Operating profit rebounded in the second quarter, but cumulative first-half results were almost breakeven

Revenue in the first half of the fiscal year ending December 2026 was ¥2,510 million, down 7.8% from ¥2,723 million in the same period of the previous year. Operating profit was only ¥3 million, down 98.1% from ¥161 million in the same period. For the full fiscal year ended December 2025, revenue was ¥5,336 million and operating profit was ¥264 million, also reflecting declines in both revenue and profit. As of the first half, the decline in revenue from the core business had not been fully offset by cost reductions. The third quarter will be a period for assessing how far operating profit recovers, rather than merely whether the company avoids an operating loss.

Improvement was evident on a quarterly basis. Revenue was ¥1,267 million and operating loss was ¥137 million in the first quarter of 2026, whereas revenue was ¥1,243 million and operating profit was ¥140 million in the second quarter. Selling, general and administrative expenses in the second quarter were ¥1,089 million, down 13.3% year on year. Accordingly, the key question for the third quarter is whether the second-quarter profit resulted from a normal improvement in revenue or from the reversal of costs concentrated in the first quarter.

First-half selling, general and administrative expenses were ¥2,486 million, down 1.4% year on year. At the same time, one-off costs of ¥185 million related to workforce reductions at overseas offices were recorded, mainly in the first quarter. The company explained that personnel expenses declined in the second quarter as a result of the workforce reductions. The absence of additional restructuring costs and the continuation of lower personnel expenses in the third quarter will support operating profit.

However, interim profit before tax was ¥527 million and interim profit attributable to owners of the parent was ¥524 million, both substantially above operating profit of ¥3 million. This reflected the recording of changes in the fair value of securities held as finance income, and should be assessed separately from the recovery in operating performance. The company has a single reportable segment and omits revenue and profit by business area, so the disclosure does not allow investors to determine whether the membership business, overseas business, moment or Cookpad Mart drove operating profit.

In the third quarter, we want to confirm the year-on-year decline in revenue, operating profit, selling, general and administrative expenses, and whether one-off costs were recorded. If operating profit improves while revenue continues to decline and profit is secured only through finance income or cost reductions, the sustainability of the earnings improvement should be considered limited.