Improving Profitability by Increasing Highly Profitable Projects and Controlling Operating Expenses

「In the high-gross-margin custom AI solutions business, the increase in revenue substantially exceeded the increase in expenses, resulting in an operating margin of 18.3%, above expectations.」

「The company continued to incur expenses for outsourcing, active recruitment and research and development to address new technologies, including generative AI. However, the operating profit margin was 14.7%, higher than forecast, because the company handled a relatively large number of projects with high profit margins.」

「As larger and longer-term projects improved gross margins and employee utilization, while the high proportion of projects from existing customers and alliance partners reduced new-business development costs, the gross margin of the custom AI solutions business improved more than expected. Operating profit therefore increased substantially above the initial plan at the interim stage and is expected to continue increasing in the second half.」

「The company continued to incur expenses for outsourcing, active recruitment and research and development to address new technologies, including generative AI. However, the increase in revenue exceeded the increase in expenses, and the operating profit margin was 10.9%, above the initial forecast.」

「The company continued to incur expenses for outsourcing, active recruitment and research and development to address new technologies, including generative AI. However, the increase in revenue exceeded the increase in expenses, and the operating profit margin remained strong at 14.3%.」

「Gross profit was ¥737.367 million, up 43.0% year on year, as revenue increased, the number of large-scale projects with high profit margins rose, and the gross profit margin improved from the previous fiscal year due to the high utilization rate of employees.」

「Many of the projects are large-scale and progressing without issue, and the gross profit margin for the 9-month period ended in the third quarter was 69.4%, well above the target of 60% or higher. Research and development expenses and advertising expenses increased mainly to support business expansion, but the operating profit margin was 16.6%, substantially above the target of 10%.」

「Cost of sales has remained favorable due to the continued high proportion of highly profitable projects, and the gross profit margin has remained at 60% or higher. Selling, general and administrative expenses increased as a percentage of revenue because the company conducted research and development to address new technologies, including generative AI.」

「Cost of sales has remained favorable due to the continued high proportion of highly profitable projects, and the gross profit margin has remained at 60% or higher. Selling, general and administrative expenses increased as a percentage of revenue because the company conducted research and development to address new technologies, including generative AI.」

「Operating profit was ¥70.346 million, up 24.7% year on year, as the decrease in research and development expenses following the completion of product development in the previous fiscal year and the reduction in outsourced operating expenses more than offset the decrease in gross profit described above.」

「Cost of sales declined as a percentage of revenue due to an increase in highly profitable projects, while selling, general and administrative expenses declined as a percentage of revenue due to operating expense controls. As a result, the operating profit margin improved year on year.」