GENOVA,Inc. Q2 FY2026 earnings call

• Core Business Performance Updates • Total consolidated revenue for the second quarter was 4.98 billion yen, a 3% year-over-year decrease, with an operating loss of 40 million yen and a net loss of 10 million yen. Both the Medical Platform and Smart Clinic businesses showed recovery signals after a growth slowdown in the prior quarter, with Smart Clinic delivering its highest operating profit in the past 12 months. • NOMOCa AI call, an AI-powered phone automation solution for clinics, saw significant growth in the first half of the fiscal year, with 181 orders and 93 delivered units, bringing the delivery rate up to 51%. A new AI solution department improved delivery timelines, and new functionality added increased customer satisfaction and lower post-delivery churn, supporting future recurring revenue growth. • ASANO, the newly acquired dental distribution subsidiary, launched operations on July 1, 2025, and has built a stable distribution network with major suppliers, with transaction recovery progressing steadily per plan.

• Organizational and Operational Changes • Split the Osaka branch into separate medical and dental sales departments, established a new corporate planning department for strategy and resource allocation, and plans to merge Tokyo and Osaka Smart Clinic sales teams in October 2025 to simplify command and improve knowledge sharing. • Shifted sales staff from the Medical Platform business to the Smart Clinic business as part of a planned temporary reallocation to drive Smart Clinic growth, with some initial growing pains as staff adapt to the new role.

• Strategic Priorities • Medical Platform: Shift focus from quantity of content to quality/credibility, leveraging the company's existing strong network of doctors and medical institutions to expand physician-supervised, high-trust content to meet shifting market demand. • Smart Clinic: Expand sales channels and strengthen the sales organization based on the NOMOCa series' leading market position, to drive growth by improving clinic operational efficiency, patient experience, and management transparency. • Post-acquisition Integration (ASANO): Leverage ASANO's 60+ year history and veteran dental sales team to create synergies, including cross-selling, DX integration, and optimized sales organization, with the goal of becoming the leading comprehensive platform for dental clinic management. Expected synergies from strengthened clinic opening support that combines GENOVA's information resources with ASANO's existing expertise have not yet been included in full-year guidance. • Build a unique comprehensive platform supporting dental clinics that combines medical information, DX solutions, and critical dental supply distribution infrastructure.

• Shareholder Return • After a 30 yen per share total dividend (10 yen regular + 20 yen anniversary special) paid in May 2025 for the 20th anniversary, the company plans to maintain the 30 yen per share regular dividend starting this fiscal year to avoid a dividend cut. Additional shareholder return measures including buybacks will be considered proactively based on share price and investor input.

1. Medical Platform Business: Revenue of 2.41 billion yen, 24% year-over-year decrease, accounting for 48.4% of total consolidated revenue. Contract volumes and clinic visit report sales recovered quarter-over-quarter, driven by new low-price service tiers that increased order volume, though average contract price declined. Monthly pageviews for the Medical DOC medical media platform reached 16.47 million. 2. Smart Clinic Business: Revenue of 1.5 billion yen, 11% year-over-year decrease, accounting for 30.1% of total consolidated revenue. Both hardware and software service contract volumes have recovered from the prior quarter bottom, with NOMOCa-Desk driving average contract price recovery. NOMOCa AI chat contract volumes recovered following AI functionality updates, and NOMOCa AI call adoption is growing steadily. Cumulative installed units of automatic checkout/self-check-in machines reached 2,636 units, and the NOMOCa series holds the No.1 position in clinic market shipment volume and market share. 3. ASANO (Subsidiary, Dental Distribution Business): ASANO exceeded its conservative initial sales budget in its first consolidated quarter. Over 90% of ASANO's revenue comes from dental distribution, with the remainder from its DX business. Post-acquisition transaction recovery reached 73.8% overall: 88.4% in the Hokuriku region and 67.2% in the Kanto region. DX business budget achievement was 65.4% for electronic medical record systems and 15.6% for reservation systems, with referral recovery remaining a key challenge.

• Full year 2026 (ending March 2026) guidance includes 9 months of ASANO's financial results, as it was consolidated mid-year. No expected cross-selling synergies between ASANO and GENOVA have been included in the current guidance. The company previously missed second quarter profit targets due to additional impairment losses on uncollected receivables and higher-than-planned costs from ASANO's integration, and has revised its full-year guidance accordingly.
  • Management expects the recent bottoming and recovery trend in core GENOVA business will continue through the second half of the fiscal year, with full-year focused efforts to improve profitability and restore earnings growth.

• The Medical Platform business saw a year-over-year sales decline and stalled access growth, though the company is investing in content quality to drive a future recovery.
  • ASANO's DX business faces low budget achievement due to slow referral recovery, and overheated competition in the medical DX space continues to create challenges for growth. • ASANO's overall transaction value is still only around 50% of pre-civil rehabilitation levels, with the Kanto region still lagging in recovery and requiring focused investment to improve market share. • The automatic clinic checkout space is now much more competitive than when GENOVA first entered the market, with many new competitors offering similar solutions.

No formal question and answer section is included in the provided transcript.