Designing
New Context

Designing
New Context

Investor Relations

CEO Comments

CEO Comments

Representative Director,
President Executive Officer and Group CEO, Digital Garage, Inc.
Kaoru Hayashi

2025.11.13

CEO Comment Vol.84 “Summary of Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2026 [IFRS] (Consolidated)”

Strategic alliances and QR code payments are expanding steadily to drive mid-term growth

Strengthening capital and business alliance with Resona Holdings, and launching joint payment platform development project with KDDI Group

Following approval by the Board of Directors today, we announced our second-quarter financial results for the fiscal year ending March 2026.

Ⅰ.  1H FY26.3 Financial Results Summary

Consolidated profit before tax for the 1H of FY26.3 reached ¥1,416 million. In addition to steady growth in the Platform Solution (PS) and Long-term Incubation (LTI) segments, the rebound from investment valuation losses recorded in the Global Investment Incubation (GII) segment in the same period last year contributed to consolidated profit before tax turning positive.

The Q2 (standalone) profit before tax for the PS segment, centered on the payment platform that serves as our group’s business foundation, was ¥2,257 million, down 3% year-on-year. This was due to the rebound in one-time revenue in the same period last year; however, the real growth rate excluding one-time factors remained strong at 17%.
In the payment business, despite the slowdown in inbound consumption, payment transaction volume over the past 12 months surpassed ¥8 trillion for the first time. Furthermore, we have prospects for the second half and beyond, including our entry into the SME-focused digital financial business through strengthened capital and business alliance with Resona Holdings, the launch of new payment platform “NESTA” under joint development with au Financial Services Corporation of KDDI Group, and the expanded introduction of DGFT’s unified QR code payment platform “Cloud Pay” series into the IoT market.

The LTI segment, composed of equity method investment profit from Kakaku.com and earnings from new business initiatives, achieved profit before tax of ¥1,288 million, representing 25% profit growth year-on-year. While equity method profit from Kakaku.com decreased slightly, payment transaction volume via Kakaku.com continues to expand. Additionally, several strategic businesses including “AppPay” and “Musubell” have transitioned to the growth phase with reduced upfront losses, resulting in increased profit for the segment as a whole.

The GII segment continues to promote the sale and off-balance sheet treatment of its investment portfolio. As a result, progress toward the five-year Medium-term Plan KPI of “¥30 billion in investment business income” has accelerated to 51% completion. We are also focusing on creating business returns through collaboration with portfolio startups.

Below is the financial summary for the first half of the fiscal year ending March 2026.

The following slide shows the consolidated results and breakdown of profit for each segment.

The next slide shows the trend of basic business revenue and profit (recurring business performance excluding investment-related income and one-time profit/loss factors).

II. Progress of DG FinTech Shift 2.0

﹤Capital and Business Alliance with Resona Holdings﹥

In order to further strengthen and deepen our relationship with Resona Group, our strategic partner, we entered into a new capital and business alliance agreement with Resona Holdings (announced in July 2025). Going forward, we will combine our group’s strengths in “payments and technology” with Resona Group’s strengths in “financial credibility and extensive customer base” to form the core of an alliance in the rapidly transforming Fintech domain driven by technology.

We first entered into a capital and business alliance with Resona Holdings in November 2022. Starting with collaboration in the payments and next-generation Fintech domains, we have steadily expanded our alliance areas to include strengthening approaches to Resona Group’s corporate customer base of approximately 500,000 companies—one of the largest in Japan—, joint development of next-generation payment applications, startup investments, and open innovation businesses. Furthermore, centered on a joint venture company jointly funded by Digital Garage and Resona Holdings, we are promoting the joint development of BaaS and digital finance businesses for SMEs, aiming to “establish a revenue base beyond the payments business.”

Below are slides regarding our collaboration with Resona Group.

