Earnings release
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1 PayPay Corporation Reports Second Quarter Ended September 30, 2026 Financial Results Another strong quarter, with Total Revenue up 28% year-on-year, Profit for the period of ¥18.4 billion and Adjusted EBITDA Margin of 36%, exceeding guidance Raises guidance for the fiscal year ending March 31, 2027, with Total Revenue expected to reach ¥474 to ¥478 billion and Adjusted EBITDA of ¥159 to ¥163 billion TOKYO, Japan, November 4 (November 3 EST), 2026 – PayPay Corporation (NASDAQ: PAYP) ("PayPay" or the "Company") today released its unaudited financial results for the second quarter ended September 30, 2026, prepared in accordance with IFRS Accounting Standards, as well as managerial results. Financial Highlights Second Quarter ended September 30, 2026 • Total Revenue - Total Revenue grew 28% year-on-year to ¥118.1 billion, propelled by solid double-digit momentum across both segments—with Payment segment revenue up 27% and Financial Service segment revenue up 38% year-on- year. Our high-frequency payments touchpoint continues to provide a foundation for deepening customer relationships across credit card, banking and securities services. o Payment Segment - Total Revenue grew 27% year-on-year to ¥96.7 billion, outpacing the 20% year-on-year growth in Payment Segment GMV (Gross Merchandise Value). This reflected both solid GMV growth and an increase in Take Rate, including payment-related revenue. GMV increased 20% year-on-year to ¥5.56 trillion. This solid growth was achieved despite temporary headwinds from a high prior-year comparison driven by elevated "Hometown Tax Donation(1)" demand in September 2025 ahead of government rule changes, as well as prolonged rainfall during the quarter, particularly in September 2026, that weighed on offline payment activity. Online channel GMV increased 40% year-on-year. 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) increased 25% and 28% year-on-year, respectively. Increased usage of PayPay Credit and PayPay Card continued to support GMV growth, driven by promotional initiatives including the “Super PayPay Festival” and campaigns linked to SoftBank mobile plans. Take Rate increased 0.1 percentage point year-on-year to 1.74%. This increase was supported by a higher share of online payments in GMV, increased interest income from expanding credit card financing balances, and lower point expenses deducted from Total Revenue following the comprehensive review of point reward programs in June 2026. Specific promotional campaigns with municipalities also contributed. Online payments accounted for 19% of combined PayPay Balance and PayPay Credit GMV, up 3 percentage points year-on-year. In addition, credit card financing balances continued to expand, led by revolving, installment payment and cash advances balances, which increased 26% year-on-year on a combined basis. • PayPay MTU (Monthly Transacting Users) - Reached 42.22 million, up 9% year-on-year, or 3.32 million users. Registered users increased 6% to 75.6 million. With PayPay MTU growth outpacing PayPay registered user growth, the active rate—calculated as PayPay MTU divided by registered users—increased 1 percentage point year-on-year to 56%. • Payment Segment Monthly GMV per MTU - Increased 9% year-on-year to ¥43,746. Broader use of PayPay Credit and PayPay Card alongside PayPay Balance supported higher transaction frequency and a higher average ticket size. Monthly GMV per MTU also continued to trend upward across all customer cohorts grouped by registration month.
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2 • Financial Service Segment - Total Revenue grew 38% year-on-year to ¥22.9 billion, driven primarily by increased interest income. The number of deposit accounts at PayPay Bank reached 10.45 million, while deposit balances increased 16% year-on-year to ¥2.4 trillion. Loan balances increased 37% year-on-year to ¥1.4 trillion, reflecting growth in mortgages, consumer and business loans. Growth in interest-earning assets, including loans and investments, together with higher interest rates following policy rate hikes, drove a 70% year-on-year increase in interest income. PayPay Securities accounts increased 28% year-on-year to 1.88 million. • Total Transaction Cost - Total Transaction Cost represented 24% of Total Revenue, compared with 22% in the same period of the previous fiscal year. The increase largely reflected higher costs associated with the rising interest rate environment and higher credit costs associated with the growth in credit card financing balances. At the same time, we continued to improve efficiency in settlement-related costs. Settlement-related costs increased 13% year-on-year on a consolidated basis, well below the 20% growth in Total GMV. This cost efficiency was supported by an improved funding source mix following the "Changes to Other Credit Card Usage on PayPay" implemented in July 2026. • Revenue Growth and Operating Leverage Improved Profitability - Revenue grew in both our Payment and Financial Service segments. While Total Transaction Cost increased with the expansion of GMV and financial balances, revenue growth outpaced operating expense growth, resulting in operating leverage. In addition, we curbed the increase in operating expenses through measures including efforts to contain growth in point reward expenses through revision of our point rewards program in June 2026, a shift toward funding sources with relatively lower costs, and continued control of outsourcing and other expenses. These factors contributed to a 55% year-over-year increase in Adjusted EBITDA to ¥42.1 billion and a 6-percentage-point increase in Adjusted EBITDA margin to 36%. Profit for the period was ¥18.4 billion, down 75% year-on-year. The prior-year period included a one-time tax benefit of ¥57.5 billion resulting from the recognition of deferred tax assets at PayPay Corporation. Excluding this benefit from the prior-year period, profit for the period increased year-on-year. (1) Hometown Tax Donation (Furusato Nozei): A Japanese tax incentive program that allows taxpayers to donate to local municipalities of their choice. In turn, donors receive tax credits for income and resident taxes (for amounts exceeding ¥2,000) and typically receive local specialty products as thank-you gifts.
