Q3 2025 SBC Medical Group Holdings Inc Earnings Call

November 17, 2025

Speaker #2: Evening. I'm Mishka Lefkui, Head of the Good IR Department. Since it is now the scheduled time, I'd like to begin today's session. Thank you very much for taking time out of your busy schedule to join the briefing of SBC Medical Group Holdings.

Speaker #2: Today, we will be presenting our third-quarter financial results, business progress, and capital policy. At the bottom of your screen, you will find the question box.

Speaker #2: If you have any questions, please enter them briefly and concisely. We will address them after the presentation. Now, I'd like to hand the presentation over to our CFO, Mr. Yoshida.

Speaker #2: Mr. Yoshida, the floor is

Speaker #2: yours. Good afternoon.

Yuya Yoshida: Good afternoon. I'm Yuya Yoshida, CFO of SBC Medical Group Holdings. Thank you very much for joining our conference call today despite your busy schedules. I will now walk you through our results for Q3, the progress of our business, and our capital policy. Please turn on slide 5. Okay. First, regarding our franchisee clinics' performance. We added the number of clinics to 258 clinics by 34 locations increase. The annual number of customers continued to increase steadily and has now expanded to approximately 6.5 million. Next, please. Yes. I'm gonna touch upon the average spend per customer. The graph on the left shows the quarterly trend of average spend per customer.

Speaker #3: I'm Yuya Yoshida, CFO of SBC Medical Group Holdings. Thank you very much for joining our conference call today despite your busy schedules. I will now walk you through our results for the third quarter, the progress of our business, and our capital policy.

Speaker #3: Please turn to slide 5. Okay. First, regarding our franchisee clinics' performance, we have increased the number of clinics to 258, representing a 34-location increase. The annual number of customers has continued to increase steadily and has now expanded to approximately 6.5 million.

Speaker #3: Next, please. Yes. I'm going to touch upon the average spent per customer. The graph on the left shows the quarterly trend of average spent per customer.

Speaker #3: As you can see, thanks to initiatives such as pricing and promotional strategy optimization, along with our multi-brand strategy and dermatology segment, which has successfully captured the highest spending customer groups, the overall average revenue per customer visit is clearly showing signs of recovery.

Yuya Yoshida: As you can see, thanks to initiatives such as pricing and promotion, strategy optimization, and our multi-brand strategy in the dermatology segment, which has successfully captured higher-spending customer groups, the overall average revenue per customer visit is clearly showing signs of recovery. We intend to sustain this positive trend by accurately capturing customer needs and continuing to provide high-quality, high-satisfaction services. Next, please. Next, financial performance for Q3. Our sales had been affected by restructuring and division to franchise fees, but have since bottomed out, supported by an increase in points-related revenues. Additionally, the decline in restructuring-related costs, including share-based compensation expenses, contributed to a turnaround in both operating income and net income. From here, we aim to place the company firmly back on a sustainable growth trajectory. Next, please. Okay.

Speaker #3: We intended to sustain this positive trend by accurately capturing customer needs and continuing to provide high-quality, high-satisfaction services. Next, please. Next, financial performance for the third quarter.

Speaker #3: Sales had been affected by restructuring and division to franchise fees, but have since bottomed out, supported by an increase in point-related revenues. Additionally, the decline in resting-related costs, including share-based compensation expenses, contributed to a tolerance in both operating income and net income.

Speaker #3: From here, we aim to place the company firmly back on a sustainable growth trajectory. Next, please. Okay, yeah. We are pleased to announce that our first step in entering into Thailand is through a partnership with Bliss Azure.

Yuya Yoshida: We are pleased to announce that our first step in entry into Thailand is through a partnership with BLEZ ASIA. We have entered into a consulting agreement with BLEZ ASIA Co., Ltd., a company with more than 10 years of experience and a network of over 20 pharmacies and clinics, mainly in Thailand, to provide laser treatment at affordable price. By deepening our collaboration with BLEZ ASIA, we'll accelerate our full-scale entry into Thailand's rapidly growing aesthetic medical market. Next, please. Regarding our initiative for Waqoo. Recently, we announced the commencement of a tender offer to acquire majority stake in Waqoo, which engages in R&D for regenerative medicine and skincare product with the goal of making it a subsidiary.

Speaker #3: We have entered into a consulting agreement with Bliss Azure Corporate Limited, a company with more than 10 years of experience in a network of over 20 pharmacies and clinics, mainly in Thailand, to provide laser treatment at an affordable price.

