Fronteo, Inc. · TSE:2158

Fronteo — Q1 FY2026 Earnings Presentation

53 slides from Fronteo's earnings presentation, Aug 14, 2026

  1. Slide 1: Financial Results 1st Quarter of FY2026

    Financial Results 1st Quarter of FY2026 FRONTEO, Inc. (TSE 2158) August 14, 2026 © FRONTEO, Inc. 2026 Proprietary and Confidential 1

  2. Slide 2: Contents

    ＣＯＮＴＥＮＴＳ 01 Financial Highlights 3 02 Life Science AI 7 03 Risk Management 32 04 DX 37 Appendix Corporate Profile © FRONTEO, Inc. 2026 Proprietary and Confidential 2

  3. Slide 3: 01 Financial Highlights

    01 Financial Highlights © FRONTEO, Inc. 2026 Proprietary and Confidential 3

  4. Slide 4: 1st Quarter of FY2026 Key Performance Indicators

    1st Quarter of FY2026 Key Performance Indicators: Results Skew Toward the Second Half, Full-Year in Line With Expectations ┃ Consolidated revenue increased 5.6% year-on-year, with strong performance in the Life Science AI segment (AI drug discovery field) and revenue from Alnetz (DX segment; acquire

  5. Slide 5: Q1 FY2026 Consolidated Earnings Results and Progress

    1st Quarter of FY2026 Consolidated Earnings Results and Progress: Life Science AI, DX Posting Strong Performance ┃ Life Science AI Segment: Revenue rose approximately 30%. Operating loss resulted from increased growth investments, including hiring more research staff in anticipation of a rise in pro

  6. Slide 6: Consolidated Earnings Results: Equity Ratio at a Safe Level of 40.3%

    1st Quarter of FY2026 Consolidated Earnings Results and Progress: Equity Ratio at a Safe Level of 40.3% ┃ In July 2026, the Company secured a loan totaling 1,220 million yen with the aim of ensuring sustained growth and expansion of the Life Science AI business. ┃ Equity ratio was at a safe level of

  7. Slide 7: 02 Life Science AI

    02 Life Science AI © FRONTEO, Inc. 2026 Proprietary and Confidential 7

  8. Slide 8: Life Science AI Segment Revenue

    Life Science AI Segment Revenue ┃ Drug Discovery AI Factory (DDAIF), an AI drug discovery support service in the AI Drug Discovery field, saw steady progress in co-creation projects*. DDAIF Innovation Bridge, a joint drug discovery ecosystem business with domestic bio-ventures, is steadily building

  9. Slide 9: KIBIT, a 100% Japanese-Developed Equation-Driven AI

    AI Drug Discovery Field: KIBIT, a 100% Japanese-Developed Equation-Driven AI ┃ KIBIT, a 100% Japanese-developed equation-driven AI, uses an equation (Toyoshiba Equation) discovered by a mathematician. Toyoshiba Equation Patented Technology in Japan, U.S. Enabled Inference L=a{F(θ2​)−F(θ1​)} ✓ Unders

  10. Slide 10: 02-1 AI-Programmed Medical Devices

    02-1 AI-Programmed Medical Devices © FRONTEO, Inc. 2026 Proprietary and Confidential 10

  11. Slide 11: AI Medical & Non-Medical Devices Field: Pipeline

    AI Medical & Non-Medical Devices Field: Pipeline ┃ Launched Talk Lab KIBIT, a conversational brain health assessment web application based on AI analysis. In use beginning FY25 at Nippon Life Insurance and Asahi Mutual Life Insurance. ┃ Nippon Life Insurance has launched a pilot project to assist wi

  12. Slide 12: Nippon Life to Begin Demonstration Test of Talk Lab KIBIT

    AI Drug Discovery Field: Nippon Life to Begin Demonstration Test of "Talk Lab KIBIT" Nippon Life to Utilize "Talk Lab KIBIT," an AI-Based Conversational Web Application for Assessing "Brain Health" Jointly Developed by FRONTEO and Shionogi, in a Demonstration Test to Support Its Decision-Confirmatio

  13. Slide 13: 02-2 Drug Discovery AI Factory

    02-2 AI Drug Discovery: Drug Discovery AI Factory © FRONTEO, Inc. 2026 Proprietary and Confidential 13

