 30s) through PayPay, life insurance plays an important role in supporting customers throughout various life stages, including risk protection, wealth accumulation, and asset succession. By incorporating the life insurance business into our group, we will create customer touchpoints across all life stages, from youth through retirement, further enhancing our customer understanding through data accumulation, and thereby accelerating our evolution into a digital financial platform. The strategic rationale for this acquisition focuses on three key areas: 1. Offering Unique Products - Life insurance covers functions ranging from protection to savings. As a first step, we can create products positioned between bank deposits and investment products by leveraging T&D Financial Life Insurance Company’s competitive edge in savings-type insurance. Further, we envision developing data-driven products tailored to our users, leveraging the advantages of an acquisition rather than a partnership. 2. Strengthening Customer Touchpoints - With an 89% life insurance penetration rate(2) among households with two or more members in Japan, the market offers diverse protection and investment features. Since these products are re- evaluated during life stage changes or financial shifts, they represent an essential component for expanding our customer reach and building long-term customer relationships. 3. Maximizing Revenue Opportunities - T&D Financial Life Insurance Company currently cedes a substantial portion of the risks associated with new single-premium policies to reinsurers. We aim to enhance our asset management capability to expand profit margins. (1) Represents the total annual premium and other income across all 41 member companies for the one-year period from April 2025 to March 2026, as reported in the "2025 Summary of Life Insurance Business" by The Life Insurance Association of Japan. (2) Represents the percentage of households with life insurance policies (including individual annuity insurance) among households with two or more members, as reported in the "2024 National Survey on Life Insurance" by the Japan Institute of Life Insurance.
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Key Financial and Operating Metrics The following table sets forth a summary of key financial and operating metrics for the three-month periods ended June 30, 2026 and 2025, and the three-month periods ended March 31, 2026 and 2025. For the three-monthperiod ended March 31, For the three-monthperiod ended June 30, 2025 2026 2025 2026 (in millions of yen, unless otherwise indicated) Total Revenue ¥ 78,631 ¥ 102,184 ¥ 86,154 ¥ 109,788 Settlement related costs ¥ 11,193 ¥ 12,383 ¥ 11,572 ¥ 13,190 Provision for loss allowance ¥ 6,701 ¥ 7,527 ¥ 5,240 ¥ 8,314 Interest expenses ¥ 1,531 ¥ 3,343 ¥ 2,203 ¥ 3,540 Total Transaction Cost ¥ 19,425 ¥ 23,253 ¥ 19,015 ¥ 25,044 Operating profit ¥ 7,326 ¥ 19,074 ¥ 15,964 ¥ 29,865 Operating profit margin 9% 19% 19% 27% Profit for the period ¥ 10,200 ¥ 14,473 ¥ 10,809 ¥ 19,749 Profit for the period margin 13% 14% 13% 18% Non-IFRS Financial Measure: Adjusted EBITDA ¥ 14,003 ¥ 28,593 ¥ 23,506 ¥ 37,395 Adjusted EBITDA Margin 18% 28% 27% 34% Operating Metrics: (in trillions of yen, unless otherwise indicated) Consolidated Total GMV ¥ 4.12 ¥ 5.07 ¥ 4.46 ¥ 5.49 Payment segment PayPay Balance GMV ¥ 2.34 ¥ 2.79 ¥ 2.52 ¥ 2.98 PayPay Credit GMV ¥ 0.94 ¥ 1.22 ¥ 1.08 ¥ 1.40 PayPay Card GMV ¥ 0.76 ¥ 0.97 ¥ 0.79 ¥ 1.01 Payment Segment GMV ¥ 4.05 ¥ 4.98 ¥ 4.39 ¥ 5.39 Take Rate 1.60% 1.65% 1.62% 1.64% Cost Rate 1.45% 1.38% 1.29% 1.23% PayPay MTU (millions of users) 37.23 40.97 37.84 41.70 PayPay Number of Transactions (millions of transactions) 1,996 2,359 2,168 2,544 Financial service segment PayPay Bank Balance of Deposits (billions of yen) ¥ 1,841.0 ¥ 2,269.1 ¥ 2,007.3 ¥ 2,342.3 PayPay Bank Balance of Loans (billions of yen) ¥ 926.9 ¥ 1,238.6 ¥ 970.9 ¥ 1,334.8 Notes: (1) Adjusted EBITDA is defined as profit for the three-month period plus income tax expense (benefit), share of loss of investments accounted for using the equity method, depreciation and amortization, loss on disposal of property and equipment and intangible assets, share-based payment expense, amortization of contract cost, listing-related expenses, M&A-related expenses and net interest expense (income) from corporate borrowings and treasury assets. Share of profit (loss) of investments accounted for using the equity method includes share of loss of a joint venture accounted for using the equity method. (2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue. (3) Total GMV, or gross merchandise value, is defined as the total of PayPay Balance GMV, PayPay Credit GMV, PayPay Card GMV and PayPay Bank Visa Debit Card