SBC Medical Group Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 13, 2026

Key Takeaways

  • Positive Sentiment: SBC reported strong second-quarter results, with revenue up 13% to $49 million, adjusted EBITDA up 32% to $20 million, and a 41% margin. Clinic locations increased to 287, visits rose 10%, and average spend per visit increased 9%.
  • Positive Sentiment: Management said domestic aesthetic medicine has re-accelerated after marketing, pricing, and treatment reforms, with same-clinic revenue up 6% and first-half transaction value up 19%. It expects a more favorable competitive environment as the pace of new clinic openings slows.
  • Positive Sentiment: AI is being deployed across customer service, marketing, call-center operations, site selection, and employee training, with management targeting higher clinic revenue and greater operating efficiency. Planned service-fee increases are expected to add roughly JPY 15 million annually, with most of the contribution flowing to profit.
  • Positive Sentiment: The company is broadening beyond aesthetics through non-aesthetic healthcare, international expansion, and new longevity offerings. It is targeting 1,000 clinics by 2035, while pursuing asset-light expansion in Southeast Asia and further growth with OrangeTwist in the U.S.
  • Negative Sentiment: A weaker Japanese yen remains a headwind because most operations are yen-denominated, while competition in Japan has recently been intense. SG&A also increased, although management attributed much of the rise to one-time costs related to the secondary offering.
AI Generated. May Contain Errors.
Earnings Conference Call
SBC Medical Group Q2 2026
00:00 / 00:00

Transcript Sections

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Company Representative at SBC Medical Group Holdings

Discussion contains forward-looking statements. These forward-looking statements do not guarantee the 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.

Company Representative at SBC Medical Group Holdings

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&A session. Please click Q&A icon at the bottom of the screen and type in and submit your questions. We will now start the presentation.

Video Narrator

Thank you for taking the time to join the second quarter 2026 conference call of SBC Medical Group Holdings, Incorporated. I will now walk you through our results for the second quarter of 2026, an update on our business strategies, and our capital and IR strategy. If I had to sum up this quarter in a single sentence, it is the quarter in which we completed the structural reforms we undertook in 2025, and SBC's growth entered a phase of re-acceleration. On the back of an expanding business base and more sophisticated support functions, including AI, we delivered profit growth that outpaced revenue growth.

Video Narrator

Let me begin with the clinic highlights. As of the end of June 2026, our number of locations reached 287, up 34 year-on-year, and the annual number of customer visits over the trailing 12 months was 6.92 million, up 10%. Year-to-date clinic revenue rose 11%, same clinic revenue was up 6%, and average spend per visit in the quarter increased 9%. With both customer volume and unit price rising together, our clinic business is showing renewed strength. Next, our financial highlights. Second quarter revenue was $49 million, up 13% year-on-year.

Video Narrator

Adjusted EBITDA was $20 million, up 32%, and our adjusted EBITDA margin was 41%. Profit growth outpaced revenue growth, with profitability improving. In the second quarter, we grew both revenue and profit despite a weaker yen. Because most of our business is conducted in yen, a weaker yen is a headwind for our reported results. Even so, we absorbed it and still delivered strong revenue and operating income. The main driver was higher management services revenue, reflecting the expansion of the points business following the change in our operating policy in June 2025.

Video Narrator

A revision of certain service fees also contributed. Now to our strategy update. Our strategy is unchanged. We aim to be a healthcare platform that supports longevity, people living young and vigorous lives, from two sides, aesthetic medicine, an appearance-based approach, and non-aesthetic or general medicine, a function-based approach. Our goal is to become the name that comes to mind when people in Japan think of longevity. We believe four growth strategies will get us there, accelerating our multi-brand strategy in aesthetic dermatology, expanding our non-aesthetic business, expanding globally, and strengthening our competitiveness and reforming our cost structure through AI.

Video Narrator

I will briefly comment on each of these four growth strategies. We believe that AI is developing into a source of SBC's next competitive advantage. In aesthetic dermatology, we are accelerating our multi-brand strategy to capture increasingly diverse needs and raise lifetime value. First-half transaction value grew a strong 19% year-on-year. To reach the customer segment that prefers basic dermatological treatments, which is driving market expansion, we are renaming Shonan Aesthetic Dermatology to SBC Skin Clinic.

Video Narrator

The Skin Clinic name lowers the barrier to aesthetic medicine and broadens our appeal, and we will open two additional clinics. Next are our high-value brands for beauty-conscious customers who choose based on the expertise of doctors and equipment. We will add three NEO Skin Clinic locations for a total of four, and one JUN CLINIC for a total of seven. To meet solid demand in men's aesthetics and hair removal, we are launching two new formats, THE LASER, a large-scale hair removal clinic, and SBC MEN'S FLASH CLINIC, which specializes in men's beard removal with high-speed operations.

