Mercari FY26 Core Operating Profit Surges 60% to ¥44.2 Billion as Revenue Hits a Record ¥229.3 Billion

Mercari, Inc. (TSE: 4385), operator of Japan's largest consumer-to-consumer flea-market app and the Merpay payments and credit business, reported consolidated results for the year ended June 30, 2026 under IFRS. Revenue rose 19.0% to ¥229,293 million, a company record, while core operating profit — operating profit excluding other income and other expenses — jumped 60.2% to ¥44,181 million. Operating profit climbed 57.7% to ¥43,905 million, profit before tax rose 51.7% to ¥44,188 million, and profit attributable to owners of the parent increased 35.6% to ¥35,401 million. Basic earnings per share were ¥214.74, up from ¥159.05; diluted EPS was ¥209.06.

Marketplace returns to double-digit GMV growth

The headline operating story is the reacceleration of the domestic marketplace. Gross merchandise value in Japan grew 14.7% to ¥1,285.6 billion — the first double-digit expansion since the year to June 2023 — as the company prioritised core-experience work around transaction safety and drew balanced growth in buyer numbers, average order value and purchase frequency. Cross-border transactions, a designated growth area, captured strong overseas demand in the entertainment and hobby categories and reached GMV of ¥112.2 billion, roughly 9% of marketplace GMV; a tie-up with second-hand retailer Suruga-ya broadened available inventory and a new global app was launched during the year. Japan marketplace revenue rose to ¥129,526 million from ¥111,200 million, and management said marketplace core operating profit of ¥42.9 billion (+40.6%) came in well above initial guidance.

Fintech credit book expands 44%

Fintech was the faster-growing leg. Segment revenue advanced to ¥51,201 million from ¥38,597 million, lifted both by higher transaction volume inside the Mercari app and by growing external usage of the Mercard credit card. The outstanding credit receivable balance across Merpay deferred payment and Merpay Smart Money rose 44.4% to ¥358.1 billion, while the collection rate held at a high 99.4% under the company's proprietary AI credit screening. Interest income recognised under IFRS 9 reached ¥38,864 million for the group, with a further ¥1,573 million from crypto-asset trading at subsidiary Melcoin. Together, the two domestic businesses produced Japan Business revenue of ¥180,858 million (+20.7%) and segment profit of ¥51,316 million (+47.2%). The segment was renamed from "Japan Region" during the first quarter; the change is cosmetic.

US business holds break-even while growing

The US marketplace, long the group's problem child, grew GMV 11.2% to US$810 million (¥125.3 billion) as category-focused CRM campaigns and shipping-discount promotions compounded with product improvements. Segment revenue rose 12.0% to ¥40,782 million — a figure that includes ¥22,370 million of shipping revenue recognised gross — and core operating profit was ¥2,062 million. Segment profit more than doubled to ¥1,664 million (+125.8%), meaning the unit delivered positive GMV growth while staying at or above break-even, an outcome management said arrived sooner than expected. Group-wide core operating margin widened to 19.3% from 14.3%, return on equity attributable to owners was 30.0%, and pre-tax return on total assets improved to 7.0% from 5.6%.

Balance sheet swells as the credit book absorbs cash

Total assets grew ¥182,859 million to ¥726,622 million, driven by a ¥109,225 million increase in trade and other receivables from Merpay deferred payment and Smart Money usage and a ¥126,483 million increase in other current financial assets from time deposits and money trusts, partly offset by a ¥66,495 million fall in guarantee deposits as Merpay's statutory security deposits were returned. Liabilities rose ¥145,032 million to ¥589,154 million, including a ¥69,047 million increase in current bonds and borrowings tied to receivable securitisation, and equity attributable to owners reached ¥137,069 million for an 18.9% equity ratio and book value per share of ¥829.62. Notably, operating cash flow was negative ¥9,512 million despite record profit: the ¥44,188 million of pre-tax earnings was more than offset by the ¥108,732 million build in trade and other receivables — the lending book itself — plus a ¥56,500 million increase in money trusts, against inflows of ¥45,203 million from customer deposits and ¥66,500 million from the returned guarantee deposits. Financing activities supplied ¥73,473 million, and period-end cash was ¥184,069 million against ¥147,028 million a year earlier.

FY27 guided as a range; no dividend, but a ¥10 billion buyback

For the year to June 2027 Mercari guides consolidated revenue of ¥260,000 million to ¥290,000 million, growth of 13.4% to 26.5%, and core operating profit of ¥45,000 million or more — a floor rather than a point estimate, implying at least 1.9% growth. The company paid no dividend for FY6/2026 and forecasts none for FY6/2027. Separately, the board resolved on August 5, 2026 to repurchase up to 4 million shares — 2.4% of shares outstanding excluding treasury — for up to ¥10 billion between August 6 and October 30, 2026, with all repurchased shares to be cancelled on November 12, 2026. Shares outstanding stood at 165,220,952 at year-end.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.