GMV, excluding the GMV of cancelled transactions. PayPay Bank Visa Debit Card GMV is defined as payments made using PayPay Bank Visa Debit Card (physical card) and Cardless Visa Debit transaction volume for both personal and corporate use, excluding the GMV of PayPay Debit and ATM withdrawal amounts when using the cash card function, excluding the GMV of any cancelled transactions. (4) PayPay Balance GMV is defined as payments made using PayPay Balance, PayPay Debit, PayPay Balance Card, other credit card payment linked to the PayPay app and payments made through other payment services and networks such as Alipay+ and HIVEX® via PayPay code payment, excluding top-ups to PayPay Balance with PayPay Card and excluding the GMV of cancelled transactions. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
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5 (5) PayPay Credit GMV is defined as payments made using PayPay Credit, top-ups to PayPay Balance made using PayPay Card and GMV made by linking a PayPay Card to the PayPay app without linking a PayPay account, excluding the GMV of cancelled transactions. (6) PayPay Card GMV is defined as payment made using PayPay Card (physical card), excluding top-ups to PayPay Balance with PayPay Card and excluding the GMV of cancelled transactions. (7) Payment Segment GMV is defined as the total of PayPay Balance GMV, PayPay Credit GMV and PayPay Card GMV, excluding the GMV of cancelled transactions. (8) Take Rate is defined as Payment Segment’s Total Revenue divided by Payment Segment GMV (which includes PayPay Balance, PayPay Credit, and PayPay Card GMV). (9) Cost Rate is defined as Payment Segment’s operating expenses divided by Payment Segment GMV (which includes PayPay Balance, PayPay Credit, and PayPay Card GMV). (10) PayPay MTU is defined as the number of unique users who completed at least one payment per month that contributes to PayPay Balance or PayPay Credit GMV, but excluding P2P (peer-to-peer) money transfers and cancelled transactions. PayPay MTU over a quarterly or annual period represents the figure from the last month in the relevant period. (11) PayPay Number of Transactions is defined as the total number of completed transactions that contribute to PayPay Balance GMV or PayPay Credit GMV, but excluding P2P (peer-to-peer) money transfers and cancelled transactions. (12) PayPay Bank Balance of Deposits is defined as the sum of demand deposit and time deposit. (13) PayPay Bank Balance of Loans is defined as the sum of mortgage loans, overdraft and other.
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6 The following table reconciles profit—the most directly comparable financial measure calculated and presented in accordance with IFRS—to Adjusted EBITDA from profit for the three-month periods ended March 31 and June 30, 2026 and 2025. The adjustments presented below are primarily depreciation expenses that do not result in a cash outflow, temporary expenses and non-operating income and expenses. For the three-month periodended March 31, For the three-month periodended June 30, 2025 2026 2025 2026 (in millions of yen, except percentages) Profit for the three-month period ¥ 10,200 ¥ 14,473 ¥ 10,809 ¥ 19,749 Add: Income tax expense (benefit) (3,040) 4,363 5,050 10,056 Add: Share of loss of investments accounted for using the equity method 166 238 105 60 Add: Depreciation and amortization 5,607 6,208 5,729 6,125 Add: Share-based payment expenses - 1,730 - 229 Add: Amortization of contract cost 349 481 386 522 Add: Loss on disposal of property and equipment and intangible assets 207 811 182 248 Add: Listing-related expenses 302 286 939 27 Add: M&A-related expenses 153 162 274 483 Add: Net interest expense (income) from corporate borrowings and treasury assets 59 (159) 32 (103) Adjusted EBITDA ¥ 14,003 ¥ 28,593 ¥ 23,506 ¥ 37,395 Divided by: Total Revenue ¥ 78,631 ¥ 102,184 ¥ 86,154 ¥ 109,788 Adjusted EBITDA Margin 18% 28% 27% 34% Notes: (1) Share of loss of investments accounted for using the equity method includes share of loss of a joint venture accounted for using the equity method. (2) Share-based payment expenses represent compensation granted to directors, officers, and employees in exchange for their services, consisting of equity-settled awards (non-cash expenses) and cash-settled awards (expenses involving future cash outflows). These expenses are recognized by allocating the fair value of each award over its respective vesting period. Following the completion of PayPay’s IPO, the cumulative amount relating to prior periods was recognized in a lump sum in the fourth quarter ended March 31, 2026. Notably, in the calculation of Adjusted EBITDA, only equity-settled share-based payment expenses are adjusted as non-cash