Gmo Internet Group Inc Stock

Yasuda, CFO of GMO Internet Group. Thank you very much for taking the time out of your busy schedules to attend the GMO Internet Group financial results briefing today. I will explain the financial results for the first quarter of the fiscal year ending December 2014 (sic) [ 2026 ]. Thank you for your time. Today's agenda is as shown here. First, I will provide a conclusion, and then I will explain the important topics of our security and AI robotics initiatives. After that, Mr. Inagaki, Group Executive Officer and Head of Finance, will provide an explanation. Thank you for your time.

Before we get into the main topic, I would like to explain the transition to disclosure based on IFRS. In conclusion, as a result of IFRS, we have introduced a new KPI called business profit. As a background, IFRS is operating profit, includes temporary and incidental items that were previously classified as non-operating items and extraordinary income and expenses under the previous Japanese GAAP. Therefore, when tracking IFRS operating income, there is a problem in that the actual value of ongoing business activities becomes difficult to see. Please take a look at this waterfall diagram. It shows how J-GAAP's operating income on the left connects to IFRS operating income. The figures listed are for the full year 2025. The main differences are the non-amortization, the reflection of the self-assessment of the incubation business, and the inclusion of temporary and incidental items that I mentioned earlier. Please refer to the appendix for details on how to handle figures prior to 2025.

Today onwards, the explanation will focus on this operating income, which indicates the actual value. So thank you for your understanding. Now, for the conclusion. I will discuss three key points from today's briefing. First, let's talk about the long-term perspective. We are steadily pursuing long-term management with the aim of becoming a corporate group that will continue for 100 years. Efforts to further evolve the group structure are also progressing steadily.

In particular, GMO Internet Inc. has completed its efforts to achieve a private listing position on the 4,784 Stock Exchange, meeting the criteria for maintaining listing. Next, regarding our performance, operating profit in FY 2019 was JPY 19.3 billion, up 32% year-on-year. Operating income was JPY 18.6 billion. Infrastructure and Finance achieved record highs for the first time in the fiscal year, driving consolidated performance. The strength of our group is our stock revenue. With the spread of AI providing a tailwind, stock revenue is expected to expand structurally. Currently, each group member is implementing internal measures to capture the growing demand in the era of AI agents.

Finally, regarding progress in the AI robotics field, which is our core area of focus. We have positioned 2026 as the first year of humanoids and are working to make the AI robotics field a new growth driver by promoting early brand recognition and social implementation. Next, I would like to report on GMO Internet's efforts to maintain its listing on the prime market. We have completed our public offering and achieved compliance with the Prime Markets listing maintenance criteria. This completes our series of efforts to maintain our listing. Now let's look at the financial results summary. As you can see, the figures show both increased revenue and profit.

Next, let's look at a summary of performance by segment. On the far right, management's revised evaluation is listed alongside the previous year's results. First, infrastructure achieved its highest performance in 20 consecutive terms. Our core companies, GMO Payment Gateway and GMO Internet drove our performance. In addition to the strong performance of existing domains, servers, and Internet connections, GMO Internet, GPU Cloud, which we had invested ahead of the competition achieved commercial profitability, and our performance is improving. We feel that we have been able to overcome the weakness of the stock revenue brought about by the overwhelming #1 service that is indispensable and will not disappear.

Next, security saw an increase in revenue by 20%. Amid the increasing threat of cyber attacks, the cybersecurity business continues to perform well, thanks to the GMO projects awareness raising prototype for Internet security. In terms of profits, brand security has made strategic investments in dot-com domains, which has led to an increase. However, we have been steadily taking the necessary steps for future growth and have been able to achieve a profit of 20%.

Next, advertising and media saw a decrease in revenue, which has led to an increase in revenue. Each company and each material is in a state of stagnation. Our own products, especially those with high profit margins, are performing well. On the other hand, passive products such as affiliate advertising are weakening, but as a result, it can be said that the shift from flow to stock type is progressing. And finance has updated its highest performance in the 20th quarter. The key driver of performance is CFDs, and CFD revenue increased 3.5x year-on-year to JPY 6.4 billion. The main factor is the increase in trading of highly profitable products such as gold, silver, and crude oil. We believe that the results of our efforts to diversify products have become apparent.

Furthermore, FX saw a decrease in revenue compared to the previous year, which was a difficult situation, but it is recovering from the phase in which profitability declined in the latter half of last year. And crypto assets or [ triangles ], this has become a raw material cost. Although it is affected by the market environment, such as the steady trend of crypto assets, we have been able to secure profits by cost recovery. Now let's take a look at the overall situation for each segment, which I explained earlier, and compare the factors behind the year-on-year changes in revenue and operating income. Revenue is on the left and operating income is on the right, with both figures compared on an if-based basis.

As I have explained so far, the consolidated overall figure increased due to the expansion of infrastructure and finance. As you can see, the performance of the first half of the year was affected by the favorable performance of CFDs. However, looking at the long term, there is a structural strength that our group has recognized over the years. That is stock revenue. This is a term that represents our group's unique revenue model. Since our founding, we have been committed to building a revenue base that is indispensable and generates recurring subscriptions. As long as the Internet remains an essential part of social infrastructure, stock revenue will continue to support the sustainable growth of our group. And we believe that the changes in industrial structure brought about by the spread of AI will further enhance the significance of this [ rock play ].

Now, the spread of AI agents and humanoids is progressing rapidly. This will lead to an increase in the amount of data and transactions. The constant connection between AI agents and the automation that does not return humans will lead to an explosive increase in the amount of information and transactions flowing on the Internet. At the same time, the objects that need to be protected will also expand. There are two reasons for this. One is that there will be a need to protect new objects that did not exist before, such as AI agents and humanoids. The other is that as the amount of data and transactions increases, the amount of information and assets that need to be protected will increase. As a result, the demand for Internet infrastructure, financial infrastructure, and Internet security will all increase.

The main players on the Internet are rapidly shifting from humans to AI. This trend of increasing demand is already evident. As you can see, the traffic of AI agents is increasing explosively. It is predicted that bot traffic will surpass human traffic by 2027. Amidst these changes, our group is required to become the entity chosen by AI. To that end, we are working on MCP and API support. MCP is a standard plan for AI agents to call services. We will create a situation where AI agents can independently call our services. We believe that this will directly lead to competitiveness in the AI era. In this way, the spread of AI will be a real tailwind for our group.

As you can see, demand will accelerate in two areas: Internet infrastructure, financial infrastructure and security. Our group has been aware of these indispensable foundations that will never disappear from society for many years. The arrival of the AI era will further increase the importance of these services. Now, what supports the importance of these services is our technological capabilities. This technology has been proven on a global level. GMO Flatt Security researchers have achieved the world's highest ranking in a vulnerability discovery program run by Anthropic, the company that developed Claude. This means that we are supporting the safety of Claude and Claude code users around the world. We are also utilizing these technologies in product development. A prime example is Takumi Guard. This service, which supports software supply chains, has received strong inquiries since its release in March. We will lead the way in security in the AI era with both technical capabilities and products.

Next, I will explain the progress we have made in the areas of security, AI, and robotics. First, let's talk about security. Let me explain our security business again. As the threat of cyber attacks becomes more serious every day and the scope of those who need to be protected expands with the advent of AI, the demand for peace of mind is structurally increasing. Security has become an indispensable foundation that supports society. In this environment, our group is working towards realizing a safe future for all people and has positioned the security business as the core area of our medium- to long-term strategy. Encryption security to prevent eavesdropping, tampering, and spoofing cybersecurity to handle late-stage cybersecurity and brand security to support spoofing monitoring and deletion.

We will further strengthen and develop our business based on these three areas. We have summarized the main companies, services, products, and strengths of each of the three areas. Each area is developing its business based on clear strengths. In encryption security, we are developing stock type products centered on electronic certificates and electronics, leveraging our strengths as a certification authority in terms of technology and operational know-how. Next, cybersecurity is the technology of the world's strongest white hat hacker group. As I explained earlier, these are our greatest strengths. As I explained earlier, we have secured the #1 spot at domestic and international cybersecurity conferences.

