PIXTA <3416> operates the digital material marketplace "PIXTA" for photos, illustrations, videos, music, etc., accounting for 90% of the cumulative revenue in the first half of 2024, and also operates the on-site photography platform "fotowa" for family and children's photos, accounting for 6%. These are the two main operations.

In the PIXTA operation, they connect creators who want to sell their work with users and companies looking for materials through a marketplace, providing high-quality Japanese materials at reasonable prices. As of the end of December 23, the number of registered creators for posting was approximately 0.4 million, the number of buyers was about 0.62 million, and the number of materials was approximately 90 million, making it the largest platform domestically for both creators and buyers. They have single sales revenue and flat-rate sales revenue, with single sales following a flow-type revenue structure (material unit price × number of purchases) and flat-rate following a stock-type revenue structure (yearly or monthly contract × number of contracts). Particularly in Japan-related materials, they overwhelm other companies in terms of quality and quantity, which is their strength as buyers are not dependent on specific industries.

In the fotowa operation, the target is mothers in their 30s to 40s who have many opportunities to take commemorative photos such as Shichi-Go-San, Omiyamairi, and newborn photography with their families. They have a flow-type revenue structure (number of shoots × shooting price), and revenue is recorded net (handling volume - photographer's fee). The take rate for handling volume is about 35%. Compared to children's photo studios, they offer a high degree of freedom, as they can choose from a variety of locations and photographers, and are able to take natural photos.

The cumulative revenue for the first half of the fiscal year ending in December 2024 landed at 1,258 million yen, a 2.4% decrease compared to the same period last year, with an operating profit increasing by 10.2% to 159 million yen. While the decline in revenue from the PIXTA operation had an impact, the cost reduction in the fotowa operation contributed to the increase in operating profit. Due to the significant contribution of a large order disclosed on July 22, 2024, the full-year performance forecast has been revised upwards. They are expecting revenue to increase by 7.9% to 2,829 million yen (previously predicted at 2,629 million yen) and operating profit to increase by 49.3% to 500 million yen (previously 340 million yen).

In the PIXTA operation, they have started expanding a service to provide image and video data necessary for AI development and machine learning in a one-stop way, offering hundreds to tens of thousands of materials per project in bulk, with project prices ranging from hundreds of thousands to millions of yen. It seems that the order amount for image and video data for machine learning has increased by about 3.3 times when comparing the second half of 2023 (July to December) and the first half of 2024 (January to June). As a medium-term business strategy, they aim to grow the service providing image and video data for machine learning and evolve towards AI-first services by automating material review using AI and optimizing material search. In addition, the fotowa operation is focusing on the newborn photo genre to achieve an increase in the number of shoots and an increase in customer price to achieve profitability and revenue growth by 2026. Other new business groups focusing on PIXTA on-demand and PIXTA custom operations aim to grow until they account for more than 10% of the total company's revenue composition. Amidst stable stock price trends, it will be important to watch whether AI will be positively reflected in performance in the future.