Good morning. Thank you very much for joining the earnings conference call of COWAY. This conference call will start with a presentation by the company, followed by a Q&A session. If you have a question, please press star one on your phone. Now, we will begin the presentation on COWAY's third quarter 2026 earnings.
Good morning. This is Inae Lim, Head of IR at COWAY. Thank you for taking the time to join our conference call for the third quarter of 2026. Today's presentation will be conducted in English, while the Q&A session following the presentation will be consecutively interpreted. Presentation slides are available in the live webcast stream as well as downloadable from our IR section of the website. Joining us today are our CEO, Jangwon Seo, CFO Soontae Kim, and VP of Business Management Division, Seongrok Kim. They will be available to take your questions after the presentation.
Please note that the figures and financial details shared today have not yet been completely reviewed by the external auditor and is subject to change depending on the final audit results. Now, CFO Soontae Kim will deliver the earnings presentation.
Good morning. Thank you for joining COWAY's earnings conference call this morning. This is Soontae Kim, CFO of COWAY, and I will be leading today's presentation. Starting from page five, where we look at the key highlights. In Q3, COWAY continued its solid revenue growth momentum. Notably, the share of overseas revenue expanded by 4.1 percentage points YoY to 41.5%, demonstrating growing contribution of overseas businesses to the group. Supported by this, consolidated revenue grew by 13.7% YoY, sustaining double-digit top-line growth. At the same time, rental account expansion driven by new customer acquisitions continued steadily.
Total group rental accounts increased by 11.9% YoY, and by continuously broadening our customer base across both domestic and overseas market, we have reinforced the foundation supporting our mid-to-long-term earnings growth. We also maintained positive momentum towards our full-year operational targets. Based on the upper bound of our full-year guidance, we have achieved 77% of our revenue target and 80% of our operating profit target. Given this ongoing earning trend, we expect to exceed our full-year management target. Domestic revenue grew 2% YoY, maintaining solid growth driven by new rental sales despite having fewer business days due to summer vacation and Chuseok holidays being concentrated in Q3 and decrease in accounts reaching contract maturity. Net rental account additions in Q3 increased by 26.7% YoY, sustaining another strong growth after Q2 in net adds. Our overseas subsidiaries also maintained robust growth this quarter, fueled by solid results across major markets.
Our Malaysian subsidiary continued its high-growth trajectory, where steady expansion in core product line was complemented by strong sales in new product categories. The U.S. subsidiary also posted outstanding performance in both direct sales and retail channels, achieving a substantial YoY revenue increase of 45.8%. Our Thai subsidiary sustained solid growth, surpassing 500,000 cumulative rental accounts. Revenue rose 38% YoY, while operating profit margin reached 6.6%, demonstrating simultaneous growth in top and bottom line improvement. In Indonesia, sales momentum recovered following the resolution of ongoing certification issues and expansion of our local sales workforce, with significantly strengthened local sales execution. On the back of these developments, the Indonesia subsidiary posted a 21.8% YoY revenue increase, continuing its operational turnaround. We will move to the next page. I will discuss here our total rental accounts, which is a core operational metric.
Total group rental accounts, combining domestic and overseas subsidiaries, reached 12.5 million accounts in Q3, representing double-digit growth of 11.9% YoY. Domestic accounts reached 7.94 million, up 11.1% YoY, while overseas accounts reached 4.56 million, up 13.3% YoY. Overseas subsidiaries now account for 36.5% of our total rental accounts, demonstrating a balanced and healthy growth across both Korea and overseas markets. Next is the consolidated business results. Our consolidated revenue in Q3 was KRW 1. 426 trillion, an increase of 13.7% YoY. The primary driver of this growth was the outstanding performance of our overseas subsidiaries. Across key entities, including Malaysia, U.S., and Thailand, revenue expanded at a strong pace, raising the overseas contribution to 41.5% in our revenue. Third quarter operating profit grew 7.3% YoY to KRW 260.8 billion, setting an all-time quarterly high. Operating margin came in at 18.3%.
While SG&A ratio remained flat YoY, the COGS rose by 1.1 percentage point YoY due to external raw material cost increases and a higher portion of finance lease sales. Q3 net profit was KRW 111.5 billion, down 36.6% YoY. The primary factor behind this decline was the substantial foreign currency-related losses resulting from foreign exchange fluctuations. Although third quarter net profit contracted due to temporary FX volatility, achieving an all-time record quarterly operating profit once again reaffirms COWAY's core business competitiveness and robust revenue-generating capacity. Going forward, we will continue building on this operational momentum to deliver sustainable growth while actively mitigating risks arising from external macro volatility such as FX swings. A more detailed performance breakdown by division will be addressed in the following slide. Next is a look at our domestic business performance.