In addition to vulnerability diagnosis and penetration testing, we are also expanding stock type products by incorporating our insights into products. Brand security is developing the service products you see here, leveraging our expertise in operating domain trademarks. Now, from here on, we will update you on the progress of the GMO Internet Security project, which was launched in February 2025 under the catch phrase Safe for Everyone. This project is an initiative aimed at establishing the first early brand in security by Ierae. The first section describes initiatives through ongoing product and service provision, while the second section describes initiatives through events such as holding large-scale conferences. We are steadily working to increase brand awareness through both product provision and event provision.

Today, I would like to introduce several things. First, we have the reporter's name domain. With the advent of AI generation, impersonation and phishing scams have become more sophisticated and sophisticated. The importance of phishing countermeasures to protect brand value has never been greater. The dot reporter name domain is the ultimate phishing countermeasure. Like our GMO, the photo name itself becomes the domain, allowing end users to tell at a glance that the e-mail and website is genuine. Applications began accepting on April 30, and companies such as TOPPAN Holdings have already decided to apply for acquisition. The deadline for accepting applications is August 12. We will steadily develop this as a new pillar of stock revenue with high unit prices and high retention rates.

Next up is MUFG GMO Security, a public venture with Mitsubishi UFJ Bank. The greatest significance of this deal is that we have established a system that can deliver cybersecurity solutions to MUFG's customer base. We have begun making proposals and are making progress in developing projects. Next up is GMO Preferred Security. This was established as a joint venture with Preferred Networks, a company at the forefront of domestic AI reactionary generation AI development.

From the perspective of economic security, establishing a domestic AI environment that does not rely on overseas technology is a pressing issue for Japan. We will address this national challenge by providing a domestic AI environment with consistent security guaranteed from hardware to software. Now let's move on to our initiatives in the AI robotics field. We have positioned 2026 as the first year of humanoids and aim to establish the first early brand. Our role is not to manufacture humanoids, but to provide the infrastructure that supports their operation. We will bring together the strength that our group has cultivated over many years, such as communications, cloud, security, and data utilization to provide total support from the introduction to the utilization of humanoids.

GMO AI and Robotics Trading, commonly known as GMO AIR, is the core company in the AI and robotics field. We started a humanoid dispatch service in April of last year. This is the first service in Japan to customize and dispatch humanoids based on customer request. It allows customers to select the most suitable humanoid from multiple humanoid without being tied to a specific manufacturer, and it does not require initial investment or specialized knowledge. Now, let me introduce some specific initiatives aimed at social implementation. The humanoid technology demonstration project, GMO Robots has started. This is the world's first initiative to have humanoids run the running data of Japan's #1 ekiden team, and I, myself, became #1 in the New Year Ekiden. We believe that mastering the basic action of running will become an important technological foundation that will lead to solving labor shortages in areas such as logistics, manufacturing, and disaster relief.

Next, we have the GMO Humanoid Lab Shibuya showroom. We introduced this in April as Japan's first and largest physical AI research and development center. Since then, we have been interviewed by several media outlets, so I believe many of you are familiar with it. We will utilize this as a venue for gathering diverse stakeholders, including developers, adopters, and the media, and accelerate the social implementation of humanoids. As an example of social implementation, we will introduce our work with JAL Ground Service. This will be the first demonstration experiment of humanoids at an airport in Japan. The recent press conference was widely covered by overseas media and has attracted a great deal of attention from society.

As you can see, airports face serious labor shortage due to the many labor-intensive task they perform, such as moving containers and loading baggage. As the first step for full scale social implementation, we will work to solve social issues by utilizing humanoids. Finally, here is an overview of our Internet Infrastructure, Security products. Up until now, we have built up stock revenues mainly through our infrastructure business. Going forward, we will develop security and AI robotics as new stocks, and develop them into medium- to long-term growth drivers. Please look forward to it. Inagaki will provide an explanation from the next section.

My name is Inagaki, and I am in charge of Group Finance. Thank you for your time. From here, I will explain the status of each segment and shareholder returns. First, let's look at non-group products. This is the lineup of the group's main products. All of these are in-house products developed and operated in-house. We are also making progress in providing new services to the AI industry. Of these products and services, our combined customer base for infrastructure, security, finance, and crypto assets exceeds 22 million. This is the sales revenue trend by segment for the launch period. Infrastructure shown in dark blue and security shown in green, both have a high sustainability and predictability, and both account for a large portion of the profits.

They continue to grow as the customer base expands. In addition, as I explained earlier, finance also performed well in the first launch period, where the results of our product diversification efforts were evident in the form of increased CFD profits. The AI revolution is expected to lead to significant growth in the amount of information and transactions online. Furthermore, we will further ensure sustainable growth by promoting the monetization of our services through [indiscernible]. The trial period trends in operating profit by segment are as shown here.

Our approach of achieving sustainable growth as a whole by combining passive, high-profit businesses with infrastructure security as a foundation for stock-based revenue remains unchanged. As you can see, in the first commercial phase, we were able to achieve high profit growth due to the strong stock-based revenue and the high growth in finance. Next, let's look at the status of each business. First, here is a breakdown of sales revenue from commercial machines in the Internet Infrastructure business. Sales of infrastructure commercial machines reached a record high due to the accumulation of stock-based revenue. Payments, which are offered through GMO Payment Gateway in light blue, continue to expand. In addition, high-priced enterprise products such as GPU Cloud offered by GMO Internet, and CloudCREW offered by GMO GlobalSign Holdings as shown in dark blue, performed well.

Here's the trend of business profits in the commercial phase. Business profits from Internet Infrastructure significantly surpassed the previous record, reaching JPY 12.3 billion. In addition to the sustained expansion of payments that I mentioned in the previous slide, GPU Cloud, a cloud rental server, has achieved a profit on a trial basis and is expanding its revenue. In addition, existing businesses such as domains and Internet connections are also continuing to grow. Furthermore, regarding the BGPU server that started service at the end of last year in GPU Cloud, all 25 units planned for the first half of 2014 are now ready for service. In addition, as the outlook for the B300 operating rate in 2014 has strengthened, we decided to make an additional investment of JPY 6.9 billion in April.

Next is Internet Security. This shows the trend of sales revenue in the commercial period in its breakdown. What I want you to look at is cybersecurity, which is in emerald green in the middle. It is followed by the two companies that make up this business, Cybersecurity, Ierae, and Flatt Security. In Internet Security, the number of projects is also increasing, but the driver of growth is the fact that orders for high-priced penetration tests are increasing. In addition, GMO GlobalSign Holdings' cryptographic security business saw strong performance from key products, such as the electronic contract service, GMO sign login, and the authentication enhancement service GMO trust log-in, as well as robust sales of SSL certificates globally.

Profit from the Internet Security business remained stable due to the impact of promotional investments in brand security products. Profit from Cybersecurity by Ierae, which is driving the growth of cybersecurity, is steadily increasing. This is a summary of the sales revenue of commercial machines in advertising and media. It was the same as before. The light blue online advertising continues to include passive products such as affiliate advertising and advertising agencies. This is the trend of profit from the advertising and media business. GMO Internet's advertising agency was able to secure a certain level of profit by capturing demand from commercial machines and reviewing its organizational structure.

Next is finance. As explained earlier, CFD revenue grew significantly, resulting in record results on a commercial machine basis, with significant increases in both revenue and profit. This is the trend of sales revenue by product. FX fell in the red due to a backlash from the strong performance of the same period of the previous year. CFDs expanded significantly due to an increase in trading volume of profitable products such as gold, silver, and crude oil. Since launching Japan's first CFD trading service using an in-house developed trading system in April 2010, GMO Click Securities has focused on this area as an advocate. We believe that the fact that it has contributed to profits to this extent is a result of our efforts to diversify our products. This shows the trend in CFD trading volume and sales revenue.

As you can see, sales revenue increased significantly in the first commercial period. Although trading volume decreased compared to the fourth commercial period of 2013, revenue increased. This is due to changes in the sales mix of products. Next is the trend in sales revenue and trading volume for the FX business. Although we are affected by the decrease in trading volume for FX in the overall market, we believe that we have been able to earn profits in our trading capacity. Furthermore, we are now on a recovery trend after the decline in profitability in the latter half of last year. This is the status of FX KPIs. At GMO Financial Holdings, we use the margin balance and active users as KPIs. As you can see, they continue to trend upward. We believe that if trading in the entire market returns due to these movements, we will be in a position to secure solid profits.

