7050.T

• Aggregate Cumulative Financial Performance
  • The 2026 April Fiscal Year third quarter cumulative consolidated revenue was 22.934 billion yen, a 66.5% increase year-over-year
  • Gross profit was 4.346 billion yen, a 68.6% increase year-over-year, with gross margin improving from 18.7% to 19.0%
  • Operating profit was 1.92 billion yen, a 145.5% increase year-over-year, with operating margin improving from 5.7% to 8.4%
  • Ordinary profit was 1.923 billion yen, a 148.6% increase year-over-year
  • Net profit attributable to parent company shareholders was 993 million yen, a 69.4% increase year-over-year
  • All profit and revenue lines significantly outperformed the prior-year period, extending strong performance from the first half of the fiscal year
• Quarterly Performance Trend
  • Q3 standalone revenue was 8.46 billion yen, a 65.0% increase year-over-year, with Q1 at 5.692 billion yen, Q2 at 8.78 billion yen, all three quarters significantly outperforming results from the prior two fiscal periods, establishing structural upward growth
  • Q3 standalone operating profit was 797 million yen, an 118.2% increase year-over-year, with Q1 at 239 million yen, Q2 at 884 million yen, all three quarters also outperforming prior two period results, extending structural profit growth
• Operating Profit Change Analysis
  • Positive drivers of profit growth included: 736 million yen from increased sales at the three core organic entities (Frontier International, Frontier Direct, Irial), 1 billion yen from increased sales at M&A-acquired group companies, and 33 million yen from improved gross profit margin
  • Negative factors included: 276 million yen from increased personnel costs due to group expansion, 77 million yen from increased retirement benefit costs due to accounting changes, and 169 million yen from other miscellaneous increases, resulting in total operating profit growing from 782 million yen in the prior year to 1.92 billion yen in the current period
• Roll-up M&A Strategic Progress
  • The company has completed 6 M&A transactions and 4 CVC investments to date as part of its core growth roll-up strategy
  • Group synergies have been realized, driving strong performance growth across both organic and inorganic business lines
  • ROE continues on an improving trend, projected to rise to 11.6% for the full 2026 April Fiscal Year
• Human Capital Investment Progress
  • The company is actively investing across recruitment, development, and engagement improvement phases: 40 new graduate hires were completed group-wide for the current fiscal year, and over 50 mid-career hires were added, with accelerated recruitment focused on highly specialized digital and creative talent
  • Training programs have been comprehensively overhauled: traditional year-based training was replaced with company-wide practical training including planning and marketing training, and training focused on liberal arts education is used to develop talent with strong imaginative capability
  • The company has implemented base salary increases for three consecutive periods and added new allowances to continuously improve employee benefits and boost engagement
• Balance Sheet Status as of end of January 2026
  • Total assets grew 1.774 billion yen from the end of the prior fiscal year to 16.256 billion yen, with current assets growing 1.32 billion yen to 13.182 billion yen, and cash and deposits increasing significantly to 9.174 billion yen
  • Total liabilities grew 797 million yen from the end of the prior fiscal year to 6.25 billion yen, driven by a 220 million yen increase in operating payables and a 240 million yen increase in unpaid corporate taxes
  • Net assets grew 977 million yen to 10.005 billion yen, with equity ratio declining 3.1 percentage points to 58.2%
• Order and Inquiry Pipeline Status
  • Total order and inquiry backlog as of January 31, 2026 was 5.096 billion yen, an increase of 710 million yen from 4.386 billion yen in the prior year, with growth in high-probability projects, and a broad base of projects across public and private entities including events, promotions, and exhibitions
  • Low-probability projects totaled 907 million yen, a decrease of 172 million yen from 1.079 billion yen in the prior year, indicating an overall improvement in the quality and conversion probability of the company's project pipeline

• Full-year 2026 April Fiscal Year guidance is maintained at the level published on December 15, 2025, as the purchase price allocation to assets and liabilities for NPU (consolidated since the second quarter) and the related amortization amount are still undetermined at the time of this earnings call, leading management to keep guidance at a conservative level
• The maintained full-year guidance is: 28.5 billion yen in total revenue (a 40.1% increase year-over-year), 1.8 billion yen in operating profit (a 40.9% increase year-over-year), 1.82 billion yen in ordinary profit (a 43.6% increase year-over-year), and 1.11 billion yen in net profit (a 26.7% increase year-over-year)
• The full-year dividend guidance is 63 yen per share, an increase of 13.5 yen from the prior fiscal year, which would be a new all-time high. This guidance already accounts for the stock split effective February 1, 2026. The company targets a consolidated payout ratio of approximately 50% as a baseline, with flexibility for large M&A transactions.

By industry segment, nearly all segments outperformed the prior-year period significantly. The sports and fashion segment saw revenue grow to approximately 8 times the prior-year period, driven by the addition of newly consolidated NPU to the group and strong growth in global luxury brand event and exhibition projects. The game and IP segment maintains sustained growth through its ongoing pop-up store operations, with projects increasing in size. The retail and home appliances segment sees sustained large-scale digital advertising projects from major retail clients. By client type, direct clients accounted for 48.6% of total revenue, up from 38.8% in the prior period, reaching nearly the company's 50% target for direct client revenue contribution.

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