Q1 loss narrowed, but FY2027-H1 will be the key period for assessing progress toward the full-year plan, including summer courses

FY2027-Q1 revenue was ¥2,992.813 million, up ¥196.394 million, or 7.0%, from ¥2,796.419 million a year earlier. The operating loss narrowed by ¥32.166 million to ¥521.939 million from ¥554.105 million, while the operating margin improved from approximately negative 19.8% to approximately negative 17.4%. The ordinary loss was ¥522 million and the net loss attributable to owners of the parent was ¥340 million, however, so all three levels of profit remained in the red.

The company’s FY2027 full-year forecasts are revenue of ¥16,223 million, operating profit of ¥1,064 million, ordinary profit of ¥1,031 million and net profit attributable to owners of the parent of ¥609 million. Q1 revenue progress was only approximately 18.4% on a simple calculation, but the company has consistently explained that its profitability is lower in Q1 and higher in Q2 and Q3 because of the timing of seasonal courses and growth in the number of enrolled students. Rather than judging the full-year target unattainable based solely on Q1 progress, it is therefore necessary to assess how much revenue and profit accumulate in the first half, including summer courses.

In the comparable FY2026-H1 period, revenue was ¥7,066.947 million and operating profit was ¥167.522 million. If FY2027-H1 revenue exceeds the prior-year period and operating profit also surpasses at least ¥167.5 million, the possibility increases that the narrower Q1 loss reflects improvement supported not only by seasonal factors but also by growth in individual tutoring enrollment and strong course demand. If revenue rises but operating profit falls below the prior-year period, increases in fixed costs such as personnel expenses, advertising and rent may be offsetting the revenue gains from summer courses.

At the next earnings release, it will be important to see more than just first-half revenue and operating profit. The company should also provide a breakdown of summer-course applicants, fees per student, applications for optional classes, and the respective revenue contributions of individual and classroom tutoring. Q1 factors were explained qualitatively, but the company did not disclose how many millions of yen of revenue or profit each factor generated or reduced. To assess the likelihood of achieving the full-year operating profit forecast of ¥1,064 million, both the absolute level of first-half operating profit and the amount of profit required in the second half will be important.