Next is cryptocurrency. As you can see, the market is operating. Revenues have increased compared to the previous year. Although the market is very stable and trading volume is low, which makes the market difficult, we were able to secure a certain level of profit by achieving a minimum operating structure through cost optimization. In this segment, we are also strengthening our profit-based products such as staking cryptocurrency. Next, I would like to explain GMO Aozora Net Bank, an important initiative in the group's growth strategy. GMO Aozora Net Bank is holding company and accounts for 40% of our performance. Here is the trend of the market. Revenues and profits increased significantly compared to the previous year, contributing to the improvement of consolidated net profit.

The main factors were the increase in transaction revenues such as transfer fees due to the increase in the number of corporate accounts. In addition, the increase in deposit balances also contributed to the increase in net income. These are the important KPIs, the number of corporate accounts and the number of contracts for birth by GMO Aozora. The number of corporate accounts at the end of March was 244,000. The customer base is expanding steadily, with the main bank growth rate ranked first for 2 consecutive years according to a survey by Tokyo Shoko. A number of contracts for another KPI birth by GMP Aozora is also increasing steadily. Birth is the system that provides banking functions such as settlement and deposit notifications to external businesses as a cloud service by returning APIs.

Businesses are highly regarded for being able to incorporate banking functions without destroying the world view of their own services. Deposit balance status. Deposit balances have increased to JPY 1.3 trillion in the 7 years since its launch in 2018. Let's summarize the growth engine of GMO Aozora Net Bank again. GMO Aozora Net Bank is highly regarded, especially by small and medium-sized enterprises and startup companies. It is #1 in the number of newly established courses, corporate courses, and account openings, and the number of base customers continues to increase. And transactions continue to expand as each customer grows.

As a result, deposit balances are increasing and the temperature of capital income is also rising. In February, we formulated a solution development plan for corporate customers in order to continue to be the bank of choice. We have announced plans to release various services that will further enhance convenience for corporate customers. GMO Aozora Net Bank will continue to play an important role as a next-generation tech bank and an engine for the group's growth. Please look forward to it. Finally, regarding shareholders. First, let me explain our approach to corporate value management. We aim to reward shareholders and improve corporate value through both growth and returns. Based on our long-term 55-year plan, we are targeting operating income growth of 15% or more each fiscal year. Regarding shareholders' returns, we have set a target of 50% or more for each fiscal year. We will also consider introducing DOE in order to provide investors with a clear understanding of the dividend amount and provide peace of mind.

Our basic policy regarding shareholders' returns has always been 50% for total returns. Regarding dividends, we plan to allocate 33% of consolidated operating income for the fiscal year and the remaining 17% for amortization of treasury stock. We have also introduced a dividend system for the fiscal year to enable us to return management results as quickly as possible. The dividend per share for the fiscal year under review is JPY 21.20.

That concludes today's briefing. Thank you for watching. We hope that everyone will enjoy the Internet.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you very much for your time today. I'd like to get started. Results and summary. This is today's agenda. I will first talk about results and executive summary. This slide says it all. We are growing sustainably, driven by rock-solid recurring businesses. Net sales was JPY 285.6 billion, and operating profit was JPY 57.1 billion for last fiscal year. I hope that message comes across that we are not only delivering those numbers for the year, but what's more important is that we are growing steadily.

What this slide is showing is we have this project called [ Internet Security for Everyone ], which makes us to be the first brand people think about top of their mind when asked about security solutions. The project had made a very good progress last year. My colleague, Yasuda will tell you more about it in details later.

And GPU Cloud as a new growth driver has become profitable on a quarterly basis. And GMO Aozora Net Bank is now benefiting from all those initiatives we have been planting, and its performance is growing rapidly and substantially, thanks to the return to a positive interest rate.

We think this is going to be the first year for humanoid. We will tell you more about it later, but we want AI and robotics to be our next rock-solid recurring businesses. We are working to be the first brand people think about in this area as well. I am currently focusing on development of AI talents by giving 8,000 employees with reskilling opportunities. We are also looking for recruiting new graduates who are very good at using AI tools. I will keep spending my time and IQ share the most to build our capabilities.

Return to shareholders will be discussed more in details by Yasuda later.

The numbers speak themselves. We have broken records in all net sales, operating profit and ordinary profit. This is more details broken down into categories. My colleague, Yasuda, again, will tell you more about this later.

This is the summary slide by segment. And we are showing the circles, double circles, triangles and Xs as usual. And they are, by the way, representation of my impressions about those businesses. The first one is infrastructure, and I gave double circles as I did for the last year. Both the top and the bottom line grew, making it the 10th straight period to break this record. Operating profit was better than JPY 40 billion and helped drive consolidated performance as a core business. Payment has grown steadily, while GPU Cloud has started to enjoy returns from its investment and became profitable for the quarter. This was a year where we have validated the effectiveness of strong #1 services that are essential and cannot do without as they formulate very strong rock solid recurring businesses.

The next one is new security (sic) [ Internet Security ] segment. I gave a double circle for that as well. Both the top and bottom line grew (sic) [ top line increased while operating profit declined YoY ]. Brand recognition has improved, thanks to [ Internet Security for Everyone ], and the Cybersecurity business drove the net sales. Profit did not grow year-on-year due to the timing issue in Brand Security business, but I gave double circle as the business is well positioned for the future growth.

I gave Ad & Media a triangle as sales and profit decreased. Recurring products gained quite strongly, but transaction businesses were rather weak due to unpredictable nature of business with GAFA. Everyone in Media segment team is working very hard to bring us out of the situation by focusing on selling our own recurring products.

Finance segment saw a decrease in top line, but gained on profit. Profitability improved as onetime costs were managed for the end of last year, but the performance is still soft as our main FX businesses was affected by the market environment. It started to shift this year, but that was the situation last year. But our customer base is growing. So we are in good shape to capture revenue when market starts to come back.

Finally, cryptoassets is triangle. This is another segment where market impact was big. Exchange business for now is experiencing low revenue. One-time revenue from the previous year have subsided. So both the top and bottom line decreased. But this segment, as you know, is having some tailwinds such as favorable tax. So we are expecting growth in the future.

This slide is year-on-year analysis for net sales and operating profit. Well, today, I would like to take a moment to tell you what I am focusing on or spending my time the most, what I'm giving the biggest attention in share of my mind or what I call IQ share. This may not be a typical topic you might expect during IR, but I don't think you will know what I am doing without knowing how I am thinking about. So I would like to tell you what is going on in my mind and what I am thinking nowadays. But first, please take a look at this video clip. This was from our new year event. This is abridged version of what I was sharing with 8,000 partners during the New Year event back in January this year. So roll the video, please.

[Presentation]

Let me just spill out 3 takeaways at the top. These 3 slides summarize what I am feeling now. The first slide is about sense of satisfaction and achievement. We just celebrated 30 years anniversary of Internet revolution on December 29 last year. I am quite happy that we have gotten here, that we are still surviving after 30 years. But the second sentiment is all about challenges and sense of urgency. We are not using AI as much as we should be by a big margin. How long does it take? I think GMO Internet Group could cease to exist if we keep going like this. That's how much urgency I'm feeling now.

But there is another truth to it, opportunities and sense of responsibility. We have a huge aspiration and the vision with our 55-year plan. We have 8,000 partners like ourselves joining forces to provide #1 services such as infrastructure, security and much more, supported by over 17 million customers with signed contracts. We are, in a sense, one of the organizations with the key to unlock the future of the Internet, AI and robotics for Japan. I also have this sense of responsibility that we have to do this to help Japan to grow in the future. That was a highlight of what I shared during the New Year event to our 8,000 partners.

We have been promoting businesses in the Internet industry now for the last 30 years. The direction in which I had been seeing or what I felt 30 years ago, I think, were proven to be the right directions. Another good thing that helped us was that we've been taking one step at a time with everyone working together. We are here because what we have been thinking about and feel about were the right things. That probably means we have been using right antennas. That makes me believe what I'm feeling right now probably is the right feeling to have. I also believe that seeing problems in things or having a sense of urgency were also the right things to do. I have this constant sense of urgency and seeing problems in things over the last 30 years.

