KDDI Corporation

Major negative / investigation overhang (BIGLOBE + G-PLAN advertising agency “fictitious transactions”) - KDDI disclosed suspected improper transactions at its consolidated subsidiary BIGLOBE and G-PLAN within the advertising agency business (not communications services like BIGLOBE). - A Special Investigation Committee (external lawyers + CPAs) was set up on Jan 14; external-auditor work ongoing. - Key scale confirmed so far (reference values): revenue cancellation/adjustments tied to fictitious transactions of about JPY 246bn total across FY Mar 2024 (~96bn), FY Mar 2025 (~82bn), FY Mar 2026 Q3 period (~68bn); potential additional impairment risk remains. - Profit impact (reference) includes operating income reversals (reported as roughly JPY 8bn / 17bn / 25bn by period) plus provisioned outflow/commission reversal (roughly JPY 5bn / 11bn / 17bn, totaling ~JPY 33bn externally flowed portion); company says it will attempt recovery of that external-flow amount.

Financial guidance / timing: postponement of Q3 release, but dividend forecast unchanged - Because the investigation outcome affects financial statement impacts, KDDI postponed the Q3 earnings release; today’s Q3 “preliminary results” and impact figures are non-final reference values subject to revision. - Target schedule: investigation report by end of March, then corrections to prior statements and FY Mar 2026 Q3 results disclosed by end of March; FY Mar 2026 full-year results to follow without delay. - Dividend forecast for FY Mar 2026 is unchanged (no revision mentioned). - Despite the investigation impact, reported core performance is progressing and company frames the business as “performing well” even with the accounting adjustments.

What’s good operationally: core businesses growing despite the accounting adjustments - For the first three quarters (cumulative) after incorporating the referenced cancellation/provision effects, KDDI reported: - Operating revenue +3.8% YoY - Operating income +2.0% YoY - Profit attributable to shareholders +5.3% YoY - Reported business drivers (positive and offsetting): - Mobile personal services base +JPY 27.2bn - Finance/Energy/Lawson +JPY 18.2bn - DX business services +JPY 8.5bn - Technology structure reform +JPY 12.9bn - Offset: negative prior-year promotional expense impact −JPY 28.9bn - No revision to overall dividend, and management emphasizes “momentum remains strong.”