GMO internet (9449) Q2 2025 earnings summary

Executive summary

• Transitioned to a pure holding company structure in January 2025, reorganizing subsidiaries and spinning off Internet Security as an independent segment to focus on sustainable growth.

• Achieved record-high operating profit of JPY 29.7B (+24.0% YoY) and net sales of JPY 142.5B (+4.4% YoY) for H1 FY2025, with net profit attributable to owners up 38.7% to JPY 10.7B.

• Recurring revenue remains the core growth driver, with strong performance in Infrastructure and Finance, while Security and Advertising segments saw profit declines due to higher costs and weak ad demand.

• Security business, especially cybersecurity, saw rapid revenue growth, supported by the 'Internet Security for Everyone' project.

• Segment structure revised to better reflect operations, with certain businesses transferred and new initiatives in AI, robotics, and open-source security support.

Financial highlights

• H1 FY2025 operating profit reached JPY 29.7B (+24.0% YoY), net sales JPY 142.5B (+4.4% YoY), and net profit JPY 10.7B (+38.7% YoY).

• Operating profit margin improved to 20.9% in H1 FY2025 from 17.6% in H1 FY2024.

• Infrastructure and Finance segments posted record-high operating profits, while Security and Advertising & Media segments faced profit declines.

• Net profit per share increased to JPY 103.99 from JPY 72.74 YoY.

• Total assets at JPY 2,095.5B, with shareholders’ equity ratio at 4.1%.

Outlook and guidance

• Focus on accumulating stock-based recurring revenue and strategic investments in GPU Cloud, AI, and cybersecurity for sustainable growth.

• No consolidated results or dividend forecast disclosed due to market volatility in Finance, Cryptoassets, and Incubation segments.

• Management expects continued growth in Infrastructure, but cites unpredictability in cryptoasset prices, financial markets, and capital gains timing.