If you ask, about 90% of the business was all about hardships. I was hands down satisfied really less than 10% of the times. Another thing that was true over the last, again, 30 years was that I saw expansive opportunities in IT revolution. We were simply all in it, doing nothing but having a deep focus on it. But now we are privileged to be one of the largest businesses to serve over 17 million customers with infrastructures, cybersecurities, Internet or being enablers for AI and robotics technologies in Japan, all of which gives me a sense of responsibility to finish what we have started.

These are the percentages. What I wanted to share with you was percentages of my mind in terms of how I am feeling them. Sense of achievement or feeling satisfied is not even at 10%, less than 10%. Opportunities and sense of responsibility, to be very honest with you, is only 20%. 70% is about sense of urgency and the problems that we have to do something about. I want to tell you today about what I see as our problems and how urgent I feel about it.

It says here Kumagai 10x. I am now 62 years old. I started GMO Internet Group when I was 32. 30 years in Internet business just flew by in the blink of an eye, and I am 62. But frankly, I am physically doing better than ever before. My capacity has improved by 10x compared with myself a year ago. Why? That's because I am only using AI tools. On the other hand, AI usage by 8,000 people in GMO Internet Group is by far not enough to say the least. That's why I see a problem where I feel a sense of urgency. I shouldn't be the most knowledgeable person about the AI in all those 8,000 people. It's a huge problem if I am using AI more than anyone else. AI and robotics are the largest technological revolution in the history of humankind. This is not another technological innovation, not even close.

This picture is often used when someone describes how humans evolved from the monkeys. As you know, history of humanity goes back 300,000 years as homo sapiens or 5,000 years if you count humanity as a civilization. If we have this chronological table, they will work this year in bold letters, red letters or with asterisks. That's how people will talk about this year in the future.

We are seeing small changes by days in front of our own eyes as we adopt AI. But those small changes will continue to affect us day in, day out. And just as we don't have power to stop the morning sun from rising, we will be powerless if we are trying to stop massive change that will force every industry to change in a few years. This is, again, not another technological advancement. This might be similar to what automotive industry has done. When it transformed the world, when cars appeared, streets started to look very different. Importance of energy started to become very different.

Speaking about energy, that was one of the reasons why a leader, a President of a country was, I know that's not the right word, but being abducted, if you look at the world. A single industry could change the entire industry or renew humanity or the civilization. I think we are at the beginning of a tipping point where the civilization will go through a huge transformation. I think we need to recognize we are now standing at the doorstep of that historical moment.

AI and robotics are the biggest technological revolution in human history. That's what Andrej Karpathy, the co-founder of OpenAI, who also led AI team at Tesla, has tweeted in X. I read this 2 days after his original post on X on December 27 last year. So I read it 2 days after the post. Close to 16 million people had read it in just 48 hours. He also shares urgency about the speed in which AI revolution is going through. If you can catch up with the speed in which technology is changing with AI, someone like Andrej Karpathy of the world could bring himself to perform 10x. What should we do? What he is saying is we all have to roll up our sleeves.

Do you share this sensitivity or not? I feel that is the fork in the world that divide chimps from humanity. This was conference held at Davos just 2 weeks ago. Demis at Google DeepMind was speaking with Dario Amodei, the CEO of Anthropic. It's kind of a big splash at the top of the AI world that you can find at YouTube. They discussed about what they think will happen this year, how labor market is shifting in a big way, and existential threat for humanity. I recommend you to watch it, too.

What they said was, well, Dario said AGI is coming next year. He also said majority of work by software engineers will be done by AI in just a matter of half a year or about in 1 year. Both of them also agree that it's no longer engineers' job to write codes. Their job already has shifted to review and edit codes written by AI. They were saying that progress will be exponential when AI accelerates the speed of coding and research on AI itself. They say AI will be writing its own code, meaning it will evolve itself. They also said that impact will shock labor markets as junior engineers will no longer be required.

Andrej Karpathy is making similar comments that we have to become unbelievably good at using those new AI tools. And he says that is the one and only way to manage it. I am feeling the change firsthand myself. It's been 30 years since I started the Internet business. I would say, until the year '27, or 3 years ago, I felt things are changing by days or by months. But now I feel the speed is so fast, things are changing by seconds or by minutes. What's happening in the last 2 weeks were even more shocking.

IT revolution was happening in the first 27 years. AI revolution had started 3 years ago. And I am feeling the biggest change of its kind in the last 2 weeks. That's how I feel about this. This is my tweet on X back on 9th of February. The biggest surprise of it all last week came from Anthropic. We saw Claude 4.6, Claude Code, Claude Cowork, Claude Code's agentic team, Claude in Excel, Claude in PowerPoint, but we saw more. These are a group of dedicated plug-ins from Claude Cowork. And you know, values of Software-as-a-Service companies are coming down fast around the world, correct? The share prices are reflecting people's fear that those SaaS businesses will no longer be needed.

The other thing that happened in those 2 weeks was OpenClaw. It was called Claudebot or Moltbot and OpenClaw. The names of the service kept changing about 3 times in a week or in 10 days. Putting aside the reason for changing names, I want to instead focus on why I think OpenClaw was so shocking. Well, if you install OpenClaw on your PC or on your server, it will keep learning languages unbeknown to us, look for our phone numbers unbeknown to us, the owners, and make a phone call to me the next day. What it is, is that self-evolution or self-development of AI is already real. I feel that will be a huge problem if we don't catch up and learn about it. The fork in the world that divided chimp from humans I think is right in front of us in the year 2026.

We have expanded the Internet in the first 27 years. This helped to minimize information gaps. All kinds of information are now made available in our smartphones without cost time-wise or money-wise. On the contrary, AI has been spreading in the last 3 years, and it is widening the gap amongst people. What I think could happen is that the gap can be as significant as what divides chimps from humans if we don't deal with AI. That is why we, GMO Internet Group, need to step up and become the best-in-class users of AI tools in the world.

To give you some ideas, the best AI talents are using different AI tools for different tasks. This is like a fit AI for a job akin to the concept of fit talent for a job. We call them AI orchestrators. All 8,000 of us need to be elevated to become AI orchestrators. Not only that, all 8,000 of us need to become vibe coders as well. I'm not only talking about engineers and creators. Non-engineers also need to become one. I've been saying over and over for the last 6 months that routine works need to adopt RPAs and macros and Vibe coding is a great approach in the setting of macros.

Furthermore, we have introduced AI boost support fund program. In this program, all 8,000 partners must use a certain amount of money for paid AI every month. In general, I believe companies allow their employees to use a certain AI only and discourages them from using any AI. We are the opposite. Naturally, after securing information security, we are encouraging our partners to utilize any paid AI possible that would contribute to enhancing their work efficiency. We are currently spending JPY 1 billion for our partners to utilize AI proactively, and we plan to more than double this cost.

We also have GMO AI Day. This is a day when partners are allowed to use AI only. They're not allowed to use anything other than AI tools on this day. The objective is to promote reskilling of AI for all 8,000 partners. As a result, in 2027, on November 30, the day when OpenAI released ChatGPT, this will be their fifth birthday. By this date, we want to supplement to a hyper-automated corporate group that fully utilizes AI agents. This is the current target we set. This means 100% of our 8,000 partners will be utilizing X number of AI agents. The number will be set as a target in the future and we'll be utilizing RPA.

Ladies and gentlemen, AI robotics is the greatest technological revolution in human history. Every one of our 8,000 partners fully utilizing AI or AI agents. In case of humans, we need to eat, drink, and in my case, I sometimes slack off, which means 8 hours is the maximum I can work. But in case of AI and AI agents, they can operate full 24 hours as long as electricity is supplied. Therefore, in terms of time efficiency, AI is 3x higher since it is 8 hours versus 24 hours. Assuming a single partner is able to run 3 AI agents, time efficiency of 3x higher multiplied by 3 AIs means 9x higher.

This means labor power of 8,000 people is sublimated into 72,000 people, 9x greater. When you add 8,000 people to this, the power will be 10x, which is worth 80,000 people's power. This is a simplified mathematics. We sublimate 8,000 people to 80,000 people, power 10x higher, and focus on offering infrastructure or service infrastructure for AI and robotics industry and sublimate to be an indispensable corporate group in the world. As a result, we will become the biggest AI robotics and Internet group that drives over hundreds of years. Internet for everyone.

