Digital Garage Second Quarter Financial Results
Digital Garage reported consolidated profit before tax for the 1H of FY26.3 of ¥1,416 million. In addition to steady growth in the Platform Solution (PS) and Long-term Incubation (LTI) segments, the rebound from investment valuation losses recorded in the Global Investment Incubation (GII) segment in the same period last year contributed to consolidated profit before tax turning positive.
The Q2 (standalone) profit before tax for the PS segment, centered on the payment platform that serves as Digital Garage group’s business foundation, was ¥2,257 million, down 3% year-on-year. This was due to the rebound in one-time revenue in the same period last year; however, the real growth rate excluding one-time factors remained strong at 17%.
In the payment business, despite the slowdown in inbound consumption, payment transaction volume over the past 12 months surpassed ¥8 trillion for the first time. Furthermore, Digital Garage has prospects for the second half and beyond, including its entry into the SME-focused digital financial business through the strengthened capital and business alliance with Resona Holdings, the launch of new payment platform “NESTA” under joint development with au Financial Services Corporation of KDDI Group, and the expanded introduction of DGFT’s unified QR code payment platform “Cloud Pay” series into the IoT market.
Progress of DG FinTech Shift 2.0
Capital and Business Alliance with Resona Holdings
In order to further strengthen and deepen Digital Garage's relationship with Resona Group, its strategic partner, Digital Garage entered into a new capital and business alliance agreement with Resona Holdings (announced in July 2025). Going forward, Digital Garage will combine its group’s strengths in “payments and technology” with Resona Group’s strengths in “financial credibility and extensive customer base” to form the core of an alliance in the rapidly transforming FinTech domain driven by technology.
Digital Garage first entered into a capital and business alliance with Resona Holdings in November 2022. Starting with collaboration in the payments and next-generation Fintech domains, Digital Garage has steadily expanded the alliance areas to include strengthening approaches to Resona Group’s corporate customer base of approximately 500,000 companies—one of the largest in Japan—, joint development of next-generation payment applications, startup investments, and open innovation businesses. Furthermore, centered on a joint venture company jointly funded by Digital Garage and Resona Holdings, the partners are promoting the joint development of BaaS and digital finance businesses for SMEs, aiming to “establish a revenue base beyond the payments business.”
Progress of Collaboration with KDDI Group
Digital Garage is jointly promoting business initiatives with KDDI group in the following 3 categories.
1. Introduction of “NESTA” to KDDI’s core telecommunications business
Digital Garage and au Financial Service Corporation (auFS) of KDDI Group concluded a business alliance agreement in May 2024. Since then, the next-generation payment platform “NESTA,” which the partners have been jointly developing, has been progressing as planned, and the process of introducing it to telecommunication fee payments for au/UQ mobile corporate contracts has commenced as the first phase cutover. Through this business initiative, Digital Garage aims to capture payment transaction volumes in the trillions of yen.
2. Expansion of initiatives within the au economic zone through joint sales efforts
“NESTA” is a platform that integrates the au economic zone with Digital Garage's payment infrastructure. Going forward, the partners plan to introduce it to various services within the KDDI Group and expand it to corporate companies outside KDDI Group. Furthermore, the partners will promote the joint development of new services that merge the management resources of both groups.
3. Joint development and deployment of new businesses
The partners will promote the joint development of new services through the integration of the management resources of the DG Group and au Financial Group, as well as the exploration of collaboration across a wide range of financial sectors.
They will bring together cutting-edge technologies on this next-generation platform to realize secure, safe, and reliable payment processing.
Going forward, Digital Garage will first launch full-scale operations of the jointly provided payment platform centered on the “au economic zone,” including KDDI Group’s telecommunications and e-commerce businesses, and then plan to expand to areas outside the “au economic zone” as a second phase. Further details will be announced separately in conjunction with the full-scale launch within this fiscal year.
Business Progress by Segment
In addition to Digital Garage's collaborations with strategic partners, business operations are progressing smoothly across all segments.
PS Segment
The adoption of “Cloud Pay”, Japan’s largest unified QR code payment service provided by DGFT, continues to expand.
Starting with the implementation into “Square,” one of the world’s largest payment platforms, in September 2024, the rollout has accelerated across the IoT market covering diverse business types, including deployment in a wide range of parking facilities from large-scale gated systems to small-scale installations with reduced facility costs, implementation into the payment terminal “Nayax” for automated service machines, and “Cloud Pay REGI,” which integrates with cash payment equipment.
In May 2025, Digital Garage invested in Phi Commerce, and DGFT entered into a business alliance agreement with them. The company is a highly reliable payment service provider licensed by the Reserve Bank of India, with proven experience in national-level payment systems such as the card brand “RuPay” operated by the National Payments Corporation of India. Digital Garage will integrate Phi Commerce’s advanced technological capabilities with its strategic businesses.
In April 2025, Digital Garage three DX-related companies within the group and launched DG Business Technology (DGBT) as a strategic company optimized for the AI era. By integrating cutting-edge technologies in AI and data science with marketing support methodologies, DGBT will support the growth of digital businesses in both online and offline contexts through a dual-axis structure with DGFT.
Additionally, DGBT will function as a hub for promoting collaboration between Digital Garage and the Resona Group to solve digital challenges for over 500,000 corporate clients.
In August 2025, Digital Garage launched “DG AI Drive,” a hybrid AI package that streamlines corporate marketing operations. This service utilizes technologies from startup companies invested in by the GII segment, and through such group synergies, Digital Garage will evolve it into a broader AI utilization platform for enterprises.
LTI Segment
AppPay, one of Japan’s largest out-of-app payment platforms that Digital Garage has been providing since 2023, launched global operations in September 2025 through a partnership with Coda Payments, which operates in over 70 countries and regions worldwide.
As a Merchant of Record (MoR), AppPay acts as the legal seller on behalf of app operators and support global expansion by providing end-to-end services covering a wide range of operations, including legal compliance in each country and region, payment processing, and tax filing.
“AppPay” continues to expand, including the launch of services for the overseas version of “Monster Strike” as the first step in introducing our global services. Behind this growth lies Digital Garage's economic rationality and fee advantages compared to major platform providers. The global gaming ecosystem is evolving into a bidirectional era, with flows from Japan to overseas and from overseas to Japan. On the technology front, in the new era, AI brings about the convergence of games and AI agents. Additionally, with the new smartphone law scheduled to take effect in December 2025, Digital Garage has been receiving inquiries from many stakeholders, including government authorities.
Digital Garage aims to grow this business from a global perspective as a “discontinuous payment business” following QR codes and the crypto business.
In the group collaboration with Kakaku.com, payment transaction volume continues to expand against the backdrop of one of Japan’s leading traffic volumes. Digital Garage is also promoting collaborative businesses that combine both companies’ assets, and following the initiative of DGFT’s payment solutions embedded in “Tabelog” inbound reservations, Digital Garage is working on a collaboration aimed at building a new real estate sales matching platform between its real estate DX platform “Musubell,” one of Japan’s largest real estate DX platforms, and Kakaku.com’s real estate media “Sumaity.”
GII Segment
Against the five-year target of “30 billion yen in investment income” outlined in our Medium-term Plan, Digital Garage has achieved 15.2 billion yen, exceeding the 50% progress rate. Digital Garage will continue to accelerate the off-balancing of operating investment securities and aim to achieve its target ahead of schedule.
Furthermore, Digital Garage is focusing on creating business returns through synergies from business co-creation with startup companies. Under this policy, Digital Garage has established a “Business Co-Creation Department” and is working to develop collaborative projects between GII segment investees and PS segment businesses.
Norbert Gehrke
