Ateam Holdings Co.,Ltd. Q1 FY2026 earnings call

• Overall Consolidated Performance: Total Q1 revenue is 5.529 billion yen, adjusted EBITDA is 287 million yen, ordinary profit is 234 million yen, and quarterly net profit is 295 million yen. Revenue and adjusted EBITDA saw slight year-over-year and quarter-over-quarter decreases, but profit progress is on track against full-year guidance, meeting management expectations. The high net profit progress comes from a gain on the sale of Ateam Finase shares.

• Strategic M&A: Completed the acquisition of 100% of Signity Co., Ltd. for 1.05 billion yen, funded entirely via bank borrowing as part of growth-focused strategic investment. Signity operates the B2B SaaS web push notification service PUSH ONE, which enables app-free push notifications to improve website user revisit rates and conversion rates with a recurring monthly subscription model. Expected synergies include: 1) serving as an accessible entry product to acquire new clients for Ateam's sales growth support business, 2) acting as a cross-sell product to enhance existing clients' customer acquisition capabilities and expand Ateam's digital marketing service offering.

• Portfolio Optimization: Completed the share transfer of subsidiary Ateam Finase, operator of the Navi Navi Hoken insurance agency business, to Sasuke Financial Lab. This transaction is aligned with the medium-term management plan, and aims to reduce business risk and volatility, optimize the business portfolio, and maximize the business value of the insurance agency operation.

• Entertainment Business Update: Announced the title of the new collaborative mobile game with Sanrio, Fragaria Memories Color of Wishes, the first mobile game title in the Fragaria Memories knight fantasy media mix project. This move supports management's strategy to reduce volatility in the entertainment segment.

1. Digital Marketing Segment: Revenue of 4.64 billion yen, adjusted EBITDA of 492 million yen, operating profit of 493 million yen. This segment contributes 83.9% of total consolidated revenue. Performance was a decrease in revenue but an increase in profit year-over-year and quarter-over-quarter, as the business prioritized profit protection. 2. Entertainment Segment: Revenue of 888 million yen, adjusted EBITDA of 36 million yen, operating profit of 36 million yen. This segment contributes 16.1% of total consolidated revenue. The segment maintained overall profitability despite a year-over-year profit decrease driven by the end of some partnership contracts due to external factors.

• Full-year FY2026 consolidated guidance is maintained from prior announcements: revenue of 24.5 billion yen, adjusted EBITDA of 1.5 billion yen, EBITDA of 1.3 billion yen, operating profit of 900 million yen, ordinary profit of 900 million yen, and net profit of 600 million yen.
• Full-year dividend guidance is set at 28 yen per share, an increase from the prior year's 22 yen per share. Dividends will be split into two 14 yen per share installments (interim and final), resulting in a projected payout ratio of 86.6%.
• The company remains on track to meet its medium-term (FY2025-FY2028) shareholder return targets: total shareholder return of 4 billion yen to 5 billion yen, and an average total return ratio of 100%, supported by the newly introduced progressive dividend policy.
• The popular shareholder benefit program for holders of 5 or more units of Ateam stock, which provides 20,000 yen in QUO cards annually split into two installments, is maintained to improve share liquidity and investment attractiveness.

• In the Digital Marketing segment, intensifying customer acquisition competition in the used car referral service (within the automotive-related media business) has driven increased advertising costs and reduced profit for this sub-business.
• Existing entertainment titles are in a continuing gradual downtrend, though the rate of decline remains very small.
• Some entertainment segment partnership contracts ended due to external factors, leading to a year-over-year profit decrease for the segment in Q1.

Q: What expectations does Ateam have for the newly acquired Signity? / A: Signity's PUSH ONE service supports user return and conversion improvement for website operators, addressing a consistent, cross-industry demand for digital customer acquisition. The low-cost, easily adoptable service works well with existing advertising strategies, making it ideal for building initial connections with new clients and expanding new customer acquisition. It also works as a strong cross-sell product for existing clients, allowing Ateam to expand the breadth of its digital customer acquisition support offerings.

Q: Why did Ateam use bank borrowing to fund the Signity acquisition, instead of other financing methods? / A: The bank borrowing aligns with Ateam's previously published financial strategy focused on optimizing capital structure. That public strategy targets reducing cost of capital via leverage and compressed shareholder equity, alongside clear capital allocation for growth investment and shareholder returns. This transaction is a direct implementation of that capital optimization policy.

Q: Is the acquisition price for Signity reasonably valued? / A: After accounting for planned cost cuts post-acquisition and Signity's 2025 business growth, the acquisition price represents an EV/EBITDA multiple of roughly 6x. This multiple falls within the generally accepted reasonable range for comparable transactions, so Ateam has confirmed the valuation is appropriate.