SBC Medical Group Holding (NASDAQ:SBC) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call.

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View the webcast at https://zoom.us/webinar/register/WN_sEGnJWOyQDejlpnuGnxQgA

Summary

SBC Medical Group Holding reported strong financial results for Q2 2026, with revenue of $49 million, up 13% year-on-year, and adjusted EBITDA of $20 million, reflecting a 32% increase.

The company has completed structural reforms from 2025, leading to re-accelerated growth with a focus on AI, aesthetic, and non-aesthetic healthcare to support longevity.

Clinic expansion continued with 287 locations as of June 2026, and initiatives include a multi-brand strategy in aesthetic dermatology, global expansion, and AI-driven efficiency improvements.

Strategic goals include expanding internationally with partnerships like OrangeTwist in the US and a Powered by SBC model in Southeast Asia.

AI plays a central role in competitive advantage, enhancing customer service with chatbots and AI call centers, and aiding in clinic network expansion.

Future outlook includes robust growth in both domestic and international markets, aiming for 1,000 clinics by 2035 and leveraging AI and longevity trends.

The company plans continued investment in M&A and organic growth, with a focus on enhancing shareholder value and broadening market recognition.

Full Transcript

Fukui, Head of IR

Joining me on the call today are Yoshiyuki Aikawa, CEO, and Yuya Yoshida, CFO, COO, and AI Evangelist. I am Fukui, Head of IR Department, and I will be your moderator today. Presentation materials for today are posted on our investor relations website. Minutes of the call will also be posted as soon as they are prepared. Today's discussion contains forward-looking statements. These forward-looking statements do not guarantee future performance. Actual results may change due to various factors.

For details, please refer to our filings with the SEC. Today's discussion may also refer to non-GAAP financial indicators. A reconciliation of GAAP to non-GAAP financial measures can be found on our presentation material for today. Let me introduce the program today. First, around 10 minutes of presentation will be delivered using AI. Please rest assured since the content has been reviewed beforehand. Then there will be a message from Dr. Aikawa.

Before we move on to the Q and A session, please click the Q and A icon at the bottom of the screen and type in and submit your questions. We will now start the presentation.

Yoshiyuki Aikawa, CEO

Good evening. I am Aikawa, CEO of SBC Medical Group Holding. Just as you have seen in the presentation, the second quarter numbers were very strong numbers in 2024 and in 2025. In these two years we saw a Dramatic change in aesthetic medicine environment in Japan where competition became very fierce. It is now the 26th year after we started our business and the growth was somewhat stagnant. But in the last two years in the much changed environment, how do we accelerate our growth was what we put our focus on and put our efforts on marketing methods. And fees, the treatment. These were all renewed and in such an environment, we were able to demonstrate that we can achieve strong growth.

We are determined to continue this strong growth continuing from this second quarter. Amongst Japanese medical institutions, we are trying to be the organization that makes the most use of AI. Our COO is taking the leadership on that. AI-based chat to respond to patients automatically is one example, or AI telephone response appointment system recommendation functions. We are able to use AI for various functions to improve convenience for our customers and improve customer experience.

And at the same time we will be able to improve the efficiency of our management. We will have more efficient management and I'm sure that that will contribute to profitability. That is how we foresee. We aim to be longevity company. That is the company-wide objective. The growth was primarily driven in aesthetic health care, but including orthopedic and ophthalmology, fertility treatments—in these categories, we expect to see growth and we intend to achieve growth in these categories.

Right now the majority of our business is aesthetic health care. But in 10 years’ time, the proportion of aesthetic healthcare is expected to be smaller while other categories will be much larger in proportion in terms of financial performance and profitability. That is the future that we are envisioning and targeting. As for the number of clinics, it is now close to 300 and in 2035 our target is to have 1000 clinics and we would like to be able to achieve that target as soon as possible and therefore would like to achieve growth in categories other than aesthetic healthcare.

And as for international business, we have clinics in Thailand, Singapore, and Vietnam. And gradually business is expanding and when we have one winning pattern, we will be able to roll that out in the all of Asian region. This second quarter was a very strong quarter and I believe that we were able to meet the expectations of the investors and we will work to improve upon this result in the third and the fourth quarters to meet your expectations.

Fukui, Head of IR

That was CEO Aikawa. Thank you very much. Now we would like to open the floor for Q&A session. Please click the Q&A icon at the bottom of the screen and enter your questions and submit it now. The first question re accelerating the growth that was presented and domestic the aesthetic clinics performance is improving. Compared to the first of 2024 and 2025, what structural changes have been brought about? Can we expect to see further improvement going forward?

Moving on to the next question. Question on Japan. What is the competitive environment in Japanese aesthetic healthcare market?

