Can FY2026 meet the earnings forecast after the upward revision in the full-year results?

Cumulative third-quarter results were revenue of ¥3,480 million, operating income of ¥344 million, ordinary income of ¥368 million and net income attributable to owners of the parent of ¥227 million. Year on year, revenue fell 4.7%, operating income 40.4%, ordinary income 38.8% and net income 41.9%. As of July, the full-year forecast had been revised down to revenue of ¥4,657 million, operating income of ¥413 million, ordinary income of ¥444 million and net income of ¥272 million.

In the performance forecast revision announced on 15 September, revenue was raised to ¥4,670 million, operating income to ¥506 million, ordinary income to ¥537 million and net income to ¥381 million. Compared with the pre-revision forecast, revenue increased by only ¥13 million, or approximately 0.3%, while operating income increased by ¥93 million, or approximately 22.5%, ordinary income by ¥93 million, or approximately 20.9%, and net income by ¥109 million, or approximately 40.1%. The key point to verify in the next results is that the increase in earnings is greater than the revenue growth.

To reach the revised forecast from the cumulative third-quarter results, the fourth quarter would need to generate approximately ¥1,190 million in revenue, ¥162 million in operating income, ¥169 million in ordinary income and ¥154 million in net income. Third-quarter standalone revenue was ¥1,078 million and operating income was ¥115 million, so operating income would need to exceed the standalone quarterly result. The full-year results should clarify whether this reflects merely the resolution of timing differences in project recognition or an improvement in margins resulting from the elimination of low-margin projects.

The third-quarter earnings presentation showed progress rates against the full-year forecast of 74.7% for revenue, 83.3% for operating income, 83.0% for ordinary income and 83.4% for net income. Although the operating income progress rate was high, the full-year forecast itself was already at the level following a downward revision. In the next results, it will be necessary to confirm not only whether the revised operating income forecast of ¥506 million was achieved, but also whether the FY2027 forecast assumes that this recovery will continue.