[Earnings Deep Dive] Fibergate (9450) FY2026 Results and Future Growth Scenario: The Background of Business Restructuring and the Full Scope of Aggressive Investment Toward '5 Billion Yen in Ordinary Profit'

This report provides an objective summary and detailed analysis of the full-year financial results for the fiscal year ended June 2026, the earnings forecast for the fiscal year ending June 2027, and updates to the medium-term vision of Fibergate Inc. (Securities Code: 9450), based on their official disclosures.

By reading this report, you will gain a comprehensive understanding of the financial materials, future growth strategies, and the intent behind the company's business model transformation.

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1. FY2026 Consolidated Earnings Highlights and Overview

For the fiscal year ended June 2026, consolidated results were as follows: Net Sales of 13,664 million yen (+4.5% YoY) , Operating Profit of 1,838 million yen (-6.1% YoY) , Ordinary Profit of 1,811 million yen (-6.8% YoY) , and Net Profit Attributable to Owners of Parent of 1,082 million yen (-18.0% YoY) .

While net sales reached a record high, maintaining year-on-year growth, both ordinary profit and net profit fell below the previous year's levels and missed the initial targets set at the beginning of the period (Net Sales: 13,850 million yen, Ordinary Profit: 2,000 million yen).

Segment Overview

• Home Use Business : Net Sales of 11,334 million yen (+4.3% YoY), Segment Profit of 2,560 million yen (-2.9% YoY). Although sales grew steadily, profit saw a slight decline due to factors such as equipment cost impacts resulting from changes in contract structures.
• Business Use Business : Net Sales of 1,827 million yen (+8.5% YoY), Segment Profit of 498 million yen (+52.7% YoY). The segment achieved significant profit growth driven by strong performance in projects for medical and nursing care facilities.
• Real Estate / Renewable Energy / Other : Net Sales of 502 million yen (-3.6% YoY), with a segment loss of 123 million yen (compared to a profit of 67 million yen in the previous year). The segment turned into a loss due to acquisition costs for construction companies in the renewable energy sector and delays in securing projects.

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2. Structural Changes in the Core "Home Use Business" and the Impact of the "Outright Equipment Sale Model"

In the core Home Use Business, a rapid transition is underway from the traditional "Equipment Leasing Model" to the "Outright Equipment Sale Model." Understanding how this shift impacts performance is the most critical point of these financial results.

[Importance and Background of the Slide Above (PAGE_8)]

This slide clearly illustrates the structural factors behind the "increased sales, decreased profit" trend in the Home Use Business.

Under the traditional "Equipment Leasing Model," communication equipment costs were recorded as monthly depreciation over a long period, which helped maintain a certain profit margin while suppressing initial profit deterioration. Conversely, under the increasingly adopted "Outright Equipment Sale Model," equipment sales and costs are recorded in a lump sum at the time of installation , which tends to lower the profit margin (gross margin) in the flow business during that period.

As shown in the "Transition of Outright Sale Ratio" graph on the right side of the slide, the weight of the outright sale model within flow sales has surged over the last three fiscal years. This has resulted in a "temporary profitability decline" where operating profit gradually decreases despite rising sales.

However, this is not solely a negative factor. By selling equipment outright, the company can curb the expansion of corporate assets (tangible fixed assets) and lighten its balance sheet , while also reducing future asset risks. While it acts as a drag on profit margins in the short term, it demonstrates steady progress in the structural transformation of the business.

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3. Progress in Stock Revenue Base and Cross-Selling Strategy

While the profitability structure on the flow side is changing, the company's foundation of stock revenue remains extremely robust.

• Number of Residence Wi-Fi Connections : Reached approximately 740,000 units (739.6 thousand) as of the end of June 2026, showing steady year-on-year accumulation.
• Growth of Stock Sales : The growth trend in stock sales has continued for 33 consecutive quarters since listing , maintaining a very high Compound Annual Growth Rate (CAGR) of 19.4% .
• Cross-Selling Initiatives : Driven by rising security awareness, the simultaneous installation of network cameras and other equipment in new properties is progressing. The cross-selling ratio within Home Use flow sales remains high at 17.0% , and further horizontal expansion into other products such as FG Smart Call and delivery lockers is expected.

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4. Financial Soundness and Cash Flow Status

Financially, the accumulation of equity and high cash flow generation capability stand out.

