4838.T

• Company Overview & Mission • Formed in April last year via the merger of listed companies Space Shower Network and SKIYAKI, operated under a co-CEO joint representative structure, with 355 consolidated employees and 5 main consolidated subsidiaries. • Mission: "EMPOWER ARTISTS & CREATORS, ENRICH FAN EXPERIENCE", with two core segments: Content Segment (creates and distributes original content to users, focused on cultural contribution) and Solution Segment (provides end-to-end support solutions to help artists sustain long-term activity). • Core corporate culture inherited from Space Shower Network: prioritize discovering and nurturing undiscovered new talented artists and creators.

• 2nd Quarter and First Half Results • 2nd Quarter standalone: Revenue 6.254 billion yen (up 10.5% YoY), operating profit 733 million yen (more than double YoY), with strong growth partially driven by the absence of 160 million yen in typhoon-related ticket refunds that hit the prior year period. • First half cumulative: Revenue 11.9 billion yen (up 12.5% YoY), operating profit 1.3 billion yen (up 130.4% YoY). 750 million yen of total profit growth came from: 289 million yen from the live event business (including elimination of prior year typhoon losses plus organic growth), 181 million yen from strong artist management/label/agent activity, 100 million yen from platform business growth from paid member growth, and 120 million yen from the elimination of prior year merger integration one-time costs, plus 450 million yen in organic operating growth beyond the elimination of one-time prior year headwinds.

• Key Operational Highlights • Content Segment: 30th anniversary SWEET LOVE SHOWER rock festival completed successfully with no weather disruptions; fast-growing HIPHOP festival POP YOURS expanded to Osaka for the first time, and will expand to 3 days at a larger Makuhari Messe venue for its 5th anniversary next spring; artist STUTS sold out a 12,000-capacity solo show at K Arena Yokohama, with its Pocari Sweat CM tie-in track driving strong streaming growth; label artist Humbert Humbert was selected for NHK Kohaku Uta Gassen following its asadora theme song placement, which is expected to drive large streaming growth; Infinia's @Home Cafe opened a new Nagoya Osu main store, growing visitor count and expanding participation in external industry events and CSR activities. • Solution Segment: SKIYAKI fan club platform hit 1,453,000 paid members (up 144,000 YoY) and added 359 new fan club services YoY; launched a new joint owned media division SPACE SHOWER ARTIST COLLECTIVE to build innovative new artist fan club models; Distribution business (SPACE SHOWER FUGA) saw domestic streaming grows 7.2% YoY to 2.68 billion plays and overseas streaming grows 84.2% YoY to 1.62 billion plays, driven by hits from STUTS and the 100 million play milestone for Suchmos' STAY TUNE; Creative Solutions (Space Shower Entertainment Producing) maintains steady music video production demand and sees strong ongoing client demand for beverage brand event production and booking.

• Core Growth Strategies • Group-wide strategy: Targets spiral synergies between Content and Solution segments: growth of popular artists in content drives distribution and platform revenue in solutions, while solution capabilities create more external content acquisition opportunities, creating a self-reinforcing growth cycle. • Platform Solution: Serves all fan club sizes from large-scale (customizable Bitfan Pro) to small-scale/individual (SaaS-based Bitfan accessible to any creator with 1+ paid member), with continued steady development to improve accessibility. Market potential remains large, as both the company and competitors see consistent paid member growth. • Distribution Solution: Core priority is overseas sales expansion, with strategic focus on business development with game/anime IP holders that have high global recognition; leverages joint venture partner FUGA's capabilities to provide data marketing consulting for clients, which is a key competitive differentiator. Total stream growth hit 31% from 2022 to 2025, with overseas share growing from 26% to 37%. • Music Content Strategy: Operates a differentiated "content ecosystem" cycle: discover new unproven artists via multiple touchpoints (media, labels, live houses), nurture them via programming and live opportunities to build recognition and grow their audience, then scale to large-scale events and profitable business as artists mature, which creates more resources to discover new talent, generating a sustainable cycle that competitors cannot easily replicate. • Entertainment Cafe Strategy: The segment has long-term untapped demand, with @Home Cafe as the leading brand with strong brand recognition; plans to continue opening new stores in high-potential areas (Akihabara/Ikebukuro in Tokyo, Namba Osaka, with potential future expansion to Fukuoka Hakata and Sapporo), to sustain 10-year growth that has seen revenue grow 4.5x since 2015.

