Q1 revenue increased and the company returned to profitability, but profit progress is lagging revenue against the FY2027 plan

Actual results for the fiscal year ended March 2026 were revenue of ¥12,153 million and operating profit of ¥386 million, while the company forecasts revenue of ¥13,000 million, operating profit of ¥490 million, ordinary profit of ¥500 million and net income attributable to owners of the parent of ¥300 million for the fiscal year ending March 2027. FY2027 Q1 revenue was ¥3,057 million, operating profit was ¥78 million, ordinary profit was ¥88 million and net income was ¥45 million. Revenue increased 15.4% year on year, while all three profit measures returned to profitability from losses in the same quarter of the previous year.

A mechanical calculation of Q1 progress against the full-year forecast gives 23.5% for revenue, based on ¥3,057 million divided by ¥13,000 million, 15.9% for operating profit, 17.6% for ordinary profit and 15.0% for net income. Revenue progress is 7.6 percentage points ahead of operating profit progress, leaving room to confirm whether revenue growth is translating into profit at the same pace. Since the company does not disclose quarterly profit plans or seasonality, the 50% first-half benchmark should be treated as a simple midpoint rather than a company plan.

Using this simple midpoint, the required FY2027 H1 revenue is ¥6,500 million and operating profit is ¥245 million. After deducting Q1 results, standalone Q2 would need to generate revenue of ¥3,443 million and operating profit of ¥167 million. This implies a standalone Q2 operating margin of approximately 4.9%, well above Q1's approximately 2.6%. On a full-year basis, revenue of ¥9,943 million and operating profit of ¥412 million remain after Q1, making profit accumulation in the second half a prerequisite as well.

As of Q1, there had been no revision to the full-year forecast, with the company maintaining its revenue and operating profit projections. Accordingly, the first-half results should be reviewed not only to confirm the return to profitability, but also to determine whether results against the ¥6,500 million revenue and ¥245 million operating profit midpoint, the standalone Q2 margin and the basis for maintaining the full-year forecast will be disclosed. In particular, if first-half operating profit falls below ¥245 million, an explanation of the profit required in the second half and the specific measures to achieve it will be important.