< Progress of Collaboration with KDDI Group >

We are jointly promoting business initiatives with KDDI group in the following 3 categories:

1. Introduction of “NESTA” to KDDI’s core telecommunications business
Our company and au Financial Service Corporation (auFS) of KDDI Group concluded a business alliance agreement in May 2024. Since then, the next-generation payment platform “NESTA,” which we have been jointly developing, has been progressing as planned, and the process of introducing it to telecommunication fee payments for au/UQ mobile corporate contracts has commenced as the first phase cutover. Through this business initiative, we aim to capture payment transaction volumes in the trillions of yen.

2. Expansion of initiatives within the au economic zone through joint sales efforts
“NESTA” is a platform that integrates the au economic zone with our group’s payment infrastructure. Going forward, we plan to introduce it to various services within the KDDI Group and expand it to corporate companies outside KDDI Group. Furthermore, we will promote the joint development of new services that merge the management resources of both groups.

3. Joint development and deployment of new businesses
We will promote the joint development of new services through the integration of the management resources of the DG Group and au Financial Group, as well as the exploration of collaboration across a wide range of financial sectors.

We will bring together cutting-edge technologies on this next-generation platform to realize secure, safe, and reliable payment processing. Going forward, we will first launch full-scale operations of the jointly provided payment platform centered on the “au economic zone,” including KDDI Group’s telecommunications and e-commerce businesses, and then plan to expand to areas outside the “au economic zone” as a second phase. Further details will be announced separately in conjunction with the full-scale launch within this fiscal year.

Below are slides regarding the progress of the partnership with au Financial Service (KDDI Group).

*Note: KDDI has also been the second-largest shareholder of Kakaku.com since 2018.

< Business Progress by Segment >

In addition to our collaborations with strategic partners, business operations are progressing smoothly across all segments. Below, we will explain the business highlights by segment.

The business overview slides are as follows:

【PS Segment】

As mentioned in the financial summary, the adoption of “Cloud Pay” (Patent No. 7303664) series, Japan’s largest unified QR code payment service provided by DGFT, continues to expand.

Starting with the implementation into “Square,” one of the world’s largest payment platforms, in September 2024, the rollout has accelerated across the IoT market covering diverse business types, including deployment in a wide range of parking facilities from large-scale gated systems to small-scale installations with reduced facility costs, implementation into the payment terminal “Nayax” for automated service machines, and “Cloud Pay REGI,” which integrates with cash payment equipment.

In May 2025, our group invested in Phi Commerce Private Ltd., and DGFT entered into a business alliance agreement with them. The company is a highly reliable payment service provider licensed by the Reserve Bank of India, with proven experience in national-level payment systems such as the card brand “RuPay” operated by the National Payments Corporation of India. We will integrate Phi Commerce’s advanced technological capabilities with our strategic businesses.

The PS segment overview slides are as follows:

In April 2025, we consolidated 3 DX-related companies within our group and launched DG Business Technology, Inc. (DGBT) as a strategic company optimized for the AI era. By integrating cutting-edge technologies in AI and data science with marketing support methodologies, we will support the growth of digital businesses in both online and offline contexts through a dual-axis structure with DGFT.
Additionally, DGBT will function as a hub for promoting collaboration between our group and the Resona Group to solve digital challenges for over 500,000 corporate clients.

In August 2025, we launched “DG AI Drive,” a hybrid AI package that streamlines corporate marketing operations. This service utilizes technologies from startup companies invested in by our GII segment, and through such group synergies, we will evolve it into a broader AI utilization platform for enterprises.

The slides regarding solution expansion by DGBT are as follows:

[LTI Segment]

AppPay, one of Japan’s largest out-of-app payment platforms that our company has been providing since 2023, launched global operations in September 2025 through a partnership with Coda Payments Pte. Ltd., which operates in over 70 countries and regions worldwide.

As a Merchant of Record (MoR), we act as the legal seller on behalf of app operators and support global expansion by providing end-to-end services covering a wide range of operations, including legal compliance in each country and region, payment processing, and tax filing.

