Bewith,Inc. Q3 FY2026 earnings call

Overall Performance

• The company has executed a short-term recovery plan since the start of the fiscal year, delivering a strong start to the second half. The third quarter standalone results achieved year-over-year revenue and profit growth, after 9-month cumulative results still show year-over-year declines in top and bottom line. Total cumulative 9-month revenue was 26.919 billion yen (in line with plan), and cumulative operating profit was 976 million yen (exceeding plan). Q3 standalone revenue was 9 billion yen, up from 8.8 billion yen year-over-year; Q3 standalone operating profit was 450 million yen, up sharply from 230 million yen year-over-year, with operating margin largely recovered to H1 2025 levels.

Short-Term Recovery Plan Execution

• Total Seat Optimization: Site consolidation to align capacity with demand was completed as planned in the first half. Fixed cost reduction of tens of millions of yen per quarter began materializing in Q3, and site utilization has improved from prior low levels. Management will continue to drive further utilization and profitability improvements from new and existing client seat growth.
• **Indirect Labor Cost Optimization: Personnel reallocation completed in the first half has delivered ongoing cost savings in Q3, reducing SG&A. Efforts combined process review, digital/AI adoption, and reallocating indirect staff to frontline roles, with reallocated staff now fully productive in frontline roles. Indirect labor cost is expected to remain at appropriate levels in Q4.
• **Omnia LINK Sales Capability Building: Sales and operations headcount for external Omnia LINK sales has been gradually expanded since April 2025. This has driven steady growth in the number of proposals (including large projects), and contributed to the Q3 backlog growth. Management will continue to build sales capability via workforce upskilling to drive further Omnia LINK expansion.

Operational KPIs

• The number of supervisors/managers has decreased even as Q3 revenue grew year-over-year, reflecting improved efficiency from upskilled managers with better AI and DX capabilities. Operator headcount decreased after the year-end busy season, but turnover remains at low stable levels due to retention initiatives, supporting stable personnel operations.

New Product & Service Launches

• AI Operator for Omnia LINK: The company added a new AI operator feature to its Omnia LINK platform, after proving effectiveness in internal testing and proof of concept. The company will roll the feature out to existing client operations and begin offering it to new clients.
• AI-Ready Service: This new service helps clients address the common barrier to effective AI adoption: unstructured, scattered internal data (manuals, FAQs, conversation logs). AI-Ready Service structures scattered client data to create a usable AI-ready data foundation, leveraging the company's internal AI expertise to support client practical AI adoption.
• Customer Harassment Countermeasure Service: The new end-to-end service supports clients in developing policies, procedures, and training for customer harassment response. Leveraging the company's frontline operations experience, it splits response into rule-based and judgment-based categories, supports building sustainable operational frameworks aligned with regulatory risk requirements, and helps clients move beyond reliance on ad-hoc individual response.

Prime Market Listing Maintenance

• At the end of the prior fiscal year, the company did not meet the Tokyo Stock Exchange Prime Market trading capitalization requirement. Management has made meeting this requirement a top priority. The current share price has traded at higher levels than the prior year, and the company is on track to fully meet the requirement assuming outstanding share counts remain unchanged from the prior year end.

1. Contact Center & BPO Segment: Cumulative 9-month revenue is 25.89 billion yen (total cumulative revenue 26.92 billion yen, accounting for ~96.2% of total revenue). Despite a 1.36 billion yen negative impact from the scaling down of a large public sector contract (in line with initial forecasts), the segment grew revenue 740 million yen from new client acquisitions and existing client expansion. By industry: Public sector saw year-over-year revenue decline (in line with plan); Lifeline sector is slightly behind plan due to reduced volume on some contracts; Manufacturing and other sectors are on plan; Distribution sector is on plan; Information and communications sector saw large year-over-year growth driven by major carrier client expansion and growing demand for AI/data-enabled helpdesk and sales support services; Financial sector exceeded plan and grew year-over-year, capturing new demand for regulatory compliance work including fraud response for securities firms and new lease accounting standard support. For the third quarter alone, the segment's revenue was 8.6 billion yen (of the 9 billion yen total Q3 revenue), a year-over-year increase from the prior year's 8.46 billion yen. 2. Omnia LINK External Sales Segment: Cumulative 9-month revenue is 1.03 billion yen, against a full-year plan of 1.31 billion yen, progressing on track. Q3 revenue was 420 million yen, boosted by initial revenue recognition from a large client shipment that originated in Q2. Annual Recurring Revenue (ARR) reached 1.34 billion yen, a 52.4% year-over-year increase driven by the launch of large client projects. Total licenses at end-Q3 stood at 5,325: Q3 saw a net increase after a 200 license reduction from one client was offset by 250 new licenses from new shipments. Backlog grew from ~250 licenses at end-Q2 to ~600 licenses at end-Q3. Average Revenue Per User (ARPU) is growing due to increased option adoption on large new client projects. Omnia LINK accounts for ~3.8% of total 9-month cumulative revenue.

Management maintained its prior full-year fiscal 2026 plan, with Omnia LINK external sales on track to hit its 1.31 billion yen full-year revenue target. Operating profit is tracking above plan driven by earlier-than-expected materialization of cost savings from the short-term recovery plan. Management expects to maintain appropriate indirect labor cost levels in the fourth quarter, and anticipates continued growth in Omnia LINK licenses and revenue driven by a growing backlog of orders. The company remains on track to meet the Tokyo Stock Exchange Prime Market listing maintenance requirement by the end of the current fiscal year. While management sees clear progress from the short-term recovery plan, it notes that full recovery is still ongoing, and will continue executing to drive further growth beyond the current fiscal year.

• The ongoing scaling down of a large public sector contract continues to create a material drag on overall revenue, with a 1.36 billion yen negative impact on cumulative revenue year-to-date, in line with initial forecasts.
• Lifeline sector segment performance is slightly behind plan due to reduced business volume on existing contracts.
• The company was not in compliance with the Tokyo Stock Exchange Prime Market listing maintenance requirement for tradable market capitalization as of the prior fiscal year end, and continued share price weakness could result in non-compliance.
• One existing client reduced its Omnia LINK license count by 200 licenses in Q3, highlighting client concentration and churn risk.

The provided transcript does not include a Question and Answer section, so there are no exchanges to summarize.