The full-year return to profitability depends on offsetting the substantial first-quarter loss in the second half.

Revenue in the first quarter of the fiscal year ending March 2027 was ¥1,912 million, down 27.2% from ¥2,626 million in the same period a year earlier. The operating loss was ¥719 million, the ordinary loss was ¥700 million, and the net loss attributable to owners of the parent was ¥636 million, resulting in losses at all three levels of the income statement. At the end of the first quarter, revenue was only approximately 17.9% of the full-year forecast of ¥10,680 million, while the operating loss had already reached ¥719 million against the full-year operating profit forecast of ¥256 million. A rapid earnings turnaround accompanied by fixed-cost absorption and improved utilization, rather than a simple recovery in revenue alone, will therefore be required.

The recovery plan also faces a high hurdle compared with the previous two fiscal years. Revenue in the fiscal year ended March 2026 was ¥8,665 million and the operating loss was ¥2,073 million, both worse than revenue of ¥10,437 million and an operating loss of ¥583 million in the fiscal year ended March 2025. By contrast, the company forecasts revenue of ¥10,680 million and an operating profit of ¥256 million for the fiscal year ending March 2027, implying an improvement of ¥2,015 million in revenue and ¥2,329 million in operating income. After recording an operating loss of ¥719 million in the first quarter, the company will need to generate at least ¥975 million in operating profit over the remaining three quarters to post a full-year profit of ¥256 million.

The company attributes the decline in revenue to delays in starting clinical trials for multiple projects in the US due to government shutdowns and other factors, the full-scale launch of operations in Europe being pushed back to the second quarter or later, and continued difficult market conditions in Japan, including drug loss and downsizing of existing projects. At the same time, the full-year forecasts of ¥10,680 million in revenue, ¥256 million in operating profit, ¥250 million in ordinary profit, and ¥180 million in net income had not been revised as of the first quarter. Although the earnings release presents full-year forecasts, it does not specify the quarterly allocation of revenue and profit or the amounts required from the second quarter onward to meet the plan.

At the next interim results announcement, it will be important to see whether revenue builds to around ¥5,340 million, half of the full-year plan, and whether the operating loss narrows from the first-quarter figure of ¥719 million. In particular, the key points will be whether the launch of projects in the US and Europe has translated into actual revenue recognition, how far the break-even point has been lowered through workforce reductions and expense controls, and whether additional disclosure with supporting figures is provided for the basis of maintaining the earnings forecasts.