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Key Financial and Operating Metrics The following table sets forth a summary of key financial and operating metrics for the six-month periods ended September 30, 2026, and 2025, and the three-month periods ended September 30, 2026 and 2025. For the six-monthperiod ended September 30, For the three-monthperiod ended September 30, 2025 2026 2025 2026 (in millions of yen, unless otherwise indicated) Total Revenue ¥ 178,632 ¥ 227,903 ¥ 92,478 ¥ 118,115 Settlement related costs ¥ 23,901 ¥ 27,102 ¥ 12,329 ¥ 13,912 Provision for loss allowance ¥ 11,313 ¥ 17,736 ¥ 6,073 ¥ 9,422 Interest expenses ¥ 4,570 ¥ 8,316 ¥ 2,367 ¥ 4,776 Total Transaction Cost ¥ 39,784 ¥ 53,154 ¥ 20,769 ¥ 28,110 Operating profit ¥ 36,452 ¥ 63,037 ¥ 20,488 ¥ 33,172 Operating profit margin 20% 28% 22% 28% Profit for the period ¥ 84,029 ¥ 38,189 ¥ 73,220 ¥ 18,440 Profit for the period margin 47% 17% 79% 16% Non-IFRS Financial Measure: Adjusted EBITDA ¥ 50,686 ¥ 79,469 ¥ 27,180 ¥ 42,074 Adjusted EBITDA Margin 28% 35% 29% 36% Operating Metrics: (in trillions of yen, unless otherwise indicated) Consolidated Total GMV ¥ 9.19 ¥ 11.14 ¥ 4.73 ¥ 5.65 Payment segment PayPay Balance GMV ¥ 5.20 ¥ 6.05 ¥ 2.68 ¥ 3.07 PayPay Credit GMV ¥ 2.20 ¥ 2.80 ¥ 1.12 ¥ 1.40 PayPay Card GMV ¥ 1.63 ¥ 2.09 ¥ 0.84 ¥ 1.08 Payment Segment GMV ¥ 9.03 ¥ 10.95 ¥ 4.65 ¥ 5.56 Take Rate 1.63% 1.69% 1.64% 1.74% Cost Rate 1.28% 1.25% 1.28% 1.26% PayPay MTU (millions of users) 38.89 42.22 38.89 42.22 PayPay Number of Transactions (millions of transactions) 4,514 5,216 2,346 2,672 Financial service segment PayPay Bank Balance of Deposits (billions of yen) ¥ 2,092.9 ¥ 2,433.0 ¥ 2,092.9 ¥ 2,433.0 PayPay Bank Balance of Loans (billions of yen) ¥ 1,020.3 ¥ 1,397.7 ¥ 1,020.3 ¥ 1,397.7 Notes: (1) Adjusted EBITDA is defined as profit for the 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. (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. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
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4 (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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5 The following table reconciles profit—the most directly comparable financial measure calculated and presented in accordance with IFRS—to Adjusted EBITDA for the six-month periods ended September 30, 2026 and 2025, and the three‐month periods ended September 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 six-month periodended September 30, For the three-month periodended September 30, 2025 2026 2025 2026 (in millions of yen, except percentages) Profit for the period ¥ 84,029 ¥ 38,189 ¥ 73,220 ¥ 18,440 Add: Income tax expense (benefit) (47,740) 20,170 (52,790) 10,114 Add: Share of loss of investments accounted for using the equity method 163 4,678 58 4,618 Add: Depreciation and amortization 11,484 12,321 5,755 6,196 Add: Share-based payment expenses - 462 - 233 Add: Amortization of contract cost 797 1,084 411 562 Add: Loss on disposal of property and equipment and intangible assets 356 1,772 174 1,524 Add: Listing-related expenses 1,380 27 441 - Add: M&A-related expenses 309 1,055 35 572 Add: Net interest expense (income) from corporate borrowings and treasury assets (92) (288) (124) (185) Adjusted EBITDA ¥ 50,686 ¥ 79,469 ¥ 27,180 ¥ 42,074 Divided by: Total Revenue ¥ 178,632 ¥ 227,903 ¥ 92,478 ¥ 118,115 Adjusted EBITDA Margin 28% 35% 29% 36% 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) Includes one-time expenses associated with the early termination of license agreements in connection with the transition to in-house system development. (4) 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. (5) 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. (6) Net interest expense (income) from corporate borrowings and treasury assets comprises interest expense on our interest-bearing debt incurred for general corporate purposes, offset by interest income derived from guarantee deposits, cash and cash equivalents, and Japanese government securities within the payment segment. Corporate borrowings exclude funding raised in the ordinary course of our banking, credit card and other financial services operations. (7) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue. (1) (2) (3) (4) (5) (6) (7)