Speaker #3: By deepening our collaboration with Bliss Azure, we'll accelerate our full-scale entry into Thailand, a rapidly growing aesthetic medical market. Next, please. Yes, regarding our initiative for Raku, we recently announced the commencement of a tender offer to acquire a majority stake in Raku, which engages in R&D for regenerative medicine and skincare products, with the goal of making it a subsidiary.

Yuya Yoshida: By combining the strengths of both companies, we aim to enhance the speed and innovation of our R&D and expand new treatments and unique service offerings in clinical areas such as AGA and orthopedics. Through this initiative, we seek to strengthen the group's overall competitiveness and achieve sustainable growth for both companies. Next, please. Yeah, next, I'm gonna touch upon the balance sheet. Oh, yeah. We maintain a sound and a robust financial base with sufficient cash and deposits. To further accelerate growth, building strong relationship with financial institutions is essential. Recently, we utilized bank financing for working capital purposes. Our untold liquidity will continue to be actively deployed for strategic investments, including both organic growth and M&A in Japan and overseas. Next, please.

Speaker #3: Companies, we aim to enhance the speed and innovation of our R&D and expand new treatments and unique service offerings in clinical areas such as AGA and orthopedics.

Speaker #3: Through this initiative, we seek to strengthen the group's overall competitiveness and achieve sustainable growth for both companies. Next, please. Yeah. Next, I'm going to touch upon the balance sheet.

Speaker #3: Oh, yeah. We maintain our sound and robust financial base with sufficient cash and deposits. To further accelerate growth, building strong relationships with financial institutions is essential.

Speaker #3: Recently, we utilized bank financing for working capital purposes. Our unpledged liquidity will continue to be actively deployed for strategic investments, including both organic growth and M&A overseas.

Speaker #3: Next, Japan. And please, finally, regarding our capital policy, we recognize that the liquidity of our sales is still low, making it difficult for many institutional investors to trade.

Yuya Yoshida: Finally, regarding our capital policy, we recognize that the liquidity of our shares is still low, making it difficult for many institutional investors to trade. To address this, we will work on improving supply and demand and pursue measures such as new share insurance and partial sale of shares held by the founders. This will help create a more investment-friendly environment for a broader range of investors. That concludes my presentation. Thank you very much for your attention.

Speaker #3: To address this, we will work on improving supply and demand and pursue measures such as new share insurance and a partial sale of shares held by the founders.

Speaker #3: This will help create a more environmentally friendly atmosphere for a broader range of investment-friendly investors. That concludes my presentation. Thank you very much for your attention.

Hikaru Fukui: Thank you very much, Mr. Yoshida. We will now move on to the Q1 session. Here is the first question. Why was COGS elevated during Q3 2025? When do you expect franchise fee division impact to be fully absorbed going forward? Thank you.

Speaker #2: Thank you very much, Mr. Yoshida. So we will now move on to the Q1 session. Here is the first question: Why was Cox elevated during Q3 2025?

Speaker #2: And when do you expect the impact of franchise fee division to be fully absorbed going forward? Thank you.

Yuya Yoshida: Okay. First of all, the main reason why the costs increased is the increase of medical equipment lease and effect of consolidation of AAH that we acquired in Singapore. We see our financial performance bottomed out of Q3, and we see this trend will continue in the rest of the last year. Although there is some uncertainty, but so far we are not seeing any major negative factors, so we want to keep the positive momentum that we saw in Q3 in the foreseeable future.

Speaker #1: Okay, first of all, the main reason why the policy increased is the rise in medical equipment lease and the effect of the consolidation of AHH that we acquired in Singapore.

Speaker #1: Yes. And, yeah, we've seen, there is, yeah, we see our financial performance bottom out of Q3, and we see this trend will continue throughout the last of the year.

Speaker #1: And, yeah, although there is asymmetry, we are not seeing any major negative factors so far. We want to keep the positive momentum that we saw in Q3 in the foreseeable future.

Hikaru Fukui: Yeah. Thank you very much. Next question is, there are various balance sheet changes during the quarter, which expected impacted cash level during Q3 2025. Could you elaborate these changes?

Speaker #2: Yeah, thank you very much. So, the next question is, there are various balance sheet changes during the quarter that are expected to impact cash levels. During Q3 2025, could you elaborate on these?

Speaker #2: changes? Okay.

Yuya Yoshida: Okay. Regarding the changes in balance sheet, first of all, we are borrowing bank financing for working capital that I mentioned in the presentation. Second, we changed the payment term for the related parties in the last quarter. Third, the decrease of tax debt, we just paid our midterm in-income tax at the end of August. That's why these changes happened in our balance sheet.

Speaker #1: Yeah. Regarding the changes in the balance sheet, first of all, we are borrowing bank financing for working capital that I mentioned in the presentation.

