Q1 sales are on track, but the full-year operating profit benchmark is missing

In the first quarter from April to June 2026, revenue was ¥60,322 million, operating income was ¥4,066 million, ordinary income was ¥3,908 million, and net income attributable to owners of the parent was ¥2,651 million. Revenue increased 33.6% year on year and operating income increased 179.5%, while progress against the full-year revenue forecast of ¥240,000 million was 25.1%. This is broadly in line with the simple 25% time-based progress after three months, so at least in terms of revenue, it is difficult to conclude that the company was significantly behind its full-year plan as of Q1.

The mechanical H1 checkpoints are revenue of ¥120,000 million, ordinary income of ¥6,800 million, and net income of ¥4,700 million. However, these are comparison benchmarks based on half of the full-year forecasts, not forecasts reflecting the company's H1 seasonality or profit allocation. Since Q1 progress was 28.7% for ordinary income and 28.2% for net income, both above the revenue progress rate, the next results announcement should assess not only revenue but also whether cumulative H1 profit approaches the mechanical 50% line.

There is an important limitation in evaluating profit progress. Q1 operating income was ¥4,066 million and the operating margin was approximately 6.7% on a calculated basis, but no full-year operating profit forecast has been disclosed. Meanwhile, full-year forecasts of ordinary income of ¥13,600 million and net income of ¥9,400 million have been provided, so it is not possible to compare the difference between operating income and ordinary income, or the annual operating margin, with the company's plan. Q1 segment revenue was also disclosed as ¥50,354 million for the Semiconductor and Electronic Devices Business and ¥9,967 million for the Computer Systems-Related Business, but revenue by region was not disclosed.

Actual results for FY2026 were revenue of ¥203,748 million, operating income of ¥10,253 million, ordinary income of ¥9,750 million, and net income of ¥7,842 million. The current full-year forecasts are revenue of ¥240,000 million, ordinary income of ¥13,600 million, and net income of ¥9,400 million, indicating expectations of higher revenue and ordinary income than in the prior year, but the extent of operating profit improvement cannot be verified. At the next results announcement, we will assess H1 progress toward revenue of around ¥120,000 million, along with any new disclosure of the operating profit forecast or the reason for its absence, segment profit progress, and the impact on results of external risks cited by the company, including yen depreciation, higher interest rates, and the situation in the Middle East.