Is LY Corporation profitable in 2026?

Yes. For FY2025, ended March 31, 2026, LY Corporation reported consolidated revenue of ¥2,036.4 billion (+6.2% YoY), adjusted EBITDA of ¥496.6 billion, and net income of ¥193.7 billion, up 26.2% year on year, per its May 2026 earnings release.

Who owns LY Corporation?

A Holdings Corporation, a 50-50 joint venture between Japan's SoftBank and South Korea's Naver, held about 63.6% of LY Corporation as of 2023. In August 2024 SoftBank and Naver sold down part of that stake via a roughly ¥150 billion tender offer amid regulatory pressure.

Could AI replace LY Corporation's Yahoo! Japan search business?

Yahoo! Japan's search runs on Google-licensed technology under an agreement expiring March 2027, and its Media segment grew only 0.4% in FY2025 (ended March 31, 2026), leaving it exposed to AI-native answer engines like ChatGPT and Perplexity eroding search-ad revenue.

Who is LY Corporation's biggest competitor?

LY faces Google in search (roughly 74-76% Japan share), Amazon Japan in e-commerce (75-80% consumer reach), and Rakuten in both e-commerce and QR payments via Rakuten Pay, competing against LY's PayPay. Sources are dated Jan-Jun 2026.

How dominant is PayPay in Japan's payments market?

PayPay holds over two-thirds of Japan's QR-code payment market with 66+ million registered users as of a March 2026 estimate. PayPay completed a Nasdaq IPO on March 12-13, 2026, raising net proceeds of ¥94.6 billion while remaining an LY consolidated subsidiary.

Has LY Corporation had recent data breaches?

Yes. On July 14, 2026, LY Corp disclosed that about 7.1 million LINE Pokopoko/Pokopang game-user records had been mistakenly transmitted to a third-party ad-tracking firm since May 2022, discovered in April 2026, following an earlier 2023-2024 LINE data-leak scandal.

Consumer platforms · Japan

LY Corporation

lycorp.co.jp ↗

Japanese internet holding company running LINE messaging, PayPay payments, and Yahoo Japan search/commerce.

Defensible for now

Assessed 22 July 2026 · Evidence as of 22 July 2026

Real protection, with named pressure against it.

On the recordSince 22 July 2026 · Checkable from March 2027 (license); December 2026 (Naver split) · Every call on the record Checkpoint: Google search license renewal deadline plus Naver systems separation deadline

The call

LY's messaging and payments businesses look locked in, but its search and shopping arms depend on a Google deal and ad model that AI search is already testing.

LY Corporation owns LINE (a messaging app with about 100 million users in Japan), PayPay (a digital payment system that handles roughly two-thirds of Japan's QR code payments), and Yahoo Japan (which runs search and shopping). The payments side is genuinely hard to replace because it has regulatory licenses and an entrenched user base, but the search and shopping sides are in trouble: Yahoo Japan's search engine runs on technology licensed from Google that expires in March 2027, and newer AI chatbots like ChatGPT and Perplexia are answering questions directly without needing a search engine, which cuts into ad revenue that makes up about one-third of the company's total income. The company also faces data breaches, regulatory pressure in Japan, and flat growth in its e-commerce business against stronger rivals like Amazon and Rakuten. Whether LY survives depends on whether it can find a replacement for its expiring Google license, rebuild trust after security failures, and prove its shopping business can compete when the search license runs out in 2027.

Why

AI pressure: Perplexity, ChatGPT, Google AI Overviews. AI answer engines pull queries away from Yahoo Japan search, threatening the ad revenue Media segment still depends on. Could AI do the core job? Only partly.

Bigger players: Google. LY licenses core search tech from Google, and that deal expires March 2027 just as Google's own AI Overviews eat query volume. Could a giant copy it? No, they are blocked.

What protects it. LINE's 100 million Japan users and PayPay's two-thirds share of QR payments run on regulated banking rails that are hard to switch away from.

What would change this call

Resolution of the Kakaku.com bidding war between LY and EQT/Digital Garage (active as of July 2026). Shows whether LY can defend a key comparison-shopping asset or loses it to a rival bidder.
LY's FY2026 Q1 earnings release around August 3, 2026. Tests whether Media and Commerce segments break out of single-digit growth or stay flat.
PayPay's Nasdaq (PAYP) stock and QR-payment share trend versus Rakuten Pay after March 2026 IPO. Shows whether LY's fintech fortress is holding share or ceding ground to Rakuten.