Q3 revenue reached KRW 754.9 billion, growing 2% YoY and continuing its upward trajectory. Rental revenue increased 2.9% YoY to KRW 731.6 billion, supported by sustained expansion in new rental sales. Other revenue, including memberships and lump sum sales, declined 20.2% YoY to KRW 23.3 billion. On the right-hand side, you look at the total domestic accounts, which reached 8.24 million in Q3, up 9.6% YoY and maintaining a healthy expansion. Rental accounts drove overall growth with 11% YoY increase, while membership accounts declined 19.5% YoY. Within domestic rental accounts, finance leases accounted for 66%, an increase of 10 percentage points from 56% in Q3 of last year. Next is a look at rental sales volume and net adds in the Korean business. Third quarter rental sales volume recorded 441,000 units, down 2.7% YoY.
This was largely attributed to the 31.5% decrease in re-rental volume resulting from fewer accounts reaching maturity. Nevertheless, new rental sales volume increased 7.3% YoY. Considering the reduction in working business days due to summer holidays and Chuseok falling in Q3, this reflects solid underlying sales growth. By product category, mattress sales posted double-digit growth, highlighting the continuous expansion of our BEREX brand. Furthermore, food waste disposers launched near the end of Q2 showed strong performance, with sales volume surging 106% compared to Q2. Finance lease accounted for 84% of quarterly rental sales, which is up 10 percentage points from 74% a year earlier. On the right hand, you look at the rental net adds. Rental net adds in Q3 reached 214,000 units in Q3, representing a sharp 26.7% increase YoY.
Following Q2, this marks our second consecutive quarter with net adds exceeding 200,000 accounts, and this strong result was achieved through a combination of robust new rental sales and fewer contract expirations. Next is our overseas subsidiaries. Total overseas revenue for Q3 rose 26.2% YoY to KRW 591.8 billion , driven by overall growth across key overseas markets. Total overseas accounts also maintained double-digit growth momentum, expanding 12.7% YoY, reaching 4.65 million accounts. Next is a look at our Malaysia and U.S. subsidiaries. First, on Malaysia. Malaysia Q3 revenue rose 21.5% YoY to KRW 428 billion , maintaining its strong growth trajectory. Steady demand for core product categories such as water and air purifier, coupled with expanding sales in new categories like air conditioners and refrigerators, drove this top-line growth. In terms of profitability, the subsidiary delivered a sound operating profit margin of 18.6%.
Despite its slight rise in SG&A ratio, strong profitability was sustained thanks to ongoing improvements in its COGS. Now, the U.S. subsidiary. Q3 revenue surged 45.8% YoY to KRW 83.9 billion . Solid direct sales coupled with sharp spike in air purifier demand through retail channels driven by external environmental factors fuel the rapid top-line growth. Operating profit margin reached 17.9%, benefiting from the operating leverage as well as tariff refunds carried over from the second quarter. Next, I will review the Thai and Indonesian businesses. Starting from Thailand, third quarter revenue increased 38% YoY to KRW 57.7 billion . Upfront marketing investments made during Q2 translated into elevated brand recognition and solid sales momentum this quarter. Combined with the ongoing expansion of our Cody sales force, the subsidiary maintained strong momentum with cumulative rental accounts now surpassing 500,000.
Operating profit surged 221.3% YoY to KRW 3.8 billion , achieving a margin of 6.6%. The operating leverage takes full effect alongside the revenue growth, and margin improvement is accelerating. We will continue to drive growth by expanding new categories and reinforcing our sales execution, aiming to surpass 1 million cumulative accounts and double-digit operating margin by 2028. On the right, we have Indonesia. Q3 revenue grew by 21.8% YoY to KRW 16 billion . Following the resolution of the SNI certification issues, operation normalized, and air quality deterioration caused by the regional volcanic eruptions and forest fires also stimulated air purifier sales. Operating profit reached KRW 100 million , turning profitable.
Since the certification issues were now resolved, we have focused on stabilizing our sales organization and reinforcing our commercial execution, and we intend to capture expanding demand for air purifiers to sustain stable revenue expansions and profitable gains. This concludes our presentation for Q3 2026. Thank you.
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Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone.
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Currently, there are no participants with questions. Please press star one, star and one to give your question.
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Currently, there are no participants with questions. We will wait for a second until there is another question.
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Since there is no further questions, we will end the conference call here. Thank you very much for attending our Q3 2026 earnings call. If you have any questions, please forward them to our IR team.