items, while cash-settled expenses are not adjusted. (3) Listing-related expenses consist of the fees and expenses of the professional advisors that we hired in connection with the preparations for our initial public offering. (4) M&A-related expenses consist of the fees and expenses of the professional advisors that we hired in connection with acquisitions and investments and accrued expenses related to holdbacks in connection with a prior acquisition. (5) Net interest expense (income) from corporate borrowings and treasury assets comprises interest expense on borrowings from LY Corporation, offset by interest income derived from guarantee deposits, cash and cash equivalents, and government securities within the Payment Segment. (6) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue. (1) (2) (3) (4) (5) (6)
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7 Financial Guidance Following a strong start to the fiscal year, we are raising our full-year financial guidance based on the expectation of continued strong momentum from the second quarter onwards, and providing our financial guidance for the three-month period ending September 30, 2026. For the year ending March 31, For the three-month period ending September 30, 2027 2026 (in millions of yen) Total Revenue ¥ 465,000 to ¥ 473,000 ¥ 114,000 to ¥ 116,000 Adjusted EBITDA ¥ 149,000 to ¥ 155,000 ¥ 37,500 to ¥ 39,500 Conference Call PayPay will host a conference call to discuss earnings at 7:30 a.m. Eastern Time, 8:30 p.m. JST on Friday, July 31, 2026. The conference call will be live on PayPay's investor relations website at https://ir.paypay.ne.jp/. A replay of the call will be available on the same website following the call. Participating on the call will be: • Ichiro Nakayama, Representative Director President, Corporate Officer, Chief Executive Officer, • Wataru Kagechika, Managing Corporate Officer, Chief Financial Officer, • Toshiki Motoda, Corporate Officer, Head of Corporate Strategy Division and Finance Division, • Kotaro Emae, Head of Investor Relations Contact Investor Relations:investor.relations@paypay-corp.co.jp Public Relations:pr@paypay-corp.co.jp
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8 Cautionary Note Regarding Forward-Looking Statements and Financial Guidance This release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. Forward-looking statements generally relate to future events or future financial or operating performance. In some cases, you can identify these statements by forward-looking words such as “expectation,” “forecast,” “anticipation,” “intention,” “plan,” “possibility,” “may,” “will,” “should,” “anticipate,” “could,” “would,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “goal,” “objective,” “seek,” or “continue,” the negative of these terms and other comparable terminology. Forward- looking statements in this release may relate to, but are not limited to, expectations of future results of operations or financial performance of the Company, including expectations related to full-year and quarter Total Revenue growth and Adjusted EBITDA, expectations regarding certain of our key financial and operating metrics, our business and growth strategy, including future product development plans, our market opportunity, the performance of newly launched products and innovations, our technological capabilities, the demand for the Company’s products and services, our expectations and management of future growth and acceleration, and our expectations regarding our industry and traditional banks, as well as assumptions relating to the foregoing. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include risks related to our ability to manage our growth effectively; our ability to attract new users, retain our active users and expand the scope of our relationship with our active users; our ability to attract new merchants to utilize our services, grow our relationships with our existing merchants, and increase transaction volumes across our payment settlement services; our ability to maintain and expand synergies between our code-based payment settlement services and our credit card payment services; our ability to maintain and strengthen the ecosystem effects of our platform; our alliances with the shareholders of our consolidated subsidiaries and equity- method affiliates; changes in the expansion and development of the cashless payments industry and the digital financial services industry in Japan; our ability to implement pricing strategies and expand our service offerings; our ability to maintain, protect, and enhance our strong and trusted brand; our ability to maintain or improve our technology infrastructure; and the complex and evolving laws and regulations applicable to our business and the banking ecosystem. Statements regarding our financial guidance and targets are forward-looking and involve known and unknown risks and uncertainties that may cause actual results to differ materially from those projected. