Q1 2026 KDDI Corp Earnings Call - Q&A
Miyakawa: For taking time out of your busy schedule to join us today. I am Miyakawa of IR Department and will serve as the moderator today. This briefing will be broadcast live on the Internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance. Let me introduce the participants today: Guahara, Executive Vice President, Representative Director, and Executive Director of Business Solutions Sector; Nanae Saishoji, Senior Managing Executive Officer, Director, CFO, and Executive Director of Corporate Sector; Hiroshi Takezawa, Senior Managing Executive Officer, Director, and Executive Director of Personal Business Sector; Katsuki, Managing Executive Officer, Director, CSO, CDO, and Executive Director of Corporate Strategy Planning Division; Yoshimura, Senior Managing Executive Officer, CTO, and Executive Director of Core Technology Sector; Aketa, Executive Officer and Executive Director of Corporate Management Division.
Thank you for taking time out of your busy schedule to join us. Today, I am Makaba of the IR department and will serve as the moderator.
This briefing will be broadcast live on the internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance. Let me introduce the participants today.
Guara Executive, Vice President, Representative Director, and Executive Director of the Business Solutions sector.
Nanae Saishoji, Senior Managing Executive Officer, Director, CFO, and Executive Director of Corporate Sector.
Senior Managing Executive Officer, Director, and Executive Director of Personal Business Sector.
Kupsky managing executive officer director, CSO CDO and executive director of corporate strategy planning division.
Yoshimura, Senior Managing Executive Officer, CTO and Executive Director of Core Technology Sector.
AA Executive Officer and Executive Director of Corporate Management Division.
Miyakawa: We have three financial results-related material and TSE, Timely Disclosure material. Total four materials are posted on our IR website. Please refer to the disclaimer in the material regarding statements made in these documents, performance targets, and projected subscriber numbers explained in the Q&A session today. Nanae Saishoji will first explain the financial results summary, followed by Q&A. Ms. Saishoji, please. Let me explain our first quarter financial results for the fiscal year ending March 2026. First is our consolidated results. Revenue increased and profit decreased on a consolidated basis, but progress is in line with the initial forecast. Top row, operating revenue was 1,436.3 billion yen, up 3.4% year-on-year. Middle row, operating income was 272.5 billion yen, down 1.6%. Bottom row, profit for the period attributable to owners of the parent was 171.1 billion yen, down 3.3%. Next is factors for change in consolidated operating income.
We have three financial results, related materials, and timely disclosure material. The total for materials is posted on our IR website. Please refer to the disclaimer in the material regarding statements made in these documents, performance targets, and projected subscriber numbers explained in the Q&A session today.
Scishow G. will first explain the financial results summary, followed by Q&A.
Miss saoji, please.
Let me explain our first quarter financial results for the fiscal year ending March 2026.
First is our consolidated results. Revenue increased and profit decreased on a consolidated basis. However, progress is in line with the initial forecasts. Top row: operating revenue was $1,436.33 billion yen, up 3.4% year on year. Middle row: operating income was 272.5 billion yen, down 1.6%. Bottom row: profit for the period attributable to owners of the parent was 171.1 billion yen, down 3.3%.
Next are the factors for change in consolidated operating income.
Miyakawa: From the left, mobile on personal services segment basis aims for a year-on-year profit increase of 1.9 billion yen and our initial forecast of full-year profit growth of over 30 billion yen. Financial and energy businesses combined were up 6.2 billion yen. Lawson's equity method profit was up 5.7 billion yen. DX was up 2.9 billion yen. Technological structural reform was up 3.2 billion yen. The impact of prior year's promotional expenses, including a 7.3 billion yen one-time expense, was negative 21.4 billion yen. Including others, such as returns to shareholders, stakeholders, and decrease in racked and roaming revenue, operating income was down 4.4 billion yen. However, as mentioned here, our core businesses are progressing steadily, and the impact of sales promotion expenses was factored in at the beginning of the year, so it is in line with our forecast.
From the left Mobile on personal services segment basis, aims for a year-on-year, profit increase of 1.9 billion yen. In our initial forecasts of full year, profit growth of over 30 billion yen financial, and energy businesses combined were up 6.2 billion, yen Lawson's, Equity method profit was up 5.7 billion. Yen DX was up to 2.9 billion yen. Technological structural reform was up 3.2 billion yen and the impact of Prior years, promotional expenses including a 7.3 billion yen. 1-time expense was negative, -21.4 billion yen, including others. Such as returns to shareholders stakeholders and decrease in rupt and roaming Revenue. Operating income was down 4.4 billion yen. However, as mentioned here, our core businesses are progressing steadily, and the impact of sales promotion, expenses was factored in at the beginning of the
Miyakawa: In the full-year results briefing in May, I touched on two points on the left regarding our commitment for the next growth. Digital data and AI will generate new values. As you see on the right, we will focus on growing our foundational power to connect and making it a strong competitive foundation of KDDI Corporation. To achieve this, we will provide the value of connected experience and expand the telecom business foundation both 2C and 2B. As the outcome of these business activities, it is important to grow our mobile revenues, which is communications plus value-added services in both personal and business service segments. To show the progress of our growth to all our supporting stakeholders, we will change and promote our KPI disclosure. For the detail on KPI disclosure, please look at the appendix. This shows the mobile revenue status for personal and business services segments combined.
Year, so it is in line with our forecast.
In the full year results briefing in May, I touched on two points on the left regarding our commitment for the next growth.