This concludes my presentation. After this, Yasuda will be explaining the details.

I am Yasuda. Now I will explain the progress of our group's key topics in the area of security, AI and robotics. Let me start with security first. As was mentioned in the last earnings call as well, we are focusing on security business. We have 3 key security areas. First, cryptographic security; the second, cybersecurity; and the third, brand security.

This is the summary of the 3 security businesses. First is cryptographic security. Leveraging our technical and operational expertise as a certification authority, we offer recurring revenue products centered on digital certificates and digital sales. The second is cybersecurity. The biggest strength we have is the advanced skills of the strongest white hat hackers in the world. In addition to vulnerability assessments and penetration testing conducted by white hat hackers possessing such technical expertise, incorporating their insights into products is also expanding our recurring revenue offerings. The third is brand security, leveraging our expertise in intellectual property management for domains and trademarks, we offer services and products you see here.

Under the slogan, a safe future for everyone, we started Internet Security for Everyone project last February, which I will report the progress of now. This project is an ongoing initiative to establish top-of-mind brand recognition. The upper part of the page shows initiatives through continuous offering of products and services. The lower part shows our initiatives in hosting major conferences and other events. We are aiming to penetrate our brands steadily through such efforts. I will introduce a number of them today. This is .yourname.

With the proliferation of generative AI, impersonation and phishing attacks have become increasingly sophisticated. One of the solutions would be brand TLD, the so-called .yourname. Unlike traditional .com or .co.jp domains, using the company name itself as the top-level domain makes the domain itself a brand identifier. We also switched to .gmo domain from gmo.jp to group.gmo. We consider this the ultimate anti-phishing measure as it demonstrates authenticity at the domain level.

Notably, applications are being accepted for the first time in 14 years, and the next application period is undetermined. The application will open at the end of April. We are witnessing strong inquiries driven by demand for brand protection. We will steadily cultivate this as a new pillar of recurring revenue, one that promises high prices and high retention rates.

Ground Self-Defense Force Lieutenant General, Jiro Hiroe, has been appointed as the General Manager of Group Cyber Defense Division 6. The name 6 originates from the functional code responsible for information communications and cyber domains within the defense organization. Mr. Hiroe has overseen the communications and cyber defense domain within the Self-Defense Forces. Cybersecurity is an area that the government has designated as a priority field from the perspective of national security and economic security. By combining that national level expertise with our technological capabilities, we will further strengthen our security business.

We established a joint venture, MUFG GMO SECURITY with MUFG Bank. The biggest significance of this is that we have established a structure to be able to offer cybersecurity solution to MUFG's customer base. We will broaden the scope of our security business by combining our technology with MUFG's customer network. Prime Strategy has joined our group. After the approval of the General Meeting of Shareholders in February, we plan to change its name to GMO Prime Strategy. The company's KUSANAGI service is a platform that runs websites with high speed and stability. We will be able to offer fast, secure, uninterrupted, all-in-one integrated web environment. We will pursue growth in recurring revenue through strong synergies with infrastructure and security domains.

Last of all is about GMO General Assembly Spring - Cybersecurity 2026. This will be hosted as one of the largest security conferences in Japan. Leaders from defense, government, research institutes, technology companies and other frontline organizations in this field will gather together. It is not merely an event, but a symbol of our company functioning as a hub in the security field. Through a cross-sector network spanning government, academia and industry, we will work to create business opportunities and foster industry development. This event will be held on March 5 at Tokyu Hotel Cerulean Tower, which is our headquarter building #1. We sincerely hope investors will join us and experience the energy on the ground firsthand.

Now I will explain about our initiatives in AI and robotics. As Kumagai mentioned earlier, we will position 2026 as the first year of the humanoid era and aim to establish top-of-mind brand recognition. Our role is not robot manufacturing, but providing infrastructure that supports operations. For robots to operate safely in society, in addition to communication, cloud services and security, it is essential to have a mechanism that accumulates operational data and continuously optimizes it through machine learning. With our expertise in infra operations and large-scale data processing, we will support the introduction, utilization, and further advancement of robotics. By leveraging existing infra and security operations, we will cultivate AI robotics as a medium- to long-term growth strategy.

The world's brightest minds and capital are converging on this field. And in the near future, 2026 will undoubtedly be recognized as the year humanoid technology took off. AI exists only within computer and smartphone screens, but only when installed in humanoids, will it physically transform the world. This physical AI is not merely a technological innovation, but a civilizational turning point that will rewrite the industrial landscape itself.

We announced AI-CEO, Masatoshi Kumagai, in December 2 years ago. And in September last year, we have announced the AI CEO, Humanoid Masatoshi Kumagai, utilizing our proprietary G1 technology. I would like to share a message about Kumagai's humanoid Masatoshi Kumagai. The real Kumagai works 8 hours a day, but humanoid Masatoshi Kumagai can work 24/7 as long as electricity is fed. Simply 3x time efficiency.

Furthermore, there are unlimited copies you can make of the humanoid. On the other hand, there is just one Kumagai and every year, he ages. 3x the infinite is infinite. Humanoid has unlimited potential. This is the message from Kumagai.

We established GMO AI & Robotics Corporation. In short, GMO AIR 2 years ago and launched a robot staffing service in April last year. The hurdle to introduce robots were the initial investment and securing of talents with specialized knowledge to operate robots. GMO AIR is a model that selects the optimal robot for each application and provides comprehensive support, including setup and operational assistance. The key feature is that it can be introduced with a focus on utilization rather than the purchase itself. We are currently receiving inquiries from a wide range of industries, including event and manufacturing sites, and are progressing from the demonstration phase to full-scale implementation.

This is about GMO Robot Lab Shibuya. From April 2026, we will open Japan's largest robot labs inside our headquarters building #1. This is not simply a space to display, but rather a hub for demonstration, verification and business negotiations to accelerate the social implementation of humanoids. We will be utilizing this hub as a gathering place for diverse stakeholders, including development companies, implementing companies, media and investors.

Next, as a part of our initiatives in the AI and robotics field, we will explain our generative AI service, Tenbin.AI. Tenbin.AI is a service that allows you to ask questions to multiple gen AIs simultaneously and compare their responses. Please watch the video.

[Presentation]

Gen AIs each have their strengths and weaknesses, and relying on a single one may not always yield the optimal answer. Comparing multiple AI models simultaneously enables more accurate decision-making. Recently, we have been continuously updating features such as automated comparative evaluation and concurrent image generation. We offer this service to businesses in a monthly subscription model and will cultivate it as a new pillar of recurring revenue.

Finally, here is the overall picture of our service expansion centered on infra security products. To date, we have focused on infra businesses to leverage synergies and build a solid foundation of recurring revenue base. Currently, our security business has entered an expansion phase across all aspects, human resources, customer base and products, and is building a stronger position. We will position AI and robotics as key drivers of medium- to long-term growth going forward, cultivating them as new solid recurring revenue source. By continuously offering value that will never disappear and that is indispensable, we will realize sustainable growth over mid- to long term.

Next, I will talk about the group overview. This slide shows the lineup of major products of our group. These are all proprietary products developed and operated in-house. Out of these, customer base for infra, security, Internet finance and cryptoassets exceed 21 million in total.

Next is performance by business. This is a full year results trend for Internet Infra, leveraging its rock-solid recurring revenue model as a strength. We achieved record high for the 10th consecutive fiscal period. In fiscal 2025, centering around our GPU cloud, cloud rental servers and payment services performed well. We have been able to make an important announcement related to rapidly growing GPU cloud.

GMO Internet concluded a partnership agreement with Turing, a start-up aiming to realize full autonomous driving utilizing AI. Equity investment will be made and computing resources will be provided over the coming 4 years. GMO Internet Group has also made investment in Turing last year. For more information on the progress of GPU cloud, please refer to GMO Internet's earnings materials.

This is Internet Security's full year results trend. Sales and gross profit remained strong, primarily driven by cybersecurity, while the cryptographic security business operated by GMO GlobalSign Holdings also performed solidly. We are proactive in making investments for future growth, such as products and adopting resources.

