FRONTIER INTERNATIONAL INC. Q1 FY2026 earnings call

• Overall Financial Performance: The first quarter (May-July 2025) delivered 5.692 billion yen in total revenue (+44.2% YoY), 1.055 billion yen in gross profit, 0.239 billion yen in operating profit (+179.5% YoY), and 0.143 billion yen in net income. Growth was driven by solid order intake in the core event business, revenue recognition for a portion of Osaka-Kansai Expo projects, the recovery of promotional events, and the first full quarter of consolidation for Cinebridge and Max Produce. All consolidated subsidiaries achieved profitability. - Accounting Change Impact: A change in accounting method for retirement benefits from the simplified method to the principle method (driven by increased employee headcount) increased selling, general and administrative expenses by 67 million yen YoY in Q1, a one-time Q1-specific profit drag. Even with this headwind, strong top-line growth and subsidiary contributions led to large profit expansion. - Balance Sheet Status: As of end-July 2025, total assets were 13.569 billion yen, a decrease of 0.912 billion yen from the prior fiscal year end, driven primarily by a 0.902 billion yen decrease in cash and cash equivalents. The equity ratio increased 2.1pp to 63.5%, maintaining a high level. - M&A Update: On August 28, 2025, the board of directors approved a resolution to acquire shares of NPU Co., Ltd. to make it a subsidiary. The company will promptly disclose any material information as it arises. - Order Backlog: As of end-July 2025, order backlog increased 21.5% YoY, with active order inquiries and intake expected to continue into the second quarter and beyond.

1. Core Event Segment: Total consolidated Q1 revenue is 5.692 billion yen. Osaka-Kansai Expo related revenue contributed 0.232 billion yen, accounting for ~4.1% of total Q1 revenue. New consolidated subsidiaries Cinebridge and Max Produce (acquired September 2024) contributed 0.674 billion yen in revenue and 0.063 billion yen in operating profit, accounting for ~11.8% of total Q1 revenue. All consolidated subsidiaries (Gaia Communications, Cinebridge, Max Produce) achieved full profitability in the quarter. By industry: The luxury goods and cosmetics sector grew due to large pop-up events hosted by prominent influencers; the other organizations sector grew due to Osaka-Kansai Expo related projects; the information and communications sector had a revenue decline due to the absence of a large unique project that existed in the prior year quarter. By client type: Transactions with major three large advertising agencies expanded steadily, and direct client development progressed led by the three consolidated subsidiaries.

• Management maintains the full-year 2026 April fiscal year guidance unchanged from the initial plan: full-year revenue is projected at 23 billion yen (+13.1% YoY), and full-year operating profit is projected at 1.55 billion yen. - The one-time Q1-specific accounting change for retirement benefits does not impact the full-year guidance. - Management is conducting careful analysis of the impact of the newly acquired NPU subsidiary on group performance, and will update guidance if a material change is identified.

No explicit material risks or operational failures were discussed in the provided transcript.

Q: What were Q1 2026 April fiscal year revenue results for Osaka-Kansai Expo related business, and what is the Q2 outlook? / A: Q1 2026 April fiscal year Osaka-Kansai Expo related revenue was 0.232 billion yen. As of the call, the company has already received 0.454 billion yen in orders for Q2 2026 April fiscal year for Expo related work.

Q: What was the earnings contribution from Cinebridge and Max Produce, acquired in September 2024, in Q1 2026 April fiscal year? / A: The two subsidiaries contributed a total of 0.674 billion yen in Q1 revenue and 0.063 billion yen in Q1 operating profit, driving strong overall group profit growth in the quarter. This is the first full quarter the two companies are included in consolidated group results.

Q: Why did order backlog grow significantly as of end-July 2025? / A: While large events like the Osaka-Kansai Expo draw much attention, the main driver of strong backlog growth is sustained active demand for corporate promotional events. This trend was already visible in Q1 from growth in the luxury goods and cosmetics sector driven by large influencer-hosted pop-ups, and active demand is expected to continue after Q1.