Assessing the viability of the ¥200 million full-year plan in FY2027-H1 after the downward revision

For the fiscal year ended March 2026, revenue was ¥24.424 billion, operating profit was ¥1.600 billion and the operating margin was 6.6%, with operating profit up 224.6% year on year. The company initially forecast FY2027 revenue of ¥26.866 billion, operating profit of ¥2.500 billion and net income of ¥1.736 billion, but its results revision at the end of September lowered these figures to ¥25.0 billion, ¥200 million and ¥150 million, respectively. The operating profit forecast was cut approximately 92% from ¥2.5 billion to ¥200 million, making clear that the improvement in profitability in the previous year will not continue unchanged.

FY2027-Q1 revenue was ¥5.75 billion and the operating loss was ¥395 million. Although revenue rose 5.2% year on year, the operating loss widened by ¥325 million from ¥70 million in the same quarter of the previous year. Recent reports put interim revenue at ¥11.8 billion and the operating loss at ¥430 million. The formal interim results should first confirm how closely revenue and earnings matched the assumptions underlying the revised forecast.

Assuming interim revenue of ¥11.8 billion and an operating loss of ¥430 million, achieving the revised full-year plan would require H2 revenue of ¥13.2 billion and operating profit of ¥630 million on a simple calculation. This implies an H2 operating margin of approximately 4.8%, so merely eliminating the H1 loss will not be sufficient. Improvements in utilization, the effect of withdrawing from low-priced projects and the reallocation of personnel to new technology areas would all need to progress at the same time.

The results should be assessed not only on whether the full-year forecast is revised again, but also on whether the revised ¥200 million is a conservative floor or an executable plan that incorporates an H2 recovery. It will be particularly important to see whether the company clearly discloses interim operating profit or loss, the ¥630 million of H2 operating profit required and the progress rate toward full-year revenue of ¥25.0 billion.