Speaker #1: And second, we changed all the payment term for the, related parties, of the, yeah. In the in the last quarter. And, third, the decrease of, tax the, tax debt, we just paid, me our midterm, in-income tax at the end of August.

Speaker #1: Yeah, that's why these changes happened in balance.

Speaker #1: sheet. Thank you very

Hikaru Fukui: Thank you very much. next is regarding the brand. Could you explain the expected impact of the new brand and also the profile, how do you think about the our SBC brand impact to the Thailand market?

Speaker #2: Much. So next is, regarding the breadth. Could you explain the expected impact of the new breadth and also provide how you think about the SBC brand's impact on Thailand?

Speaker #2: market? Yes.

Yuya Yoshida: Yes. Yeah. We are pleased to announce this initiative in Thailand. Yeah, regarding the financial impact, in the near term, the impact will be not significant because we are trying some POC, proof of concept, in Thailand, yeah, by providing the laser treatment to customers, not only Japanese, but also Thai people, at affordable prices. After we completed POC, we think we can expand the business into not only Thailand, but also other Asian countries such as Malaysia or Indonesia. Yeah.

Speaker #1: Yeah. We are pleased to announce this initiative in Thailand. Regarding the financial impact, in the near term, the impact will be not significant.

Speaker #1: Because we are trying the same POC, proof of concept, in Thailand. Yeah. By providing the laser treatment to customers, not only Japanese but also Thai people, at affordable prices.

Speaker #1: So, but after we completed the POC, we think we can expand the business into not only Thailand, but also other Asian countries such as Malaysia or Indonesia.

Speaker #1: Yeah.

Hikaru Fukui: Thank you so much. Next is, what is your expectation for organic growth going forward for both clinics and revenue?

Speaker #2: Thank you very much. Next, what is your expectation for organic growth going forward for both Greeks and revenue?

Yuya Yoshida: Again, yeah, we expect we can keep this positive momentum that we saw in Q3 because we basically completed fee structure changes. But, although, yeah, we completed our financial restrictions somewhat, the effect for the revenue and profit of SBC Holdings will be late a bit. I think we expect more stable financial performance in Q4 and next year.

Speaker #1: Again, yeah, we expect we can keep this positive momentum that we saw in Q3 because we completed, or basically completed, fee structure changes.

Speaker #1: So, but although we completed our financial restrictions somewhat, the effect on the revenue and profit of SBC Holdings will be delayed a bit.

Speaker #1: So, I think we expect more stable financial performance in Q4 and next year.

Speaker #2: Thank you very much. So next is regarding WAKU. Could you describe the strategic relationship behind the acquisition of WAKU, and also, please show the outline of the integration roadmap for WAKU?

Hikaru Fukui: Thank you very much. Next is, regarding Waqoo. Could you describe this strategic rationale behind acquiring, Waqoo? Also, please show the outline of the integration roadmap for Waqoo.

Speaker #1: Okay, maybe, yeah. I'll talk about, I mentioned Mr. Sakaguchi. Can touch upon this initiative.

Yuya Yoshida: Maybe, yeah, also provide mention, Mr. Sakaguchi can touch upon this initiative.

Taiki Sakaguchi: Sure. This is Taichi Sakaguchi. I'm Chief Planning Officer in SBC. Regarding the WAKU, actually, it's difficult to describe the real number about this WAKU TOB, but we believe that synergies can be realized through strengthening the sales of WAKU products at SBC Clinic and jointly developing pharmaceutical and medical devices and outsourcing cell culture and processing operations to WAKU, which currently we outsource to other companies. We complete this operation within our group. After completing this TOB, we will discuss with WAKU management in detail on this, and we will clarify the numbers. This is what we are considering right now.

Speaker #3: Sure. This is Take Sakaguchi. I'm the Chief Planning Officer at S-SBC. Regarding the WAKU, actually, it's difficult to describe the real number about this, WAKU TOB, but we believe that synergies can be realized through strengthening the sales of WAKU products at SBC Clinic.

Speaker #3: And jointly developing pharmaceuticals and medical devices and outsourcing cell culture and processing operations to WAKU, which we currently outsource to other companies. We complete this operation within our group.

Speaker #3: And after completing this TOB, we will discuss with WAKU management in detail on this, and we will clarify the number. This is what we are considering right now.

Hikaru Fukui: Mm-hmm.

Speaker #3: Thank you.

Yuya Yoshida: Yeah. Basically, it's very important combine Waqoo's R&D function and SBC's, our clinics, franchising network. Yeah. That's most important things in this initiative.