  14. Slide 14: Competitive Advantages of KIBIT AI Biology Lab

    AI Drug Discovery Field: Competitive Advantages of KIBIT AI Biology Lab ┃ Opened KIBIT AI Biology Lab, a center for AI drug discovery, in May 2026. ┃ Analysis incorporates data from literature databases, as well as the results of wet lab verification and clinical studies conducted at joint research

  15. Slide 15: AI Drug Discovery Field: Four Business Models

    AI Drug Discovery Field: Four Business Models ┃ Four AI drug discovery business models designed to meet the level of involvement in the drug development process and the type of contract. ┃ Building a portfolio that generates revenue from short-term income to medium to long-term out-licensing and roy

  16. Slide 16: Drug Discovery Process Supported by DDAIF

    AI Drug Discovery Field: Drug Discovery Process Supported by DDAIF (Earliest Stage of the Drug Discovery Process) Compound Preclinical Clinical Target Selection Discovery Approval Trials Trials Optimization Meiji Seika Pharma New indication discovery for existing drugs and compounds under developmen

  17. Slide 17: Development of Drug Discovery AI Factory (DDAIF)

    AI Drug Discovery Field: Development of Drug Discovery AI Factory (DDAIF) ┃ Since our launch of DDAIF in July 2023, we have established a reputation for the performance of patent-backed technologies in POC, leading to Co- Creation projects with pharmaceutical companies, etc. ┃ In FY25, we launched D

  18. Slide 18: List of Drug Discovery Project Solutions

    AI Drug Discovery Field: List of Drug Discovery Project Solutions ┃ FRONTEO provides a variety of solutions, including new target identification and indication exploration. ┃ New target identification is the most common activity, and there are high expectations that pharmaceutical companies will be

  19. Slide 19: Drug Discovery Project Partners 1/4

    AI Drug Discovery Field: Drug Discovery Project Partners 1/4 ┃ Launched DDAIF in July 2023. The number of projects has increased steadily, from one in FY23 to seven in FY24 and 22 in FY25. Project Partners FY24 FY25 FY26 FY27 FY28 Q1 Q2 Q3 Q4 DAIICHI SANKYO Safety analysis UBE Indication discovery T

  20. Slide 20: Drug Discovery Project Partners 2/4

    AI Drug Discovery Field: Drug Discovery Project Partners 2/4 ┃ In addition to traditional co-creation projects, we aim for non-sequential revenue growth through a comprehensive co-creation model and DDAIF Innovation Bridge. Project Partners FY24 FY25 FY26 FY27 FY28 Q1 Q2 Q3 Q4 NICCA CHEMICAL New tar

  21. Slide 21: Drug Discovery Project Partners 3/4

    AI Drug Discovery Field: Drug Discovery Project Partners 3/4 ┃ An increasing number of projects — including NB Health Laboratory — have progressed to the second phase subsequent to the confirmation of DDAIF effectiveness in the first phase. ┃ The deal with NB Health Laboratory aims for out-licensing

  22. Slide 22: Drug Discovery Project Partners 4/4

    AI Drug Discovery Field: Drug Discovery Project Partners 4/4 ┃ We continued to build up the project pipeline steadily in FY26, securing four new contracts. Project Partners FY24 FY25 FY26 FY27 FY28 Q1 Q2 Q3 Q4 Scohia Pharma DDAIF Innovation Bridge Company H New target identification Santen New targe

  23. Slide 23: FRONTEO and Santen Launch Second Co-creation Project

    AI Drug Discovery Field: FRONTEO and Santen Pharmaceutical Launch Second Co-creation Project Driving Pipeline Expansion in the Ophthalmology Field Using the AI-powered Drug Discovery Support Service "Drug Discovery AI Factory" Tokyo, Japan, July 16, 2026 - FRONTEO, Inc. (Headquarters: Tokyo, Japan;

  24. Slide 24: 02-3 Branding and Expansion in the U.S.

    02-3 Branding and Expansion in the U.S. © FRONTEO, Inc. 2026 Proprietary and Confidential 24

  25. Slide 25: AI Drug Discovery Field: Expansion in the U.S.

    AI Drug Discovery Field: Expansion in the U.S. ┃ In FY26, we began full-scale expansion into the U.S. market. In the same way that we steadily added co-creation projects and collaborations with pharmaceutical companies, startups, and academic institutions in Japan, we are currently working to expand