Digital data and AI will generate new values. So, as you see on the right,
We will focus on growing our foundational power to connect and making it a strong competitive foundation for KDDI. To achieve this, we will provide the value of connected experiences and expand the telecom business foundation both to see and to be.
As the outcome of these business activities, it is important to grow our mobile revenues, which is Communications Plus' value-added services in both personal and business service segments.
To show the progress of our growth to all our supporting stakeholders, we will change and promote our KPI disclosure.
The detail on KPI disclosure; please look at the appendix.
Miyakawa: On the left side, mobile revenues were 550.6 billion yen, up 7.6 billion yen year-on-year. In the center, mobile RPU was 4,340 yen, up 60 yen. On the right side, the number of smartphone subscriptions increased by 450,000. Personal segment basis mobile revenues is promoting the communication and added value services. Year-on-year, it is up 2.3 billion. We're making steady progress. On the right side, Q1 mobile RPU and smartphone subscriptions are steadily increasing, and new plans offering connected experience value are well received and are off to a good start. Both brand migration and churn rate trends have improved. We expect significant growth in the second half, including the impact of service revisions, and will continue to aim to achieve a virtuous economic cycle. The new plans launched in June are off to a good start.
Were ¥550.6 billion, up ¥7.6 billion year on year. In the center, mobile RPU was ¥4,340, up ¥60. On the right side, the number of smartphone subscriptions increased by 450,000.
personal segment bases, mobile revenues
Is promoting the communication and added value services.
And you're on here. It is up to $3 billion; we're making steady progress.
Right side. Q1 mobile approve.
uh, and
Uh, smartphone subscriptions are steadily increasing, and new plans offering a connected experience are well received and are off to a good start.
Both brand migration and churn rate trends have improved.
We expect significant growth in the second half, including the impact of service revisions, and will continue to aim to achieve a virtuous economic cycle.
Miyakawa: On the left-hand side, new value of connected experience such as AU5G FastLane, SAT-Link Direct, and unlimited data overseas have been extremely well received. As a result, about 80% of customers choose the AU Value Link Plan and Unlimited Data Max Plus, which combine reliable unlimited data use with the value of connectivity. On the right, at UQ Mobile, due to the increased data usage, about 40% of customers choose Komikomi Plan+, which offers the largest capacity. Due to the value of connected experience and data demand, High Capacity Plan is very well accepted. This is the effect of the multi-brand strategy we redesigned along with our service revisions. It has worked as expected with both AU and UQ Mobile seeing improved trends. On the left, as AU's attractiveness has increased, brand migration trend has improved, and its flattening is in sight for FY March 2026.
The new plans launched in June are off to a good start. On the left-hand side, the new value of connected experience, such as AU5 GF Fast, Lane Fastlink, Direct, and Unlimited Data Overseas, have been extremely well received. As a result, about 80% of customers choose the AU Valued Link plan and Unlimited Data Max.
Which combined reliable and limited data use with the value of connectivity.
On the right.
YouTube mobile.
Due to the increased data usage, about 40% of customers choose Qumi, Qumi plan value, which offers the largest capacity.
Due to the value of connected experience and data demand, the high capacity plan is very well accepted.
The effect of the multi-brand strategy we redesigned, along with our service revisions, has worked as expected. Both Awe and UQ Mobile are seeing improved trends, as the brand attractiveness has increased and the migration trend has improved.
and its flattening is in sight for Phi March 26th.
Miyakawa: The number of migrations from UQ Mobile to AU continues to increase, expanding 1.4 times year-on-year. We will continue to strengthen efforts to make AU more attractive, aiming for further growth. The number of migrations from AU to UQ Mobile decreased significantly in June. On the right, churn rates have also been positively affected, with that of AU remaining low and that of UQ Mobile showing a significant improvement in June. The trend continues in July as well. Recently, we have seen a trend within the industry toward focusing on contracts with highly engaged customers. We too will transform our structure to the one that is more conscious of lifetime value. While many companies are focusing on finance, I'd like to reiterate the strengths of KDDI Corporation's financial services. On the left, KDDI Corporation has been a pioneer in creating a synergy model between telecommunications and finance.
The number of migrations from Yuki Mobile to Au continues to increase, expanding 1.4 times year on year.
We will continue to strengthen efforts to make a more attractive environment, aiming for further growth.
The number of migrations from ow to Yuck mobile decreased significantly in June on the right.
Turn rates have also been positively affected, with that of AWE remaining low and that of UQ mobile showing a significant improvement in June.
The trend continues in July as well.
Recently, we have seen a trend within the industry toward focusing on contracts with highly engaged customers.
We too will transform our structure to one that is more conscious of lifetime value.
While American companies are focusing on finance, I'd like to reiterate the strengths of KDDI's Financial Services on the left. KDDI has been a pioneer in creating a synergy model between telecommunications and finance.
Miyakawa: In the fall of 2025, we will begin collaboration with SBI Securities to strengthen alliance between banking and securities. In addition to Mitsubishi UFJ eSmart Securities, SBI Securities will join as a partner for this alliance. By using real-time direct debit set up with AU Jibun Bank, customers will receive preferential interest rates. This will also help us increase our bank deposits. We will continue to expand our collaboration with securities firms in order to strengthen our financial functions together with our partners. The financial businesses' performance and KPIs are progressing smoothly. On the left, AU Financial Holdings' operating income increased 33% year-on-year to 11.7 billion yen. On the right, AU Money Activity Plan, which has now exceeded the cumulative number of subscriptions of 1.6 million, has been successful, expanding our customer base, including AU Pay Gold Card members.
In the fall of 2025, we will begin collaboration with SBI Securities to strengthen the alliance between banking and securities.