This is IERAE's mid- to long-term growth outlook, which announced the start of preparations for its IPO today. As the basis, there is existing services centering around vulnerability assessments and penetration testing. This is an area where demand is expected to continue growing against the backdrop of growing societal demand.

Next is the expansion into new domains driven by the broadening scope of areas cybersecurity must cover. We will expand our service offerings to address critical themes that businesses and nations must tackle as shown here. Furthermore, through our joint venture with MUFG, we will expand our services to MUFG's customer base.

And then scaling up through productization by prioritizing the expertise of white hat hackers, we will expand our portfolio of recurring revenue products. We will continue to aim for sustainable growth.

This is Online Advertising & Media's full year results trend, which was a decrease in sales and profit. The industry-wide trend towards AI-driven advertising operations, coupled with a significant shift toward in-house advertising management by clients bypassing agencies, led to a challenging advertising environment. In the Internet media, subscription-based services expanded.

Next is trend of Internet Finance. Revenue declined due to reduced profitability from range bound markets for FX, while CFD revenue decreased due to lower profitability resulting from spread reductions aimed at expanding the customer base. Profit increased due to the recognition of approximately JPY 9.5 billion in provisions for doubtful accounts related to the Thai business and other items in previous fiscal year. On the other hand, the customer base remains solid. FX traders and margin deposits are progressing steadily, and we believe the foundation is in place to generate solid profits once trading activity returns.

The last is full year results of Cryptoassets business. Revenue declined due to lower profitability resulting from range-bound market conditions in the latter half of the year.

Next, I will explain GMO Aozora Net Bank, a key initiative in our group's growth strategy. GMO Aozora Net Bank is an equity method affiliate, and we recognize 50% of its earnings. Quarterly results are as shown. Revenue and profits have increased significantly compared to the previous year, contributing to the improvement in consolidated ordinary income. Transaction revenue, including transfer fees, continues to grow due to the sustained expansion of corporate accounts. Interest income has also increased due to the rise in deposit balances.

These are the key KPIs, the number of corporate accounts and the number of BaaS by GMO Aozora contracts. As shown here, our customer base is steadily expanding as evidenced by our ranking as #1 for 2 consecutive years in the main bank growth rate survey conducted by Tokyo Shoko Research. Another key KPI, the number of BaaS by GMO Aozora contract is also steadily increasing.

Last of all, this is deposit balance. This growth is the result of our strategy of specializing in corporate clients and the high regard we have earned from our small- to medium-sized enterprises and start-up clients. Given the policy interest rate hike, steady growth in interest income is also anticipated. The bank will continue to serve as a key growth engine for the group as the next-generation tech bank.

Finally, I will explain the 1Account initiative, a new undertaking originating in the financial sector. This is an open ID integration platform that enables participation by companies, both within and outside the group. We have already begun collaboration in certain financial services such as securities and crypto assets and will gradually expand the range of services covered. By building an environment where a single ID can be used across multiple services, we enhance user convenience and achieve efficient customer acquisition. Furthermore, we will collaborate with external companies to build an open ecosystem.

Let me give an update on sustainability management. Let me start with human capital strategy. As Kumagai mentioned, we are focusing on the development and utilization of AI talent as one of our top priorities. First, we will realize full use of AI. We assume all partners will master AI usage and promote its practical application through systems like the one shown here. At the same time, we are enhancing AI talent recruiting. We are continuously investing in acquiring highly skilled AI talent, including our new graduate program with an annual salary of JPY 7.1 million. Through these 2 pillars, we are advancing our evolution into hyperautomation corporate group.

I will report 2 things on the progress of sustainability management. Last year, we published our first edition of integrated report. We delved into the GMOism that underpins our sustainable growth. Please take a look. Also, through the sustainability disclosure, our FTSE score has also improved.

As for our approach to enhancing corporate value, we will be rewarding shareholders through commitment to both growth and shareholder returns. Based on our 55-year plan, we aim to achieve 15% or more of annual growth of operating profit. We are upholding quarterly dividend payments with total payout ratio of 50% or higher. We will also consider introduction of DOE to ensure peace of mind to investors by showing the minimum dividends. The total payout ratio is set at 50% with 33% allocated to dividends based on the consolidated net income and the remaining 17% allocated to share buybacks and cancellations.

I will reiterate our long-term goals for share buybacks and cancellations and report on our progress. In 2007, when we withdrew from the loan credit business, we were forced to issue approximately 38.35 million new shares to strengthen our capital. We firmly believe that acquiring and canceling all approximately 38.35 million shares is necessary as a way to return. For this reason, we have established a target for the total payout ratio, which includes share buybacks. The status of treasury stocks acquired and canceled are shown. When setting our goals, we were prepared for a long-term commitment. But thanks to all the support, we feel we are making progress well ahead of schedule. We are presenting it again as a goal that must be achieved. This is the new share buyback program we announced today.

This is the track record of shareholder returns. You will notice that total payout ratio has been trending above the 50% basic policy. Total payout ratio against net profit in fiscal 2025 will be 112%, far exceeding the 50%.

This concludes the earnings call today. Thank you for your attention.

Internet for Everyone.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

This is Yasuda, CFO of GMO Internet Group. Thank you very much for joining us today for GMO Internet Group's Fiscal 2025 Third Quarter Earnings Call. As our fiscal year ends in December, I will provide explanation for the results of July to September period.

The agenda for today is as shown here. I will cover strategic highlights and summary and our security, AI and robotics initiatives as key topics, followed by our Group Executive Officer and General Manager of the Group Financial Department, Inagaki, to provide further details.

Now I will present the strategic highlights and summary. There are 3 key points I will discuss today. The first is about our long-term vision. We are aiming to become a corporate group that will continue to thrive over the next century by thoroughly implementing a long-term management. In January this year, we transitioned to a position that is like a holdings company. At the same time, newly reorganized GMO Internet Inc., inheriting our original infrastructure business, has started with a new structure. In September, GMO Commerce became listed in the Growth Market anew. And in October, GMO Product Platform and GMO TECH Holdings started with a new structure.

The second topic is our performance. In Q3, both net sales and OP increased, with OP reaching JPY 14.7 billion. Infrastructure drove growth, renewing its record highs for 3 consecutive quarters. OP exceeded JPY 10 billion. Out of this segment, the GPU Cloud business turned profitable on a monthly basis and has entered into a phase to recover investments. For sustainable growth, we believe accumulation of solid recurring revenue is important. From that perspective, we are advancing ahead with recurring revenue, not only in infrastructure segment, but across all segments.

The third point is the growth of security and AI and robotics, our top priority area. Driven by increasing social demands, high growth of Ierae and Flatt in cybersecurity are continuing. The Internet Security for Everyone project, advancing under the slogan, "A Safe Future for Everyone," held the AI & Robotics Conference Autumn 2025 in September. It presented a road map for industry, government, academia collaboration centered on humanoids, aiming for the social implementation of cutting-edge technologies. From next year onwards, we will hold the event twice a year in the spring with a focus on cybersecurity and in the fall, with a focus on AI and robotics.

Next is about earnings summary. As you can see from the results, we achieved increase in both sales and profits. In particular, OP reached a high level as the infrastructure segment posted record high results for the third consecutive quarter. These are cumulative results from January to September. We renewed our record highs for both sales and OP.

This is the summary by segment. At the right end, we have the management's qualitative evaluation of Q3 along with the previous quarter. Infrastructure was double checks. Sales and profits increased, achieving record highs for 3 straight quarters, with OP exceeding JPY 10 billion for the first time. GMO Payment Gateway and GMO Internet drove overall performance. GMO Internet entered into the investment recovery phase with its GPU Cloud achieving monthly profitability following prior investments.

In addition to steady performance in its existing domain, server and internet connection businesses, we believe we demonstrated the rock-solid stability of our recurring revenue, derived from the collective strength of overwhelmingly #1 services made up of indispensable products that will not disappear.

Next, security was double checks, achieving increase in sales and profits. Amid growing cyberattack threats, awareness raising initiatives under the Internet Security for Everyone project contributed to continuing strong performance in the cybersecurity business. Additionally, our overseas SSL sales, which temporarily declined last year, recovered. Although the size of profit is still small, we are taking action for future growth, therefore, the double checks.

