Q1 is running ahead of the full-year plan, but the key question is whether this can be sustained through the first half

In Q1 of the fiscal year ending March 2027, revenue was ¥2,959 million, operating profit was ¥770 million, ordinary profit was ¥622 million and net profit was ¥416 million. Year on year, revenue rose 16.5%, operating profit 46.0%, ordinary profit 51.6% and net profit 49.4%, with all major profit measures increasing. The operating margin rose by approximately 5.3 percentage points, from approximately 20.8% in the same quarter of the previous year to approximately 26.0% in the quarter under review.

Compared with the full-year forecasts, revenue of ¥2,959 million represents 25.7% of ¥11,525 million, while operating profit of ¥770 million represents 33.6% of ¥2,291 million. Ordinary profit has reached 44.9% of the full-year forecast of ¥1,384 million, and net profit 45.0% of the forecast of ¥925 million. The earnings supplement states that Q1 progress against the interim forecasts was 52.0% for revenue, 68.4% for operating profit, 82.3% for ordinary profit and 82.4% for net profit. The company also assesses that progress against its first-half plan is well advanced.

However, strong Q1 progress does not necessarily mean that full-year results will exceed expectations. Although ordinary profit and net profit appear closer to their full-year forecasts than operating profit at the Q1 stage, the company expects interest expense to increase as interest rates rise over the full year. In FY2027-H1, it will be necessary to distinguish between the build-up in revenue, whether the margin secured with operating profit of ¥770 million can be maintained, and the extent to which the impact of financial expenses expands from ordinary profit of ¥622 million.

At the next results announcement, we will want to check the difference between cumulative first-half results and the interim forecasts, as well as whether the full-year forecasts are maintained or revised. In particular, whether operating profit exceeds ¥1,145.5 million, equivalent to 50% of the full-year forecast, and whether ordinary profit exceeds ¥692 million and net profit exceeds ¥462.5 million will provide specific benchmarks for assessing the likelihood of achieving the annual plan at the first-half stage.