• Shareholder Return • Commits to a progressive dividend policy targeting a 35-45% payout ratio, per the medium-term management plan; Increased full-year dividend from 16 yen to 20 yen following the upward earnings revision, aligned with this policy. • Completed the prior 200 million yen share repurchase program (96.3% utilized by October), approved a new 12-month 200 million yen share repurchase program starting December 2025.

• Full-year FY2026 guidance was revised upward after first half results already exceeded the original full-year operating profit target. The revised guidance is: 22.0 billion yen total revenue (up 4.8% from original guidance), 1.6 billion yen operating profit (up 23.1% from original guidance), with all other profit/EBITDA targets also revised upward correspondingly. • The revised full-year FY2026 results are already near the original medium-term target for FY2028 (24.0 billion yen revenue, 1.6 billion yen operating profit), with EBITDA already exceeding the original FY2028 target. The company will announce revised medium-term management plan targets alongside the full-year FY2026 results release. • The company maintains its original medium-term dividend policy through FY2028: progressive dividends with a 35% to 45% target payout ratio, with no planned changes to this framework.

For the cumulative first half (ending 2nd quarter), total consolidated revenue was 11.9 billion yen, split between two main segments: 1. Content Segment: Total revenue contribution of 54.4% of the total. Within this segment: Live & Content sub-segment grew revenue 700 million yen year-over-year, driving most of the segment's growth, and accounted for the majority of the segment's 500 million+ yen year-over-year increase in segment profit; Media (paid broadcasting) sub-segment continues a gradual declining revenue trend; Entertainment Cafe sub-segment grew sales following new store openings, with 232,000 visitors in the 2nd quarter (up 14.8% YoY), but upfront investment for new store expansion kept profits flat year-over-year. 2. Solution Segment: Total revenue contribution of 45.6% of the total. Within this segment: Total revenue grew 600 million yen year-over-year, with Fan Club Platform sub-segment contributing 200 million yen of growth and Distribution sub-segment contributing 400 million yen of growth. Total segment profit grew 200 million yen YoY to 275 million yen, with roughly half of the profit growth from SKIYAKI (platform business) and most of the remainder from the distribution business. At the major subsidiary level: Space Shower Network (Content Segment) grew operating profit more than 600 million yen YoY and led overall group profit growth; SKIYAKI grew operating profit 100 million yen YoY; Infinia (Entertainment Cafe) saw flat YoY results due to upfront investment for new Nagoya store opening.

• Profit seasonality: Large flagship live festivals are concentrated in the first half of the fiscal year, leading to a strong profit bias toward the first half, with artist management/label revenue also fluctuates year-to-year based on tour and release timing that is difficult to smooth. • New large event development requires coordination with venue availability and market conditions, so timing of new events to reduce seasonality cannot be guaranteed. • The synergies between the two merged business segments have not yet reached full maturity, and the full benefit of cross-segment synergies has not yet been fully realized as of the second quarter.

Q: Why has the stock price remained sluggish despite the strong upward earnings revision? What is the company's view on this? / A: Management notes that the first quarter strong results already drove a large stock price increase, so the second quarter upward revision was largely priced in by the market. The broader entertainment sector also sees this trend: many firms hitting record profits but seeing stagnant stock prices. Management also acknowledges that the lower expected second half growth has created uncertainty for investors, and the company intentionally took a cautious approach to guidance amid near-term visibility challenges for content business. Management states the core solution is to deliver sustained solid earnings growth, and will focus on hitting and exceeding guidance in the second half to drive shareholder value. (Total characters: 631)