Next, online ad & media was poor. Sales and profits declined. We are continuing to see variance in earnings depending on the company and the products. Our own products, especially stock-type products, with high margin maintained steady performance. On the other hand, flow-type products such as advertising agency services and affiliate advertising are experiencing a decline. And because of that, we are promoting a shift from flow-type to stock-type products.

Next, internet finance was a single check. Both sales and profits decreased. This is mainly because our main product, FX, remained soft due to market conditions. But on the other hand, we are continuing with growth of the key KPIs, unique transaction numbers and margin balance.

Next, cryptoassets was double checks, with the increase in sales and profits. Despite the impact of fluctuation in cryptoassets market, exchange business remained at a high level. Evaluation was double checked since the stock-type products are growing rather than because of short-term earnings results.

Here is a breakdown of factors affecting Y-o-Y changes in sales and OP by segment. On the left, we have sales. On the right is OP. As I mentioned earlier, expansion of infrastructure, security, cryptoassets and incubation contributed to increased sales and profits. On the other hand, in the financial segment, although the impact of provisions recorded in the previous year related to Thai Securities lessened, there was a downward pressure from the market factors. In total, consolidated sales and profits increased.

This is revenue growth ranking within the group. For many of the investors, you might think mainly of infrastructure and security segments when you think of recurring revenue. However, rock-solid recurring revenue is growing not only in infrastructure but throughout the group. For example, GMO Beauty ranked first, provides DX support for aesthetic medicine and achieved its top position through growth driven by both stock- and flow-based revenue models. GMO Coin ranked second, operates a typical flow-based revenue model of cryptoassets, but has spent several years cultivating, staking as a stock-based product. We believe that accumulating assets is critical for sustainable growth, and we hope you can see that these efforts are steadily progressing across the entire group.

This is quarterly OP trends, excluding VC investments and incubation business. You can see that our group's earnings power based on our solid recurring revenue is growing steadily.

Next, I will talk about the key topics of progress in security and AI and robotics area. I will start with security. I mentioned about this in the last earnings call as well, but I'd like to explain why we established the security business as an independent segment. GMO Internet Group has been working on the penetration and evolution of the Internet under our corporate slogan, "Internet for Everyone". And Internet now plays a very important role as a social infrastructure.

But at the same time, threats of cyberattacks are becoming more serious day by day. Ensuring safety has become an urgent issue, and security is now considered one of the foundations that supports the society that is indispensable. In this context, we have made cybersecurity our most prioritized area and have positioned it as a key component of our medium- to long-term strategy to realize "A Safe Future for Everyone." Cryptographic security, which provides protection against eavesdropping, tampering and impersonation, cybersecurity, which is countermeasures against cyberattacks. Brand security, which offers monitoring and takedown support for impersonation.

Our focus is on these 3. We are working to further strengthen and develop the security business. These are the 3 key areas of Internet security business. We have the main operating companies, their respective services and products and key strength.

Let me start with cryptographic security. We offer stock-type products such as digital certificates and electronic signatures based on our strength of technology and operation know-how as a certificate authority.

Next is cybersecurity. The biggest strength we have is the technical skills of the world's strongest group of white hackers. They have won the #1 position in cybersecurity conferences inside and outside of Japan. Vulnerability diagnosis and penetration tests are performed by white hackers, with technical skills. On top of that, services have been developed utilizing their expertise, which is leading to expansion in stock-based products.

In brand security, leveraging the strength of IP management know-how of domain and trademarks, services and products as shown are being offered.

This shows full year revenue of Internet security business by segment. As you can see, with cryptographic security as the basis, growth of cryptosecurity -- cybersecurity, which we newly entered into in 2022, is accelerating. As a result, full year sales of Internet security business was nearly JPY 20 billion in fiscal 2024.

Now I will explain the progress of Internet Security for Everyone project, which we started in February 2025 with a catch phrase of "A Safe Security for Everyone" (sic) [ "A Safe Future for Everyone" ]. This project aims to establish our brand as top-of-mind brand in the security field. The upper part of the page shows our ongoing efforts through continuous products and service offerings. The lower part highlights our efforts through events, including large-scale conferences. We are steadily increasing brand recognition through both product offerings and events.

Today, I will introduce a number of cases, starting with dot-brand. In recent years, the emergence of generative AI has led to increasingly sophisticated and elaborate impersonation and phishing scams. We firmly believe that providing peace of mind through anti-phishing measures is essential for enhancing brand value.

Domains that are typical are .com and .jp. We have been using the domain name of gmo.jp for web URLs and email addresses for a long time. We are now shifting from gmo.jp domain to .gmo domain, named group.gmo. For end users who receive emails, they will be able to understand at a glance that the emails sent from .gmo are from authentic email address, enabling us to reduce communication costs significantly.

This implies that dot-brand is an ultimate countermeasure against phishing. And what is notable is that the application will be accepted for the first time in 14 years. And the next acceptance period is TBD. This means that this is a once-in-a-decade opportunity.

The company names shown at the bottom are the ones who have obtained those domains at the last application opportunity 14 years ago. Since we started this offering in May, we have received so many inquiries. The interest is clearly much higher compared to the last application period. Toward the application period, in spring next year, we will steadily cultivate this as a new pillar of recurring revenue with high unit price and high retention rates.

Next is about GMO AI Robotics Conference Autumn 2025, one of the largest conferences in Japan. First, I'd like to show a 1-minute video.

[Presentation]

As you have seen, this conference brought together top industry leaders, including a video message from NVIDIA CEO, Jensen Huang; Professor Matsuo from the University of Tokyo; and Director Furuta from the Future Robotics Technology Research Center at Chiba Institute of Technology.

In our CEO, Kumagai's presentation, he stated that next year, 2026, will likely be called the year 1 of humanoids, and he emphasized that Japan should lead this greatest technological revolution in human history through collaboration between industry, government and academia. At the venue, we presented a road map for industry, government, academia collaboration towards social implementation and exhibited operational humanoid robots, allowing attendees to experience cutting-edge technology firsthand.

I'd like to talk about GMO AI & Robotics Corporation, GMO AIR in short, which we established last year. GMO AIR is positioned as a trading company of robots, and robot offering service was launched in April this year. The company is not bound by any particular manufacturer. We are able to compare multiple robots and is able to make the optimal proposal for customers, which is our strength as a trading firm.

Conventionally, a few tens of millions of yen were necessary as initial investment to introduce robots as well as securing of professionals. You cannot just buy robots, you need technical skills in order to actually use them. Our service is Japan's first business model that customizes programs according to customers' requests and dispatches them.

Furthermore, we will also make use of our group security know-how to support safe social implementation. We are currently receiving many inquiries from diverse sectors such as events and factories. We are steadily accumulating track record.

Finally, I would like to explain how we plan to develop the GMO conference going forward. Starting next year, we intend to hold it twice annually. In spring, the theme will be cybersecurity and in full, AI, robotics. As one of the largest conferences of its kind in Japan, we will continue sharing the latest developments in the cutting-edge technology. By doing so, we aim to accelerate the social implementation of advanced technologies and create business opportunities.

Next, as one of our initiatives in the AI robotics domain, I would like to introduce our generative AI service, Tenbin AI. Tenbin AI is a service that allows users to submit the same questions simultaneously to up to 6 different gen AI engines and compare the responses. Each gen AI engine has its strength and weaknesses, and a single engine may not always provide a complete answer. By comparing responses from multiple engines, users can gain more reliable and accurate insights. To meet corporate needs for operational efficiency, we have launched the service under a monthly subscription model, and we will develop it as a new pillar of recurring revenue.

Lastly, this is an overview of our service offerings centered on our core infrastructure and security business. We have provided a wide range of services from foundational areas such as Internet connectivity, domains, cloud and rental service, to value-added areas such as payment services and online store support. Each of these services is a market leader, and the synergy among them have enabled sustainable growth.

Now security is becoming the key driver that will further accelerate this growth. By achieving strong differentiation in the security domain and strengthening integration between security and all of our services, we will expand indispensable enduring value and reinforce sustainable growth. And please look forward to it.

From here, Group Executive Officer and Head of Finance, Ms. Inagaki, will continue the presentation. Thank you very much.

