FreeBit Co.,Ltd. Q2 FY2026 earnings call

Overall Consolidated Performance

• All key metrics achieved double-digit year-over-year growth: total revenue reached 30.799 billion yen (+15.7% YoY), operating profit reached 3.463 billion yen (+14.5% YoY), ordinary profit reached 3.308 billion yen (+7.5% YoY), and net income attributable to parent company shareholders reached 2.269 billion yen (+28.4% YoY). Performance is ahead of the compound annual growth rate (CAGR) targets set in the mid-term SiLK VISION 2027 plan, and on track to meet full-year guidance.
• The 100% full acquisition of GigaPrize (voting rights) reduced non-controlling interests, driving the larger than revenue growth increase in net income. One-time special gains and losses from investment partnership liquidation and impairment losses were also recorded in the period.
• Growth investment for new drivers has already been expensed in operating profit: the company invested 0.11 billion yen in Q1 and 0.132 billion yen in Q2 in web3-based projects including the StandAlone platform and 5G Healthstyle.
• Balance sheet improvement: Retained earnings increased, net worth recovered to over 10 billion yen, interest-bearing debt is being reduced, and the equity ratio reached 20.3%.

Strategic Initiatives

• The company is targeting to become a web3-native implementation company under the SiLK VISION 2027 mid-term plan. A partnership with SoftBank has launched, with ongoing progress on web3 technology proof of concept (PoC), joint smartphone service development, joint procurement of cost-competitive network lines, and planning for mobile sales promotions and discounts.
• Cross-segment new initiative: The Freebit Shareholder DAO, a web3-focused stakeholder community for shareholders, added a new benefit of up to 2x points for the Freebit Premium Premium Club via the TONE Coin point system. Since the July announcement, shareholder participation has increased sharply, driving growth in the number of nodes supporting the company's web3 infrastructure.

New Product/Service Launches

• 5G Lifestyle Support: GigaPrize began test deployment of digital signage for multi-unit dwellings in partnership with group company Clyde, as part of efforts to create new cross-group value.
• Corporate & Creator 5G DX Support: The StandAlone fan community building service for the 5G and web3 era grew registered app members 46.7% year-over-year. Fullspeed launched a new end-to-end TikTok Shop support service covering everything from account opening to PR planning.

1. 5G Infrastructure Support Business: Segment profit increased 45.3% year-over-year to 1.001 billion yen. Growth is driven by expanding mobile service subscriptions, with steady growth in recurring revenue building a stable earnings base. The high-margin "data + SMS + voice" bundle accounted for 59.1% of sales for the freebit MVNO Pack offering, and direct-to-corporate freebit Business saw strong subscriber growth following increased marketing investment, partially offset by declining fixed network service usage and higher shared costs from talent expansion.
2. 5G Lifestyle Support Business: Segment profit increased 21.9% year-over-year to 1.995 billion yen. Growth is led by GigaPrize's 5G Homestyle ISP service for multi-unit dwellings, which added 64,000 units in the first half of the fiscal year, hitting 48.0% of the full-year target with steadily growing recurring revenue. This segment contributed the largest share of total segment profit at ~51% of aggregate segment profit for the half period.
3. Corporate & Creator 5G DX Support Business: Revenue increased 20.5% year-over-year, driven primarily by growth in domestic affiliate services from the Fullspeed Group. The segment is actively pursuing upfront growth investment including the opening of overseas locations, but is on track to meet its full-year budget targets.

• Full-year 2026 April Term performance is tracking well: half-year revenue hit 51.3% of full-year guidance, and half-year operating profit hit 56.8% of full-year guidance, with both ordinary profit and net income also exceeding 50% of full-year targets. Management expects all segments to meet full-year projections.
• For the mid-term SiLK VISION 2027 plan (final fiscal year 2027 April Term), management maintained the operating profit target of 8 billion yen and revised upward the revenue target from 63 billion yen to 70 billion yen, incorporating contributions from new growth drivers. The plan targets a revenue CAGR of 7-10% and an operating profit CAGR of 13% through the final year.
• Fiscal 2026 April Term is the midpoint of the SiLK VISION 2027 plan. Under the "One freebit" initiative, management is focused on building group-wide integrated management, joint procurement, joint sales, and joint technology/service development structures to hit the 2027 targets.

The provided transcript does not contain explicit discussion of material business risks, operational failures, or downside risk factors. The only headwinds mentioned are contained within segment operations: declining fixed network service usage and higher shared costs for talent expansion in the 5G Infrastructure Support Business, which were more than offset by mobile service growth.

The provided transcript does not include a transcribed question and answer session from the earnings call.