In addition to Mitsubishi UFJ, Smart Securities, and SBI Securities will join as a partner for this alliance.
By using real-time direct debit setup with Aug. Boom, bank customers receive preferential interest rates.
This will also help us increase our bank deposits.
We will continue to expand our collaboration with the securities funds in order to strengthen our financial functions together with our partners.
The financial business's performance and KPIs are progressing smoothly. On the left, Au Financial Holdings' operating income increased 33% year on year to $1.17 billion.
On the right.
Miyakawa: Next, we will look at the performance of the business services segment. On the left, consolidated operating revenue was ¥349.7 billion, up 4.5% year-on-year, and operating income was ¥57.5 billion, up 5.4%. For base, revenue grew with growth in mobile revenues, and both ID and RPU were solid, resulting in an increase of ¥3.9 billion, or up 2.5%. In growth area, operating revenue was up 6.2% due to delays in the integration progress at Altios Link. Toward the end of the fiscal year, we aim to expand the growth in focus areas such as security and IoT and to bottom out and accelerate BPO performance. Finally, to date summary. As to the first quarter consolidated results, despite the decrease in profit compared to the previous fiscal year, progress is in line with our initial forecast.
Funding a customer base, including AUP and Gold Card members.
Next, we will look at the performance of the Business Services segment on the left.
Consolidated operating revenue was $3,149.7 billion, up 4.5% year on year, and operating income was $57.5 billion, up 5.4%. Base revenue grew with an increase in mobile revenues, and both ID and apoo were solid, resulting in an increase of $3.9 billion, or up 2.5%, in gross area.
Operating revenue was up 6.2% due to delays in integration progress at Aalto linked to the end of the fiscal year. We aim to expand growth in focus areas such as security and IoT, and to bottom out and accelerate BPO performance. Finally, to date summary.
Miyakawa: New plans are off to a good start, and the new connected experience value has been well received. Our multi-brand redefined has been successful, and we continue to aim for a full-year profit increase of over ¥30 billion in mobile in the personal services segment. In the financial services business, we will strengthen bank securities alliance and further expand the value we provide by combining telecommunications and finance. In the business services segment, we will strengthen initiatives in focus areas and accelerate our growth trend. That's all. Now we'd like to move on to Q&A.
As to the first quarter consolidated results, despite the decrease in profit compared to the previous fiscal year, progress is in line with our initial forecast. New plans are off to a good start, and a new connected experience value has been well received. A multi-part redefine has been successful, and we continue to aim for a full year profit increase of over ¥30 billion in Mobile in the personal services segment.
In the financial services business, we will strengthen bulk Securities Alliance and further expand the value we provide by combining telecommunications and finance in the business services segment. We will strengthen initiatives in focus areas and accelerate our growth trend.
That's all now. We'd like to move on to Q&A.
Nanae Saishoji: Thank you, Ms. Nanae Saishoji. We will now take your questions. If you have questions, please tap the Zoom raise hand icon or raise hand button in the reaction. When you are nominated, please tap unmute and ask your question after the presenter mentions your company name and name. To receive questions from as many people as possible, please limit your questions to two per person. If you do not have your name or company name, we cannot appoint you, so please mention your name. We will now take your questions. First question is from Daiwa Securities, Tokunaga-san. Please unmute yourself and ask your question.
Thank you, Mr. G
We will now take your questions.
If you have questions, please tap the Zoom raise hand icon or raise hand button in the reaction. When you are nominated, please tap on mute and ask your question. After the presenter mentions your company name and name, we will receive questions from as many people as possible. Please limit your questions to 2 per person.
If you do not have your name or a company name, we cannot appoint you. So please, uh, mention your name.
Hiroshi Takezawa: Hello, this is Tokunaga from Daiwa Securities. I have two questions. First is about the sales promotional expenses. One reason profit declined is because the sales promotion was big, excluding the one-off basis, and all players are having strong results. This means that you have this result in Q1, and this competition will continue on a full year, or you are not using much expenses now. Is it just this past year factor that is impacting your results this time? Thank you for the question. I mentioned in the increased decrease of profits, the sales promotion expenses increased, which pushed down the profit for the one-off factor, 7.3 billion. For others, was this spent this year or prior years? I think your question is on that point. This is the personal services segment. Hiroshi Takezawa would like to explain.
You will now take your questions. The first question is from Dio, Securities. Please unmute yourself and ask your question.
Hello. This is Tokunaga from Dao Securities. I have two questions.
First.
Is about the sales promotional expenses.
So, one reason profit declined is because the sales promotion, uh, was big, excluding the one-off basis. All players are having strong results. So this means that.
Uh, you are, you have this, uh, result in the Pew?
And this competition will continue for a full year, or you're not using many expenses now. It's just this past year factor that is impacting your results this time.
Thank you for the question.
So I mentioned the increase and decrease of profits.
The sales promotion expenses increased, which pushed down the profit.
Uh, for the 1-off factor, $7.3 billion.
And for others.
Was this spent this year or prior years?
Hiroshi Takezawa: Thank you very much for your question. Hiroshi Takezawa would like to answer. First of all, as you rightly said, 7.3 billion is the promotion expense-related gain on the reversal of the provision. That was one-off factor. It will not be incurred from now on. For the others, our smartphone TOKUSURU program, the program that we offer, this is the expense increase for the past existing customers. This TOKUSURU program started in September 2021. With the installment receivables, we had the customers who purchased using the installment increased. From the device purchase two years or after three years from the purchase, this benefit is executed. When this benefit is exercised, the residual value portion tends to rise. That is where we are now. Going forward, this benefit will end among some customers, and the customers who will newly join will become better balanced. The year-over-year impact will improve.