Speaker #1: Yeah. Basically,

Speaker #1: It's very important to combine WAKU's R&D function and SBC's clinics and franchising network. Yeah, that's the most important thing in this initiative.

Speaker #2: Thank you very much. So, next question is for Steven: can you comment on the relative status of your U.S. business development efforts?

Hikaru Fukui: Thank you very much. Next question is for Stephen. Can you comment on the latest status of your US business development efforts?

Speaker #4: Sure. Hi, Steven here. I'm the head of Global Planning Strategy, and also leading SBC's market entry into the U.S. So, the way that we've been thinking about the U.S. strategy is, you know, looking at what we've developed in Japan, which is amazing over the last 25 years, developing into the number one medical aesthetic clinic.

Stephen: Sure. Hi. Stephen here. I'm the Head of Global Planning Strategy, and also leading SBC's market entry into the US. The way that we've been thinking about the US strategy is, you know, looking at what we've developed in Japan, which is amazing over the last 25 years, developing into the number one, you know, medical aesthetic clinic. You know, we have to recognize that what we've built there is, it's really hard to just copy and paste and move that into the US where the market is, you know, very different.

Speaker #4: you know, we have to recognize that we what we've built there is, is really hard to just copy and paste. and move that into into the US where the market is, you know, very different.

Stephen: At the moment now we're in a phase of really getting smart about, you know, what's happening in the US, and we're looking for, you know, strong partners that we can work with that we can leverage a lot of the SBC learnings and strengths in Japan and that we can use in the US. You know, at the same time too, we're also looking at a lot of the cool things that are happening in terms of different treatments and technologies that are being introduced in the US and overseas that we could then potentially get first mover advantage back into Japan as well. We're also looking at a lot of different technologies too. You know, there's a lot of cool things happening there.

Speaker #4: The moment now, we're in a phase of really getting smart about, you know, what's happening in the U.S. And we're looking for, you know, strong partners that we can work with, that we can leverage a lot of the SBC learnings and strengths in Japan and that we can use in the U.S.

Speaker #4: You know, and at the same time too, we're also looking at a lot of the cool things that are happening in terms of different treatments and technologies that are being introduced in the U.S. and overseas.

Speaker #4: That we give them potentially gets first mover advantage back into Japan as well. And then we're also looking at a lot of different technologies to, you know, there's a lot of cool things happening there.

Speaker #4: So I would say right now we're really looking at companies where we can develop strong partnerships. I would say, you know, initially, we're hesitant to just kind of copy and paste and start building our clinics now, but that could be in the future.

Stephen: I would say right now we're really looking at companies where we can develop strong partnerships. I would say, you know, initially, we're hesitant to just kind of copy and paste and start building, you know, our clinics now, but that could be in the future. Then once we start to feel more comfortable, I think we'll start to see a lot more growth and expansion in the US.

Speaker #4: And then once we start to feel more comfortable, I think we'll start to see a lot more growth and expansion in the U.S.

Speaker #2: Thank you very much. So, the next question is probably for Ichimori-san. Can you discuss your expectations for M&A going forward?

Hikaru Fukui: Thank you very much. Next question is probably this is for Ichimori-san. Can you discuss your expectation for M&A going forward?

Taiki Sakaguchi: Can you hear me?

Speaker #3: Can you hear me?

Hikaru Fukui: Yeah.

Speaker #3: So, going forward, I think the M&A strategy is separated between Japanese domestic, which means Japan, and global M&A strategy. For the domestic M&A strategy, I think we will pursue, as we have done so far, a focus on medical, specifically in the clinic field.

Taiki Sakaguchi: Going forward, I think the M&A strategy is separated between domestic, which means Japanese, and a global M&A strategy. For domestic M&A strategy, I think we pursue, as we have done so far, to like medical, which is in the clinic field acquisition as we have done so far. Also we can also pursue more like not only aesthetic medical industry, but also more like medical clinical industry as well. For global perspective, we are going into medical spa industry, which we are familiarized with. Also, like, I think we needed to study a little bit more in this industry and global perspective. We may want to invest rather than actual acquisition, especially in the US industry.

Speaker #3: Acquisition, as we have done so far. And, also we can also, pursue, more like not only aesthetic medical industry, but also more like medical clinical industry as well.

Speaker #3: And for global global perspective, we are going going into, me-metal spark industry, which we are familiarized with. and also, but, like, I, I think we are we needed to study a little bit more in this industry in global perspective.

Speaker #3: So we may want to invest rather than full acquisition, especially in the U.S. industry. So I think that's the brief global strategy, I mean, M&A strategy going forward.

Taiki Sakaguchi: I think that's the brief, global strategy. I mean, amount of strategy going forward.