Video Narrator

Gorilla Clinic's first half transaction value was JPY 62 million, up 19% year-on-year. Using hair removal and oral AGA treatments as entry points, we guide customers step-by-step toward dermatological and higher value treatments, and this deeper penetration of our existing customer base drove the growth. Aiming for a Japan where longevity means SBC, we position non-aesthetic healthcare as our second growth engine. Our transaction value mix is still roughly 84% aesthetic and 16% non-aesthetic, which means the potential upside is significant.

Video Narrator

To drive this, we established a dedicated team in June 2026, led by Naoya Fujimoto, formerly an executive officer at a major healthcare and IT talent platform company. We will strengthen both customer acquisition and medical management. First, sharpening the acquisition and operations of existing clinics to raise utilization and revenue per clinic. In parallel, using M&A to expand the number of locations. The premise of our global expansion is a stable earnings base in Japan.

Video Narrator

On that foundation, we grow overseas with discipline. In the U.S., we are advancing our collaboration with OrangeTwist, in which we took a minority stake in December 2025. OrangeTwist has 24 locations across six states and a membership base where recurring revenue exceeds 40% of sales. We are currently sharing operating know-how and expanding the service menu. Over the medium to long term, we aim to export the model we establish in the U.S. to Japan and Asia. In Southeast Asia, we are exporting asset-light, the operating system honed in Japan, affordable, reliable, and standardized.

Video Narrator

We are proving this out at our first Thai clinic, Bleez Clinic. Under our Powered by SBC model, the local partner provides capital and operations while SBC supplies procurement, standardization, training, and patient acquisition, earning recurring fees linked to revenue in return. This expands our footprint at a high return on invested capital, or ROIC, while holding down capital expenditure. Starting from Thailand, we will expand the model across ASEAN. AI is a foundational strategy supporting both growth and efficiency.

Video Narrator

We are leveraging more than 26 years of accumulated management data to support AI development, building a barrier that is hard to replicate. Strengthening our MSO platform through AI lifts growth in three directions at once, the number of locations, the fee per clinic, and the range of service menus. A more attractive platform draws in new clinics. More active transactions raise service fee levels, and the service menu expands. A virtuous cycle that we believe drives recurring consolidated revenue and EPS growth.

Video Narrator

We are progressively deploying AI that directly supports clinic management. Our AI chatbot for around-the-clock inquiries and our AI interpreter, TalkBridge, which gives on-the-spot English and Chinese interpretation to capture inbound demand, are already released. Our marketing AI is rolling out in phases, and a call center AI to raise answer rates and prevent missed calls is scheduled for release during 2026. Together, these enhance the customer experience and our marketing, contributing to higher clinic revenue.

Video Narrator

We are also deploying AI that supports network expansion itself, a site candidate recommendation AI that gathers population, foot traffic, and competitor data to speed up site selection, and a knowledge-sharing AI that turns 26 years of on-the-ground know-how into a company-wide asset, improving the repeatability of new openings and helping staff ramp up quickly. This lets us expand the network with both precision and speed while maintaining high quality and strengthens our appeal as a franchise.

Video Narrator

More sophisticated support functions, AI foremost among them, translate directly into greater value for clinics, and we are raising service fee levels in stages accordingly. Enhanced call center functions are expected to add roughly JPY 11 million per year, and stronger support for the Gorilla and Rize clinics is expected to add roughly JPY 4 million, together about JPY 15 million per year on a full year basis. On a win-win basis with the medical corporations, we aim to sustainably raise our average fee per clinic, or AFPC, at limited additional cost, which further supports profitability.

Video Narrator

Since our Nasdaq listing, we have reinforced our core platform and laid strategic groundwork overseas and in new domains. From here, we enter a phase of multifaceted acceleration, expanding and rebranding domestic aesthetic dermatology, launching new formats, strengthening non-aesthetic healthcare, moving the United States into phase II, expanding B2B and joint ventures in Southeast Asia, applying AI, and planning a longevity center for 2027. Through disciplined investment, we will pursue differentiated earnings and sustained EPS growth.

Video Narrator

Finally, our capital and IR strategy. Our basic policy is to pursue EPS growth and a normalization of our valuation in parallel, enhancing shareholder value over the medium to long term. Backed by ample cash, we are investing in both organic growth and disciplined M&A. At the same time, we recognize that SBC's recognition in the capital markets, particularly in the U.S., is still limited. That said, our investor base is broadening rapidly. Our shareholder base has grown roughly 4.7x year-on-year as of July 2026.

Video Narrator

Building on this momentum, in 2026, we have and will continue to actively participate in IR conferences in New York, Hong Kong, and elsewhere, and step up our year-round investor engagement, including NDRs, one-on-ones, and outreach to retail investors. We will also keep working to expand analyst coverage. Through all of this, with continuous EPS growth and the pursuit of an appropriate valuation in the capital markets as our two wheels, we expect to deliver even greater value to all our stakeholders, beginning with you, our shareholders.