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6 Financial Guidance Based on our performance to date, we raise our full-year financial guidance, and provide guidance for the three-month period ending December 31, 2026. For the year ending March 31, For the three-month period endingDecember 31, 2027 2026 (in millions of yen) Total Revenue ¥ 474,000 to ¥ 478,000 ¥ 121,000 to ¥ 123,000 Adjusted EBITDA ¥ 159,000 to ¥ 163,000 ¥ 41,500 to ¥ 43,500
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7 Conference Call PayPay will host two conference briefings to discuss its earnings. Both briefings will be webcast live on PayPay's investor relations website at https://ir.paypay.ne.jp/, with replays available on the same website following the calls. Earnings Briefing (Overview & Key Highlights) The first call, tailored for media, institutional investors and sell-side analysts, will take place from 9:00 to 10:30 a.m. JST on Wednesday, November 4, 2026 (7:00 to 8:30 p.m. EST on Tuesday, November 3). Ichiro Nakayama, Representative Director, President, Corporate Officer, Chief Executive Officer will provide an overview of our FY2026 Q2 financial results and key business highlights. 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 Finance Group, • Keita Oishi, Head of Investor Relations Investor Briefing (Financial Deep Dive) The second call, tailored for institutional investors and sell-side analysts, will take place from 8:00 to 9:00 p.m. JST on Wednesday, November 4, 2026 (6:00 to 7:00 a.m. EST on Wednesday, November 4). Wataru Kagechika, Managing Corporate Officer and Chief Financial Officer, will provide a detailed review of our financial performance. Participating on the call will be: • Wataru Kagechika, Managing Corporate Officer, Chief Financial Officer, • Toshiki Motoda, Corporate Officer, Head of Finance Group, • Keita Oishi, 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 periods (Unaudited) 11 Condensed Consolidated Statements of Comprehensive Income for the periods (Unaudited) 13 Condensed Consolidated Statements of Changes in Equity for the periods (Unaudited) 14 Condensed Consolidated Statements of Cash Flows for the periods (Unaudited) 15 Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Segment Information 16 2. Cash and Cash Equivalents 18 3. Guarantee Deposits 18 4. Loans and Advances to Customers 19 5. Securities 19 6. Deposits 20 7. Borrowings 20 8. Revenue 21 9. Operating Expenses 23
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10 Condensed Consolidated Statements of Financial Position (Unaudited) (In millions of yen) Notes March 31, 2026 September 30, 2026 Assets Cash and cash equivalents 2 363,083 570,085 Guarantee deposits 3 74,139 49,384 Call loans 40,014 51 Accounts receivable 150,372 193,801 Loans and advances to customers 4 2,512,851 2,737,424 Securities 5 1,736,835 1,881,558 Other financial assets 32,293 39,358 Property and equipment 14,879 15,311 Right-of-use assets 12,175 10,761 Intangible assets 66,466 65,886 Goodwill 15,157 15,157 Investments accounted for using the equity method 12,762 8,174 Deferred tax assets 107,275 102,282 Other assets 37,711 40,929 Total assets 5,176,012 5,730,161 Liabilities Deposits 6 2,952,495 3,215,443 Accounts payable 1,122,338 1,081,409 Income tax payables 13,073 13,790 Borrowings 7 564,956 861,699 Other financial liabilities 48,116 57,057 Provisions 7,403 7,595 Lease liabilities 9,549 8,443 Deferred tax liabilities 206 165 Other liabilities 27,115 21,662 Total liabilities 4,745,251 5,267,263 Shareholders’ equity Issued capital 200,635 201,041 Share premium 86,730 87,507 Retained earnings 109,869 145,608 Accumulated other comprehensive loss (3,055) (8,358) Equity attributable to owners of the parent company 394,179 425,798 Non-controlling interests 36,582 37,100 Total shareholders’ equity 430,761 462,898 Total liabilities and shareholders’ equity 5,176,012 5,730,161 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 six months ended Notes September 30, 2025 September 30, 2026 Transaction and service income 118,907 146,830 Interest income 53,313 73,327 Gains (losses) on financial instruments 5,523 6,065 Other operating income 889 1,681 Total revenue 1, 8 178,632 227,903 Point expenses (28,421) (32,484) Settlement related cost (23,901) (27,102) Employee benefit expenses (21,729) (23,620) Provision for loss allowance (11,313) (17,736) Professional and outsourcing services expenses (14,814) (13,292) Other operating expenses (42,002) (50,632) Total operating expenses 1, 9 (142,180) (164,866) Operating profit 1 36,452 63,037 Share of loss of investments accounted for using the equity method (163) (4,678) Profit before tax 36,289 58,359 Income tax benefit (expense) 47,740 (20,170) Profit for the period 84,029 38,189 Attributable to Owners of the parent company 83,097 35,739 Non-controlling interests 932 2,450 (In yen) Earnings per share Earnings per share attributable to owners of the parent company Basic earnings per share 131.01 52.77 Diluted earnings per share 131.01 52.44 (1) The share split occurred and became effective on November 15, 2025 and earnings per share for the six months ended September 30, 2025 has been retrospectively adjusted. (1)