Hikaru Fukui: Thank you very much. I'll get back to the financial matter. What do you mean by more stable financial performance in Q4 and 2026? Does this mean a return to revenue growth? If so, could you provide any expectation for how much growth?

Speaker #2: Thank you very much. So I'll get you back to the financial matter. What do you mean by more stable financial performance in Q4 and 2026?

Speaker #2: Does this mean a return to revenue growth? And if so, could you provide any expectations for how much growth?

Yuya Yoshida: Yeah. The simple answer is yes. Unfortunately, at this moment, we cannot give you a concrete number of the revenue growth and profit growth. We heard from our investors that they need kind of revenue guideline or profit guideline. That's where we are considering actively. We are thinking providing some financial guidance in the near future.

Speaker #1: Yeah. The simple answer is yes. And, yeah, unfortunately, at this moment, we cannot give you a concrete number of the revenue growth and the profit growth.

Speaker #1: Yeah, we heard from our investors that they need kind of revenue guidelines or profit guidelines. So we are actively considering that.

Speaker #1: So yeah, we are thinking of providing some financial guidance in the near future. Yeah.

Speaker #2: Thank you very much. So, I'll get you to move to the capital matters. Regarding the current liquidity situation, how do you think about improving the liquidity situation?

Hikaru Fukui: Thank you very much. I'd like to move to the capital matters. Regarding current liquidity situation, how do you think about how to improve the liquidity situation? Thank you.

Speaker #2: Thank

Speaker #2: you.

Yuya Yoshida: Basically, we want to increase the free float. Free float shares. As I mentioned in the presentation, we are considering the new issuance of shares or selling by our CEO founded shares. On top of that, we are considering the share buyback as well, that we done in this year. Yes. Given the weak share price. We have to admit the current share price is too low, so we're considering the number of methods to tackle with the share price.

Speaker #1: Yeah.

Speaker #1: Basically, we want to increase the free float. Yeah. Free float sales. So, as I mentioned in the presentation, we are considering the new issuance of shares or selling by our CEO, founder sales.

Speaker #1: Yeah. On top of that, we are considering the, share buyback and, as well. Yeah. That we, we done in the, in this year. Yes.

Speaker #1: Given that the share price is weak, we have to admit the current share price is too low. So we are considering a number of measures to talk with the share.

Speaker #2: Thank you very

Hikaru Fukui: Thank you very much. Do you think about the dividend going forward?

Speaker #2: Much. Do you think about the price of the dividend going?

Speaker #2: forward?

Yuya Yoshida: Sure. Yeah. Dividend has been one of our options. We do see dividends as one of the effective way to attract new investors, especially retail investors. On the other hand, we believe there are still many multiple growth opportunities. Yeah, we see very good pipelines in the M&A, not only domestically, but also globally. Our priority is to allocate capital with those strategic initiative.

Speaker #1: Sure. Yeah. Dividend,

Speaker #1: As has been one of our options, we receive dividends as one of the effective ways to attract new investors, especially retail investors. But on the other hand, we believe there are still many multiple growth opportunities, especially the, yeah, we see very good pipelines in the M&A.

Speaker #1: Not only domestically, but also globally. So our priority is to obtain capital through the source of strategic initiatives.

Speaker #2: Thank you very much. So, do you have any plans to disclose guidance, financial guidance, or performance guidance going forward?

Hikaru Fukui: Thank you very much. Do you have any plan to disclose, guidance, financial guidance or performance guidance going forward?

Yuya Yoshida: Yeah. That's what we, I just mentioned. Yeah, we are considering that. Yeah.

Speaker #1: Yeah, that's what we just mentioned. Yeah, we are considering that.

Speaker #2: Thank you very much. So thank you very much. So I'd like to wrap up this session. Mr. Yoshida, do you have any, wrap-up, message to the, investors?

Hikaru Fukui: Thank you very much. I'd like to wrap up this session. Mr. Yoshida, do you have any wrap-up message to the investors?

Speaker #1: Yeah, I mean, thank you for joining this conference call. We committed to provide sufficient information to our investors. We hope our positive trend will continue in the near future.

Yuya Yoshida: Yeah, again, thank you for joining this conference call. Yeah, we committed to provide sufficient information to our investors. Yeah, we hope our positive trend will continue in the near future. Yeah, let's see. Thank you very much.

Speaker #1: So yeah, let's see. Thank you very much.

Hikaru Fukui: Thank you very much. We'd like to wrap up this today's earnings brief session. Thank you very much for joining.

Q3 2025 SBC Medical Group Holdings Inc Earnings Call

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