EX-99.1

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-month period ended March 31,						For the three-month period 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(1)	¥	14,003		¥	28,593		¥	23,506		¥	37,395
Adjusted EBITDA Margin(2)		18	%		28	%		27	%		34	%



Operating Metrics:	(in trillions of yen, unless otherwise indicated)
Consolidated
Total GMV(3)	¥	4.12		¥	5.07		¥	4.46		¥	5.49
Payment segment
PayPay Balance GMV(4)	¥	2.34		¥	2.79		¥	2.52		¥	2.98
PayPay Credit GMV(5)	¥	0.94		¥	1.22		¥	1.08		¥	1.40
PayPay Card GMV(6)	¥	0.76		¥	0.97		¥	0.79		¥	1.01
Payment Segment GMV(7)	¥	4.05		¥	4.98		¥	4.39		¥	5.39
Take Rate(8)		1.60	%		1.65	%		1.62	%		1.64	%
Cost Rate(9)		1.45	%		1.38	%		1.29	%		1.23	%
PayPay MTU (millions of users)(10)		37.23			40.97			37.84			41.70
PayPay Number of Transactions (millions of transactions)(11)		1,996			2,359			2,168			2,544
Financial service segment
PayPay Bank Balance of Deposits (billions of yen)(12)	¥	1,841.0		¥	2,269.1		¥	2,007.3		¥	2,342.3
PayPay Bank Balance of Loans (billions of yen)(13)	¥	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.

(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.

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 period ended March 31,						For the three-month period ended 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(1)		166			238			105			60
Add: Depreciation and amortization		5,607			6,208			5,729			6,125
Add: Share-based payment expenses(2)	-				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(3)		302			286			939			27
Add: M&A-related expenses(4)		153			162			274			483
Add: Net interest expense (income) from corporate borrowings and treasury assets(5)		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(6)		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.

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

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.

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

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)

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 (1)
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

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

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)

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			Financial service			Inter-segment eliminations			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 (1)		(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			Financial service			Inter-segment eliminations			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 (1)		(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.

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 (1)(2)(3)		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.

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 (1)		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

6. Deposits

Deposits are as follows:


	(In millions of yen)
	March 31, 2026		June 30, 2026
Payment:
PayPay Users' deposits (1)(2)		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

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 (1)		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 (1)		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 (2)		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 (1)		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 (2)		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.

9. Operating Expenses

Operating expenses by nature are as follows:


For the three months ended June 30, 2025
	(In millions of yen)
	Payment		Financial service		Inter-segment eliminations			Consolidated
Point expenses (1)		13,153		—		—			13,153
Settlement related cost (2)		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 (3)		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		Financial service		Inter-segment eliminations			Consolidated
Point expenses (1)		16,041		—		—			16,041
Settlement related cost (2)		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 (3)		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.