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12 (In millions of yen) For the three months ended Notes September 30, 2025 September 30, 2026 Transaction and service income 62,091 76,869 Interest income 27,878 38,183 Gains (losses) on financial instruments 1,962 2,261 Other operating income 547 802 Total revenue 1, 8 92,478 118,115 Point expenses (15,268) (16,443) Settlement related cost (12,329) (13,912) Employee benefit expenses (10,946) (11,854) Provision for loss allowance (6,073) (9,422) Professional and outsourcing services expenses (7,077) (6,774) Other operating expenses (20,297) (26,538) Total operating expenses 1, 9 (71,990) (84,943) Operating profit 1 20,488 33,172 Share of loss of investments accounted for using the equity method (58) (4,618) Profit before tax 20,430 28,554 Income tax benefit (expense) 52,790 (10,114) Profit for the period 73,220 18,440 Attributable to Owners of the parent company 72,586 17,311 Non-controlling interests 634 1,129 (In yen) Earnings per share Earnings per share attributable to owners of the parent company Basic earnings per share 113.85 25.56 Diluted earnings per share 113.85 25.42 (1) The share split occurred and became effective on November 15, 2025 and earnings per share for the three months ended September 30, 2025 has been retrospectively adjusted. See Notes to Condensed Consolidated Financial Statements (Unaudited) (1)
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13 Condensed Consolidated Statements of Comprehensive Income (Unaudited) (In millions of yen) For the six months ended Notes September 30, 2025 September 30, 2026 Profit for the period 84,029 38,189 Other comprehensive income (loss) for the period, net of tax Items that will not be reclassified to profit or loss Changes in the fair value of equity instruments at FVTOCI — (3,280) Total items that will not be reclassified to profit or loss — (3,280) Items that may be reclassified subsequently to profit or loss Changes in the fair value of debt instruments at FVTOCI (53) (2,694) Exchange differences on translation of foreign operations (13) (44) Total items that may be reclassified subsequently to profit or loss (66) (2,738) Total other comprehensive income (loss) for the period, net of tax (66) (6,018) Total comprehensive income for the period, net of tax 83,963 32,171 Total comprehensive income for the period, net of tax attributable to Owners of the parent company 82,933 30,436 Non-controlling interests 1,030 1,735 (In millions of yen) For the three months ended Notes September 30, 2025 September 30, 2026 Profit for the period 73,220 18,440 Other comprehensive income (loss) for the period, net of tax Items that will not be reclassified to profit or loss Changes in the fair value of equity instruments at FVTOCI — (3,280) Total items that will not be reclassified to profit or loss — (3,280) Items that may be reclassified subsequently to profit or loss Changes in the fair value of debt instruments at FVTOCI (925) (2,585) Exchange differences on translation of foreign operations (4) (51) Total items that may be reclassified subsequently to profit or loss (929) (2,636) Total other comprehensive income (loss) for the period, net of tax (929) (5,916) Total comprehensive income for the period, net of tax 72,291 12,524 Total comprehensive income for the period, net of tax attributable to Owners of the parent company 71,882 12,096 Non-controlling interests 409 428