  26. Slide 26: Norikazu Eiki Appointed Strategic Advisor

    AI Drug Discovery Field: Former Bayer Yakuhin Chairman Norikazu Eiki Appointed Strategic Advisor Supporting U.S. Expansion in AI Drug Discovery and Domestic Business Growth Through Global Pharmaceutical Management Experience and U.S. Biocluster Network FRONTEO, Inc. (Headquarters: Minato-ku, Tokyo;

  27. Slide 27: FRONTEO Gives Lecture at Healthcare Industry Growth Strategy Seminar

    AI Drug Discovery Field: FRONTEO Gives Lecture at Healthcare Industry Growth Strategy Seminar Annual Forum 2026 Lecture Given at Healthcare Industry Growth Strategy Seminar Annual Forum 2026, Bringing Together a Nobel Laureate and Leaders From Industry, Academia and Government FRONTEO, Inc. (Headqua

  28. Slide 28: 02-4 AI Drug Discovery Business: The FRONTEO Vision

    02-4 AI Drug Discovery Business The FRONTEO Vision © FRONTEO, Inc. 2026 Proprietary and Confidential 28

  29. Slide 29: Earliest Stage of the Drug Discovery Process

    AI Drug Discovery Field: Earliest Stage of the Drug Discovery Process ┃ DDAIF makes the process from target selection, compound discovery and optimization, and preclinical testing (normally a 10-plus year process) significantly more efficient and facilitates rapid out-licensing. Compound Discovery T

  30. Slide 30: AI Drug Discovery Field: Out-Licensing Pipeline

    AI Drug Discovery Field: Out-Licensing Pipeline ┃ Multiple pipelines in progress for out-licensing to pharmaceutical companies. ┃ The University of Oklahoma is studying pancreatic cancer cases; the university is one of the central institutions for cancer research in the U.S. Further evidence will be

  31. Slide 31: AI Drug Discovery Business Model Growth

    AI Drug Discovery Field: AI Drug Discovery Business Model Growth ┃ FRONTEO provides hypotheses that can be considered blueprints for drug development. ┃ Based on a stable profit model from co-creation projects, aim for medium to long-term non-sequential growth through milestones based on the progres

  32. Slide 32: 03 Risk Management

    03 Risk Management © FRONTEO, Inc. 2026 Proprietary and Confidential 32

  33. Slide 33: BI and Compliance Support Field: Revenue by Category

    Risk Management Segment BI and Compliance Support Field: Revenue by Category ┃ Revenue declined by 34.4% year on year. ┃ Revenue from a project for a major financial institution secured last fiscal year has begun to contribute to earnings; however, the contribution has not been enough to offset cont

  34. Slide 34: BI and Professional Support Field: Revenue by Category

    Risk Management Segment BI and Professional Support Field: Revenue by Category ┃ Revenue declined by 29.3% year on year. ┃ While securing new projects is taking time, our partnership with Alnetz allows us to provide comprehensive DX support, from the initial stages of DX implementation through to th

  35. Slide 35: LegalTech AI Field: Revenue by Category

    Risk Management Segment LegalTech AI Field: Revenue by Category ┃ Revenue declined by 3.9% year on year. ┃ The digital forensic field in Japan experienced firm demand for projects, reflecting growing needs for investigations, including use by third-party committees and special investigative committe

  36. Slide 36: Economic Security Field: Revenue by Category

    Risk Management Segment Economic Security Field: Revenue by Category ┃ Revenue declined by 33.0% year on year. Sales to government agencies saw double-digit growth compared to the same period last year, but sales to private companies fell sharply. ┃ We are developing a contract for a research securi

  37. Slide 37: DX

    04 DX © FRONTEO, Inc. 2026 Proprietary and Confidential 37

  38. Slide 38: DX Segment Revenue

    DX Segment Revenue ┃ Revenue increased by a significant 64.4% due to the inclusion of Alnetz (acquired at the end of April 2025) in financial results as of the beginning of the current fiscal year. Alnetz has also posted steady growth. ┃ Alnetz’s solutions integrate and digitize data dispersed throu

  39. Slide 39: Appendix

    Appendix © FRONTEO, Inc. 2026 Proprietary and Confidential 39

  40. Slide 40: Financial Information by Segment

    Financial Information by Segment FY24 FY24 FY25 FY25 FY26 (¥M) Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Life Science AI Revenue 64 75 73 141 354 107 166 241 518 1,033 139 AI Drug Discovery 15 17 27 63 122 64 120 194 370 751 102 AI Medical Devices 48 58 46 78 231 42 45 46 147 281 36 Operating I

