4256.T

• Core Business Growth

  • Total contracted stores grew 16.2% year-over-year to 22,193, with strong growth from Kanzashi beyond hair salons, matching demand from eyelash extension and nail salons in the broader beauty segment
  • Customer churn rate remains very low at 0.67%, following a record low 0.64% in Q1; ~40% of churn is due to unavoidable store closures, and the company is targeting further gradual churn reduction via service improvements
  • ARPU is flat quarter-over-quarter, which is aligned with the company's stated top priority of expanding contracted store count this fiscal year
  • EBITDA grew 33.3% quarter-over-quarter, with an EBITDA margin of 29.2%, in line with management expectations after Q1 had one-time costs from large trade show participation

• New Product Development

  • Added a new check-in lottery feature to BM Smart Mirror, allowing customers to scan a QR code for entry to win promotional products, adding gamification to improve user experience
  • Launched menu and coupon data integration between BeautyMerit (reservation management system) and SalonAnswer (POS accounting system), eliminating double data entry at checkout, reducing payment errors, and streamlining salon workflow from booking to checkout
  • Officially launched BM Smart Mirror in November 2025 after a beta testing period with salon partners; key features include targeted high-relevance ad delivery for beauty products, automated in-store messaging telops, and integrated information sharing that leverages the company's existing reservation and CRM systems to organize customer and appointment data

• Shareholder Initiative

  • Announced the introduction of a new shareholder benefit program, set to launch for shareholders of record at the end of the 2026 March fiscal year; eligible shareholders will receive 16,000 yen in digital gift benefits, which equates to an 8.2% yield based on the closing price as of November 7, 2025

• Workforce Strategy

  • Total headcount decreased by 1 person quarter-over-quarter, with 3 fewer sales staff at Synd; this is planned natural attrition, as the company is prioritizing resource allocation to employee education over large-scale new hiring this fiscal year

• Full-year revenue progress through the first half is 47.3%, which management considers on track, as the company's subscription business model typically sees faster progress in the second half of the fiscal year
• Full-year EBITDA progress through the first half is 49.3%, which is in line with plan; the lower progress ratio compared to the prior year reflects planned one-time investment in Q1 and a planned profit build-up in the second half, with no expected deviation from full-year targets
• Pacific Porter's EBITDA and operating profit are running ahead of plan, and the company will execute additional sales capability expansion investment from Q2 onward, resulting in full-year results still expected to land in line with original forecasts
• The full-year result will also absorb the planned cost of the new shareholder benefit program at year-end, and management expects to hit full-year targets as planned

1. BeautyMerit: 9,171 contracted stores, ARPU of 15,349 yen. Revenue contribution is not explicitly broken out, drives core higher-value subscription revenue for the company. 2. Kanzashi (operated by Pacific Porter Inc.): 13,022 contracted stores, ARPU of 4,194 yen. Kanzashi has delivered notable profit contribution to the group, with contracted store growth outperforming initial expectations. 3. BM Smart Mirror: Newly launched product, no material revenue contribution reported this quarter. Consolidated group totals: Q2 revenue is 620 million yen (13.5% year-over-year growth), EBITDA is 180 million yen (17.2% year-over-year growth), total contracted stores exceed 22,000 at 22,193 (16.2% year-over-year growth), annual recurring revenue (ARR) is 2.34 billion yen (13.2% year-over-year growth), gross profit is 481 million yen with a 77.5% gross margin, operating profit is 157 million yen (first quarter of over 100 million yen in operating profit since the 2023 March fiscal year).

• Industry-specific structural risk: the market is dominated by small, independent beauty businesses, so unavoidable churn from store closures is a persistent factor, making it extremely difficult to reduce churn below 0.5%
• Growth slowdown: year-over-year revenue growth in Q2 moderated compared to Q1, and subscription revenue growth also saw a slight sequential decline
• Near-term product uncertainty: BM Smart Mirror is newly launched, and the timeline for meaningful revenue contribution and profitability has not been confirmed
• Low stock liquidity: the company has a large proportion of insider share ownership by executives, resulting in limited free float and low trading liquidity that discourages institutional investor participation

Q: How does Synd plan to scale sales of BM Smart Mirror, and what is the expected timeline for monetization? / A: After the official November 2025 launch, management is currently building out the sales network by partnering and coordinating with beauty industry dealers and trading companies that have an existing customer base in the salon sector. Management will first gather customer demand feedback through these partner channels before finalizing the level of investment for expansion, and has not announced a fixed monetization timeline at this stage.

Q: Why did Synd choose a digital gift format for the new shareholder benefit program? / A: Management targeted the program at individual investors because the company currently has very limited free float, which makes it difficult for institutional investors to participate. With limited financial resources for shareholder returns, a digital gift benefit allows management to deliver a higher effective yield than a traditional dividend, which is designed to attract more individual shareholders, increase trading volume and liquidity, and eventually create a more attractive environment for long-term institutional investment.

Q: Does the recent reduction in sales staff create a risk to future growth? / A: The sales headcount reduction is planned natural attrition, as the company shifted its focus from adding headcount to strengthening employee education and upskilling this fiscal year. Contracted store growth remains on track, the education build-out is progressing smoothly, and management sees no material risk to full-year growth from the current headcount structure, with upside expected as younger employees mature in their roles.