Revenue grew, but the operating loss widened, putting earnings quality in focus for the next results announcement.

Consolidated revenue in FY2027-Q1 was ¥728 million, up from ¥442 million in the same period of the previous year and an increase of 64.5% year on year. The expansion of the scope of consolidation appears to have driven revenue growth, but the company posted an operating loss of ¥188 million, compared with a ¥154 million loss in the same period of the previous year, a deterioration of ¥34 million. The fact that the expansion in revenue scale has not translated directly into improved operating profitability is the first issue to verify in FY2027-H1.

The company also recorded an ordinary loss of ¥169 million, with only ¥19 million of improvement from the operating loss. Meanwhile, quarterly net profit attributable to owners of the parent was ¥148 million, although recent earnings information points to reliance on a ¥316 million gain on the recognition of negative goodwill. Accordingly, it is difficult to conclude that the earnings structure has improved based solely on the net profit, and operating profit, ordinary profit, profit before tax, extraordinary gains and losses, and one-off gains related to business combinations need to be reviewed separately.

In FY2026-Q1, revenue was ¥442 million, the operating loss was ¥154 million, and the quarterly net loss attributable to owners of the parent was ¥265 million. Although revenue increased by ¥286 million this time, the operating loss widened. The extent to which the gross margin of the newly consolidated businesses, selling, general and administrative expenses, personnel costs, audit fees, and business-combination-related expenses weighed on operating profit or loss is therefore an important gap in the disclosure.

In the next results announcement for FY2027-H1, it will be necessary to confirm not only whether revenue growth has continued, but also how far the ¥188 million first-quarter operating loss has narrowed. In particular, achieving the full-year operating profit forecast of ¥294 million will require the company to offset the first-quarter operating loss and generate operating profit of ¥482 million over the remaining 3 quarters. Whether the company can turn profitable on an operating basis in the first half, and whether the net profit remains positive alongside improvements in operating profit and ordinary profit without relying on one-off gains, will determine the assessment of the results.