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14 Condensed Consolidated Statements of Changes in Equity (Unaudited) For the six months ended September 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 — — 83,097 — 83,097 932 84,029 Other comprehensive income (loss) — — — (164) (164) 98 (66) Total comprehensive income for the period — — 83,097 (164) 82,933 1,030 83,963 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 1 4 Total transactions with owners and other transactions 60,971 23,533 (277) (31) 84,196 (89,266) (5,070) Balance as of September 30, 2025 152,405 37,260 77,933 (574) 267,024 35,600 302,624 For the six months ended September 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 — — 35,739 — 35,739 2,450 38,189 Other comprehensive loss — — — (5,303) (5,303) (715) (6,018) Total comprehensive income for the period — — 35,739 (5,303) 30,436 1,735 32,171 Dividends paid to non-controlling interests — — — — — (1,379) (1,379) Issuance of new shares 406 213 — — 619 — 619 Share-based payment transactions — 564 — — 564 — 564 Capital contribution from non-controlling interests — — — — — 162 162 Total transactions with owners and other transactions 406 777 — — 1,183 (1,217) (34) Balance as of September 30, 2026 201,041 87,507 145,608 (8,358) 425,798 37,100 462,898
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15 Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions of yen) For the six months ended Notes September 30, 2025 September 30, 2026 Cash flows from (used in) operating activities Profit before tax 36,289 58,359 Adjustments for: Depreciation and amortization 12,281 13,405 Share of loss of investments accounted for using the equity method 163 4,678 Loss on disposal of property and equipment and intangible assets 339 779 Share-based payment expenses — 418 Other income and costs (542) (435) Changes in assets and liabilities: Guarantee deposits 3 28,810 24,755 Call loans (43,000) 39,963 Accounts receivable (42,164) (43,537) Loans and advances to customers 4 (166,975) (224,573) Securities 5 (57,209) (60,723) Deposits 6 345,207 262,948 Accounts payable 4,921 (41,370) Other financial assets (2,438) (2,984) Other financial liabilities 19,670 8,571 Provisions (50) 196 Other (852) (10,470) Cash provided by operations 134,450 29,980 Income tax paid (7,739) (14,355) Income tax refunded 860 1,101 Net cash provided by operating activities 127,571 16,726 Cash flows from (used in) investing activities Purchases of securities 5 (308,161) (211,302) Proceeds from sales/redemption of securities 5 90,146 121,991 Purchases of property and equipment (3,575) (3,232) Purchases of intangible assets (8,761) (8,411) Purchase of investment accounted for using the equity method (11,655) — Other (2,358) (3,274) Net cash used in investing activities (244,364) (104,228) Cash flows from (used in) financing activities Net increase in short-term borrowings 7 40,000 304,593 Proceeds from borrowings 7 652,150 223,000 Repayments of borrowings 7 (544,966) (230,850) Repayments of lease liabilities (1,526) (1,176) Proceeds from issuance of new common shares 121,331 229 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) (1,379) Dividends paid to the ultimate parent company (311) — Other — 162 Net cash provided by financing activities 133,584 294,579 Effect of exchange rate changes on cash and cash equivalents (19) (75) Increase in cash and cash equivalents 16,772 207,002 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 2 386,583 570,085 See Notes to Condensed Consolidated Financial Statements (Unaudited)
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16 Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Segment Information Profit or Loss for the Group's Reportable Segments For the six months ended September 30, 2025 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Transaction and service income Revenue from external customers 104,501 14,406 — 118,907 Inter-segment revenue 484 390 (874) — Total transaction and service income 104,985 14,796 (874) 118,907 Interest income 39,720 13,593 — 53,313 Gains (losses) on financial instruments 1,802 3,721 — 5,523 Other operating income 799 90 — 889 Total revenue 147,306 32,200 (874) 178,632 Operating expenses (115,781) (27,273) 874 (142,180) Segment profit 31,525 4,927 — 36,452 (Reconciliation to profit before tax) Share of loss of investments accounted for using the equity method (163) Profit before tax 36,289 For the six months ended September 30, 2026 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Transaction and service income Revenue from external customers 131,258 15,572 — 146,830 Inter-segment revenue 752 606 (1,358) — Total transaction and service income 132,010 16,178 (1,358) 146,830 Interest income 51,037 23,588 (1,298) 73,327 Gains (losses) on financial instruments 719 5,343 3 6,065 Other operating income 1,561 254 (134) 1,681 Total revenue 185,327 45,363 (2,787) 227,903 Operating expenses (136,343) (31,225) 2,702 (164,866) Segment profit 48,984 14,138 (85) 63,037 (Reconciliation to profit before tax) Share of loss of investments accounted for using the equity method (4,678) Profit before tax 58,359 (1) (1)
