KDDI (9433) Q3 2026 earnings summary

Executive summary

• Preliminary Q3 results were presented, adjusted for inappropriate transactions at BIGLOBE and G-PLAN, with final numbers pending the Special Investigation Committee's report by end of March 2026.

• Core business areas, especially mobile, finance, IoT, and DX, showed steady year-over-year growth, with management emphasizing no effect on core communication services and a commitment to governance reforms.

• The company advanced its Satellite Growth Strategy, focusing on generative AI, 5G, DX, finance, and energy, while expanding global and domestic partnerships.

• New initiatives included the launch of WAKONX for AI-driven DX, expansion of 5G coverage, and new financial and energy products.

• The Special Investigation Committee's report is expected by end of March, with final Q3 and full-year results to follow.

Significant events and developments

• Fictitious transactions were discovered at BIGLOBE and G-PLAN, involving two employees, leading to overstated sales and profits over multiple years.

• Approx. ¥246.0B in revenue and ¥50.0B in operating income identified for reversal over multiple years due to fictitious transactions.

• The scheme involved recording fictitious sales and external outflows of commissions, with the total impact estimated at JPY 246 billion in revenue and JPY 33 billion in external outflows.

• The business started in 2017 (G-PLAN) and 2022 (BIGLOBE), with the fictitious transactions likely from inception.

• Special Investigation Committee confirmed fictitious transactions at subsidiaries, leading to corrections in prior financial statements.

Financial highlights

• Q1-3 FY26-03 operating revenue: ¥4,471.8B (+3.8% YoY); operating income: ¥871.3B (+2.0% YoY); profit for the period: ¥554.0B (+5.3% YoY), all figures adjusted for fictitious transactions.

• Gross profit increased 2.8% year-over-year to ¥1,942,258 million; net profit for the period was ¥601,683 million, up 4.6%.

• Basic earnings per share rose to ¥141.10 from ¥127.46, reflecting a two-for-one stock split.

• Segment contributions: Personal Services +JPY 27.2B, Finance/Energy/Lawson +JPY 18.2B, DX Business Services +JPY 8.5B, Technological Structure Reform +JPY 12.9B.

• Negative impact from prior years' promotional expenses: -JPY 28.9B.