Uh, I think your question is on that point. So this is a personal services segment I'd like to explain.
Thank you very much for your question. We'd like to answer.
first of all, as you rightly said,
7.3 billion.
Is the promotion expense related gain on the reversal of the provisions? So that was a one-off factor. It will not be incurred from now on, and for the others.
so,
our smartphone to program.
Uh, the program that we offer.
Uh, this is the expense increase for the, uh, past existing customers. And this talks through the program.
this started in September 2021.
And with the installment receivables, we had, uh,
Using the installment increased.
And so, from the device purchase,
Two years or after three years.
From the purchase.
Uh, this benefit is executed.
and when this,
Benefit is exercised, the residual value.
Uh, portion tends to rise. And that is where we are now.
going forward, this
Benefit will end among some customers, and the customers will newly join.
Will become better balanced.
and so,
The yoy impact will improve.
Hiroshi Takezawa: For this year, we will gradually improve. This was factored in at the beginning of the year as we planned for the full year. We will continue our efforts to achieve the target. Thank you. In this quarter, the smartphone subscriptions net addition is slowing down. It is a bit weak, but the expense was not injected in this quarter. For the new injections, you are being rather restrictive, suppressive. Yes, you are right. We are not really restrained, but looking at the profit situation, and right now, we are in the middle of the service revisions. We will watch the market condition and use our promotional expenses accordingly. For now, on the payment basis, we are not dramatically increasing this year. Thank you. My second question is about mobile revenues. Personal segment, around 2 billion increase in Q1.
But for this year,
we will gradually improve.
So, this was factored in at the beginning of the year as we planned for the full year.
We will continue our efforts to achieve the target.
Thank you.
So, in this quarter, the smartphone subscriptions' net addition is slowing down. It's a bit weak, but...
The expense was not injected in this quarter.
So, for the new injections, you are being rather restrictive and suppressive.
Yes, you're right. Well, we're not really restrained, but...
Looking at the prophet.
And right now, we are in the middle of the service revisions. So we will watch the market conditions and, uh, use our promotional expenses accordingly.
For now.
On the payment basis, we are not dramatically increasing this year.
Thank you.
And my second question is about mobile revenues.
Hiroshi Takezawa: On the full year, 30 billion profit increase, I think you said. Profit increase means how much mobile revenue increase are you anticipating for the full year? I think it is partially due to the revisions, service revisions. This will increase as we go through Q2, Q3. Are you in line with the profit increase plan? The 30 billion yen full-year forecast for mobile revenues. Thank you for the question. Full-year 30 billion profit increase is the target in the personal services segment. Q1 profit increase seems a bit weak. I think that is the gist of your question. This is again personal business related, so Hiroshi Takezawa will answer. Thank you for the question. Let me answer. 2.3 billion profit increase. As you see in the waterfall chart, the profit is 1.9 billion. The revenue was not converted 100% into profit.
Personal segment, uh, around $2 billion increase in Q1.
On the full year.
30 billion profit increase. I think you said.
so, profit increase means
How much mobile revenue increase are you anticipating for the full year? I think it's partially due to the revisions in service revisions, so this will increase as we go through Q2 and Q3.
So, are you in line with the profit increase plan?
So, the ¥30 billion full-year forecast for mobile revenues.
Thank you for the question.
So, full year, $30 billion profit increase.
Is the target in the personal services segment?
Q1 profit increase seems a bit weak.
I think that is the gist of your question.
So this is again, personal business related, so I will answer. Thank you for the question.
So, let me answer.
2.3 billion.
Profit increase.
But as you see in the waterfall chart, the profit is $1.9 billion.
Hiroshi Takezawa: There was added value revenue included in the mobile revenues. That is the reason. 30 billion profit increase on the profit basis, we need to increase profit by 40 billion. From August 1st, we started our service revisions and some price revisions. The new pricing plan started in June is now seeing an upside compared to the plan. We hope we can maintain our momentum until the end of the year. Net additions of smartphones need to accelerate. Summer to fall, and towards the end of the year, we will try to promote and drive this business and keep the momentum so that we can increase the profit by 40 billion to achieve the 30 billion yen target. Thank you.
So, the revenue was not, uh, converted 100% into profit. There was added value revenue included in the mobile revenues. That's the reason.
so,
30 billion profit increase.
On the profit basis, we need to increase profit by $40 billion.
and,
From August 1st.
We started our service revisions and some price revisions.
and,
The new pricing plan started in June.
Is.
Now, seeing an upside compared to the plan.
So, we hope we can maintain our momentum until the end of the year. And.
Net additions of smartphones need to accelerate.
So, summer to fall and towards the end of the year.
Try to promote.
And drive this business and keep the momentum so that we can increase the profit by $40 billion to achieve the $30 billion target.
Hiroshi Takezawa: My follow-up question is, this revision on August 1st, the progress, given that your new pricing is off to a good start, second, third week mobile revenue value added, I think this is a good progress. Can I see it that way? Including the subscriptions, yes, the base telecom revenue will rise, and the added value will also be offered to our users accordingly. The mobile revenues overall can grow, we think. Thank you.
Thank you. My follow-up question is
So this revision on August 1st.
The progress given that you are, your new pricing is off to a good start.
Uh, second or third week, mobile revenue, value added. Uh, I think this is a good problem. Can I see it that way?
Including the subscriptions.
Yes, the base telecom revenue will rise.
And the added value.
Will also be offered to our users accordingly. So the mobile revenues overall,
Can grow.
