Waqoo (4937) Q3 FY2026 Earnings Deep Dive: Business Transformation Yields Second Upward Revision, Operating Profit Surges 3.7x YoY to ¥560 Million

1. Executive Summary: Completion of Strategic Pivot from D2C to Medical Support for Regenerative Medicine

Waqoo, Inc. (the "Company") has announced its financial results for the third quarter of the fiscal year ending September 2026 (October 2025 – June 2026), demonstrating dramatic growth and improved profitability across all profit lines . Since December 2023, the Company has been executing a large-scale restructuring of its business portfolio, shifting from a single-model "D2C business" to a "Medical Support business" centered on the field of regenerative medicine.

In this third quarter, the synergies from the capital and business alliance with the SBC Medical Group , the Company's largest shareholder, have fully materialized. Furthermore, the number of partner clinics and the utilization rate for its flagship "PDF-FD" blood-derived processing service have surged. Consequently, the Company has announced its second upward revision to its full-year earnings forecast , significantly raising its full-year operating profit projection to ¥560 million (a 3.7x increase YoY, with an operating margin of 20.4%) , which is approximately 1.8 times the initial forecast.

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2. Q3 FY2026 Consolidated Performance Analysis

A Sharp Turnaround: From Year-Ago Losses to ¥415 Million in Operating Profit

For the first nine months of the fiscal year, the Company achieved a rapid turnaround and profit growth across all metrics: net sales reached ¥2.039 billion (+54.9% YoY) , operating profit was ¥415 million (a ¥448 million improvement from the ¥32 million operating loss in the same period last year) , ordinary profit was ¥409 million (vs. a ¥33 million loss last year) , and net profit attributable to owners of the parent was ¥392 million (vs. a ¥61 million loss last year) .

Slide Commentary: Q3 Standalone Operating Margin Hits 30.7%

As shown in Slide 16, the standalone performance for the third quarter (April–June) shows net sales of ¥905 million (+24.8% QoQ) , with an operating profit of ¥277 million (+61.5% QoQ) , resulting in a quarterly operating margin of 30.7% . This high level of profitability is driven by the rapid expansion of the Medical Support business, which carries high marginal profit ratios, and the powerful effect of "operating leverage," where the growth in gross profit significantly outpaces the increase in SG&A expenses. The EBITDA margin for the third quarter alone reached 34.5% , indicating a dramatic increase in cash-generating capability.

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3. Second Upward Revision: Full-Year Operating Profit Set to Triple YoY

Following the revision in May, the Company has once again raised its full-year earnings forecast. This is due to the business structural transformation and the collaboration with the SBC Medical Group progressing significantly faster than initially anticipated.

Slide Commentary: The Trajectory of Upward Revisions Reflecting a Dramatic Shift in Profitability

As shown in the comparison table in Slide 6, the initial plan of ¥2.345 billion in sales and ¥304 million in operating profit (13.0% margin) has been revised upward to ¥2.75 billion in sales and ¥560 million in operating profit (20.4% margin) . Compared to the previous fiscal year's actual operating profit of ¥150 million, the current operating profit is set to reach 3.7 times that level . The net profit forecast has also been significantly revised from the initial ¥184 million to ¥410 million (+122.0%) , with the Q3 progress rate against the revised forecast reaching 95.8% .

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4. Segment Performance and Business Model Transformation

(1) Medical Support Business: The Core Driver Accounting for 64% of Sales

• Net Sales : 9-month total ¥1.312 billion (+128.5% YoY)
• Segment Profit : 9-month total over ¥330 million (¥244 million in Q3 alone, +903.7% YoY)

The flagship "PDF-FD" (Plasma Derived Factor-Freeze Dry) contract processing service is accelerating its adoption in medical institutions, including national hospitals, for orthopedics (e.g., knee pain) and plastic surgery/aesthetic fields (e.g., hair concerns). A stock-based revenue model based on continuous transactions with medical institutions has been firmly established, creating an annual cycle where profit margins improve with each passing quarter.

(2) D2C Business: Redefined as a Cash-Generating Engine with Higher Profitability

• Net Sales : 9-month total ¥543 million (-26.0% YoY)
• Segment Profit : Q3 standalone ¥74 million (maintaining a high level, nearly flat YoY)

Moving away from the previous expansion-focused strategy, the Company has curbed advertising investment to maximize LTV from existing customers and streamline operations. While the top line has decreased, "profitability-oriented business management" that generates stable operating cash flow has taken root.

(3) Other/Overseas Business: Expansion of Platform-Based Revenue Models

• Net Sales : 9-month total ¥182 million (¥57 million in Q3 alone, with ¥31 million in operating profit)

This segment develops business models that support the introduction of advanced overseas medical products and technologies based on the needs of partner clinics. By leveraging early partnerships with overseas manufacturers and utilizing the existing medical institution network, this segment is beginning to contribute as a high-margin new revenue source.

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5. Key KPI Trends: Simultaneous Growth in Network Effects and Utilization Rates

The KPIs supporting the revenue base of the Medical Support business are composed of the product of the "number of partner clinics" and the "average number of daily processing orders (utilization rate)."

Slide Commentary: Stock-Based Growth Proven by Sustained KPI Expansion

Slide 27 clearly illustrates the increasing depth of the Company's business foundation.

• Number of Partner Clinics (Cumulative) : Reached 844 clinics (+135.0% YoY) at the end of Q3 FY2026, steadily expanding the nationwide network of clinics and hospitals.
• Average Daily Processing Orders : Reached a record high of 29.3 orders (+137.6% YoY) , up from 26.7 in the previous quarter.

Through the penetration of "one-stop sales" that provide consistent support from new contracts to utilization, the active rate after introduction and the number of orders per clinic are increasing. The cumulative number of processing orders has surpassed the 20,000 mark, reaching 21,818 (+163.7% YoY) .

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6. Rapid Improvement in Financial Health and Shareholder Returns

Retained Earnings Turn Positive, Equity Ratio Rises to 67.8%

With the transformation of the profit structure, the balance sheet has also improved dramatically.

• Total Assets : ¥3.683 billion (+¥484 million from the end of the previous fiscal year)
• Net Assets : ¥2.511 billion (+¥420 million from the end of the previous fiscal year)
• Equity Ratio : 67.8% (+2.7pt from the end of the previous fiscal year)
• Retained Earnings : Achieved a turnaround from a deficit of ¥338 million at the end of the previous fiscal year to a surplus of ¥54 million at the end of Q3.

First-Time Introduction of Shareholder Benefits

As part of deepening the capital and business alliance with the SBC Medical Group, the Company has introduced a shareholder benefit program for the first time . Shareholders holding 100 shares (one unit) or more will receive a "10% OFF coupon" usable at 146 SBC Shonan Beauty Clinics nationwide. This is not merely a return to shareholders, but a circular design that directly leads to improved corporate earnings through customer referrals to partner clinics and the promotion of the Company's own products and services .

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7. Mid-to-Long-Term Growth Story and Outlook

The Company is looking beyond its current autologous cell-based PDF-FD contract processing business toward the mass production and cost reduction of regenerative medicine products using allogeneic cells in the future. By taking on challenges in intractable diseases such as dementia and diabetes through joint research with the Center for iPS Cell Research and Application at Kyoto University, and by building technical barriers to entry through the filing of upstream patents (20 applications), the Company is establishing a system that integrates academics, clinical practice, intellectual property, and manufacturing.

By reinvesting its current robust cash-generating power into R&D and the expansion of its partnership network, the Company is establishing a unique position that elevates regenerative medicine from "expectation" to an "industry."