Revenue is growing, but acceleration in the second half is needed to achieve the full-year forecast

Revenue for FY2026 from January through June was ¥820.526 million, an increase of ¥72.630 million, or 9.7%, from ¥747.896 million in the previous year's interim period. However, the full-year revenue forecast was maintained at ¥2,096 million, leaving first-half progress at just 39.1%. This is approximately 10.9 percentage points below the simple 50% benchmark halfway through the calendar year, indicating that revenue remains behind the company's plan.

Subtracting first-half actual revenue from the full-year forecast leaves required second-half revenue of ¥1,275.474 million. Second-half revenue for the fiscal year ended December 2025 is calculated as ¥735.917 million, by subtracting first-half revenue of ¥747.896 million from full-year revenue of ¥1,483.813 million. Accordingly, second-half revenue this fiscal year needs to increase by approximately 73.3% year on year. The company plans to build revenue equivalent to 1.56 times first-half actual revenue over the remaining 6 months, making cumulative 9M revenue of ¥1,572.0 million one milestone to watch in Q3.

By business, the earnings presentation stated that first-half revenue from the LegalTech SaaS business was ¥491 million, up 23.8% year on year, while revenue from the Registry Business was ¥329 million, down 6.2%. SaaS is driving overall revenue growth, but if the decline in the Legal Procedures Cloud business continues, the required second-half acceleration would have to come from a single business. The earnings summary presents segment profit only for the LegalTech business as a single segment, so in Q3 it will be important to review at least revenue by business, usage volumes, and each business's contribution to profit or gross profit together.

At the next earnings release, we will check whether 9M revenue exceeds ¥1,572.0 million and whether Q3 alone shows sufficient orders and contract accumulation to achieve second-half revenue of ¥1,275.5 million. The specific issues for assessing the feasibility of the full-year forecast are whether LegalTech SaaS's revenue growth is driven by temporary large projects or accompanied by increases in ARR, customer numbers and average customer spend, and whether usage of the Legal Procedures Cloud business has bottomed out.