GMO TECH <6026> focuses on attracting support services like search engine-related services and affiliate services (which accounted for 95.8% of revenue as of the third quarter of the fiscal year ending December 2024), while also developing a property service business, including rental DX services (4.2% of revenue).

In the main attracting support business, search engine-related services like "ME Dash! by GMO" and "MEO Dashboard by GMO" as well as affiliate services such as "GMO SmaAFFi" are provided. The primary MEO service, known as "Map Engine Optimization," helps users easily find store information and business details in local searches on Google Maps by implementing strategies to rank above competitors in search results. The company's MEO service is ranked No. 1 in Japan based on the cumulative number of client companies and top-ranking rates, and it has significantly expanded its service offerings through the active use of AI technology. On the other hand, the affiliate service operates on a CPA-fixed advertising model, which poses less risk to advertisers compared to pure advertising and performance-based advertising. It is strong in performance-based advertising for smart phone applications, with over 3,000 successful application cases. The number of overseas application projects has reached No. 1, reinforcing the overseas market.

In the property service business, a rental management platform leveraging the comprehensive strengths of the GMO Internet Group is being developed, with numerous implementations in major and medium-sized property management companies. It widely supports everything from operational efficiency for management companies to revenue increases, providing apps for both owners and tenants. The company earns a monthly service fee from property management companies, which varies depending on the number of managed properties and the details of provided services. As it is a stacking model, stable revenue schedule can be expected, leading to high profitability, steadily accumulating stock revenue to move toward profitability.

The cumulative revenue for the third quarter of the fiscal year ending December 2024 increased 17.2% year-on-year to 5,241 million yen, while operating profit rose 41.7% to 6.6 million yen. The MEO service grew 40% alongside strong stock revenue from saas and consulting, aided by enhanced AI capabilities and new personnel strategies. However, the affiliate service saw a decline of 25.3% due to budget cuts and project halts from specific large clients and stagnation in new business investments from major customers. Meanwhile, the property service business is seeing steady growth through stock revenue from the saas business, with the company's service cancellation rate remaining low at around 1%.

For the full fiscal year, revenue is anticipated to reach 7,200 million yen, reflecting a 15.1% increase from the previous term, while operating profit is projected to increase 83.7% to 1,040 million yen. In the third quarter, the affiliate service, which is a flow product, substantially underperformed against plans, causing a slowdown in the growth rate of operating profit. Nevertheless, measures to recover the growth trend of the affiliate service will be prioritized in the fourth quarter. Efforts will be made to improve management quality to prime standards, including recruiting high-caliber talent and strengthening the management department.

Additionally, the company announced the release of "GMO External App Payments" concurrently with the earnings reports. Unlike traditional payment methods within smart phone applications, "GMO External App Payments" allows purchases of in-game items to be made through external websites. It is said that transaction fees for payments made within smartphone apps generally incur around 30%, but using "GMO External App Payments" can reduce this to a minimum of 5%. This significantly lowers transaction fees, supporting revenue growth for app operators, while app users can purchase in-game items at lower prices than in-app purchases or receive more bonuses for the same amount, thus creating an economical payment environment. Along with this announcement, the company has also stated plans to aim for a global rollout of the external payment project, having agreed to collaborate with six domestic game media companies as the first step. Additionally, on November 15, a strategic business partnership was established with Sanjuunana, a group company of Corek Holdings, which operates "Altema," one of Japan's largest game strategy sites. Following this partnership, the provision of "GMO External App Payments" will commence on "Altema." The confirmed partnerships signal promising future expansion.

The company has disclosed its mid-term management policy, aiming to increase the ratio of stock-type products like MEO and property services, and transform into a business entity capable of steadily accumulating results. Regarding the market environment, the MEO market is expected to continue stable growth, projecting to exceed 30 billion yen in scale by 2028, buoyed by an increase in active contracts. Furthermore, the scale of the domestic affiliate market is expected to grow at a CAGR of about 8% from 2019 to 2027, indicating steady growth, while focusing on app clients and direct sales efforts to substantially increase revenue. The value added by the affiliate service will likely increase with the growth of exclusive projects both domestically and overseas. Moreover, the property tech market is projected to grow at about 15% annually, expected to surpass 1.2 trillion yen by 2025, with ambitions to achieve overwhelming No. 1 market share in rental-type applications (based on the number of owners and tenants using the application). The collaboration with various No. 1 services and high development capabilities of the GMO Internet Group is something to keep an eye on. Additionally, on November 15, a share buyback plan with a cap of 70 million yen was announced. The dividend payout ratio is set at 50%, with the recent dividend yield exceeding 4%, likely attracting attention as a high-dividend growth stock.