Yahoo! Japan Earnings Preview: Mobile To Boost Revenues Across Advertising, Commerce Businesses

YAHOY: Yahoo Japan Corp ADR logo
Yahoo Japan Corp ADR

Yahoo Japan (OTC:YAHOY) is set to announce its fiscal Q2 results on October 26. As the company continues to expand its services and footprint in the Japanese e-commerce industry, and strengthen its position in the Japanese online ad industry, the company looks set to report another quarter of growth for its business. Below we outline our expectations for the quarter.

e-Commerce Provides Growth Opportunity

As Yahoo Japan continues to expand its services to the mobile domain, we expect it to report growth in the revenue contribution from mobile devices across its verticals. We expect that mobile transactions will once again account for a majority of the company’s transaction value across its e-commerce business. Additionally, since online sales still account for a relative small portion of total retail sales in Japan, the untapped market provides a significant opportunity for the company to grow its business in the coming years.

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According to the company, monthly mobile page views from smartphones stood at 44,415 in fiscal Q1. This translates into nearly 61% of total monthly page views. Given the increasing mobile traffic, we expect advertising revenues from mobile to increase in fiscal Q2. Furthermore, as advertisers are earmarking more funds for mobile ads, we expect revenues from mobile devices to drive revenue growth for Yahoo! Japan, which leads the Japanese internet market in terms of traffic.

Payments Opportunity

Yahoo Japan has formed partnerships with players such as Softbank to promote its digital payment services, which includes credit card and digital wallet services. This resulted in a 104% increase in credit card transaction value for the company in the previous quarter. The number of Yahoo Wallet Accounts (37.32 million accounts) and transaction volumes also grew strongly in Q1, signaling strong adoption in the Japanese market. This trend likely continued in Q2, and we expect the company to report growth in revenues from digital payment services once again.

See our complete analysis of Yahoo! JAPAN here

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