Yoshiyuki Aikawa, CEO

Well, in terms of the competitive landscape. At maximum last year or in the first half of this year, right now has probably seen the peak of competition and recently or earlier there were a lot of new aesthetic clinics being opened increasing their numbers. But recently we have seen slowing down of the increase. So the players, the number of players, is going to be reduced going forward. But in Japan's aesthetic medicine market, I believe that the market itself is going to expand going forward.

With the expansion of the market, but slightly reduced number of players in the market. That is what we are expecting to see. And going forward we believe that the environment will come where we will be able to exhibit our strength.

Fukui, Head of IR

Thank you very much. Next question is about financials. The second quarter was a very great quarter. However, SG&A was higher than expected. Will you please detail? Thank you. We have another question on finance. About $15 million of upside in fee was highlighted. What is the timing of those increases and how much of this is already reflected in Q2 and what is the incremental margin contributions? Thank you very much. Next is about global strategy. OrangeTwist. What is the current status of the OrangeTwist? Could you please give us your update? Since you made investment, what learnings did you get? Or in the coming 12 months, what kind of important milestone are you planning to have?

Yuya Yoshida (Chief Financial Officer, Chief Operating Officer, and AI Evangelist)

Since I'm responsible for international business, I would like to respond to this question. As for a major learning, in the past six months or so, the management structure was reviewed and one of the co-founder became the CEO. He's Clint Colonel and we have learned much from him. Medspa business in the US, how it will be expanded in the United States, we are learning that under his leadership. For example, SBC's procurement can be utilized to reduce cost of purchase.

Comprehensive marketing strategy is also being revisited. In actual clinics, customer proposition protocol is being reviewed and events to attract customers will be organized. This is related to branding. We have not done these before, but in a very short period of time these are implemented one after another. The speed of implementation is much quicker after Clint joined. In the growth area, longevity products will be enhanced in conjunction with SBC in the next 12 months.

What we can expect over the next 12 months, SBC is working together with OrangeTwist and under SBC brand. We would also like to do business

Fukui, Head of IR

We have another question on the United States. In expanding U.S. business, what are you thinking of doing? Will you expand OrangeTwist locations or buy other companies or increase your ownership of OrangeTwist?

Yoshiyuki Aikawa, CEO

Well, expanding OrangeTwist itself. Yes. This is something that we are sure will be done. And increasing our stake in OrangeTwist is also being considered. And members of OrangeTwist will be cooperating with us so that our unique, winning model in the United States market, together with them, we would like to scale across regions, increasing the number of locations.

Yuya Yoshida (Chief Financial Officer, Chief Operating Officer, and AI Evangelist)

If I may add, as he mentioned, in principle there will be a mixture of different measures. As SBC Medical Group Holding, we may be deploying our locations as well. In principle, an OrangeTwist roll-up strategy and M&A are being utilized in order to increase the clinics, and last year we did one, increasing the number of locations to 24. Now, other than this, there may be opportunities for M&A. There has been approach to OrangeTwist. Therefore we are currently considering all of these as opportunities for growth.

Thank you very much for your question.

Fukui, Head of IR

Next question is about Southeast Asia. Your strategy in this region. What is the traction of the strategy being implemented? What are going to be the future steps

Yoshiyuki Aikawa, CEO

In Vietnam, in Thailand and in Singapore. We have clinics in Singapore. Last year we acquired AHH. We would like to expand AHH clinics in Singapore. As for Vietnam, it has been already 10 years after we have started operating clinics and for the first time we are seeing increase in the number of Vietnamese patients, customers, and it has started to grow rapidly. Once we have a strong model here, then in Vietnam alone, population is 100 million. So I'm sure we will be able to open other locations in Thailand and in Hong Kong.

These are countries where there are people who like Japanese culture and I believe it will be easier to open clinics in these countries. In relation to international business, as for inbound, on a single-month basis, in the past few months we have seen growth by several folds and in particular we have seen increasing customers from Taiwan. The measures that we have implemented in the past one or two years are leading to these actual results in our business in Asia and also our business with inbound customers.

Fukui, Head of IR

Thank you very much. We have a related question. Outside of Japan, in the second half of 2026 and in 2027, in that time span, what territories represent the greatest growth opportunity?

Yoshiyuki Aikawa, CEO

Well, as we mentioned earlier, Vietnam may have the opportunities, and also inbound market, foreign visitors coming to Japan. This market is growing for sure. And business in the US, with the leadership change, it is showing a speedy growth. So these three areas are those opportunities that we will be growing for sure.

Fukui, Head of IR

Thank you very much. Next question is about AI strategy. Service fee is going to be enhanced due to the development of AI technologies, and other than this, what kind of impacts can be seen from the implementation of AI technologies? If you have any time of scale for that, could you please share it with us?

Yuya Yoshida (Chief Financial Officer, Chief Operating Officer, and AI Evangelist)

I'm happy to address that question. We are releasing various AI products one after another. As Dr. Aikawa explained, chatbot has been released in August, and before the end of the year we expect to open AI call center and AI preceptor to support the training of nurses, and concierge will also be launched. So in the next six months to 12 months, we will be introducing more AI products, and core system will be revamped using AI. What we are basically aiming to achieve is that in 2035 we would like to have 1,000 clinics.

