FY2027-Q1: a quarter to test whether cloud subscription revenue is reaccelerating, rather than simply delivering full-year revenue and profit growth

For the fiscal year ended May 2026, revenue was ¥1,734.668 million and operating profit was ¥655.128 million, up 5.3% and 14.1%, respectively, year on year. The company's forecast for the fiscal year ending May 2027 is revenue of ¥1,800 million and operating profit of ¥670 million, implying revenue growth of 3.8% and operating profit growth of only 2.3%. The forecast operating margin is approximately 37.2%, slightly below the 37.8% recorded for the fiscal year ended May 2026, making the maintenance of margins more important than revenue expansion in the coming fiscal year.

FY2026-Q1 revenue was ¥303 million and operating profit was ¥80 million, down from revenue of ¥356 million and operating profit of ¥120 million in the same quarter of the prior year. The cumulative first-half figures subsequently recovered to revenue of ¥646 million and operating profit of ¥206 million, while the nine-month figures reached revenue of ¥1,090 million and operating profit of ¥412 million. If FY2027-Q1 revenue falls below ¥303 million, more than ¥1,497 million would need to be generated from Q2 onward to meet the full-year forecast of ¥1,800 million. This makes it necessary to assess not only seasonality but also project progress.

Cloud subscription revenue is the main growth driver. For the fiscal year ended May 2026, cloud subscription revenue was ¥907.383 million, up 10.0% year on year. The earnings presentation stated that it accounted for approximately 52% of the revenue mix, while recurring revenue, including cloud subscription revenue and maintenance services, had risen to approximately 59%. Cloud subscription revenue was ¥218 million in FY2026-Q1, so it will be important for FY2027-Q1 to exceed at least this level and demonstrate whether growth of around 10% annually is continuing, as this will determine the credibility of the full-year forecast.

The sources currently available do not disclose standalone FY2027-Q1 forecasts for revenue or operating profit, quarterly forecasts for cloud subscription revenue, or the order backlog as of Q1. In the next earnings release, the key comparisons will be revenue of ¥303 million, operating profit of ¥80 million, and cloud subscription revenue of ¥218 million in the same quarter of the prior year. In addition to growth in cloud subscription revenue, it will be necessary to check whether the operating margin remains around 37%, whether the full-year forecasts of ¥1,800 million and ¥670 million are maintained or revised, and whether revenue by product category is disclosed.