We think.
Guahara: Tokunaga-san, thank you. Next question. Please tap the raise hand button. Masuno-san from Noma Securities, please.
Thank you.
Thank you.
Next question.
The please stop. There is a hunt.
but,
From numerous Securities, please.
Speaker 5: I have two questions. First, about the personal section, mobile revenue. So 2.5% and the 9.7% increase for business. So altogether 1.4. Because RPU plus 1.4. As to personal, 0.5% increase, that is rather limited. So it is not really a real growth. As to RPU in the first quarter, maybe not so much growth. Am I right? In the simple calculation about the repricing, at the seven months, from October, ¥300. The ¥70 million, that is from other smartphones. So the ¥350 or so, the increase. From June Q, the gross new, the 4 million assumed, and over 10 times, maybe ¥8 billion or so, altogether, the ¥40 billion or so increase in revenue. From the repricing, ¥40 billion increase, then the personal section, we will see increase in profit. I think that is your plan.
I have 2 questions.
First about the personal section, Mobile Avenue.
For 2.5% and the 9.7% increase for business.
so, altogether 1.4
Goes up to plus 1.4, so...
As to personal.
0.5% increase. That's rather Limited.
So, it's not really a real growth and as to our poo, in the first quarter, maybe not so much growth. Am I right?
so in a simple calculation about the repricing,
At the 7 months.
Idea that from October 300 yen.
And dear, the 17th, that's from the smartphone. So, the 350 yen or so, uh, the increase.
So from other June in queue, the gross new, uh, the $4 million assumed and over.
10 times, maybe $8 billion or so altogether.
The $40 billion also increased revenue.
So, from the repricing, a $40 billion increase, then the personal section, and we'll see an increase in profit.
I think that's your plan.
Speaker 5: As to our structure, of course, the financial business and those are continuing the positive growth. Am I right to understand that that is going to be the biggest change for the personal sector, the current RPU, and the ¥40 billion increase in revenue because of the repricing? Am I right? Thank you for your question. For the first quarter, actually, in the first quarter, mobile revenue, RPU, it does not look like growing so much. In order to achieve the initial target of profit, is it mainly by the impact coming from repricing? That is, I think, the intent of the question, and Takezawa-san is going to answer your question. Thank you for the question. Our view is more or less in line with your comment.
As the end of our structure, of course, the financial business. And those on continuing the positive growth.
Am I right? Understand that? That is going to be the biggest change for the personal.
Uh, the sector, the current RPU, and the, uh, the ¥40 billion increase in revenue because of the repricing. Uh, am I right?
Thank you for your question.
For the first quarter.
Actual in the first quarter, mobile revenue.
Uh, poo.
Uh, it's not, uh, it doesn't look like it's growing so much.
So, in order to achieve the initial target of profit,
uh,
Is it mainly by the impact coming from re-pricing?
That is, I think, the intent of the other question and is going to answer your question.
Thank you for the question.
I love you. Uh, is
more or less in line with your comment.
Speaker 5: As I mentioned earlier, RPU revenue itself in the service revision, some of them are doing very well, but the middle capacity, low capacity zone with the current service revision to that zone, we decided to make more focus on the LTB and the more engaged users. So the net increase there in that zone is not really satisfactory as the basis for AT. But with this repricing and the service revision within this fiscal year, we would like to make another challenge. With that included, RPU as to RPU revenue, as I mentioned earlier, in terms of revenue, about ¥40 billion and profit, ¥30 billion plus. That is the stick in our minds. We would like to take necessary measures going forward as well. Thank you. Thank you. As to the business sector, business services sector, in the first quarter, mobile revenue increased 10%, plus ¥5.3 billion.
as I mentioned earlier,
our Revenue itself.
In the other service revision.
Some of them are doing very well, but
The middle capacity, low capacity zone.
With the current therapist revision.
As to that zone.
We decided to, uh, to make more focus on the LTB and more engaged users.
So, the net increase there in that zone, uh, that is not really satisfactory as the basis for it. But with this repricing and service rep vision, within this fiscal year, we would like to make another challenge.
And we start included.
Poo, as to operate Revenue.
As I mentioned earlier, in terms of revenue,
About ¥40 billion and the profit. So that's the Arctic in our mind.
And then we would like to take necessary measures going forward as well. Thank you.
Thank you.
As the business sector, it's in a services sector.
In the first quarter.
Revenue.
Increased 10%.
Speaker 5: I think profit came from here. RPU grew by about 1%. The other in terms of number of business volumes must have been increased a lot. Data center and VPO are not growing really, but the other growth area that is doing well. IoT or data center business VPO excluded, the rest, I think, must be growing. Other than the area, other than these three highlighted areas, what is really growing? If it is growing, that is good. Is it contributing to profit? Mobile is doing well, and the volume is driving the other profit. In the growth area, other areas, my intent is to know more about the other area. As to business-related revenue, mobile revenue is increasing, but data center VPO are not really growing. What about the rest of the business? What is growing? What is the current status of growth area? That was the question.
Plus ¥5.3 billion. I think Prophet came here, came from here.
Uh, Pooh grew by about 1%. So, dear, in terms of the number of business volumes.
Uh, must have been increased a lot: Data Center and VPO.
Are not growing, really.
But the growth area, uh, is doing well. So, IoT or data center business VPO excluded, the rest I think must be, uh, growing.
Other than the area, other than these three highlighted areas, what is really growing?
And if it is growing, that's good. But is it contributing to profit?
Mobile is doing well and the uh, the volume is the driving uh the the prophet.