• Equity Ratio : Reached 53.3% as of the end of June 2026, maintaining the highest level since listing.
• Free Cash Flow (FCF) : Recorded a surplus of 980 million yen for the full year (Operating CF: 2.44 billion yen, Investment CF: -1.46 billion yen), marking the 4th consecutive year of FCF surplus . Even in the second half, which saw heavy capital expenditures such as M&A, the company maintained a surplus, demonstrating strong cash-generating power.

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5. FY2027 Earnings Forecast: Significant Sales Growth and Segment Strategies

For the upcoming fiscal year ending June 2027, the company has presented a plan anticipating substantial sales growth.

[Importance and Background of the Slide Above (PAGE_19)]

This slide shows the rationale behind the seemingly contrasting forecast of rapid sales expansion (+20.8% YoY) and slight growth in ordinary profit (+0.5% YoY) for the fiscal year ending June 2027.

Roles and outlooks for each segment are as follows:

1. Home Use Business (Sales +10.8%, Operating Profit +9.0%) : Plans a turnaround to profit growth ( first profit increase in three years ) through the acceleration of the outright sale model and acquisition of new construction projects.
2. Business Use Business (Sales -1.0%, Operating Profit -15.8%) : Anticipates a temporary decline in sales and profit due to the reaction from the concentration of large-scale projects in the previous year and the positioning of this fiscal year as a "preparation period for projects."
3. Renewable Energy / Other (Sales 1.38 billion yen, Operating Profit 8 million yen) : A significant increase from the previous year's 200 million yen in sales to 1.38 billion yen (approx. 6.6x) , with plans to turn to operating profit . The contribution of the acquired construction company and progress in project acquisition are expected to drive sales and profit.

Although total company sales are expected to jump to 16.5 billion yen , reaching the 16 billion yen range, ordinary profit is planned to remain flat at 1.82 billion yen due to aggressive future investments and the recording of line and system expenses, as described below.

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6. Medium-Term Vision: "Premises Infrastructure Integrator" and Acceleration of Strategic Investment

Fibergate is currently in a transition period, evolving from a mere Wi-Fi provider into a "Premises Infrastructure Integrator." To build a system (a winning pattern) capable of achieving "5 billion yen in ordinary profit" in the medium to long term, the company has announced a major shift in its capital allocation policy.

[Importance and Background of the Slide Above (PAGE_28)]

This slide indicates the most important change in capital allocation in the company's future management strategy.

While the previous stance was conservative, focusing on self-funding, the company has clearly stated a policy to concentrate 5 billion to 6 billion yen in strategic investments over the next two years to solidify its growth trajectory for the 5th stage.

Main uses of funds include:

• M&A (acquiring construction capabilities and technical expertise)
• Operational efficiency and system-related investments
• Human resources and development investments for the B2C market

In addition to operating cash flow (5 billion yen over two years), the company plans to actively utilize external financing (approximately 5 billion yen over two years) as needed . While this will increase fixed costs and depreciation in the short term, putting pressure on profits, these are "foundations" for capturing a massive potential market in the future and signify the reignition of the growth engine to raise the ROE, which had been on a downward trend.

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7. Dividend Policy (Shareholder Returns) and Summary of Future Outlook

Regarding shareholder returns, the company plans to maintain its high return stance.

• FY2026 Dividend : Planned at 27 yen per share annually (dividend payout ratio of 50.2% ).
• FY2027 Dividend Forecast : Planned to be maintained at 27 yen per share annually (dividend payout ratio of 47.7% ).

This maintains a return level significantly higher than the previous basic policy of a "dividend payout ratio of around 33%" for three consecutive years, demonstrating a commitment to shareholder returns even while pursuing growth investments.

Conclusion and Summary

Fibergate's FY2026 financial results and future plans can be summarized as a "transition period where the company is leveraging its existing stable revenue (stock) while pushing for the lightening of its business structure and large-scale investment in next-generation infrastructure."

In the short term, profit growth appears to be slowing due to the transition to the outright sale model and upfront strategic investments, but these are being executed as part of a structural reform process to achieve the ambitious medium-term goal of "5 billion yen in ordinary profit." Key points to watch moving forward include the achievement of profitability in the renewable energy business, the horizontal expansion of cross-sell products, and the early monetization of strategic investments (M&A and systems).