  41. Slide 41: Revenue and Operating Income by Quarter

    Revenue and Operating Income by Quarter ┃ Steady progress in shifting to focused areas, including the Life Science AI segment (AI Drug Discovery field) and DX segment. ┃ Consolidated operating loss was in line with plan, reflecting investments in personnel in Life Science AI and the fact that we exp

  42. Slide 42: Company Overview

    Company Overview Company Name: FRONTEO, Inc. Listed Exchange: Tokyo Stock Exchange Growth Market (Securities code: 2158) President and CEO: Masahiro Morimoto Established: August 8, 2003 Capital: ¥915,057,000 (as of June 30, 2026) Employees (consolidated): 272 (as of March 31, 2026) Decision support

  43. Slide 43: History and Achievements of Our Equation-Driven AI, KIBIT

    More Than a Decade in the AI Business History and Achievements of Our Equation-Driven AI, KIBIT Since the launch of KIBIT in 2012, we have continued to advance our technology in line with the expansion of business domains and diversification of challenges. 2025~ Life Science AI 2021~ Alnetz Risk Man

  44. Slide 44: Major Partners

    FRONTEO Partners Major Partners Financial Institutions Manufacturers Pharmaceutical Service Academia * As of April 30, 2026 (partial list, no particular order) © FRONTEO, Inc. 2026 Proprietary and Confidential 44

  45. Slide 45: The FRONTEO Business Concept

    The FRONTEO Business Concept Through the equation-driven AI, KIBIT, FRONTEO provides scientific support to experts working tirelessly in various fields that face social issues Social Issues Disease Litigation Fraud Compliance Economic Security Skill Transfer DX Efforts to Find Solutions Experts Drug

  46. Slide 46: Equation-Driven AI: KIBIT

    Equation-Driven AI: KIBIT KIBIT: defining features ┃ Light, fast, and highly accurate proprietary AI leveraged in Natural Model Language Processing and network analysis ┃ Green micro AI with lower energy consumption and smaller 1/400 layers environmental impacts GRU ┃ Equipped with proprietary algor

  47. Slide 47: KIBIT: 100% Japanese-Developed Equation-Driven AI

    The KIBIT Design Concept KIBIT: 100% Japanese-Developed Equation-Driven AI Toyoshiba Equation Enabled Inference ✓ Understanding of causality ✓ Completely new discovery Parses documents and words ✓ Extreme power savings (1 CPU) with meaning © FRONTEO, Inc. 2026 Proprietary and Confidential 47

  48. Slide 48: AI-Driven Comparison

    AI-Driven Comparison Data-Driven AI Equation-Driven AI (including generative AI) (KIBIT) Optimum Solution Equation © FRONTEO, Inc. 2026 Proprietary and Confidential 48

  49. Slide 49: Drug Discovery Support with Data-Driven AI

    Drug Discovery Support with Data-Driven AI Supercomputer & AI Wet laboratory and robotics Wet lab confirms vast array of results from correlation screening © FRONTEO, Inc. 2026 Proprietary and Confidential 49

  50. Slide 50: Supporting Drug Development with Equation-Driven AI KIBIT

    Supporting Drug Development with Equation-Driven AI KIBIT KIBIT is based on the information of the papers According to KIBIT Extracting Relations along Biology Only Verification method using simulation function Medical paper 2 d Map Analysis Transforming the corpus into a two dimensional map to expl

  51. Slide 51: White Paper on AI Drug Discovery Approach Using KIBIT

    Publication of White Paper on innovative drug discovery approach using FRONTEO’s AI engine 「KIBIT」 The white paper introduces; ┃ Our Drug Discovery AI Factory, an AI drug discovery support service using unique technologies that discover unreported insights from published literature, to support targe

  52. Slide 52: FRONTEO Bright Value

    Corporate Philosophy FRONTEO Bright Value We provide solutions that do not overlook risks and opportunities buried in records to achieve fairness in the information society © FRONTEO, Inc. 2026 Proprietary and Confidential 52

  53. Slide 53: Contact and Safe Harbor Statement

    President and CEO Masahiro Morimoto X account Contact: [email protected] Safe Harbor Statement This document is for information purposes only and does not constitute an offer to sell or solicit an offer to buy any products or securities associated with FRONTEO, Inc. We offer no guarantee regarding

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