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. These forward-looking statements reflect the Company’s views with respect to future events as of the date of this release and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Further information on these risks and other factors that could affect our financial results are set forth in our regulatory filings and periodic reports. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this release. Non-IFRS Financial Measures and Key Metrics This release includes financial information prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS”). This release also includes non-IFRS financial information, which should be considered supplemental to, not a substitute for, or superior to, the financial measures calculated in accordance with IFRS. Some of the non-IFRS financial measures that are included in this release are Adjusted EBITDA and Adjusted EBITDA Margin. We use these non-IFRS financial measures in conjunction with IFRS measures to evaluate our operating performance, formulate business plans, prepare budgets and forecasts, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. We believe that these non-IFRS financial measures provide useful information to investors, analysts, and others about our business and financial performance, enhance their overall understanding of our performance, and can assist in providing a more consistent and comparable overview of our financial performance across periods. There are a number of limitations related to the use of these non-IFRS financial measures and their nearest IFRS equivalents. For example, the Company’s definitions of non-IFRS financial measures may differ from non-IFRS financial measures used by other companies. For reconciliations to the most directly comparable IFRS measure, see the financial tables attached to this release. However, the Company is unable to provide a reconciliation of certain non-IFRS guidance measures to the corresponding IFRS measures on a forward-looking basis without unreasonable effort due to the unpredictability of the amounts and timing of events affecting the items we exclude from the non-IFRS measures. Notwithstanding the foregoing, it is important to note that material changes to reconciling items could have a significant effect on future IFRS results. Additionally, this release includes key operating metrics that we use to evaluate our operating performance, formulate business plans, and make strategic decisions. Unaudited Financial Information Please note that the financial information for the periods presented in this release is unaudited and derived from the Company's management accounts. Industry and Market Data This release may contain information, estimates and other statistical data derived from third-party sources. While the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and the Company has not independently verified such data.
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9 TABLE OF CONTENTS Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Financial Position (Unaudited) 10 Condensed Consolidated Statements of Profit or Loss for the three months (Unaudited) 11 Condensed Consolidated Statements of Comprehensive Income for the three months (Unaudited) 11 Condensed Consolidated Statements of Changes in Equity for the three months (Unaudited) 12 Condensed Consolidated Statements of Cash Flows for the three months (Unaudited) 13 Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Segment Information 14 2. Cash and Cash Equivalents 15 3. Guarantee Deposits 15 4. Loans and Advances to Customers 16 5. Securities 16 6. Deposits 17 7. Borrowings 17 8. Revenue 18 9. Operating Expenses 19
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10 Condensed Consolidated Statements of Financial Position (Unaudited) (In millions of yen) Notes March 31, 2026 June 30, 2026 Assets Cash and cash equivalents 2 363,083 491,087 Guarantee deposits 3 74,139 57,727 Call loans 40,014 14 Accounts receivable 150,372 210,339 Loans and advances to customers 4 2,512,851 2,631,267 Securities 5 1,736,835 1,791,867 Other financial assets 32,293 46,735 Property and equipment 14,879 15,141 Right-of-use assets 12,175 11,379 Intangible assets 66,466 66,441 Goodwill 15,157 15,157 Investments accounted for using the equity method 12,762 12,761 Deferred tax assets 107,275 103,076 Other assets 37,711 40,728 Total assets 5,176,012 5,493,719 Liabilities Deposits 6 2,952,495 3,112,287 Accounts payable 1,122,338 1,080,710 Income tax payables 13,073 5,917 Borrowings 7 564,956 757,093 Other financial liabilities 48,116 51,681 Provisions 7,403 7,447 Lease liabilities 9,549 8,910 Deferred tax liabilities 206 223 Other liabilities 27,115 19,524 Total liabilities 4,745,251 5,043,792 Shareholders’ equity Issued capital 200,635 201,041 Share premium 86,730 87,220 Retained earnings 109,869 128,299 Accumulated other comprehensive loss (3,055) (3,143) Equity attributable to owners of the parent company 394,179 413,417 Non-controlling interests 36,582 36,510 Total shareholders’ equity 430,761 449,927 Total liabilities and shareholders’ equity 5,176,012 5,493,719 See Notes to Condensed Consolidated Financial Statements (Unaudited)
