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Financial results presentation5137SmartDrive inc.Information and Communications, Services and Others

Q&A Summary for the Second Quarter of the Fiscal Year Ending September 2026

The company explained the increase in recurring revenue, higher SG&A expenses, the full-year plan weighted toward the second half, and progress on AI Mobility OS and InterZone for the second quarter of the fiscal year ending September 2026. While it left its full-year earnings forecast unchanged, it said that uncertainty remains regarding business discussions and sales in the second half.

Worth reading
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Direction
Mixed performance
Direction inferred from the company’s description.
Scale
610
¥ million
Wording
Avoiding a definitive answer
How definitive the wording is.

Contents of this document

Summary of Q&ASecond quarter of the fiscal year ending September 20268 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Selling, general and administrative expensesUp ¥147 million year on year
Results for the three months of the current quarter
Recurring revenue
¥610 million+60.0%
Initial revenue
¥244 million
Recurring revenue ratio
71 %
Prior-year period48
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Recognized as within the structure weighted toward the second half / Full-year plan unchanged
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Drivers of the increase in Q2 recurring revenue: accumulation of MRR in the existing business and consolidation of InterZone.
  2. Drivers of the decline in initial revenue: the reaction to a large project in the same period of the previous year and the shift of sales resources toward AI Mobility OS-related activities.
  3. Drivers of the increase in SG&A expenses: consolidation of InterZone and stronger recruiting and sales capabilities for the rollout of AI Mobility OS.
  4. Basis for leaving the full-year forecast unchanged: the weighting toward the second half, InterZone's six-month contribution in the second half, and the incorporation of upfront investment into the plan.
  5. Status of AI Mobility OS: no companies have proceeded to full-scale implementation under a formal contract, while PoCs and business discussions are underway with multiple companies.
  6. Financial impact of InterZone: interest-bearing debt of ¥1.950 billion, net assets of ¥1.351 billion, total assets of ¥4.286 billion, an equity ratio of 31.5%, and a DE ratio of 1.44x.
  7. Change in the launch timing for BRAKEPAD SCAN: additional time was required for final coordination and quality checks with partner companies.
  8. Share repurchases: under consideration as part of the capital policy, but whether and when to conduct them has not been determined.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Accumulation of MRR in the existing businessUp 27% on an existing-business basis
  • Consolidation of InterZoneConsolidated from February 2026; Q2 includes one month
  • Increase in SG&A expenses¥147 million
  • Increase in second-half sales¥2,999 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
The company expects six months of revenue and profit contribution from InterZone in the second half. The plan incorporates business discussions related to AI Mobility OS and the planned launch of sales to new customer segments using new devices. Other numerical assumptions are not disclosed.
New initiatives
  • Preparation for and full-scale rollout of external provision of AI Mobility OS
  • Approach to new customer segments using new devices
  • FO×AO collaboration with InterZone and data integration with AI Mobility OS
  • Coordination toward the launch of BRAKEPAD SCAN
Key KPIsA metric the company considers important as a management benchmark.
  • Recurring revenue¥610 million
    Year on year against the same period last year+60.0%
  • Recurring revenue ratio71 %
    Year on year against the same period last yearUp from 48% in the same period of the previous year
  • QoQ growth in recurring revenue excluding InterZoneSlightly above 2%
Financial targets
Equity ratio
Actual results as of March 202631.5 %
Debt-to-equity ratio
Actual results as of March 20261.44 times
Acquisition of treasury shares
Whether and when to conduct a purchase has not been determined; the purchase amount, number of shares and period have not been disclosed
Contents of this document
ItemDetails
Document typeSummary of Q&A
Fiscal Period CoveredSecond quarter of the fiscal year ending September 2026
Selling, general and administrative expensesUp ¥147 million year on year
Results for the three months of the current quarterRecurring revenue ¥610 million (YoY +60.0%) / Initial revenue ¥244 million / Recurring revenue ratio 71 %
Self-assessment against the planRecognized as within the structure weighted toward the second half / Full-year plan unchanged
Breakdown of Factors Affecting the ChangeFactors Accumulation of MRR in the existing business / Amount Up 27% on an existing-business basis, Factors Consolidation of InterZone / Amount Consolidated from February 2026; Q2 includes one month, Factors Increase in SG&A expenses / Amount ¥147 million, Factors Increase in second-half sales / Amount ¥2,999 million
Key KPIsIndicator name Recurring revenue / Value ¥610 million / Year on year against the same period last year ¥60 million, Indicator name Recurring revenue ratio / Value 71 % / Year on year against the same period last year Up from 48% in the same period of the previous year, Indicator name QoQ growth in recurring revenue excluding InterZone / Value Slightly above 2% / Year on year against the same period last year Not disclosed
Assumptions Underlying the Business OutlookThe company expects six months of revenue and profit contribution from InterZone in the second half. The plan incorporates business discussions related to AI Mobility OS and the planned launch of sales to new customer segments using new devices. Other numerical assumptions are not disclosed.
Financial targetsEquity ratio Value 31.5 % / Category Actual results as of March 2026 / Debt-to-equity ratio Value 1.44 times / Category Actual results as of March 2026
Acquisition of treasury sharesWhether and when to conduct a purchase has not been determined; the purchase amount, number of shares and period have not been disclosed
Key points of the Q&ADrivers of the increase in Q2 recurring revenue: accumulation of MRR in the existing business and consolidation of InterZone., Drivers of the decline in initial revenue: the reaction to a large project in the same period of the previous year and the shift of sales resources toward AI Mobility OS-related activities., Drivers of the increase in SG&A expenses: consolidation of InterZone and stronger recruiting and sales capabilities for the rollout of AI Mobility OS., Basis for leaving the full-year forecast unchanged: the weighting toward the second half, InterZone's six-month contribution in the second half, and the incorporation of upfront investment into the plan., Status of AI Mobility OS: no companies have proceeded to full-scale implementation under a formal contract, while PoCs and business discussions are underway with multiple companies., Financial impact of InterZone: interest-bearing debt of ¥1.950 billion, net assets of ¥1.351 billion, total assets of ¥4.286 billion, an equity ratio of 31.5%, and a DE ratio of 1.44x., Change in the launch timing for BRAKEPAD SCAN: additional time was required for final coordination and quality checks with partner companies., Share repurchases: under consideration as part of the capital policy, but whether and when to conduct them has not been determined.
New initiativesPreparation for and full-scale rollout of external provision of AI Mobility OS, Approach to new customer segments using new devices, FO×AO collaboration with InterZone and data integration with AI Mobility OS, Coordination toward the launch of BRAKEPAD SCAN
Items this document does not state (19)
Net SalesOperating profitOrdinary incomeNet incomeGross Profit MarginOperating profit marginFull-year earnings forecastProgress against full-year forecastSegment resultsUnit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookMedium-term management plan targetsAnnual DividendPayout ratioCapital expendituresOrders received and order backlogMarket Size / Share

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The increase in recurring revenue was due to the accumulation of MRR in the existing business and the consolidation of InterZone beginning in February 2026. The increase in SG&A expenses reflected additional fixed costs associated with the consolidation of InterZone and the strengthening of the sales organization for the rollout of AI Mobility OS. The full-year forecast was left unchanged because the plan already incorporated InterZone's six-month contribution in the second half and upfront investment related to AI Mobility OS.

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Q&A Summary for the Second Quarter of the Fiscal Year Ending September 2026 | SmartDrive inc. (5137) timely disclosure | Komori