And in the gross area.
Other areas I... my intent is to know more about the other area.
Speaker 5: Guahara-san answers your question. Thank you for the question. The base growth separately, starting with base, mobile is performing very well. ID, RPU, and the mobile value-added services are positively affecting to produce profit. As to growth side, the good news and bad news, starting with the good ones, there is something which is not shown here. Our new focus, namely cybersecurity and facility solution, or Starlink drone, they are growing very steadily. Meanwhile, digital VPO is not doing so well. Year-on-year, both revenue and profit decreased. The turnaround there will be a key point. As to data center, it is somewhat weakening, but in the first quarter, last year had some one-off factor and also FX impact as well. That is why it is a bit weaker. On a full-year basis, the profit is expected to grow by double digit. Thank you.
As to business-related revenue, the mobile revenue is increasing, but the data center DPO is not really growing. So what about the rest of the business? What is growing? What is the current status of the growth area? That was the question.
so, karaan
answered your question.
Thank you for the question.
The base growth separately. Starting with space mobile, it is performing very well.
ID approve.
And the mobile value-added services are positively affecting.
Uh, the to produce profit.
and as to grow site,
The good news and bad news.
Starting with the good ones.
Uh, there's something that is not shown here.
Our new Focus.
Namely cyber security.
And facility solution.
Was darling, drone.
They are growing very steadily.
Meanwhile.
Digital BPO is not doing so well.
Your own ear.
Was revenue and profit decreased.
So, the turnaround there.
uh,
It will be a key point.
As to Data Center.
It's somewhere to weakening, but in the, uh, the first quarter last year, had some, the one factor and also affect the impact as well.
And that is why we are a bit weaker, but on a full-year basis, the profit is expected to grow by double digits. Thank you.
Speaker 5: Digital VPO, the situation remained the same from the last year. In the past, you said that on the customer side, the size of orders was decreasing, you said, in the past. That trend continues. Could you please elaborate on the background? Thank you. Digital VPO, here is what we are doing. As to existing customers, we are digitalizing those customer bases. That means that the revenue decreases to some extent. To set it off, we are going to acquire new customers so that the ultimate result will be positive. From the last year, the progress is kind of slow. Comparing last year and this year, the number of transactions increased 1.6 times. In the second half of the year, we will see some positive growth and results. Thank you.
Digital BPO.
The situation remained the same from last year, and in the past, you said that they had on the customer's side.
uh,
The size of orders was decreasing. You said in the past that the trend continues. Could you please elaborate on the background? Thank you.
Digital BPO.
Here is what we are doing as the existing customers: we are digitalizing into those customer bases. That means that the revenue decreases to some extent.
And to set it off.
At that, we are going to do a new customer acquisition strategy so that the ultimate results will be positive.
So from the last year, the progress is kind of slow.
But comparing last year and this year,
The number of transactions increased 1.6 times.
So, in the second half of the year,
That we, uh, that we'll see some positive, uh, growth in results.
Thank you.
Guahara: マスノさん、ありがとうございます。
Miyakawa: Thank you, Masuno-san. Next question. Please tap the raise hand button on Zoom. Okasan Securities, Okumura-san, please tap the unmute button and ask your question. Thank you. I am Okumura from Okasan Securities. Can you hear me? Yes. Thank you. I have two questions. First is on the new pricing plan. Since it was introduced, how is the competitive landscape? You mentioned that you are doing good. In the short-term perspective, since June 3rd, since the plan was introduced, smartphone subscription has been positive. How is MNP moving? In addition to that, which brand, which attribute customers are changing or showing some changes? You mentioned what is happening in the brand, but vis-à-vis competitors, how have you seen any changes in the competitive landscape? Thank you. Thank you for the question. After the new pricing plan was introduced, how the competition changed? Subscriptions, MNP, brand, and vis-à-vis competitors.
Thank you. Thank
next question.
Uh, please tap the raise hand button on Zoom.
So, Okasan Securities, please tap the unmute button and ask your question.
Thank you. I'm Miura from Okasan Securities. Can you hear me?
Yes.
Thank you.
I have 2 questions.
First.
Is on the new pricing plan.
Since it was introduced, uh, how is the competitive landscape?
You mentioned that you are doing good. Uh, and in the short term,
Perspective on June, uh, since June 3rd.
Since the plan was introduced, smartphone subscription has been positive. How is MNP moving?
And in addition to that, which brand, which attribute customers are changing or showing some changes.
You mentioned, uh, what is happening in the brand vis-à-vis competitors. How have you seen any changes, uh, in the competitive landscape? Thank you.
Thank you for the question. So after the new pricing plan was introduced, how did the competition change subscriptions, MNP brand, and Visa V competitors?
Miyakawa: This is personal services sector, so Takezawa will explain. Thank you for the question. Takezawa will answer your question. First, on June 3rd, the new pricing plan started in AU Value Link Plan. As mentioned in the presentation, about 80% of AU users joined this. On UQ side, Komikomi Value and Tokutoku Plan 2, two new pricing plans are launched. Komikomi Value, 40% have joined. We are seeing an upside compared to our plan. On the other hand, vis-à-vis competitors, the mid-volume and above, we are fully competitive. In UQ, the low volume area, we have many plans. We closed the new applications for this lowest bracket. It's not so much churn. In terms of acquisition, we are seeing an impact. For this part, Tokutoku Plan 2 appeal product attractiveness is being pursued. How we compete in the low volume area is the key.
This is personal services sector, so we'll explain.
Thank you for the question.
So, Takisawa will answer your question.