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11 Condensed Consolidated Statements of Profit or Loss (Unaudited) (In millions of yen) For the three months ended Notes June 30, 2025 June 30, 2026 Transaction and service income 56,816 69,961 Interest income 25,435 35,144 Gains (losses) on financial instruments 3,561 3,804 Other operating income 342 879 Total revenue 1, 8 86,154 109,788 Point expenses (13,153) (16,041) Settlement related cost (11,572) (13,190) Employee benefit expenses (10,783) (11,766) Provision for loss allowance (5,240) (8,314) Professional and outsourcing services expenses (7,737) (6,518) Other operating expenses (21,705) (24,094) Total operating expenses 1, 9 (70,190) (79,923) Operating profit 1 15,964 29,865 Share of loss of investments accounted for using the equity method (105) (60) Profit before tax 15,859 29,805 Income tax expense (5,050) (10,056) Profit for the period 10,809 19,749 Attributable to Owners of the parent company 10,511 18,428 Non-controlling interests 298 1,321 (In yen) Earnings per share Earnings per share attributable to owners of the parent company Basic earnings per share 16.66 27.21 Diluted earnings per share 16.66 27.02 (1) The share split occurred and became effective on November 15, 2025 and earnings per share for the three months ended June 30, 2025 has been retrospectively adjusted. See Notes to Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Comprehensive Income (Unaudited) (In millions of yen) For the three months ended Notes June 30, 2025 June 30, 2026 Profit for the period 10,809 19,749 Other comprehensive income (loss) for the period, net of tax Items that may be reclassified subsequently to profit or loss Changes in the fair value of debt instruments at FVTOCI 870 (109) Exchange differences on translation of foreign operations (11) 6 Total other comprehensive income (loss) for the period, net of tax 859 (103) Total comprehensive income for the period, net of tax 11,668 19,646 Total comprehensive income for the period, net of tax attributable to Owners of the parent company 11,047 18,339 Non-controlling interests 621 1,307 (1)
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12 Condensed Consolidated Statements of Changes in Equity (Unaudited) For the three months ended June 30, 2025 (In millions of yen) Equity attributable to owners of the parent company Notes Issued capital Share premium Retained earnings (Accumulated deficit) Accumulated other comprehensive income (loss) Total Non- controlling interests Total shareholders’ equity Balance as of April 1, 2025 91,434 13,727 (4,887) (379) 99,895 123,836 223,731 Profit for the period — — 10,511 — 10,511 298 10,809 Other comprehensive income — — — 536 536 323 859 Total Comprehensive income for the period — — 10,511 536 11,047 621 11,668 Dividends paid to non-controlling interests — — — — — (2,909) (2,909) Dividends paid to the ultimate parent company — — (311) — (311) — (311) Issuance of new shares 60,971 60,360 — — 121,331 — 121,331 Changes due to business combinations of entities under common control - PayPay Securities Corporation and PayPay Bank Corporation — (36,827) — — (36,827) (86,358) (123,185) Other — — 34 (31) 3 3 6 Total transactions with owners and other transactions 60,971 23,533 (277) (31) 84,196 (89,264) (5,068) Balance as of June 30, 2025 152,405 37,260 5,347 126 195,138 35,193 230,331 For the three months ended June 30, 2026 (In millions of yen) Equity attributable to owners of the parent company Notes Issued capital Share premium Retained earnings Accumulated other comprehensive income (loss) Total Non- controlling interests Total shareholders’ equity Balance as of April 1, 2026 200,635 86,730 109,869 (3,055) 394,179 36,582 430,761 Profit for the period — — 18,428 — 18,428 1,321 19,749 Other comprehensive loss — — — (89) (89) (14) (103) Total Comprehensive income for the period — — 18,428 (89) 18,339 1,307 19,646 Dividends paid to non-controlling interests — — — — — (1,379) (1,379) Issuance of new shares 406 213 — — 619 — 619 Share-based payments transactions — 277 — — 277 — 277 Other — — 2 1 3 — 3 Total transactions with owners and other transactions 406 490 2 1 899 (1,379) (480) Balance as of June 30, 2026 201,041 87,220 128,299 (3,143) 413,417 36,510 449,927
