Announcement of Financial Results for the Second Quarter of the Fiscal Year Ending November 2025
Hello, this is Miura from the IR department at note (5243).
We have announced our financial results for the second quarter of the fiscal year ending November 2025, and I would like to provide an overview of those results.
Financial Results Highlights for the Second Quarter of the Fiscal Year Ending November 2025
The main points for the second quarter of the fiscal year ending November 2025 are the expansion of net sales supported by strong growth in our core business, the achievement of operating profit profitability for the fifth consecutive quarter, and the achievement of adjusted EBITDA profitability for the sixth consecutive quarter (adjusted EBITDA reached its highest level since listing).
Driven by the increase in GMV of the note business, net sales for the second quarter grew strongly to 1,013 million yen (+24.9% year-on-year), and gross profit also grew to 946 million yen (+24.0% year-on-year).
In terms of profit, adjusted EBITDA was 33 million yen and operating profit was 18 million yen, achieving profitability for the sixth consecutive quarter for adjusted EBITDA and the fifth consecutive quarter for operating profit. Looking at each profit indicator for the first half (cumulative total of 1Q and 2Q), they show high growth rates compared to the same period last year, which we believe is a reflection of our efforts to improve profitability through sales growth and appropriate cost control.
Background of Sales Growth
The expansion in net sales is due to the strong growth of our core note business and the corporate-oriented note pro business.
In the core note business, the quarterly Gross Merchandise Value (GMV) reached 5,205 million yen, surpassing 5 billion yen for the first time. A feature of this quarter is that it also increased compared to 1Q. This is mainly due to an increase in the number of subscribers, showing a 24.7% increase year-on-year and a 4.9% growth from the previous quarter, demonstrating continuous growth.
The note pro business is also steadily increasing its number of paid contracts, recording 865 contracts, a net increase of 49 from the end of the previous quarter. We are continuously implementing new features and expanding optional plans to meet user needs, achieving an increase in new contracts and a decrease in churn rates.
In addition, the status of various business KPIs is as follows. Starting with the GMV growth rate in the mid-20% range, all are increasing steadily with
high growth rates exceeding 20%.
Although the figures above are as of the end of May 2025, the number of registered members exceeded 10 million in June 2025, and the number of published content items exceeded 60 million. We launched the service in April 2014, surpassed 5 million users in our eighth year, and have grown to 10 million in the three years since then, continuing to expand steadily as a platform.
Regarding the Cost Situation
While net sales increased by 24.9% year-on-year and 5.8% quarter-on-quarter, expenses increased by 24.9% year-on-year and 4.4% quarter-on-quarter. The main factors for the increase are an increase in payment processing fees associated with the expansion of GMV, an increase in communication costs such as server fees due to service expansion, and an increase in personnel expenses due to hiring progress in the first half. We are continuously working on cost control initiatives for payment processing fees and communication costs, such as by conducting ongoing negotiations with service providers.
Personnel expenses increased due to our ability to secure talent during the first half of the year, supported by strong business conditions such as the announcement of our capital and business alliance with Google in January 2025. However, this was absorbed by the growth in net sales, and the ratio of personnel expenses to net sales continues to decline.
The trends in headcount are as follows, but we plan to be more selective in our hiring for the second half of the year and do not anticipate the same level of headcount growth as in the first half.
Regarding Earnings Forecasts for the Current Fiscal Year
As of the end of the first half, the progress rate for net sales is 49.1%, and the progress rate for net income is 64.5%, indicating that we are progressing steadily toward our announced earnings forecasts. Therefore, we have not changed our full-year consolidated earnings forecast for the fiscal year ending November 2025 from the figures announced at the beginning of the year.
We anticipate net sales of 4,010 million yen, gross profit of 3,700 million yen, operating profit of 60 million yen, and net income of 110 million yen. We intend to further increase sales in the second half and continue to advance various initiatives.
Future Growth Strategy and Recent Initiatives
As a medium- to long-term growth strategy, we have set the theme of expanding the ecosystem by leveraging note's assets.
Specifically, while further growing our existing services such as note, note pro, and services for corporations, we will launch new businesses and services by utilizing the various technologies we have cultivated through the note business, such as creator, content, and AI utilization. By creating synergy with existing services, we will maximize the value provided by the business as a whole and lead to further growth.
In addition to the growth of existing businesses, we aim to achieve a sales growth rate of 20% to 30% in the medium to long term through the expansion of the note ecosystem and contributions from new businesses.
We are promoting various initiatives in line with this growth image, and we were able to make many announcements in the first half as well. We will highlight and introduce the main topics.
Creating New Revenue Opportunities by Providing Data to AI Companies
We announced that we would revise the note Terms of Service starting in August 2025 to begin an initiative to provide creator content to AI companies and return the proceeds to the creators. This will allow us to provide new revenue opportunities to our creators, and we also expect to create new revenue opportunities for our company. Aiming to build a creator ecosystem in the AI era, we are currently in discussions with multiple AI companies.
For more details on this, please also refer to the following article.
Release of the New Site "note Money"
In March 2025, we launched "note money," a new site specializing in financial and investment information, to expand exposure for creators in the finance and investment sectors and increase revenue opportunities through articles.
You can view the note money site here.
Launch of the story submission site "Tales"
In April 2025, we opened the story submission site "Tales" with the goal of expanding creators' potential and sending entertainment works that break through media barriers out into the world.
You can view the Tales site here.
Furthermore, Tales & Co., our subsidiary that co-operates "Tales" with note, is also working on realizing media mixes and creating IP in collaboration with media and content companies.
Although it has been just over a year since the company was established, it has already worked on several notable projects, and production projects in collaboration with media and other partners are currently underway.
Holding a collaboration contest with Google Gemini
Since announcing our capital and business alliance with Google in January 2025, we have been holding various discussions toward business collaboration. As one of these initiatives, we held the "#TriedWithAI" collaboration contest with Google Gemini in June.
Since the announcement of the capital and business alliance, our management and employees have been invited to attend Google I/O in person, and we are holding various discussions on a regular basis. We will inform you again if any matters requiring disclosure arise in the future.
In addition, the first half of FY2025 saw us rapidly advancing various initiatives. We will continue to work toward further growth in the second half!
Conclusion
The second quarter of the fiscal year ending November 2025 was a fulfilling period in which we achieved steady sales growth against the backdrop of expanding GMV and the number of note pro contracts, while simultaneously promoting various new initiatives in line with our future growth vision.
In particular, the initiative for compensation through AI learning, which begins in August, is an important topic not only because it can create new revenue opportunities for both creators and our company, but also because it helps you understand the role note intends to play as a content platform in the AI era. We are currently in negotiations with multiple AI companies both in Japan and overseas. We will let you know as soon as there are any updates, so please keep an eye on future developments.
And for those who are interested in note's AI strategy, we have also explained it in an interview article with CEO Kato and CXO Fukatsu, so we would appreciate it if you could read that as well.
The next financial results announcement is scheduled for early October 2025. We appreciate your continued support!
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