First, on June 3rd, the new pricing plan started in Awe, Value Link.
Plan.
as mentioned in the presentation,
About 80%, uh, the, uh, users joined this on the UK side.
2.
To, two new pricing plans are launched.
40%.
Have joined so.
We are seeing an upside.
Compared to our plan. But on the other hand,
these are the competitors.
The midv volume and above.
Uh, we are fully competitive, but...
In UQ, the low volume area.
We have many, many plans.
We are close to the new applications for this, uh, low.
Lowest bracket.
So it's not so much churn in terms of acquisition; we're seeing an impact.
And for this part,
To toku plan 2.
Uh, appeal. A product's attractiveness is being pursued.
Miyakawa: Smartphone net addition is not strong enough, as mentioned earlier. We are trying to come up with the comprehensive measures to address this. First, starting today, some new pricing plan was introduced. This new pricing plan that is off to a good start will be used to compete effectively with our competitors. Thank you. Thank you. Compared to April and May, June smartphone subscriptions on MNP had settled somewhat. Yes, churn in June was settled, stabilized compared to April and May. In terms of acquisitions, we were a bit behind. The key is how we reinforce that part. Thank you. My second question is on business services segment. So this may be repetitive, but in growth domain, excluding lack consolidation, the actual real-term profit is down. You are struggling with digital BPO, but you are expecting positives in the second half.
So, how we compete in the low-volume area is the key.
Smartphone Knit Edition is not strong enough, as mentioned earlier. So we are trying to come up with comprehensive measures to address this.
First.
Starting today.
Uh, some, uh, new pricing plan was introduced.
so, this
New pricing plan that is off to a good start will be used to compete effectively with our competitors. Thank you.
Thank you.
so,
Compared to April and May, June smartphone subscriptions on MNT have settled somewhat.
Yes, churn in June was stabilized compared to April and May, but in terms of acquisitions, we were a bit behind. So, the key is how we reinforce that part.
Thank you.
My second question is on the Business Services segment.
Uh, so this may be repetitive, but in the growth domain.
Uh, excluding lack consolidation.
You're struggling with digital PPO, but...
Miyakawa: As you have been explaining from the past, what is the probability of the growth accelerating in the second half? Thank you. In growth area, excluding lack, it seems that it is negative growth. You want to know the probability of the growth in the second half. Guahara will answer your question. Thank you for the question. First, what we do in the second half? In our plan, looking at first and second half, as every year, we are second-half heavy, especially Q4. The one-off money, so the seasonality-wise, we have this ramp-up in Q4. For example, mobile smartphone, IoT, the monthly revenue is progressing steadily. The remainder is the temporary factor. Excluding security, we look at security together. The security is contributing to positive. We think we can continue growing security. Thank you. I hope this answers your question. Thank you.
Uh, you will be expecting positives in the second half, as you've been explaining from the past.
Uh, what is the probability of the growth accelerating in the second half? Thank you.
Thank you.
So, in the growth area, excluding lack.
Uh, it seems that it is negative growth.
So, uh, you want to know the probability of the growth in the second half.
So, Kuhara will answer your question.
Thank you for the question.
First, what we do in the second half...
In our plan looking at the first and second half.
As every year, we are second half heavy, especially in the fourth quarter.
Uh, the one-off, uh, money.
Uh, so the seasonality-wise, we have the stamp up in the fourth quarter.
For example.
Mobile smartphone IoT, the monthly revenue.
Is progressing steadily.
So, the remainder.
Is the uh, temporary.
Factor.
So, excluding security.
We look at security together.
So, the security is contributing to positive.
And we think we can continue growing security.
Thank you. I hope the censors your question.
Thank you.
Miyakawa: Just one follow-up question on the business services segment. The corporate mobile price revision, what is your thinking plan or progress? Anything you could share with us? Thank you. On the corporate side, we have revised our plan. New pricing plan has been introduced. On the corporate side, we have a one-on-one bilateral contract with companies. The number of connections, subscriptions, we discuss with customers and revise accordingly. Starlink Direct or Remote Zoom that companies use or Teams. The additional, we have a plan where we add the giga. This is highly welcomed by corporates. This is a bilateral negotiation and contract. We negotiate and revise accordingly. Thank you very much. That is all from me.
Just one follow-up question on the business services segment.
So, the corporate mobile.
Price revision. Uh, what are your thoughts? Any plans or progress you could share with us?
Thank you.
so on the corporate side,
We have revised our plan. New pricing and a new plan have been introduced, but on the corporate side (C), we have a 1-on-1 bilateral contract with the companies. So,
The number of connections subscriptions.
Yeah, we discuss with customers and revise accordingly.
Starlink Direct.
Or.
Remote, Zoom, that companies use or teams.
The additional... Uh, we have a plan where we add the giga.
So this is a highly welcomed by C Corporates. This is a bilateral negotiation and contract with. So we negotiate and revise accordingly.
Thank you very much.
Guahara: はい、奥村さん、ありがとうございます。
That's all from me.
Speaker 5: Okumura-san, thank you. Next question, please. Please tap the raise hand button. Tsusaka-san from Morgan Stanley MA Fuji Securities. Here it is, Tsusaka. Can you hear me? Yes, we can. I have one question. The net increase of smartphone subscriptions quarter on quarter was extremely small growth. By changing prices in the market, it is said that it is because of the repricing and the churn rate has risen. In August, there is the other price hike for the existing plans. Some users understand it, but other users do not. The other quarter starting in September, maybe you cannot expect a lot for the net increase for this fiscal year. In the personal area, mobile revenue and the design and the structure, not the number of users, but the migration to large capacity plans, is that your focus?