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13 Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions of yen) For the three months ended Notes June 30, 2025 June 30, 2026 Cash flows from (used in) operating activities Profit before tax 15,859 29,805 Adjustments for: Depreciation and amortization 6,115 6,648 Loss on disposal of property and equipment and intangible assets 182 247 Share-based payment expenses — 167 Other income and costs (87) (877) Changes in assets and liabilities: Guarantee deposits 3 16,190 16,412 Call loans 33,000 40,000 Accounts receivable (42,378) (59,813) Loans and advances to customers 4 (68,484) (118,416) Securities 5 (24,643) (54,838) Deposits 6 211,300 159,792 Accounts payable (50,337) (43,716) Other financial assets (1,815) (7,854) Other financial liabilities 2,799 2,362 Provisions (55) 52 Other (3,098) (10,587) Cash provided by (used in) operations 94,548 (40,616) Income tax paid (7,602) (13,636) Income tax refunded 45 — Net cash provided by (used in) operating activities 86,991 (54,252) Cash flows from (used in) investing activities Purchases of securities 5 (175,246) (74,531) Proceeds from sales/redemption of securities 5 45,415 74,386 Purchases of property and equipment (2,067) (1,709) Purchases of intangible assets (4,668) (4,172) Other (1,506) (3,131) Net cash used in investing activities (138,072) (9,157) Cash flows from (used in) financing activities Net increase in short-term borrowings 7 150,000 177,037 Proceeds from long-term borrowings 7 314,565 123,500 Repayments of long-term borrowings 7 (250,340) (108,400) Repayments of lease liabilities (764) (587) Proceeds from issuance of new common shares 121,624 (146) Payments for the purchase of the equity interest of subsidiaries, through business combinations of entities under common control (130,185) — Dividends paid to non-controlling interests (2,909) — Dividends paid to the ultimate parent company (311) — Net cash provided by financing activities 201,680 191,404 Effect of exchange rate changes on cash and cash equivalents (46) 9 Increase in cash and cash equivalents 150,553 128,004 Cash and cash equivalents at the beginning of the period 2 369,811 363,083 Cash and cash equivalents at the end of the period 2 520,364 491,087 See Notes to Condensed Consolidated Financial Statements (Unaudited)
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14 Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Segment Information Profit or Loss for the Group's Reportable Segments For the three months ended June 30, 2025 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Transaction and service income Revenue from external customers 49,643 7,173 — 56,816 Inter-segment revenue 247 188 (435) — Total transaction and service income 49,890 7,361 (435) 56,816 Interest income 19,261 6,174 — 25,435 Gains (losses) on financial instruments 1,563 1,998 — 3,561 Other operating income 305 37 — 342 Total revenue 71,019 15,570 (435) 86,154 Operating expenses (56,523) (14,102) 435 (70,190) Segment profit 14,496 1,468 — 15,964 (Reconciliation to profit before tax) Share of loss of investments accounted for using the equity method (105) Profit before tax 15,859 For the three months ended June 30, 2026 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Transaction and service income Revenue from external customers 62,180 7,781 — 69,961 Inter-segment revenue 410 263 (673) — Total transaction and service income 62,590 8,044 (673) 69,961 Interest income 24,708 11,004 (568) 35,144 Gains (losses) on financial instruments 511 3,293 — 3,804 Other operating income 774 122 (17) 879 Total revenue 88,583 22,463 (1,258) 109,788 Operating expenses (66,061) (15,078) 1,216 (79,923) Segment profit 22,522 7,385 (42) 29,865 (Reconciliation to profit before tax) Share of loss of investments accounted for using the equity method (60) Profit before tax 29,805 (1) For details of operating expenses, refer to Note 9, Operating Expenses. (1) (1)