Key numbers

FY2025 revenue ¥2,036.4B, up 6.2% (2026-03-31)
Media segment revenue ¥735.1B, up just 0.4% (2026-03-31)
PayPay holds over two-thirds of Japan QR payment share (2026-03-31)

Named risks

Google search license expires March 2027, exposing Media segment to renegotiation or AI-search disintermediation. Severity: high
Repeated data breaches, including 7.1 million record Pokopoko leak disclosed July 2026, raise regulatory scrutiny. Severity: high
Kakaku.com bidding war against EQT could force overpayment or capital-discipline breakdown, ongoing July 2026. Severity: medium
Naver systems-separation deadline December 2026 carries execution and cost risk post 2023-24 breach. Severity: medium
Media and Commerce segments grew only 0.4% and ~1% in FY2025 against fully-deployed Amazon and Rakuten. Severity: medium

Rivals, as read in July 2026

Rival	Direction	Evidence
Google	contesting	Yahoo! Japan search relies on Google-licensed tech through March 2027 amid AI-search erosion risk
Amazon Japan	losing to	Amazon Japan reaches 75-80% of consumers vs LY's flat ~1% Commerce segment growth, FY2025 (2026-03-31)
Rakuten	contesting	Rakuten Pay competes with PayPay; Rakuten cites ~¥6.1 trillion GMV and 100M+ members, June 2026
EQT/Digital Garage	contesting	Active bidding war for Kakaku.com, EQT bid $4.2B vs LY/Bain $4.1B, July 17, 2026
Naver	contesting	Part-owner via A Holdings but also being separated from LINE systems by December 2026 deadline

Questions people ask

Is LY Corporation profitable in 2026?: Yes. For FY2025, ended March 31, 2026, LY Corporation reported consolidated revenue of ¥2,036.4 billion (+6.2% YoY), adjusted EBITDA of ¥496.6 billion, and net income of ¥193.7 billion, up 26.2% year on year, per its May 2026 earnings release.
Who owns LY Corporation?: A Holdings Corporation, a 50-50 joint venture between Japan's SoftBank and South Korea's Naver, held about 63.6% of LY Corporation as of 2023. In August 2024 SoftBank and Naver sold down part of that stake via a roughly ¥150 billion tender offer amid regulatory pressure.
Could AI replace LY Corporation's Yahoo! Japan search business?: Yahoo! Japan's search runs on Google-licensed technology under an agreement expiring March 2027, and its Media segment grew only 0.4% in FY2025 (ended March 31, 2026), leaving it exposed to AI-native answer engines like ChatGPT and Perplexity eroding search-ad revenue.
Who is LY Corporation's biggest competitor?: LY faces Google in search (roughly 74-76% Japan share), Amazon Japan in e-commerce (75-80% consumer reach), and Rakuten in both e-commerce and QR payments via Rakuten Pay, competing against LY's PayPay. Sources are dated Jan-Jun 2026.
How dominant is PayPay in Japan's payments market?: PayPay holds over two-thirds of Japan's QR-code payment market with 66+ million registered users as of a March 2026 estimate. PayPay completed a Nasdaq IPO on March 12-13, 2026, raising net proceeds of ¥94.6 billion while remaining an LY consolidated subsidiary.
Has LY Corporation had recent data breaches?: Yes. On July 14, 2026, LY Corp disclosed that about 7.1 million LINE Pokopoko/Pokopang game-user records had been mistakenly transmitted to a third-party ad-tracking firm since May 2022, discovered in April 2026, following an earlier 2023-2024 LINE data-leak scandal.

Timeline

2026-07-17EQT raises rival bid for Kakaku.com to about $4.2 billion, topping LY/Bain offer
2026-07-14LY discloses 7.1 million LINE Pokopoko game-user records leaked to ad-tracker since 2022
2026-05LY and Bain raise Kakaku.com bid to about $4.1 billion, citing generative AI strategic value
2026-04-26LY launches unified LY Ads Display Ads platform merging LINE and Yahoo! JAPAN ad inventory
2026-03-12PayPay completes Nasdaq IPO, raising net ¥94.6 billion, remains LY subsidiary
2025-10Ransomware attack on ASKUL causes outage, dents FY2025 consolidated results
2025-09LINE MAN Wongnai (Thailand) becomes a consolidated LY subsidiary
2024-08-02SoftBank and Naver sell down LY stake via roughly 150 billion yen tender offer
2023-10-01LY Corporation formed via merger of Z Holdings, LINE, Yahoo! Japan, Z Entertainment, Z Data

Revision history

22 July 2026

First assessed. Defensible for now. The text above is fixed as of this date and is not edited afterwards.

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