VISION INC. Q2 FY2025 earnings call

• Core Corporate Strategy

  • Focus on niche markets to build dominant market leading positions, supported by competitive low pricing to drive high one-visit close rates and reduce customer acquisition costs.
  • Implements specialized division of labor: sales teams focus exclusively on new customer acquisition, while a dedicated 100-person concierge team handles all post-sales account management. This structure delivers far higher sales productivity than peers, reduces customer churn, and drives consistent upsell and cross-sell growth.
  • Prioritizes productivity growth over headcount expansion, a strategy that aligns well with AI-enabled operational efficiency gains.

• Global WiFi Business Updates

  • Holds only 17% market share in Japan's inbound/outbound travel segment, leaving substantial room for future growth. Despite a 30% decline in Japanese individual outbound travelers vs 2019 levels (driven by yen weakness), operating profit has doubled vs 2019, led by strong growth in the corporate-focused Global WiFi for Biz segment.
  • Global WiFi for Biz offers secure connectivity that works both domestically and internationally, with automatic usage tracking and consolidated billing. The service dynamically switches between local carrier networks based on region to deliver stable, high-quality connectivity for business meetings, leading to steady customer growth.
  • Launched World eSIM for single travelers, targeting short, low-cost trips; the service sold ~100,000 units per quarter in H1 2025, and acts as a customer lead generation funnel for the higher-end Global WiFi rental service.
  • Established a new 3-person hub in New York (U.S.) in 2025, after exiting Los Angeles pre-COVID. The U.S. market has enormous total addressable size, limited existing competition post-COVID, and strong pricing potential, creating high growth upside.

• Information and Telecommunications Services Business Updates

  • Added a new accounting BPO service called Kicho Daikou.com this year, leveraging improved AI OCR (including handwritten text recognition) to enable full-service bookkeeping that handles all customer work with no customer-side effort.
  • The service differentiates from competitors by conducting full cost reviews to identify cross-sell opportunities for other Vision services, and is currently prioritizing quality over rapid expansion by slowly building up operating track record.
  • Actively hires workers with disabilities to fill operations roles for this service, receiving strong application volume from candidates overlooked by other firms.

• Glamping & Tourism Business Updates

  • The business was launched during COVID as a side project for the Global WiFi team, and will stop expanding after the upcoming Awaji Island facility opens. Existing facilities (including the popular Yamanakako location) maintain 95%+ occupancy, with a differentiated premium offering that includes on-site private saunas, open-air baths, and pet-friendly private spaces, winning industry awards.

For the first half of the 2025 December fiscal year: 1. Global WiFi Business: Segment profit reached 2.791 billion yen, accounting for 56.9% of total company revenue (up from 55.9% in the prior year). The segment set a new all-time high for both revenue and profit, with growth driven primarily by rising corporate demand and modest inbound travel recovery. 2. Information and Telecommunications Services Business: Segment profit reached 951 million yen, also hitting a new all-time high for revenue and profit. Recurring stock-based revenue now accounts for over 50% of the segment's total, providing stable underlying profit support. 3. Glamping & Tourism Business: Segment profit reached 63 million yen, with both revenue and profit hitting a new all-time high. Growth is driven by rising occupancy and average daily rates at existing glamping facilities, plus expanding inbound tourism-related services.

• Maintains full-year 2025 guidance of 40 billion yen in total revenue and 6.439 billion yen in operating profit, up from 5.365 billion yen in the prior fiscal year. Confirms that first half results are already above initial planned targets.
• The company is in an active investment phase for this year and next, but maintains its target of sustaining ROE above 20% while delivering a 50% payout ratio.
• Reaffirms the medium-term target of reaching 10 billion yen in operating profit by 2028. Management notes that this target would be achievable even without the current batch of new investments, which are viewed as planting seeds for additional growth beyond 2028.

• Yen weakness has reduced Japanese individual outbound travel volumes, which has caused Global WiFi consumer segment revenue to trail initial planning assumptions. Management does not plan to increase aggressive marketing to offset this trend, waiting for consumer travel demand to recover naturally.
• World eSIM cannot match the coverage and quality of Global WiFi's carrier-switched rental service, and relies on lower-quality capacity offered by global carriers that have limited interest in growing the travel eSIM market.
• Glamping expansion requires multi-year lead times for land purchase and permitting, and capital-intensive real estate investment would distract from higher-growth core business opportunities.

Q: What three areas is the company focusing its current upfront investment on, and will these investments deliver the 10 billion yen 2028 operating profit target? / A: The three focus areas for investment are the New York U.S. Global WiFi hub, global expansion of World eSIM (positioned as lead generation for core Global WiFi services), and the new accounting BPO Kicho Daikou.com service. Accounting BPO has high synergy with the existing information communications business, and the company plans to expand to one-stop back-office services over time. Management confirms 10 billion yen in 2028 operating profit is achievable even without these new investments; the investments are seeds for future growth after 2028.

Q: Why isn't the company expanding the high-demand, high-occupancy glamping business further? / A: Glamping is a capital-intensive, real estate-heavy business that requires 3+ years of lead time for new locations. The company's core communications businesses have far higher growth potential, so spreading resources to additional glamping expansion would slow overall company growth. After the Awaji Island facility opens, the glamping segment will stop growing, but it has already succeeded in creating a new premium leisure category in Japan that has been widely imitated by other operators.

Q: Why is Global WiFi revenue behind plan, and what is the cause? / A: The company planned for 81.1% recovery in Japanese outbound traveler numbers vs 2019 levels, but consumer travel demand has not recovered in Japan unlike other developed economies, so consumer segment revenue is behind plan. However, faster-than-expected growth in the corporate segment has offset this shortfall, and the overall Global WiFi segment still grew year-over-year to 9.745 billion yen in H1 from 9.186 billion yen in the prior year. Management is not pessimistic, as any future recovery in consumer travel will add incremental growth, and focusing on growing the corporate segment (the core future driver) is the right priority.

Q: Does World eSIM cause internal competition with Global WiFi's existing rental services, what is the market positioning for each? / A: Management initially expected internal competition, but the two services target distinct customer segments. World eSIM serves budget, single-person, short-trip travelers, with lower quality that cannot meet business demand for stable, high-volume connectivity. Global WiFi serves corporate users and groups, offering the high coverage and speed that eSIM cannot match, with natural segmentation: 1-2 travelers typically choose eSIM, groups of 3+ choose shared Global WiFi. Management is still refining this segmentation to reduce overlap.