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15 2. Cash and Cash Equivalents Cash and cash equivalents are as follows: (In millions of yen) March 31, 2026 June 30, 2026 Payment: Cash and demand deposits 53,439 74,896 Restricted cash related to transfers of credit card receivables 697 697 Subtotal 54,136 75,593 Financial service: Cash and demand deposits 16,322 19,937 Deposits with the Bank of Japan 292,622 395,557 Other 3 — Subtotal 308,947 415,494 Total 363,083 491,087 3. Guarantee Deposits Guarantee deposits are as follows: (In millions of yen) March 31, 2026 June 30, 2026 Payment: Guarantee deposits under Payment Services Act 49,734 35,855 Subtotal 49,734 35,855 Financial service: Other 24,405 21,872 Subtotal 24,405 21,872 Total 74,139 57,727 (1) In accordance with the Payment Services Act of Japan, the Company is required to implement prescribed safeguarding measures for unused prepaid balances held by users of PayPay settlement services. The balance is required to cover 100% of the total unused prepaid balance of PayPay Money and 50% of the total unused prepaid balance of PayPay Money Lite. The Company has implemented the prescribed safeguarding measures by (i) making a security deposit (the "guarantee deposit") with the Legal Affairs Bureau, (ii) depositing Japanese government bonds with the Legal Affairs Bureau, (iii) establishing a trust and reporting the trust arrangement to the Kanto Local Finance Bureau, and (iv) entering into a guarantee agreement and reporting the agreement to the Kanto Local Finance Bureau. The trust is included in the scope of consolidation. During the three months ended June 30, 2026, the Company entered into a guarantee agreement with a financial institution and implemented an additional method for safeguarding the unused prepaid balances. (2) The total amount of the guarantee deposits, the Japanese government bonds, and assets held by the trust amounts to 306,747 million yen and 297,890 million yen as of March 31, 2026 and June 30, 2026, respectively. Under the trust arrangement, the Company has deposited 196,500 million yen and 208,800 million yen with PayPay Bank Corporation as of March 31, 2026 and June 30, 2026, respectively, and the funds are managed in the normal course of the banking business. (3) The balance also includes regulatory safeguarding assets maintained in connection with digital wage payment services pursuant to the Ordinance for Enforcement of the Labor Standards Act of Japan. The balance amounts to 5,011 million yen as of both March 31, 2026 and June 30, 2026. (1)(2)(3)
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16 4. Loans and Advances to Customers Loans and advances to customers are as follows: (In millions of yen) March 31, 2026 June 30, 2026 Payment: Credit card receivables 1,321,827 1,349,072 Loss allowance (45,312) (50,096) Subtotal 1,276,515 1,298,976 Financial service: Mortgage loans 909,483 978,262 Overdraft 312,255 327,755 Other 16,879 28,798 Loss allowance (2,281) (2,524) Subtotal 1,236,336 1,332,291 Total 2,512,851 2,631,267 (1) Mortgage loans include the loans acquired from a financial institution with a guarantee provided by the seller up to 1% of the transferred loan balance. The remaining balances of acquired loans are 175,950 million yen and 172,837 million yen as of March 31, 2026 and June 30, 2026, respectively. 5. Securities Securities are as follows: (In millions of yen) March 31, 2026 June 30, 2026 Payment: Japanese government bonds 65,612 58,246 Subtotal 65,612 58,246 Financial service: Japanese government bonds and municipal bonds 713,244 732,464 Corporate and other debt securities 416,121 409,734 Asset backed securities 337,685 330,339 Exchange traded funds 202,879 259,754 Equity securities 1,294 1,330 Subtotal 1,671,223 1,733,621 Total 1,736,835 1,791,867 (1)
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17 6. Deposits Deposits are as follows: (In millions of yen) March 31, 2026 June 30, 2026 Payment: PayPay Users' deposits 451,263 483,824 Subtotal 451,263 483,824 Financial service: Deposits from customers in the banking business Demand deposits 2,090,486 2,219,176 Time deposits 178,594 123,121 Deposits from customers in the securities intermediary business 221,374 274,907 Other 10,778 11,259 Subtotal 2,501,232 2,628,463 Total 2,952,495 3,112,287 (1) PayPay Users' deposits are PayPay Balance and Other Items held by PayPay Users in PayPay Settlement Services. (2) PayPay Users' deposits include PayPay Money which PayPay Users can withdraw at users' discretion. The balance of PayPay Money amounts to 212,179 million yen and 224,112 million yen as of March 31, 2026 and June 30, 2026, respectively. 7. Borrowings Components of Borrowings are as follows: (In millions of yen) March 31, 2026 June 30, 2026 Payment: Loan payables 280,825 302,925 Commercial papers 73,000 87,000 Subtotal 353,825 389,925 Financial service: Loan payables 211,131 367,168 Subtotal 211,131 367,168 Total 564,956 757,093 (1)(2)
