FreeBit Co.,Ltd. Q1 FY2026 earnings call

• Overall 1Q Performance

  • Consolidated revenue: 15.177 billion yen, up 14.2% year-over-year; operating profit: 1.687 billion yen, up 15.3% YoY; ordinary profit: 1.65 billion yen, up 13.7% YoY; net profit attributable to parent company shareholders: 1.062 billion yen, up 30.6% YoY. All core metrics achieved double-digit year-over-year growth.
  • The 30.6% net profit growth was amplified by the full 100% voting rights acquisition of GigaPrize, which reduced net profit attributable to non-controlling shareholders.
  • Revenue reached 25.3% of the full-year guidance target, and operating profit reached 27.7% of the full-year target, putting the company well ahead of plan for the full year.

• Long-Term Strategy & Positioning

  • Freebit is executing a 10-year plan from 2021 to 2030, with FY2026 (April 2026 term) falling as a midterm year within the SiLK VISION 2027 sub-plan. The core strategic focus is becoming a company that delivers real-world web3 implementation, centered on the keyword "location of trust".
  • The midterm SiLK VISION 2027 targets a compound annual growth rate (CAGR) of 7-10% for revenue and 13% CAGR for operating profit, with final targets of 63-70 billion yen in total revenue and 8 billion yen in operating profit. Current 1Q performance exceeds these CAGR targets.

• Operational & Strategic Initiatives

  • In 5G Infrastructure Support: The freebit MVNO Pack (data + SNS + voice) package for carriers continues to drive steady sales; the fixed-IP "Doko demo IP" service under freebit Business has growing customer counts; the newly launched freebit mobile Biz (January 2025) has gotten off to a strong start, with recurring revenue building steadily.
  • Investment in new growth drivers: The company invested a total of 110 million yen (0.11 billion yen) in Q1 in new growth initiatives, including web3-related projects based on the Portfolia web3 infrastructure platform, the StandAlone fan community platform, and the 5G Healthstyle segment.
  • SoftBank capital and business alliance: Announced in January 2025, the alliance covers four core collaboration areas. The company already recorded initial web3 development revenue from SoftBank in Q1, and collaboration on remaining areas is ongoing.
  • Group integration: FY2026's theme is "One freebit", focused on implementing sweeping structural reform to unify group operations, including joint procurement, joint sales, and joint technology/service development, after the full acquisition of GigaPrize. A value creation committee has been established with GigaPrize to drive this work.
  • Web3 transformation: The company is actively advancing its transformation into a web3-type Platformers Maker via its Portfolia platform, with multiple internal social implementation projects progressing and gradually taking shape, with plans to expand solutions to external partners.

• Balance Sheet Updates

  • Retained earnings increased due to strong quarterly performance. Cash and deposits decreased due to dividend payments and capital outlay for non-tendering shareholders in the GigaPrize takeover bid. Equity ratio increased 18.1%.
  • Integrated group operations have driven improved selling, general and administrative expense efficiency, supporting steady operating profit growth.

1. 5G Infrastructure Support Business: Segment profit reached 498 million yen (0.498 billion yen), with a 53.3% year-over-year profit increase. Growth was driven by strong expansion of B2B2B/B2B2C mobile services, while fixed network services continued to see declining usage and shared costs increased from the second half of the prior fiscal year. This segment accounts for approximately 32.8% of total consolidated profit.
2. 5G Lifestyle Support Business: Segment profit reached 917 million yen (0.917 billion yen), with a 19.3% year-over-year profit increase. Growth was led by GigaPrize's 5G Homestyle ISP service for multi-unit dwellings, which reached a cumulative total of 1.377 million serviced units with steadily growing recurring revenue. The segment also recorded initial web3 development-related revenue from SoftBank in the quarter, while DTI-led consumer fixed network services continued to decline and web3 investment expenses were incurred. This segment accounts for approximately 60.5% of total consolidated profit.
3. Enterprise & Creator 5G DX Support Business: Revenue grew year-over-year, driven by increased sales in Full Speed Group's EC-related business and expansion of affiliate services in domestic and global markets. The business prioritizes revenue expansion as its primary goal and has incurred upfront investment, leading to a year-over-year decline in segment profit, but remains on track for full-year revenue and profit growth.

• The company maintains its previously announced full-year FY2026 guidance of 60 billion yen in consolidated revenue and 6.1 billion yen in consolidated operating profit. 1Q performance is tracking above the planned progress rate toward these targets.
• Management expects performance to continue in line with original projections from the second quarter onward, with all segments positioned to deliver solid results for the full year.
• The long-term SiLK VISION 2027 targets (63-70 billion yen revenue, 8 billion yen operating profit, 7-10% revenue CAGR, 13% operating profit CAGR) are maintained, and current 1Q progress is exceeding these long-term CAGR targets.
• The enterprise & creator 5G DX support business is on track to achieve full-year revenue and profit growth, despite upfront investments that reduced Q1 segment profit.

• Fixed network services in both the 5G Infrastructure Support and 5G Lifestyle Support segments continue to experience declining usage, creating ongoing downward pressure on revenue from these legacy business lines.
• Shared corporate costs increased starting in the second half of the prior fiscal year, driven by talent strengthening investments, which creates margin pressure for the 5G Infrastructure Support segment.
• Web3-related new growth initiatives are still in early investment stages, requiring ongoing capital outlay that near-term pressure on segment margins, and there is no guarantee these investments will deliver expected revenue and profit growth over the long term.
• The enterprise & creator 5G DX segment's focus on revenue expansion requires upfront investment that has reduced near-term segment profit, and there is risk that expected future revenue growth will not materialize as planned.

No question and answer section was included in the provided transcript.