At least in the indirect departments, we would like to maintain the scale at the current scale in terms of headcount, and we would like to achieve 1,000 clinics without increasing fixed cost. To improve operational efficiency, we are using AI, and that area is moving ahead of other areas, but we would also like to improve customer experience. For example, AI chatbot released on the websites may be converted to apps so that a treatment history and simulation using customers’ own photographs may be used in a more personalized fashion to improve UX.

Through such efforts, we would like to improve customers’ convenience and improve our sales. We not only aim to improve efficiency, but increase sales through the use of AI. That is what we are hoping to achieve and we expect to achieve.

Fukui, Head of IR

Thank you. We have a question on longevity, about longevity efforts. How does SBC Medical Group Holding see longevity as an opportunity and how does SBC Medical Group Holding plan to make it a business?

Yoshiyuki Aikawa, CEO

Yes, longevity in Japan. Japan is actually the country where people live longest. With aging population in this country, and the number of elderly people is very large. So compared to other countries, in this sense we are more advanced. We would like to turn this into a major pillar for profitability and revenue for healthcare. Logically speaking, and simply put, for people to live healthy and vibrant lives for long so that they are able to enjoy their lives, we would like to help that through implementation of our medical technologies.

So in that sense, aesthetic medicine or healthcare is helpful even for those elderly people in order to better their appearance. By doing so, they will be able to stay vibrant and they will be able to continue working. For that, we believe that we will be able to help people living that way. And for example, regenerative medicine and orthopedics that we are engaged in: in these areas, if you have a painful knee or joint, you are not able to enjoy playing sports or you are not able to travel.

So in these senses, in order to prevent such restriction of activities for such people, we would like to help them. And in dentistry, chewing, utilizing your own teeth to eat, is very important for human activity. So we'd like to grow that area as well. And the gene screening that is conducted in the United States in order to see the ages of organs can be investigated, for which peptides or hormone endocrinology and the supplements—any kinds of therapies—can be proposed to address such aging of organs.

A kind of subscription, recurring services based upon the investigation of the cell age on a regular basis and also providing the health checkup and whatever is necessary for that particular person through supplemental provision—that kind of business model is being considered by us.

Yuya Yoshida (Chief Financial Officer, Chief Operating Officer, and AI Evangelist)

If I may add, there are two major points. SBC Medical Group Holding’s positioning, related to what he mentioned earlier: in medical areas, we are able to provide layers of intervention. We are not just showing the numbers. We are able to provide improvement through therapies. We are able to provide such medical services. That is the differentiator from others. And the second point is healthy longevity: for people to live lively, vibrant lives, which will lead to the expansion of the aesthetic market, and in this area, which is the area where SBC Medical Group Holding is able to grow further.

So for longevity trend to continue for medium to longer term will provide the tailwind for us strongly. And next year we are going to establish the Longevity Center, and an online platform will be built next year. So we would like to make the branding where people will associate longevity always with SBC Medical Group Holding in Japan. Thank you very much.

Fukui, Head of IR

Regarding the next question about the capital. Net cash is almost 45% of market cap. Net cash is increasing as such. So with such ample cash on hand, what plans do you have in order to enhance shareholder values for investors? Why do we need to pay attention to SBC Medical Group Holding now?

Yoshiyuki Aikawa, CEO

First of all, before we became public, under our group, we have RISE clinics and Gorilla clinics. In the beginning, when we acquired these clinics, total turnover was about 25 billion. But in the last three to four years it has increased to 33 billion, or to over 30 billion level. So growth was achieved. Going forward, orthopedics, ophthalmology and also aesthetic healthcare: in these categories, we would like to implement M&A so that we can achieve 1,000 clinics in 2035.

We want to realize this and not end up just having a pie in the sky. We aim to achieve this number by 2035.

Fukui, Head of IR

Thank you very much. Are there any other questions? Then with this, we'd like to conclude the Q&A session. Lastly, we'd like to invite CFO Yoshida to say a few words to close. CFO Yoshida, please have the floor.

Yuya Yoshida (Chief Financial Officer, Chief Operating Officer, and AI Evangelist)

Thank you very much for participating in our conference call, earnings call, out of your busy schedule. As you have seen today, we are glad, as CFO, to be able to deliver and report these strong results for the quarter under review. We are confident in accelerating our growth, and as we have been making over the past several years, we have been able to strengthen further this positioning of SBC Medical Group Holding as a result. As a result of this, the service unit price or fee has been enhanced for clinics, and by developing the new business format we will be able to increase the clinic network, and for the further growth in the medium to longer term, we'll be able to implement AI and the longevity trend, which will all further strengthen the positioning of SBC Medical Group Holding. Please stay tuned in what we are able to bring. Thank you very much for your gathering.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.