After the upward revision, confirming the landing for FY2026 revenue and net income is more important than operating profit

Cumulative consolidated revenue through the third quarter was ¥73,707 million, up 1.2% year on year, while operating profit was ¥5,694 million, up 8.7%. As of 14 August, the full-year forecasts had remained unchanged at revenue of ¥97,000 million, operating profit of ¥5,800 million and net income attributable to owners of the parent of ¥3,850 million, but on 21 August they were revised upward to revenue of ¥100,000 million, operating profit of ¥6,000 million and net income of ¥4,000 million.

Cumulative progress through the third quarter against the revised forecasts was approximately 73.7% for revenue and 94.9% for operating profit. On a simple calculation, approximately ¥26,293 million of revenue and ¥305.825 million of operating profit will be required in the fourth quarter to achieve the full-year forecasts. The operating margin required on the remaining revenue is approximately 1.2%, below the approximately 7.7% operating margin for the first three quarters. Because seasonality and year-end expense recognition may affect the results, achievement cannot be determined from this difference alone, but the focus is on the timing of revenue recognition rather than additional operating profit upside.

In addition, cumulative net income attributable to owners of the parent through the third quarter was ¥4,319 million, ¥319 million above the revised full-year forecast of ¥4,000 million. On a simple difference basis, the full-year forecast would be exceeded unless a net loss of approximately ¥319 million is recorded in the fourth quarter. Actual results may be affected by income taxes, foreign exchange gains or losses, extraordinary gains or losses and other factors, so the next earnings announcement will need to be checked for the bridge from fourth-quarter income before income taxes and other adjustments to net income.

At the next earnings announcement, the key checks will be not only the variance from the revised forecasts of revenue of ¥100,000 million, operating profit of ¥6,000 million and net income of ¥4,000 million, but also which segments and projects generated the reported revenue. Even if operating profit meets the forecast, the quality of earnings will differ if revenue falls short, net income undershoots, or results depend on non-operating factors such as foreign exchange gains. The variance from forecast EPS of ¥333.19 and the breakdown of year-end expenses and tax charges will be important areas for review.