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18 8. Revenue (1)Disaggregation of Revenue (i) Revenue recognized from contracts with customers and other sources (In millions of yen) For the three months ended June 30, 2025 June 30, 2026 Revenue from contracts with customers Transaction and service income 56,816 69,961 Revenue from other sources Interest income 25,435 35,144 Gains (losses) on financial instruments 3,561 3,804 Other operating income 342 879 Total 86,154 109,788 (1) The Group pays guarantee fees to third-party financial institutions to mitigate the credit risk of loans and advances to customers. These guarantee fees are an integral part of the loan arrangement. In accordance with IFRS 9 “Financial Instruments”, these guarantee fees are included in the calculation under the effective interest rate method and therefore reduce interest income. The guarantee fees were 5,212 million yen and 5,709 million yen for the three months ended June 30, 2025 and 2026, respectively. (ii)Disaggregation of revenue from contracts with customers by type of service For the three months ended June 30, 2025 (In millions of yen) Payment Financial service Total Payment Settlement Services PayPay Settlement Services 44,196 — 44,196 Credit Payment Settlement Services and Acquiring Services 10,072 — 10,072 Debit Payment Settlement Services — 1,277 1,277 Payment settlement services deduction (11,160) (332) (11,492) Subtotal 43,108 945 44,053 Financial services — 5,984 5,984 Other 6,535 244 6,779 Total 49,643 7,173 56,816 For the three months ended June 30, 2026 (In millions of yen) Payment Financial service Total Payment Settlement Services PayPay Settlement Services 67,834 — 67,834 Credit Payment Settlement Services and Acquiring Services 13,063 — 13,063 Debit Payment Settlement Services — 1,565 1,565 Payment settlement services deduction (26,841) (382) (27,223) Subtotal 54,056 1,183 55,239 Financial services — 6,229 6,229 Other 8,124 369 8,493 Total 62,180 7,781 69,961 (1) Revenue from Credit Payment Settlement Services and Acquiring Services is presented net of interchange fees charged by the credit card issuer in respect of Acquiring Services, as the Group recognizes revenue based on the settlement amount of the purchase transaction and the predetermined rate, less such interchange fees. The interchange fees were 2,669 million yen and 3,060 million yen for the three months ended June 30, 2025 and 2026, respectively. (2) Other in the Payment segment includes revenues primarily earned from a monthly paid subscription plan for PayPay Merchants, and is presented net of a revenue deduction, which amounts to 735 million yen and 1,486 million yen for the three months ended June 30, 2025 and 2026, respectively. These deductions mainly relate to consideration payable to customers in connection with annual membership fees for a certain type of PayPay Card. (1) (1) (2) (1) (2)
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19 9. Operating Expenses Operating expenses by nature are as follows: For the three months ended June 30, 2025 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Point expenses 13,153 — — 13,153 Settlement related cost 8,837 2,895 (160) 11,572 Employee benefit expenses 8,473 2,310 — 10,783 Provision for loss allowance 5,087 153 — 5,240 Professional and outsourcing services expenses 5,279 2,525 (67) 7,737 Other operating expenses Depreciation and amortization 4,041 1,688 — 5,729 License fees 4,283 — — 4,283 Interest expenses 764 1,464 (25) 2,203 Advertising and promotion expenses 1,411 1,065 (88) 2,388 Tax and charges 624 613 — 1,237 Amortization of contract cost 386 — — 386 Other 4,185 1,389 (95) 5,479 Subtotal 15,694 6,219 (208) 21,705 Total 56,523 14,102 (435) 70,190 For the three months ended June 30, 2026 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Point expenses 16,041 — — 16,041 Settlement related cost 10,303 3,106 (219) 13,190 Employee benefit expenses 9,101 2,670 (5) 11,766 Provision for loss allowance 8,046 268 — 8,314 Professional and outsourcing services expenses 4,782 1,783 (47) 6,518 Other operating expenses Depreciation and amortization 4,537 1,588 — 6,125 License fees 5,142 253 — 5,395 Interest expenses 1,159 2,588 (207) 3,540 Advertising and promotion expenses 1,864 482 (105) 2,241 Tax and charges 682 491 — 1,173 Amortization of contract cost 522 — — 522 Other 3,882 1,849 (633) 5,098 Subtotal 17,788 7,251 (945) 24,094 Total 66,061 15,078 (1,216) 79,923 (1) Point expenses are incurred primarily when the Group grants reward points to PayPay Users through various reward programs, which PayPay Users can use reward points at the merchants to pay off balance due in a purchase transaction. (2) Settlement related cost includes fees paid to banks for users to charge their PayPay Balance from their bank accounts and brand or network fees paid to international card brands. Settlement related cost also includes interbank transaction fees. (3) Professional and outsourcing services expenses include customer service related costs, system development labor, and other professional services. (1) (2) (3) (1) (2) (3)