SBC Medical Group Holdings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the three months ended September 30, 2026, were $59 million, a 35% increase year-over-year; for the nine months ended September 30, 2026, revenues were $151 million, up 13% year-over-year.
• Income from operations for the third quarter was $26 million, up 66% year-over-year, with an operating margin of 45%.
• Net income attributable to SBC Medical was $16 million for the third quarter, up 22% year-over-year, with a net income margin of 27% (a 3 percentage point decrease year-over-year); for the nine months, net income was $38 million, up 2% year-over-year, with a margin of 25% (a 2 percentage point decrease year-over-year).
• Adjusted EBITDA was $28 million for the third quarter, up 66% year-over-year, with an Adjusted EBITDA margin of 47% (a 9 percentage point expansion year-over-year); for the nine months, Adjusted EBITDA was $66 million, up 17% year-over-year, with a margin of 44% (a 2 percentage point expansion year-over-year).
• Basic earnings per share (EPS) was $0.15 for the third quarter, up 25% year-over-year; for the nine months, EPS was $0.37, up 3% year-over-year.
• Net cash provided by operating activities totaled $50 million for the nine months ended September 30, 2026.
• As of September 30, 2026, the company held $198 million in cash and cash equivalents and $154 million in Net Cash.

Guidance and Future Outlook:

• Management intends to deploy its strong financial position toward disciplined growth investment with the goal of sustaining EPS growth over the medium- to long-term and enhancing corporate value.
• The company plans to continue expanding its multi-brand presence in aesthetic dermatology and broadening non-aesthetic medical services in Japan.
• International expansion strategies include pursuing collaboration with OrangeTwist in the United States and expanding across ASEAN markets.
• The company aims to improve profitability at existing clinics and make new clinic openings more efficient through investments in AI and technology.

Business Segments and Product Lines:

• Revenue growth was driven by higher management services revenue, including the impact of service fee structure revisions announced in August, and the consolidation of Waqoo.
• The clinic network increased by 36 locations year-over-year to 293 locations as of September 30, 2026.
• Patient visits over the trailing twelve months totaled 7.06 million, up 9% year-over-year, with an average spend per visit of $290, up 4% year-over-year.
• The Longevity business is developing an in-house DNA methylation-based test to estimate biological age, leveraging Waqoo Group's research and technology.
• The company is advancing its clinic operating systems through a capital and business alliance with Atomic Software.
• The company is developing a proprietary local large language model (LLM) infrastructure designed to enable secure use of medical data while optimizing AI costs.

Market and Competitive Landscape:

• SBC Medical operates as a Medical Services Organization (MSO) providing management support across a wide range of healthcare fields in Japan and abroad, including aesthetic healthcare, dermatology, orthopedics, fertility treatment, gynecology, dentistry, alopecia treatment, and ophthalmology.
• The company was listed on Nasdaq in September 2024 and selected for inclusion in the Russell 3000® Index in June 2025.
• The company actively expands its global presence through direct operations and medical tourism initiatives, particularly in the United States and Asia.

Risks and Challenges:

• The press release includes a standard forward-looking statement warning that actual results may differ materially due to various risks, uncertainties, and assumptions, including changes in global, regional, or local economic, business, competitive, market, and regulatory conditions.
• Specific risks are detailed in the Company's filings with the U.S. Securities and Exchange Commission (SEC), though specific risk factors are not enumerated in this text.

Management Commentary and Tone:

• Chairman and CEO Yoshiyuki Aikawa described the third quarter as a "strong reacceleration in SBC Medical's growth," noting that growth and profitability are improving in tandem following structural reforms implemented in 2025.
• Management emphasized that the MSO revenue growth is supported by two key levers: expanding the clinic network and increasing service fees per clinic, aiming to raise productivity and profitability while expanding efficiently.
• The tone reflects confidence in the highly profitable MSO model and the potential of AI and technology initiatives to generate greater earnings power as the business expands.

Other Key Points:

• The company held a conference call on November 13, 2026, to discuss the financial results.
• The company's Net Cash is a non-GAAP measure calculated as cash and cash equivalents ($198 million) less bank and other borrowings and finance lease liabilities ($34 million) and operating lease liabilities ($10 million).
• The company reported a gain on redemption of life insurance policies of $8.7 million in the prior year period (nine months 2025), which was not present in the current period.
• Stock-based compensation for the nine months ended September 30, 2026, was $19,541.
• The company has a minority equity interest in OrangeTwist through its equity method investment in OT Midco Holdings, LLC.