I am Inagaki in charge of Group Finance. Thank you for joining us. Now I will explain the performance by segment and our shareholders' returns. First, an overview of the group. Here's the lineup of our main products. All of them are developed and operated in-house. In addition to Tenbin AI, we are also advancing new services for the AI industry. The combined customer base for infrastructure, security, finance and cryptoassets exceeds 18 million.

Here's the quarterly trend in the net sales by segment. Dark blue infrastructure segment overlaid with the green security segment derives a large portion of its revenue from a highly predictable and sustainable recurring income. Both continue to grow along with our expanding customer base. As mentioned earlier, recurring rock-solid service models are also increasing outside infrastructure and security. The volume of information and transactions on the Internet is expected to continue increasing. By further reinforcing our recurring revenue foundation, we will secure even more sustainable growth.

Here is the quarterly trend in operating profit by segment. As you can see, we continue to pursue overall sustainable growth by combining rock-solid recurring revenue in infrastructure and security with high profit flow-type businesses such as finance and cryptoassets. This approach remains unchanged.

Next, the status of each business segment. First, the quarterly net sales of the Internet Infrastructure business and its breakdown. Infrastructure sales reached a record high, driven by the accumulation of stable recurring revenue. The payment business offered through GMO Payment Gateway, shown in light blue, continues to expand steadily. The cloud and rental server businesses, shown in dark blue, such as GPU Cloud at GMO Internet and CloudCREW at GMO Global Sign Holdings also performed strongly, supported by enterprise demand.

Here's the quarterly trend in operating profit. We achieved a record operating profit for the third consecutive quarter, surpassing JPY 10 billion for the first time. In addition to steady growth in the payment services, contributions from GMO Internet increased. Existing business such as domain, cloud and rental servers and Internet connectivity performed steadily, while GPU Cloud previously in an investment-first phase achieved monthly profitability and entered the investment recovery phase. These were the primary drivers.

Next, an update on GPU Cloud, a strategic product of GMO Internet. The service launched last November and after an investment-first phase, achieved monthly profitability as utilization increased. The sales progress towards full operation in the fourth quarter is going smoothly. As previously announced, we plan to offer servers equipped with the B300 within this year.

Here are some examples of companies that have adopted GPU Cloud. Today, we announced that Sakana AI, one of the Japan's fastest-growing unicorns, gaining international attention, has adopted GPU Cloud as its next-generation AI development platform. GPU Cloud was built with a strong focus on performance, thanks to its technical advantages, is being adopted across a wide range of fields.

Lastly, an infrastructure-related topic. Let me introduce GMO Commerce, newly listed on the Growth Market in September. It belongs to the e-commerce support segment. GMO Commerce provides a digital marketing platform for chain-type brick-and-mortar stores, with a mission to become the marketing platform for everyone. Through the services shown here, it helps maximize customer acquisition efficiency and enhance customer experience. Its strength lie in the know-hows and data accumulated since the early days of social media.

About 70% of its revenue comes from recurring revenue, along with the transaction revenue based on the ad delivery volume and usage, enabling stable recurring growth. Going forward, it aims to drive further growth through AI-powered personalized ad delivery, tailored to end user preferences. Please look forward to it.

Next, the network security business. Here is the quarterly trend in the net sales and its breakdown. Please focus on the area in emerald green, which represents cybersecurity. Flatt Security and Cybersecurity by Ierae continues to deliver strong growth. While the number of projects is increasing, strong demand for high-value penetration testing has been a key driver. In cryptosecurity, strategic products such as GMO Sign performed well and overseas SSL sales recovered, compared with the same period last year.

Here is the quarterly trend in operating profit. As you can see, the profit increased year-on-year, returned to profitability. As noted earlier, the primary factor was a recovery in cryptosecurity. Meanwhile, cybersecurity continues to show strong revenue and growth profit while we also pursue strategic investments for future growth, including hiring engineers and strengthening SaaS products. We view these as essential investments to achieve "A Safe Future for All" (sic) [ "A Safe Future for Everyone" ] and to support sustainable growth.

Here is the quarterly trend in the revenue for the advertising and the media segment and its breakdown. Revenue declined year-on-year. In the light blue area, Internet advertising, particularly flow-type products such as agency services and affiliate advertising remains soft. In agency services, especially, we are seeing the effect of structural changes in the market, such as advertiser internalizing operations and engaging directly with the major platforms. However, we have seen some modest recovery since the second quarter. Meanwhile, our in-house products, especially high-margin recurring products, continue to perform steadily.

Here's the quarterly trend in operating profit. Although high-margin recurring products grew, the decline in flow-type businesses led to a lower profit.

Next, the finance segment. As shown, the quarterly result declined in both revenue and profit. The size of the decline reflects allowances -- allowance expenses recorded in the Thai Security business last year.

Here is the trend in revenue by product. Both FX and CFD revenues decreased. This was driven by the market factors rather than the company-specific issues, mainly low volatility and reduced trading activity. This chart shows the relationship between FX revenue and FX trading volume. FX performed well through the second quarter, but volatility, especially in the U.S. dollars and Japanese yen, decreased, and trading volume declined. While revenue remains in line with the trading volume, we are being affected by the significant decline in OTC FX trading volume across the market. Meanwhile, the customer base continues to grow steadily.

At GMO Financial Holdings, we are currently focusing on the margin deposit balance and the number of active users as key KPIs. As shown in the bar chart on the left, the margin deposit balance reached a record high for the second consecutive quarter. The line graph on the right shows the number of FX traders, active users has risen steadily since our policy shift at the end of 2022, accounting for around 15%. Both indicators shows that the number of customers is increasing, placing us in a strong position to capture revenue once trading activity recovers.

Next, the cryptoassets segment. Here are the quarterly results. Revenue and net profit increased year-on-year. Despite market volatility affecting cryptoasset conditions, trading volume and revenue in the exchange business remained at a high level. Within this segment, we are also strengthening recurring revenue products such as staking and in crypto lending. We began offering staking in 2021. Quarterly revenue remained modest at around JPY 100 million, but it has doubled from the same period last year and continues to grow steadily. We aim to continue expanding by increasing customer deposits.

Next, I would like to explain GMO Aozora Net Bank, a key initiative in our group growth strategy. GMO Aozora Net Bank is an equity-method affiliate, and 50% of its profit is reflected in our consolidated results. Here are the quarterly performance trends. The bank achieved higher revenue and then return to profitability compared with the previous year. It contributed to improvements in consolidated ordinary income. The primary factors were growth in transaction revenue such as transfer fees, supported by steady increases in the corporate account openings as well as rising deposit balances contributed to revenues steadily.

Here are 2 important KPIs: the number of business accounts and then contracts for BaaS by GMO Aozora. According to Tokyo Shoko Research, the bank ranked #1 for main bank growth rate for the second consecutive year, demonstrating strong expansion of its customer base. Since its launch in 2018, the bank has continuously enhanced convenience, expanded functionality, strengthening its competitive fee structure to provide #1 products. In addition to in-house development and operation by engineers, who account for about 40% of the partners, has continued -- contributed significantly to higher customer satisfaction.

The number of BaaS by GMO Aozora contracts, another important KPI, is also growing steadily. Through APIs that provide banking functions such as payment and deposit notifications as a cloud services, we offer solution that will allow businesses to integrate banking into their own service experiences without disruption and aspect highly valued by customers.

Finally, here's the status of our deposit balances. We have achieved a major milestone of surpassing JPY 1 trillion. 7 years after launch in 2018, together with 200,000 business accounts, we have now reached an important milestone of JPY 1 trillion in deposit. This is a result of our corporate focused strategy and the strong support we have received from SMEs and start-up customers. Going forward, as a next-generation tech bank, we will continue to serve as an important growth engine for the group. Please look forward to it.

Finally, shareholder returns. Our basic shareholder returns policy has long been a total shareholder returns ratio of 50%. The dividends accounts for 33% of consolidated net income, while the remaining 70% (sic) [ 67% ] is allocated to shareholder -- share buybacks and cancellations. To return results to shareholders promptly, we have introduced a quarterly dividend system. The dividend per share for this quarter is JPY 9.5. Finally, an update on the progress of our share repurchase program. The planned total of JPY 10 billion has now been fully completed.

This concludes today's presentation. Thank you very much for watching. "Internet for Everyone".

[Statements in English on this transcript were spoken by an interpreter present on the live call.]