Yahoo! Japan Earnings Preview: Revenue Set To Grow In Q3

Yahoo Japan (OTC:YAHOY) is set to announce its fiscal Q3 results on February 2. 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, it looks set to report another quarter of growth. We have created an interactive dashboard that illustrates our expectations for its various divisions. You can modify the revenue and net profit expectations for each division to see how the company’s earnings would be affected.

 Ad Revenues Set To Grow Again

Yahoo Japan’s advertising revenues have been increasing for the past few years, largely due to the increased adoption of smartphones and the company’s hold in the Japanese smartphone market. For Q3, we expect that revenues for mobile will continue to boost advertising revenues once more.

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 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 relatively 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.

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 an 86% increase in credit card transaction value for the company in the previous quarter. The number of Yahoo Wallet Accounts (38.14 million accounts) and transaction volumes also grew strongly in Q2, signaling strong adoption in the Japanese market. This trend likely continued in Q3, 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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