SBC Medical Group NASDAQ: SBC reported fiscal third-quarter revenue of $59 million, up 35% from a year earlier, as higher management service fees, rental revenue and a newly consolidated business helped lift operating income by 66%.
The medical services company reported operating income of $26 million and adjusted earnings before interest, taxes, depreciation and amortization of $28 million, also up 66%. Its adjusted EBITDA margin rose nine percentage points to 47%, while basic earnings per share increased 25% to $0.15.
During the earnings call, Director, Chief Financial Officer and Chief Operating Officer Yuya Yoshida said he expects profitability to improve further over the medium to long term as clinic productivity and the network expand. He also outlined plans to invest in longevity services, artificial intelligence and acquisitions, while saying the company is not currently considering a share buyback.
Clinic Growth and Higher Fees Drive Results
In a prerecorded presentation, SBC said management services revenue increased 73% year over year, reflecting service fee revisions announced in August and lower promotional costs in its points business. Rental revenue grew as medical equipment was installed at newly opened clinics, while the newly consolidated Waqoo segment contributed $5.6 million in revenue.
Net income attributable to SBC Medical rose 22% year over year, according to the presentation. The company said its operating margin expanded to 45% from 37% a year earlier.
For the first nine months of the year, same-clinic revenue reached $836 million, up 7%. Over the trailing 12 months, customer visits increased 9% to 7.06 million and average spending per visit rose 4% to $290. The network reached 293 locations, an increase of 36 from a year earlier.
Yoshida said strategic pricing and increases to some treatment prices contributed to the performance. He also cited newer equipment and treatments, including the expansion of NEO Skin Clinic, which offers a range of laser equipment.
Yoshida said he expects aesthetic clinic expansion next year to continue at roughly this year’s pace. SBC also plans to expand in general medicine, including dentistry, orthopedics and ophthalmology, and is planning acquisitions of both aesthetic and general medicine clinic networks.
Longevity and AI Plans
SBC laid out a roadmap for its longevity business through 2028. The company said it would begin developing a blood biomarker testing program in November 2026 and has started in-house development of a DNA methylation test intended to estimate biological age.
The company aims to establish a longevity center and an online coaching and tracking platform in 2027. It also plans to develop AI-generated, doctor-verified treatment protocols and explore expansion of longevity services in the United States and Southeast Asia.
Yoshida said SBC expects a meaningful revenue contribution from longevity services around 2028. He described the existing clinic network as an advantage because it provides the infrastructure to deliver treatment after testing.
SBC is also developing a local large language model to support the use of patient data and reduce reliance on cloud API pricing. Proposed applications include automated medical charting, staff scheduling, clinical-system monitoring and treatment recommendations. Yoshida said the company’s alliance with Taiwan’s NeuroBrain Dynamics supports development of the model.
The company also announced a capital and business alliance with AtomicSoftware, provider of the medicalforce operating platform for self-pay clinics. SBC said the partners plan to co-develop AI features and implement them in SBC’s systems.
U.S. Expansion, Capital Allocation and Governance
Stephen Rodgers, head of global planning strategy, said SBC is working with OrangeTwist, in which it holds a minority stake, to support expansion of its medical spa network. He said OrangeTwist was opening at least one more clinic during the quarter and that the partners hoped to add eight to 10 clinics in the following three to four months.
Rodgers said SBC is researching which of its Japanese brands could appeal to U.S. customers and is working on plans for SBC-branded clinics over the next six to 12 months. The company is also looking for other partners, he said.
On capital allocation, Yoshida said SBC would prioritize spending on acquisitions and new clinic openings. He said the company was not considering a share buyback at present and identified improving liquidity as an ongoing priority. Average daily trading value in October was about $1 million, roughly 4.1 times the July level, according to the company.
Asked about a shortage of independent directors, Yoshida said strengthening governance was a management priority and that the selection process was underway. He said the company would report the new board’s composition as soon as possible.
About SBC Medical Group (NASDAQ:SBC)
SBC Medical Group Holdings provides management and support services to medical institutions, with a focus on clinics offering aesthetic medicine. Its services include support for clinic operations, marketing, staff training, procurement and customer service, allowing affiliated medical providers to focus on patient care. The group is associated with the Shonan Beauty Clinic brand and a broader network of clinics offering services such as cosmetic surgery and dermatology. Its business is centered primarily in Japan, where it supports the operations and growth of affiliated medical institutions.
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