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17 For the three months ended September 30, 2025 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Transaction and service income Revenue from external customers 54,858 7,233 — 62,091 Inter-segment revenue 237 202 (439) — Total transaction and service income 55,095 7,435 (439) 62,091 Interest income 20,459 7,419 — 27,878 Gains (losses) on financial instruments 239 1,723 — 1,962 Other operating income 494 53 — 547 Total revenue 76,287 16,630 (439) 92,478 Operating expenses (59,258) (13,171) 439 (71,990) Segment profit 17,029 3,459 — 20,488 (Reconciliation to profit before tax) Share of loss of investments accounted for using the equity method (58) Profit before tax 20,430 For the three months ended September 30, 2026 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Transaction and service income Revenue from external customers 69,078 7,791 — 76,869 Inter-segment revenue 342 343 (685) — Total transaction and service income 69,420 8,134 (685) 76,869 Interest income 26,329 12,584 (730) 38,183 Gains (losses) on financial instruments 208 2,050 3 2,261 Other operating income 787 132 (117) 802 Total revenue 96,744 22,900 (1,529) 118,115 Operating expenses (70,282) (16,147) 1,486 (84,943) Segment profit 26,462 6,753 (43) 33,172 (Reconciliation to profit before tax) Share of loss of investments accounted for using the equity method (4,618) Profit before tax 28,554 (1) For details of operating expenses, refer to Note 9, Operating Expenses. (1) (1)
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18 2. Cash and Cash Equivalents Cash and cash equivalents are as follows: (In millions of yen) March 31, 2026 September 30, 2026 Payment: Cash and demand deposits 53,439 79,011 Time deposits (maturities of three months or less) — 629 Restricted cash related to transfers of credit card receivables 697 697 Subtotal 54,136 80,337 Financial service: Cash and demand deposits 16,322 16,762 Deposits with the Bank of Japan 292,622 472,986 Other 3 — Subtotal 308,947 489,748 Total 363,083 570,085 3. Guarantee Deposits Guarantee deposits are as follows: (In millions of yen) March 31, 2026 September 30, 2026 Payment: Guarantee deposits under Payment Services Act 49,734 29,253 Subtotal 49,734 29,253 Financial service: Other 24,405 20,131 Subtotal 24,405 20,131 Total 74,139 49,384 (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 "PayPay Users"). 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 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 six months ended September 30, 2026, the Company entered into a guarantee agreement with a financial institution and implemented an additional method for safeguarding the unused prepaid balance of PayPay Money Lite. (2) The total amount of the guarantee deposits in cash, the Japanese government bonds, and assets held by the trust amounts to 306,747 million yen and 311,706 million yen as of March 31, 2026 and September 30, 2026, respectively. Under the trust arrangement, the Company has deposited 196,500 million yen and 229,200 million yen with PayPay Bank Corporation as of March 31, 2026 and September 30, 2026, respectively, and the funds are managed and invested in the ordinary course of business in accordance with applicable banking laws and regulations. (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 and 5,017 million yen as of March 31, 2026 and September 30, 2026, respectively. (1)(2)(3)
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19 4. Loans and Advances to Customers Loans and advances to customers are as follows: (In millions of yen) March 31, 2026 September 30, 2026 Payment: Credit card receivables 1,321,827 1,398,378 Loss allowance (45,312) (55,971) Subtotal 1,276,515 1,342,407 Financial service: Mortgage loans 909,483 1,023,090 Overdraft 312,255 348,432 Other 16,879 26,201 Loss allowance (2,281) (2,706) Subtotal 1,236,336 1,395,017 Total 2,512,851 2,737,424 (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 170,308 million yen as of March 31, 2026 and September 30, 2026, respectively. 5. Securities Securities are as follows: (In millions of yen) March 31, 2026 September 30, 2026 Payment: Japanese government bonds 65,612 58,272 Equity securities — 96,803 Subtotal 65,612 155,075 Financial service: Japanese government bonds and municipal bonds 713,244 731,735 Corporate and other debt securities 416,121 404,396 Asset-backed securities 337,685 321,250 Exchange traded funds 202,879 265,995 Equity securities 1,294 3,107 Subtotal 1,671,223 1,726,483 Total 1,736,835 1,881,558 (1) Equity securities include shares of Seven & i Holdings Co., Ltd. acquired by the Group in August 2026. The Group irrevocably designated the investment as an equity instrument measured at fair value through other comprehensive income because the investment is held to maintain or enhance a business relationship and it is not held for trading. The fair value of the shares as of September 30, 2026 was 96,787 million yen. (1) (1)
