OKINAWA CELLULAR TELEPHONE COMPANY Q1 FY2026 earnings call

Reporting and Disclosure Updates

• Changed slide layout and structure to align with the new medium-term management plan, improving clarity of the company's priority areas for investors
• Adopted a new definition of "Mobile Integrated Revenue", combining historical communication revenue and value-added service revenue to align with the company's strategy of integrated communication and value-added offering that includes bundled services such as Ponta Pass and subscription point add-ons

Core Mobile Business Operations

• Maintained a steady trend of positive net contract additions, with stable growth
• Multi-brand churn rate fell to 1.11% from the previous quarter but remains elevated; high churn is concentrated in UQ mobile, driven primarily by SIM-only customers
• Continued churn mitigation efforts: promoting device bundles and offering bundled services including Ponta Pass, FTTH, and au Denki to UQ mobile customers
• Growth was supported by strong device insurance service performance and record tourist numbers to Okinawa driving higher roaming revenue

Fixed and Energy Business Operations

• FTTH: Added 1,100 net new contracts to break 130,000 total contracts, on track against full-year guidance; 10Gbps service adoption is outperforming expectations, following intensified upsell efforts to existing customers
• au Denki: Paused sales through June 2025 to address prior profitability issues, resumed sales in July 2025. The company will enter the retail electricity market directly in October 2025, shifting from acting as an agency for Okinawa Electric Power; full end-to-end control of power procurement and customer service will enable value chain efficiency improvements and profitability gains. Pre-launch outreach for the new retail plans is proceeding smoothly.

1. Mobile Integrated Revenue: 11.157 billion yen, increased 266 million yen year-over-year, accounting for ~54.1% of total operating revenue. The segment added 2,800 net new contracts to reach a total of 693,000 contracts; year-to-date progress against full-year guidance is 28%.
2. Terminal Sales Revenue: Increased 193 million yen year-over-year, contributing ~24.1% of total operating revenue growth.
3. FTTH: Added 1,100 net new contracts to exceed 130,000 total contracts; year-to-date progress against full-year guidance is 28%, contributing to growth in other revenue.
4. au Denki (Electricity): Increased 139 million yen year-over-year, contributing ~17.4% of total operating revenue growth. Total contracts decreased slightly to 76,700 due to paused sales through June 2025.
5. Other Revenue (including business solutions): Increased 202 million yen year-over-year, driven by growth in business and FTTH sales.

Consolidated results: Total operating revenue of 20.613 billion yen (+0.8 billion yen YoY); operating profit of 4.644 billion yen (+273 million yen YoY); net income of 3.272 billion yen (+284 million yen YoY); EBITDA of 6.202 billion yen (+140 million yen YoY).

• Mobile net additions, FTTH net additions, total revenue, and operating profit are all progressing on track against full-year guidance at 28% completion for contract addition targets in the first quarter
• au Denki targets 4,400 net new contracts for the full fiscal year, with management aiming for steady achievement of this target
• Okinawa Cellular declared an upward revision to the year-end dividend to 64 yen per share, achieving 24 consecutive years of increased dividends

• Elevated churn remains a risk for the mobile business, particularly in the UQ Mobile SIM-only customer segment, with churn staying at high levels despite a sequential improvement from the prior quarter
• JUNGLIA OKINAWA's location in Nago City presents a local public transport access gap and risk of traffic congestion, which the company is addressing via a new AI on-demand mobility partnership
• au Denki experienced profitability deterioration in the prior fiscal year, requiring a sales pause through June 2025 before the company's transition to direct retail operation to improve margins

No Q&A section was included in the provided earnings call transcript.