Thank you.
Next question, please.
Please stop race hunt button.
To Sasan, from Morgan Stanley. I am a security.
Here it is, Sokka. Can you hear me? Yes, we can.
I have 1 question.
The net increase of smartphone subscriptions quarter on quarter was an extremely small growth.
By changing prices.
Uh, in the market, it said that the reason is because of the repricing, and the turn rate has...
Risen up.
and in August,
This is the other price hike for existing plants.
Some users are under standard, but the users don't.
The, uh, the quarter starting in September.
Maybe you cannot expect a lot for the net increase for this fiscal year.
In the personal area.
Mobile revenue and the design and the structure.
Is that uh, your focus?
Speaker 5: In June, that net increase was very small and the churn rate went up. With the rate hike in August, maybe it could be an additional risk. What is your thought? Thank you. Thank you for your summary. Takezawa-san answers your question. Thank you for the question. As you mentioned, this net increase level, the small changes in the market and some changes in our account measures vis-à-vis customers are because of these changes and that we need to wait for those changes to pay off to be effective. We did make some other pricing changes and the changes that we announced in May. What will be the timing for them and to what extent? Of course, we will watch closely market conditions to make decisions in that area. When the right time comes, we would like to talk about it to you.
So in June, the net increase was very small, and the other channel rate is going up. And with the other rate hike in August, maybe that could be an additional risk.
What is your thought?
Thank you.
Thank you for your summary.
So, your question.
Thank you for the question.
As you mentioned.
This net increase.
Level.
The small changes in the market.
And some changes in our account measures. These are the customers, uh, because of these changes, and that we need to wait for those changes to pay off.
To be effective.
So, we did make some, uh, the pricing change.
And, uh, the changes that we announced in May.
What will be the timing for them? And, uh, to what extent? And of course, we will watch closely market conditions to make decisions in that area.
When the right time comes, we would like to talk about it with you.
Speaker 5: As to the overall structure, here is our thought. There are customers who could change the carriers or the plans. It is a good thing for us to have customers who are very loyal to us. But we are afraid of the engagement with customers becoming weaker, and that would have some impact on churn rate as well. As we announced at the beginning of the fiscal year, we started this new Value Link plan from June and also for UQ, Tokutoku, and Komikomi Value, centering around those other programs or plans, we would like to make advancements. As to the competitiveness or competitive edge for the low capacity side, how should we think about it? Some countermeasures included. We are thinking about how to maintain or recover our momentum in the competition. I think it is quite possible that we move on to that direction.
As to the overall structure.
Here is our thought.
There are customers.
who could uh, the change
The carriers or the plants, uh, the other, it is very, um, the good thing for us to have customers who are very loyal to us, but we are afraid of the engagement with customers. Uh,
Becoming weak, uh, and that would have some impact on turn rate as well.
so,
As we announced at the beginning of the fiscal year, we started this new value link plan from June, and also for the UK Dr. 2, and ecomi value.
Centering around those, uh, the programs or plans, we would like to make advancements.
As to the competitiveness of Competitive Edge for the low-capacity side, how should we think about it?
Well.
Some countermeasures include it. We are thinking about how to maintain or recover.
Our momentum in the competition.
Speaker 5: In any case, we are going to watch closely the market to make the next move. I am sorry. Could you please make some follow-ups? The ARPU revenue or mobile revenue increase comes mainly from the repricing of existing customers. Once the first round is completed, beyond that, the plan change only will bring about the ARPU increase. If that is the case, then the organic pricing change is good. I think the number of subscriptions contracts is also important, and also pricing for the plan. What will be the good balance? Once this repricing has completed its course, what will be your next step? Basically, revenue ID times the ARPU. That is for telecommunication. That remains unchanged. For ARPU, we have been working on ARPU. We have accumulated to some extent. This time, in addition, along with the provision of values, we also changed prices.
I think, uh, it is quite possible that we move in that direction. In any case, we are going to watch closely the market to make the next move. I'm sorry. Could you please make some follow-ups?
The UPU revenue or mobile revenue increase.
Uh, that comes mainly from the, uh, the repricing of existing customers. But once the first round is completed, beyond that, the plan change only, uh, that will bring about, uh, the UPU increase, if that's the case.
Then the organic, uh, the pricing change is good, but I think the number of subscription contracts is also important.
and also,
Pricing.
Prices for the plan. What will be the good balance? Once this, uh, the pricing that has completed its the other course, then what will be your next step?
Well, basically revenue IDs are not ideal.
That is for the communication.
That remains unchanged.
And for a Q1, we have been working on a Q1.
And we have accumulated to some extent.
but this time in addition,
Speaker 5: As you pointed out, the remaining element is the number of customers. I have been saying this repeatedly, that we are looking at ID as an important element as well, because that will lead to more revenue. ID times ARPU. We need to maximize the result of that calculation. That way, we need to operate our business. Thank you.
Uh, along with the provision of values, we also changed prices.
Number of customers.
And I think I have been saying this repeatedly, that we are looking at ID as an important element as well.
Because that will lead to more revenue.
ID times are poor, and we need to maximize the result of that calculation. That way, we need to operate our business.
Guahara: はい、つさかさん、ありがとう。
Thank you.
Miyakawa: Thank you, Tsukasa-san. It is exactly time. We will close KDDI's first quarter briefing of fiscal year ending March 2026. Thank you very much for your attendance.
Hi, thank you.
So, it is exactly time. We will close KDDI.
Uh, first quarter briefing of fiscal year ending March 2026. Thank you very much for your attendance.