PayPay Corp. (PAYP) 1Q Beat and Raise on back of GMV loan growth and margin improvement

Equity Research 1 August 2026 | 2:55AM JST

PayPay Corp. (PAYP) 1Q Beat and Raise on back of GMV/loan growth and margin improvement

PAYP 12m Price Target: $31.50 Price: $16.09 Upside: 95.8% BUY Makoto Kuroda PayPay reported 1Q3/27 results on the morning of July 31 and held | Goldman Sachs Japan Co., Ltd. a results briefing at 7:30 am (EST) / 8:30 pm (JST). 1Q3/27 total Hibiki Takuma revenue was ¥109.7 bn (guidance: ¥103.0–105.0 bn; BBG | Goldman Sachs Japan Co., Ltd. consensus: ¥105.7 bn; GSe: ¥104.7 bn), and adjusted EBITDA was ¥37.3 bn (BBG consensus: ¥31.3 bn; GSe: ¥30.7 bn), landing above GSe and the BBG consensus. GMV continued to grow in the payment segment driven by increases in MTUs, the active user ratio, and unit prices, and loan balances grew in the financial service segment. The Key Data _____________________________________ Market cap: $10.9bn adjusted EBITDA margin also improved qoq due to a better take rate 3m ADTV: $17.3mn Japan and a review of point rewards starting in June (targeting only eKYC Japan Financials users). M&A Rank: 3

GS Forecast __________________________________ At end-June 2026, registered users stood at 74.6 mn (+7% yoy, vs. 3/26 3/27E 3/28E 3/29E Net inc. (¥ bn) New GSe 74.7 mn) and MTUs at 41.7 mn (+10% yoy, vs. GSe 41.4 mn). Net inc. (¥ bn) Old Amid a slight increase in the active user ratio to 56%, high GMV EPS (¥) New EPS (¥) Old growth (+23% yoy) continued, led by PayPay Card (+28% yoy) and EPS growth (%)

PayPay Credit (+30% yoy). The payment segment take rate P/E (X) P/B (X) 5.8 3.6 2.9 2.2 (company KPI) was 1.64%, improving +2 bp yoy. The company Price/PPOP (X)

attributed this to revenue growth driven primarily by a rise in the Dividend yield (%) NM NM NM NM

online payment ratio (18%, up +3 ppt yoy). In addition, solid 6/26 9/26E 12/26E 3/27E EPS (¥) expansion in revolving and installment loan balances (+25% yoy) and cash advance balances (+57% yoy) also contributed to higher GS Factor Profile ______________________________ Growth financing profits. Financial Returns

PayPay also revised up its FY3/27 guidance and newly disclosed Multiple 2Q3/27 guidance. The FY3/27 guidance calls for a total revenue range of ¥465.0–473.0 bn (vs. ¥454.0–462.0 bn as of end-FY3/26; Integrated

BBG consensus: ¥463.0 bn; GSe: ¥457.9 bn), and adjusted EBITDA of Percentile 20th 40th 60th 80th 100th ¥149.0–155.0 bn (vs. ¥134.5–140.5 bn previously; BBG consensus: ¥139.4 bn; GSe: ¥146.8 bn). The ranges are roughly in line with or PAYP relative to Japan Coverage PAYP relative to Japan Financials slightly above our estimates. The 1Q results marked an early Source: Company data, Goldman Sachs Research estimates. attainment of the Beat and Raise (earnings beat estimates and See disclosures for details. full-year guidance was raised) aspiration PayPay mentioned at the FY3/26 results briefing.

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Goldman Sachs PayPay Corp. (PAYP)

PayPay Corp. (PAYP) Income Statement (¥ bn) ___________________________________ BUY Rating since Apr 7, 2026 3/26 3/27E 3/28E 3/29E Net interest income Net fees -- -- -- -- Treasury income Ratios & Valuation __________________________________________ Other operating income /26 3/27E 3/28E 3/29E Total revenue P/E (X) Compensation & benefits exp. ( ) Price/PPOP (X) Non-employee costs ( ) P/B (X) 5.8 3.6 2.9 2.2 Pre-provision op. profit P/NTA per share (X) -- -- -- -- Provision for loans -- -- -- -- Dividend yield (%) NM NM NM NM Total provision expense ( ) Div. payout ratio (%) 0.0 0.0 0.0 0.0 Income/(loss) from associates (0.1) (0.1) (0.2) (0.1) Pre-tax profit Growth & Margins (%) ______________________________________ Provision for taxes /26 3/27E 3/28E 3/29E Minority interest…