KDDI CORPORATION Q3 FY2026 earnings call

Apology and Investigation

• Apologized for improper transactions at a subsidiary, noting it's limited to the advertising agency business and no impact on communication services. Postponed Q3 earnings release due to ongoing investigation.

Business Progress

• Mobile: Structural transformation with focus on LTV, ARPU growth, and churn rate reduction. Mobile revenues grew, and initiatives like UQ Mobile promotions and au Starlink Direct were highlighted.
• Finance: Credit card business showed growth with operating income up 30.5% year-on-year cumulatively in Q3. Deposit procurement capability improved.
• DX Business: 7.7% growth in Q3, with BPO/SI-related services turning around and IoT connections exceeding 66 million.

AI Initiatives

• Launched Osaka Sakai Data Center, plan to launch Miyazaki Network Center, and developing AI digital belt with nationwide low latency network and computational infrastructure.

The Mobile personal services segment had a base increase of JPY 27.2 billion. The Finance Energy Lawson segment saw an increase of JPY 18.2 billion. The DX business services segment had an increase of JPY 8.5 billion. The Technological structure reform segment had an increase of JPY 12.9 billion, while prior year's promotional expenses had a minus of JPY 28.9 billion. Cumulatively, the total was plus JPY 17.4 billion. Mobile revenues bottomed out in FY March '24 and grew by JPY 29.9 billion year-on-year in FY March '26. The credit card business in the Finance Energy Lawson segment saw operating income up 30.5% year-on-year cumulatively in Q3. The DX business services segment had a 7.7% growth in Q3, with IoT connections exceeding 66 million.

Timing

• Targeted end of March for Special Investigation Committee report and Q3 results disclosure.

Dividend

• No revision to dividend forecast for FY March '26.

• Suspected improper transactions at a subsidiary, potential impact on financial statements. Need to restore trust in the KDDI Group due to this matter.

Q: About the amount of fictitious transactions.

A: Impact on revenue is JPY 246 billion, profit impact minus JPY 50 billion, with possibility of additional impairment.

Q: About external outflow.

A: Explained the scheme of fictitious transactions involving upstream agencies.

Q: About employees involved.

A: Two employees from G-PLAN seconded to BIGLOBE involved, privacy concerns noted.

Q: About AI implementation in finance.

A: Studying contact center and fraud detection, working on POC with other institutions.

Q: About CapEx.

A: Focusing on AI infrastructure, keeping CapEx flat.