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20 6. Deposits Deposits are as follows: (In millions of yen) March 31, 2026 September 30, 2026 Payment: PayPay Users' deposits 451,263 491,778 Subtotal 451,263 491,778 Financial service: Deposits from customers in the banking business Demand deposits 2,090,486 2,164,265 Time deposits 178,594 268,744 Deposits from customers in the securities intermediary business 221,374 279,576 Other 10,778 11,080 Subtotal 2,501,232 2,723,665 Total 2,952,495 3,215,443 (1) PayPay Users' deposits consist of PayPay Balance and other items held by PayPay Users, including deposits and points accrued by PayPay Users. (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 234,264 million yen as of March 31, 2026 and September 30, 2026, respectively. 7. Borrowings Borrowings are as follows: (In millions of yen) March 31, 2026 September 30, 2026 Payment: Loan payables 280,825 513,075 Commercial papers 73,000 64,000 Subtotal 353,825 577,075 Financial service: Loan payables 211,131 284,624 Subtotal 211,131 284,624 Total 564,956 861,699 (1)(2)
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21 8. Revenue Disaggregation of Revenue (1) Revenue recognized from contracts with customers and other sources (In millions of yen) For the six months ended September 30, 2025 September 30, 2026 Revenue from contracts with customers Transaction and service income 118,907 146,830 Revenue from other sources Interest income 53,313 73,327 Gains (losses) on financial instruments 5,523 6,065 Other operating income 889 1,681 Total 178,632 227,903 (In millions of yen) For the three months ended September 30, 2025 September 30, 2026 Revenue from contracts with customers Transaction and service income 62,091 76,869 Revenue from other sources Interest income 27,878 38,183 Gains (losses) on financial instruments 1,962 2,261 Other operating income 547 802 Total 92,478 118,115 (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 10,584 million yen and 11,588 million yen for the six months ended September 30, 2025 and 2026, respectively, and 5,372 million yen and 5,879 million yen for the three months ended September 30, 2025 and 2026, respectively. (2) Disaggregation of revenue from contracts with customers by type of service For the six months ended September 30, 2025 (In millions of yen) Payment Financial service Total Payment Settlement Services PayPay Settlement Services 116,113 — 116,113 Credit Payment Settlement Services and Acquiring Services 20,866 — 20,866 Debit Payment Settlement Services — 2,614 2,614 Payment settlement services deduction (46,281) (684) (46,965) Subtotal 90,698 1,930 92,628 Financial services — 11,772 11,772 Other 13,803 704 14,507 Total 104,501 14,406 118,907 For the six months ended September 30, 2026 (In millions of yen) Payment Financial service Total Payment Settlement Services PayPay Settlement Services 141,241 — 141,241 Credit Payment Settlement Services and Acquiring Services 27,167 — 27,167 Debit Payment Settlement Services — 3,078 3,078 Payment settlement services deduction (54,238) (785) (55,023) Subtotal 114,170 2,293 116,463 Financial services — 12,525 12,525 Other 17,088 754 17,842 Total 131,258 15,572 146,830 (1) (1) (1) (2) (1) (2)
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22 For the three months ended September 30, 2025 (In millions of yen) Payment Financial service Total Payment Settlement Services PayPay Settlement Services 71,917 — 71,917 Credit Payment Settlement Services and Acquiring Services 10,794 — 10,794 Debit Payment Settlement Services — 1,337 1,337 Payment settlement services deduction (35,121) (352) (35,473) Subtotal 47,590 985 48,575 Financial services — 5,788 5,788 Other 7,268 460 7,728 Total 54,858 7,233 62,091 For the three months ended September 30, 2026 (In millions of yen) Payment Financial service Total Payment Settlement Services PayPay Settlement Services 73,407 — 73,407 Credit Payment Settlement Services and Acquiring Services 14,104 — 14,104 Debit Payment Settlement Services — 1,513 1,513 Payment settlement services deduction (27,397) (403) (27,800) Subtotal 60,114 1,110 61,224 Financial services — 6,296 6,296 Other 8,964 385 9,349 Total 69,078 7,791 76,869 (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 5,293 million yen and 5,925 million yen for the six months ended September 30, 2025 and 2026, respectively, and 2,624 million yen and 2,865 million yen for the three months ended September 30, 2025 and 2026, respectively. (2) Other in the Payment segment includes revenues primarily earned from a monthly subscription plan for PayPay Merchants, and is presented net of a revenue deduction, which amounts to 1,593 million yen and 3,298 million yen for the six months ended September 30, 2025 and 2026, respectively, and 858 million yen and 1,812 million yen for the three months ended September 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) (2) (1) (2)
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23 9. Operating Expenses Operating expenses by nature are as follows: For the six months ended September 30, 2025 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Point expenses 28,421 — — 28,421 Settlement related cost 18,526 5,757 (382) 23,901 Employee benefit expenses 16,936 4,795 (2) 21,729 Provision for loss allowance 11,027 286 — 11,313 Professional and outsourcing services expenses 10,328 4,624 (138) 14,814 Other operating expenses Depreciation and amortization 8,101 3,383 — 11,484 License fees 8,784 2 — 8,786 Interest expenses 1,550 3,074 (54) 4,570 Advertising and promotion expenses 3,132 1,860 (157) 4,835 Taxes and charges 1,230 1,041 — 2,271 Amortization of contract cost 797 — — 797 Other 6,949 2,451 (141) 9,259 Subtotal 30,543 11,811 (352) 42,002 Total 115,781 27,273 (874) 142,180 For the six months ended September 30, 2026 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Point expenses 32,484 — — 32,484 Settlement related cost 21,351 6,201 (450) 27,102 Employee benefit expenses 18,128 5,570 (78) 23,620 Provision for loss allowance 17,241 495 — 17,736 Professional and outsourcing services expenses 9,756 3,620 (84) 13,292 Other operating expenses Depreciation and amortization 9,103 3,219 (1) 12,321 License fees 10,308 561 — 10,869 Interest expenses 2,895 6,716 (1,295) 8,316 Advertising and promotion expenses 3,381 931 (219) 4,093 Taxes and charges 1,363 1,008 — 2,371 Amortization of contract cost 1,084 — — 1,084 Other 9,249 2,904 (575) 11,578 Subtotal 37,383 15,339 (2,090) 50,632 Total 136,343 31,225 (2,702) 164,866 (1) (2) (3) (1) (2) (3)
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24 For the three months ended September 30, 2025 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Point expenses 15,268 — — 15,268 Settlement related cost 9,689 2,862 (222) 12,329 Employee benefit expenses 8,463 2,485 (2) 10,946 Provision for loss allowance 5,940 133 — 6,073 Professional and outsourcing services expenses 5,049 2,099 (71) 7,077 Other operating expenses Depreciation and amortization 4,060 1,695 — 5,755 License fees 4,501 2 — 4,503 Interest expenses 786 1,610 (29) 2,367 Advertising and promotion expenses 1,721 795 (69) 2,447 Taxes and charges 606 428 — 1,034 Amortization of contract cost 411 — — 411 Other 2,764 1,062 (46) 3,780 Subtotal 14,849 5,592 (144) 20,297 Total 59,258 13,171 (439) 71,990 For the three months ended September 30, 2026 (In millions of yen) Payment Financialservice Inter-segmenteliminations Consolidated Point expenses 16,443 — — 16,443 Settlement related cost 11,048 3,095 (231) 13,912 Employee benefit expenses 9,027 2,900 (73) 11,854 Provision for loss allowance 9,195 227 — 9,422 Professional and outsourcing services expenses 4,974 1,837 (37) 6,774 Other operating expenses Depreciation and amortization 4,566 1,631 (1) 6,196 License fees 5,166 308 — 5,474 Interest expenses 1,736 4,128 (1,088) 4,776 Advertising and promotion expenses 1,517 449 (114) 1,852 Taxes and charges 681 517 — 1,198 Amortization of contract cost 562 — — 562 Other 5,367 1,055 58 6,480 Subtotal 19,595 8,088 (1,145) 26,538 Total 70,282 16,147 (1,486) 84,943 (1) Point expenses are incurred primarily when the Group grants reward points to PayPay Users through various reward programs. PayPay Users can use these points to make payments at merchants. (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 costs, and other professional services. (1) (2) (3) (1) (2) (3)