Video Narrator

We hope you will look forward to what lies ahead for SBC. That concludes my remarks. Thank you very much for your attention.

Company Representative at SBC Medical Group Holdings

Thank you for watching. I will now turn the call over to Dr. Aikawa, CEO, to deliver a short speech.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

Good evening. I am Aikawa, CEO of SBC Medical Group Holdings. 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.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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 am 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 healthcare, but including orthopedic and ophthalmology, fertility treatment.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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 healthcare, 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.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

Our target is to have 1,000 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. As for international business, we have clinics in Thailand, Singapore, and Vietnam. Gradually, business is expanding, and when we have one winning pattern, we will be able to roll that out in all of the 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. Thank you.

Company Representative at SBC Medical Group Holdings

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 in a domestic, the aesthetic clinics performance is improving compared to the first halves of 2024 and 2025, what structural changes have been brought about? Can we expect to see further improvement going forward?

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

I would like to respond to that question. Competitive landscape has become more fiercely competitive. What I have done is to look at the results of customer satisfaction survey and to see where we have competitive edge or where we are weaker competitively. We have conducted such analysis. We are sending out information from our website using various media, including photographs, fee structure, and expressions. All of these were reviewed and renewed. The first CMO, the chief of marketing, was newly appointed.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

That was also a major change. Marketing, social media marketing, TV commercials, we have reviewed all of these thoroughly so that we are able to win in this very competitive environment. Now we are seeing good results. I believe this momentum will continue. I expect a strong growth to continue.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

I would like to add to that. As Dr. Aikawa explained, we are seeing results in terms of number of customers and unit price. Both are growing. That is the difference between the past two years. In aesthetic dermatology, our growth is outpacing the market growth. It is not merely because the market itself is growing, but our SBC platform is stronger as a result of a revamp, including of marketing. As a result, we have become stronger. We are becoming more confident.

Company Representative at SBC Medical Group Holdings

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

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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. Recently or earlier, there were a lot of new aesthetic clinics being opened, increasing their numbers. Recently, we have seen slowing down of the increase. The number of players is going to be reduced going forward. 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 the slightly reduced number of players in the market, that is what we are expecting to see.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

Going forward, we believe that the environment will come where we will be able to exhibit our strengths.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

If I may add, as Dr. Aikawa mentioned, regarding the competitive landscape, I believe that there has been a complete change of the current, where SBC's position has been further strengthened. That means that we are currently in a favorable position for SBC in terms of the number of locations and the customer volume. We are positioned as number one overwhelmingly, with the very overwhelmingly stronger brand power and also business base and the scale of the business.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

In each of our brands, we are able to provide value as well as balance the pricing and values. Therefore, that will prevent us from falling into the competition in pricing. We are able to maintain our competitiveness, we will be able to maintain profitability. It is something that cannot be done by any other peers who are running single brand. Given the current environment, where the environment for business running for other peers are getting difficult and considering the current longevity trend, we are going to grow further in that landscape.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

We believe that SBC will be able to increase our share of market. If I may be more specific, for example, aesthetic dermatology area, utilizing our financial capability, we are able to buy the cutting-edge medical equipment at scale faster than any other players. Furthermore, we are going to optimize our operation utilizing our AI capability, CapEx or whatever which will require investment can be done. Including these strategies, we believe that this is something that cannot be reproduced by any other peers.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

When it comes to the data foundation being improved, as Dr. Aikawa mentioned, the management reform is based upon the data-driven model. Based upon the specific analysis of the data, we are trying to enhance our business base, and I believe that we have been able to strengthen our business base further. We are increasingly confident.

Company Representative at SBC Medical Group Holdings

Thank you very much. Next question is about the financials. The second quarter was a very great quarter. However, SG&A was higher than expected. Will you please detail?

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

I would like to respond to that question. Thank you very much for commending us for having a great quarter. As for SG&A, it increased slightly. What is important first is that it was only a slight increase. There are some reasons. One of the reasons is one-time cost as a result of the secondary offering that accounted for much of the increase. It is not that overall trend is that of increasing SG&A.

Company Representative at SBC Medical Group Holdings

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? What is the incremental margin contributions?

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

Let me respond to this question again. Regarding the timeline, it will depend on each item, but there are specifically two items, Gorilla Clinic starting from July, and a call center revision starting from June. Sorry, call center starting from July, Gorilla Clinic starting from June. Regarding the results under review for the second quarter, which did not include this impact, some of which may have been included in the result for June. Part of the impact has been included slightly in the results under review.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

Full contribution we will be seeing starting from next fiscal year, but in Q3 and Q4 for this fiscal year, about a half of the unrealized gains will be included. These two items that we are explaining have been already determined, but other than this, high value-added services will contribute to the further increase in the unit price. Revenue per clinic will be further enhanced by other factors than what is described here. Regarding the contribution to the profitability, in principle, these are the services which are provided based upon the fixed costs.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

Therefore, most of the gains can be directly contributing to the profits. What has been determined is the basis for the upside in the amount of JPY 15 million. We are increasingly confident in achieving this.

