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Strategic Portfolio Expansion

• The company continued to steadily implement business foundation strengthening measures for medium-to-long term sustainable growth, aligned with its September 2025 published business plan.
• Active advertising investment in new products and new categories to launch products added in the prior period was maintained, improving the overall product portfolio.
• Aurumtech was established in March 2025 to expand the business portfolio and build a new revenue base, with services officially launching in June 2025.

Core Product and KPI Progress

• The number of core products with monthly revenue over 10 million yen increased from 20 in Q1 to 21 in Q2. Growth in the number of core products has steadily delivered risk diversification effects, even as individual products face volatility from external factors like media and customer changes.
• The company has delivered stable earnings amid high external volatility by expanding the product portfolio, and aims to further reduce volatility and drive stable sales growth by converting in-flight new products to core products and expanding subsidiary sales.

New Product Milestone

• The new product Dora Scroll under the supported JOVS brand was released in January 2026. This is the first time Bleach has participated from the product planning stage, developing a high-performance model tailored to Japanese market needs. This deepened involvement reflects strong recognition of Bleach's support services, and has strengthened the company's strategic partnership with the JOVS manufacturer. Dora Scroll will be positioned as the main JOVS product to drive future sales growth.

Human Resource Investment

• 26 new graduate employees joined in April 2025, increasing the average number of marketers to 112. While new graduate training is largely complete, employees have not yet fully contributed to business results, so per-marketer revenue is currently at a relatively low level compared to historical trends.
• The company views this as a necessary period of human resource investment, drawing on its past track record of developing inexperienced new hires. The company expects faster growth as new hires become fully productive via targeted training, and will continue to actively hire talented personnel and invest in training alongside business expansion.

Balance Sheet and Financial Health

• Cash and deposits decreased by 1.244 billion yen, driven by 360 million yen in long-term debt repayment and 670 million yen in advance payments for Aurumtech product orders. Net cash (cash balance minus interest-bearing debt balance) as of the end of December 2025 stood at 6.21 billion yen.
• Inventory increased to 461 million yen compared to the prior period end, driven by product purchases for Aurumtech.
• Equity ratio is 73.4%, which management assesses as maintaining high financial soundness.

• Management maintains the existing growth strategy outlined in the prior full year earnings briefing, with no updated guidance revisions provided in this call. The company will focus resources on improving the existing business product portfolio, driving growth via Aurumtech's direct-to-consumer retail operations, and building a solid foundation for future business expansion.
• The company aims to accelerate the conversion of new products from lower ranks to core status, to speed up overall sales growth. Targeted improvements to existing product ROAS will also be pursued to boost profitability, offsetting the naturally lower ROAS of new products during the launch phase.
• Management expects the shift to direct online sales of Dora Scroll to increase average selling price, and drive future sales and profit growth for Aurumtech. Aurumtech will steadily increase the number of supported brands and client companies to expand its support domain and create new revenue opportunities.
• The company will accelerate the conversion of new products and new categories to core status via strengthened marketer training and AI-driven operational efficiency improvements, to offset the current slow pace of core product conversion.

1. Bleach (Parent Company Core Ad Business):

• Total parent advertising profit for the first half: 1.593 billion yen, a 3.3% decrease of 54 million yen year-over-year. Q2 standalone advertising profit fell from 870 million yen in Q1 to 720 million yen, driven by elevated ad spend on new products and categories. Q2 standalone total revenue grew by 20 million yen quarter-over-quarter, with growth in functional labeled foods and pharmaceuticals categories, offset by sales declines in beauty salons and recruiting categories. A-rank product sales reached 2.4 billion yen with 5 A-rank products, and total handled products increased to 57 products, with core products (monthly revenue over 10 million yen) growing from 20 in Q1 to 21 in Q2.

1. Aurumtech (Subsidiary Beauty Device Business):

• Q2 sales fell from 180 million yen in the prior quarter to 26 million yen, an expected decline driven by the transition from wholesale to direct online retail following acquisition of exclusive sales rights for the JOVS brand. The number of supported client companies increased to 4. Pre-launch marketing expenses were incurred for the new product Dora Scroll released in January 2026.

Consolidated Total:

• First half consolidated revenue: 8.734 billion yen, a 5.3% year-over-year increase of 439 million yen. First half consolidated operating profit was a loss of 10 million yen, a 196 million yen year-over-year decrease, from a 186 million yen profit in the prior year first half. Gross profit from Aurumtech's beauty device business increased by 23 million yen year-over-year, partially offsetting the core business profit decline.

• Individual products face inherent revenue volatility from external factors including changes in advertising media conditions, shifts in customer sales strategies, and changes to success-based commission rates tied to product demand cycles. This volatility has already driven sales declines in categories including beauty salons and recruiting in the most recent quarter.
• Core product conversion of new products is currently progressing slower than expected, due to external environment impacts and the longer lead time required to launch new products, so significant top-line growth from the expanded product portfolio has not yet been realized.
• Current operating losses are driven by large upfront investments in talent acquisition, training, and pre-launch marketing for new businesses, and these investments may not deliver the expected future revenue and profit growth.

No question and answer section was included in the provided transcript.