“AppPay” continues to expand, including the launch of services for the overseas version of “Monster Strike” as the first step in introducing our global services. Behind this growth lies our economic rationality and fee advantages compared to major platform providers. The global gaming ecosystem is evolving into a bidirectional era, with flows from Japan to overseas and from overseas to Japan. On the technology front, we are entering an era where AI brings about the convergence of games and AI agents. Additionally, with the new smartphone law scheduled to take effect in December 2025, we have been receiving consultations from many stakeholders, including government authorities.
We aim to grow this business from a global perspective as a “discontinuous payment business” following QR codes and the crypto business.

Below is a slide regarding the launch of AppPay’s global service.

Next, in our group collaboration with Kakaku.com, payment transaction volume continues to expand against the backdrop of one of Japan’s leading traffic volumes. We are also promoting collaborative businesses that combine both companies’ assets, and following the initiative of DGFT’s payment solutions embedded in “Tabelog” inbound reservations, we are working on a collaboration aimed at building a new real estate sales matching platform between Digital Garage’s real estate DX platform “Musubell,” one of Japan’s largest real estate DX platforms, and Kakaku.com’s real estate media “Sumaity.”

Below is a slide regarding our group collaboration with Kakaku.com.

At BI.Garage, which operates the “Quality Media Consortium,” which comprises 33 media group companies, we launched domestic provision of “TollBit,” a platform that supports content value protection from AI traffic, in October 2025. We aim for fair coexistence between media and AI, and will promote adoption among leading domestic media companies. Additionally, in collaboration with DGFT, we are preparing to enable stablecoin payments on “TollBit.”

Below is a slide regarding the progress of LTI segment strategic businesses.

[GII Segment]

Against the five-year target of “30 billion yen in investment income” outlined in our Medium-term Plan, we have achieved 15.2 billion yen, exceeding the 50% progress rate. We will continue to accelerate the off-balancing of operating investment securities and aim to achieve our target ahead of schedule.

Furthermore, we are focusing on creating business returns through synergies from business co-creation with startup companies. Under this policy, we have established a “Business Co-Creation Department” and are working to develop collaborative projects between GII segment investees and PS segment businesses.

Below is a slide providing an overview of the GII segment.

III. Startup Events and Conferences

We have been holding the “NEW CONTEXT CONFERENCE (NCC)” in Tokyo and San Francisco since 2005. This year marks the 27th conference and has become a special event commemorating our 30th anniversary.
This time, under the theme “The Future Japan Envisions in a Global Digital Society: A New Era of Digital Architecture Designed by Zen AI and Blockchain,” we engaged in in-depth discussions on various areas where Japan can contribute in the new AI era.

Below, you can view the official “NCC TOKYO 2025 Summer” website and videos of each session.

https://ncc.garage.co.jp/2025summer/en/

Additionally, Open Network Lab (Onlab), which operates Japan’s first seed accelerator program, celebrated its 15th anniversary since its establishment in 2010. To commemorate this milestone, we held the “Open Network Lab 15th Anniversary Party” in June 2025. Under the concept of “connecting generations and celebrating challenges,” approximately 200 people gathered, including Onlab alumni and past mentors. We have grown into a major community that celebrates the challenges of graduate entrepreneurs and connects entrepreneurs with one another.

You can view highlights from the event on Onlab’s blog.

https://onlab.jp/journal/onlab15th-anniv/(Only in Japanese)

IV. Sustainability Initiatives

In October 2025, we published our integrated report “DG Integrated Report 2025*.”

This report integrates financial and non-financial information to present our group’s strategic story. As we celebrate our 30th anniversary, it marks the 30-year trajectory of Digital Garage, which has consistently anticipated changing times and evolved alongside technology.

As a Context Company, we will continue to boldly challenge ourselves with technology and strive to maximize corporate value in line with our purpose: “Designing ‘New Context’ for a sustainable society with technology.” By returning the fruits of growth born from these challenges to society, we will contribute to a sustainable future.
We look forward to your continued support and encouragement.

For more details, please refer to our integrated report “DG Integrated Report 2025*.”

*Currently available in Japanese only. English version will be available soon.

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