Company Representative at SBC Medical Group Holdings

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
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

Since I am 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-founders became the CEO. He is Clint Carnell, and we have learned much from him. MedSpa business in the U.S., 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.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

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.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

We would also like to do business in the United States under our own brand, and we believe that there is synergy between OrangeTwist and SBC.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

I would also like to add to that. I agree fully with what Yoshida has said. After the leadership change, there has been a rapid reform of OrangeTwist, which is reflected in the performance, and we have much to learn from his leadership. He visited Japan. Clint visited Japan, and he also observed our clinics here in Japan. We were able to provide information from our side, and we had a lot to learn from the U.S. It may take time, but we would like to make sure that we make the full use of these opportunities and learn, and to build a strong business model in the United States.

Company Representative at SBC Medical Group Holdings

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

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

If I may add, as he mentioned, in principle, there will be a mixture of different measures. As SBC, we may be deploying our locations as well.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

In principle, OrangeTwist rolled up a strategy, M&A being utilized in order to increase the clinics. Last year, we did one, and increasing the number of locations, reaching 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 the opportunities for growth. Thank you very much for your question.

Company Representative at SBC Medical Group Holdings

Thank you. 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
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

In Vietnam, in Thailand, and in Singapore, we have clinics. In Singapore, last year, we acquired Aesthetic Healthcare Holdings. We would like to expand Aesthetic Healthcare Holdings 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.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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. In particular, we have seen increase in 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.

Company Representative at SBC Medical Group Holdings

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?

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

As we mentioned earlier, Vietnam may have the opportunities and also inbound market, foreign visitors coming to Japan. This market is growing for sure. Business in the U.S., with the leadership change, it is showing a speedy growth. These three areas are those opportunities that we will be growing for sure.

Company Representative at SBC Medical Group Holdings

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

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

I am 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. 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 department.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

We would like to maintain the scale at the current scale in terms of head count, and we would like to achieve 1,000 clinics without increasing fixed cost. To improve operational efficiency, we are using AI, and that effort is moving ahead of other areas, but we would 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.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

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.

Company Representative at SBC Medical Group Holdings

Thank you. We have a question on longevity, about longevity efforts. How does SBC see longevity as an opportunity, and how does SBC plan to make it a business? Yes, longevity in Japan. Japan is actually the country where people live longest with the aging population in this country, and the number of elderly people is very large.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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. 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. 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.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

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 these areas, if you have a painful knee or joints, you are not able to enjoy playing sports, or you are not able to travel. In these senses, in order to prevent such restriction of activities for such people, we would like to help them. In dentistry, chewing, utilizing your own teeth to eat is very important for human activity, so we would like to grow that area as well.

Yoshiyuki Aikawa
Yoshiyuki Aikawa
Chairman and CEO at SBC Medical Group Holdings

Gene screening that is conducted in the U.S. in order to see the ages of organs can be investigated, for which peptides or hormone endocrinology and supplements, any kinds of therapies can be proposed to address such aging of organs, a kind of a subscription, recurring services based upon the investigation of the cell age on a regular basis, and also providing the health checkup and whether we're necessary for that particular person through supplemental provision. That kind of business model is being considered by us.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

If I may add, there are two major points.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

SBC'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 things or services. That is the differentiator from others. The second point is the healthy longevity for people to live lively or vibrant lives, which will lead to the expansion of the aesthetic market. In this area, which is the area where SBC is able to grow further.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

So for a longevity trend to continue for medium to longer term will provide the tailwind for us strongly. Next year, we are going to establish the longevity center and online platform will be built next year. So we'd like to make the branding where people will associate longevity always with SBC in Japan.

Company Representative at SBC Medical Group Holdings

Thank you very much. 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 now?

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

First of all, before we became public, under our group, we have Rize Clinic and Gorilla Clinic. In the beginning, when we acquired these clinics, total turnover was about JPY 25 billion, but in the last three to four years, it has increased to JPY 33 billion or to over JPY 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.

Company Representative at SBC Medical Group Holdings

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

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

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 and the review. We are confident in accelerating our growth. As we have been making over the past several years, we have been able to strengthen further this positioning of SBC 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'll be able to increase the clinic network.

Yuya Yoshida
Yuya Yoshida
CFO and COO at SBC Medical Group Holdings

For the further growth in the medium to longer term, we will be able to implement AI and longevity trend, which will all further strengthen positioning of SBC. Please stay tuned in what we are able to bring. Thank you very much for your gathering.

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