Q1 is on track for the full-year plan, but first-half profit progress and second-half dependence need to be monitored

Revenue in Q1 of the fiscal year ending March 2027 was ¥60,682 million, EBITDA was ¥3,374 million and operating profit was ¥2,271 million. The full-year forecasts are ¥252,000 million, ¥13,400 million and ¥8,700 million, respectively, implying progress of approximately 24.1% for revenue, 25.2% for EBITDA and 26.1% for operating profit. The materials also show company-wide progress of 24% for revenue and 25% for EBITDA, and the company assesses Q1 as solid relative to its full-year plan.

On a simple calculation, the amounts required from Q2 onward to achieve the full-year forecasts are ¥191,318 million of revenue, ¥10,026 million of EBITDA and ¥6,429 million of operating profit. Although Q1 alone secured approximately one-quarter of the full-year operating profit forecast, quarterly seasonality and changes in the business mix following the sale of the vehicle operations need to be taken into account. Q1 progress therefore cannot be treated as a direct measure of the likelihood of achieving the full-year plan.

Profit progress is slightly stronger than revenue progress. Revenue fell 8.6% year on year, while operating profit rose 23.6%, and the operating margin improved by 0.9 percentage points, from approximately 2.8% to 3.7%. However, profit attributable to owners of the parent was ¥1,289 million, representing approximately 24.7% progress against the full-year forecast of ¥5,210 million, below the level for operating profit. The company cites a lower income tax burden resulting from the corporate reorganization as a factor supporting its full-year net profit forecast. It will therefore be important in the first half to determine how much of the increase in operating profit converts into profit after tax.

The earnings presentation indicates expected first-half profit progress in the low-40% range and above 50% for B2B. Since Q1 showed notable profit improvement in B2B and Social Services, the key questions for FY2027-H1 are whether this expectation is confirmed in the results, and whether B2B’s profit growth is attributable to price optimization and operating standardization or to M&A and changes in the scope of consolidation. The Q1 financial results also did not include a quarterly consolidated cash flow statement, leaving operating cash flow and cash balance undisclosed. These will therefore need to be checked in the first-half results.