GLOBAL LINK MANAGEMENT INC. Q1 FY2025 earnings call

• Strategic Long-Term and Mid-Term Planning

• GLM has set a long-term group strategy "GLM1000" targeting over 100 billion yen in ordinary profit by 2040, with a target 25% average annual growth rate (maintained since 2017 IPO).
• The first phase of this strategy is the mid-term management plan "GLM100", targeting 100 billion yen in ordinary profit, 100 billion yen in revenue, and 17 billion yen in gross profit by 2027.
• Financial KPIs for the mid-term plan include maintaining a minimum 30% equity ratio and 25% ROE to balance capital efficiency and financial health.

• Operational Progress

• GLM implemented quarterly earnings smoothing starting this fiscal year, and Q1 results landed roughly in line with internal projections, after uneven quarterly performance in prior years.
• The company already meets the Tokyo Stock Exchange Prime Market listing maintenance requirements: trading share ratio rose to 42.7% as of March-end, and floating market capitalization reached 13.2 billion yen as of mid-May.
• A partnership with Teradata Japan will combine both firms' core strengths to accelerate customer acquisition and DX business expansion.
• Pipeline acquisition for future fiscal years is progressing on schedule, including a new hotel project scheduled for delivery in 2026 that will be added to the asset portfolio.

• Shareholder Returns

• GLM maintains a core policy of 30% payout ratio and progressive dividends. The full-year dividend forecast is 72.5 yen per share, representing a 7.5 yen increase after adjusting for the April 2025 stock split.

Consolidated total revenue for Q1 FY2025 was 16.472 billion yen, a 300% increase year-over-year, and ordinary profit was 1.627 billion yen, a 4210% increase year-over-year (both all-time records).

1. Development Business (core real estate segment): 1,118 units (24 buildings) of sales contracts signed as of May 13, exceeding the full-year target of 1,100 units. Gross margin hit 16.8%, improving from the prior period.

2. Land Planning Business: 1 unit sold in Q1 in line with plan; 2 sales contracts signed as of May 13, against a full-year target of 18 units.

3. Renovation Business: 1 building sold and 1 building acquired in Q1 in line with plan. As of May 13, 2 buildings sold and 4 buildings acquired under contract, against full-year targets of 7 buildings sold and 10 buildings acquired.

4. DX Business: Announced a new strategic partnership with Teradata Japan in May 2025, with no material revenue contribution in the quarter.

• Full-year FY2025 guidance is maintained unchanged from the prior projection, with planned revenue of 72 billion yen (up from 64.482 billion yen in FY2024) and ordinary profit of 6 billion yen (up from 5.138 billion yen in FY2024). Management expects to hit the full-year plan based on current progress. • Full-year gross margin for the development business is projected to exceed the initial 13.1% target, following Q1's stronger-than-expected 16.8% gross margin. • Q2 FY2025 is projected to have 6 planned land planning sales, 1 additional planned renovation building sale (with one sale already contracted), and similar expense levels to Q1. Quarterly earnings are expected to remain broadly smoothed for the full year. • Management targets 100 billion yen in market capitalization by the end of the GLM100 mid-term plan period.

• Rising construction costs: Labor shortages from 2024 regulatory changes are driving continued construction cost increases, which could pressure profit margins depending on price pass-through progress and construction timing. Tighter new residential supply from delayed construction also creates a positive pricing effect for GLM's existing inventory. • Interest rate volatility: Long-term Japanese interest rates rose to near 1.6% in March 2025, and have traded around 1.3% since. While rate increases create downward pressure on real estate prices, the market has already priced in expected long-term rate hikes, and rising rents from inflation are supporting property values. Foreign investors still view Japanese real estate as an attractive investment per management surveys. • Foreign exchange volatility: Continued yen appreciation driven by shrinking US-Japan interest rate differentials and trade policy uncertainty has not weakened demand from foreign institutional investors to date, but management will monitor exchange rate movements closely. • US tariff policy uncertainty: Surveys of GLM's domestic and foreign investor base indicate that even if proposed Trump administration tariffs are implemented, no material change in Japanese real estate investment demand is expected at this time.

Q: With only 2 contracted sales out of the full-year 18 target for the land planning business at the end of Q1, progress looks very slow. How will management accelerate sales in coming quarters?

A: The land planning business has a longer transaction closing cycle, with most deals scheduled to close in the second half of the fiscal year. The current contracted count is in line with management's internal quarterly phasing plan, and the business remains on track to hit the full-year 18-sale target. Management will continue flexible decision-making based on profitability and capital efficiency to hit annual targets.

Q: What impact will potential new tariffs under the Trump administration have on GLM's business and investor demand?

A: GLM conducted a survey of its domestic and foreign investor base after tariff proposals emerged. The results showed that nearly all investors do not expect to change their Japanese real estate investment plans even if tariffs are implemented, so management currently sees no material risk to demand from this policy change. We will continue to monitor any shifts in investor sentiment as the policy develops.

Q: Will management upgrade the full-year earnings guidance given that the development business has already exceeded its full-year sales contract target in Q1?

A: While current sales progress is well ahead of the original plan, management maintains the current full-year guidance for now. This is because earnings recognition for real estate development is tied to project completion and closing, not just contract signing, and there remains uncertainty around future cost and market conditions. Management will revisit guidance if sustained stronger progress warrants an update later in the year.