Will growth in advertising production orders and margin improvement continue in FY2027-H1?

Advertising production reported FY2026-H1 revenue of ¥13,937 million and segment profit of ¥1,747 million, up 24.4% and 70.5%, respectively, year on year. For FY2026 as a whole, it secured revenue of ¥31,719 million and segment profit of ¥4,063 million, representing revenue growth of 10.3% and operating profit growth of 34.9%. Active order acquisition, staff development and margin improvement measures supported past growth, making the key issue at the next results announcement whether this improvement was driven by temporary project factors.

In FY2027-Q1, revenue was ¥5,906 million, down 1.2% year on year. Segment profit rose 4.9% to ¥558 million, implying that the margin improved to approximately 9.4% from approximately 8.9% a year earlier, although revenue growth paused. Accordingly, in FY2027-H1 it will be necessary to assess not only whether revenue can recover to the year-earlier ¥13,937 million, but also whether profit can be maintained at the year-earlier ¥1,747 million, and whether the increase in profit came from gross margin improvement or SG&A cost control.

At the consolidated level in FY2027-Q1, overall operating profit declined because lower profit in the content-related businesses offset the increase in advertising production profit. The company has continued to provide qualitative explanations that orders in the commercial production business are strong, but it has not disclosed order intake or order backlog in monetary terms. At the next results announcement, the focus will be on whether additional leading indicators can be provided to assess revenue and margins, including order intake, order backlog, delivery timing and the presence of low-margin projects.

In August 2026, the company announced a partnership with Deluxe covering localization services in the Asia-Pacific region. The partnership is intended to strengthen the delivery structure for local-language services, but no contribution to performance in terms of revenue, orders or customer numbers has been disclosed to date. It will be important to determine from the FY2027-H1 explanation of advertising- and content-related orders whether the partnership has led to project wins or overseas expansion.