Can the forecast recovery to operating profitability in FY2027 be confirmed in the first half?

In FY2026, total revenue was ¥7,858 million, down 1.4% year on year, while operating results deteriorated from the ¥9 million operating profit recorded in the previous fiscal year to a ¥23 million operating loss. For FY2027, the company expects total revenue of ¥8,200 million, operating profit of ¥180 million and ordinary profit of ¥200 million. On an operating-profit basis, the plan assumes an improvement of ¥203 million, from a ¥23 million loss to a ¥180 million profit.

In the latest first quarter of FY2027, total revenue was ¥1,694 million, revenue was ¥476 million, operating loss was ¥75 million, ordinary loss was ¥69 million and net loss attributable to owners of the parent was ¥53 million. Revenue rose 8.5% year on year, and the operating loss narrowed from ¥102 million in the year-earlier quarter, but the company has not yet returned to profitability. Revenue progress against the full-year forecast was 20.7%, below the simple quarterly run rate of 25%, so it is difficult to describe progress at the end of the first quarter as comfortably on track.

The operating loss was ¥133 million in the year-earlier first half and ¥200 million through the year-earlier third quarter, before narrowing to ¥23 million for FY2026. Given the seasonal concentration of profit in the fourth quarter, it is too early to conclude from the first-quarter loss alone that the full-year plan will be missed, but in FY2027-H1 we will want to confirm how far the operating loss has narrowed year on year. In particular, it is important to determine whether the first-quarter improvement reflected price revisions, project profitability management and a better order mix in the advertising business, rather than the recognition of one-off projects.

In its first-quarter explanation, the company cited the introduction of AI tools, digital projects, spatial production, sports marketing and proposals related to public authorities as factors behind the revenue increase. However, it has not disclosed by project or initiative how much profit these measures generated toward the ¥180 million operating-profit target. In FY2027-H1, it will be necessary to review cumulative first-half operating results, the advertising business's loss, software development profit and the increase in selling, general and administrative expenses together.