Revenue growth to be maintained, while FY2027 profit is planned to decline sharply

In FY2026, revenue was ¥1,751 million and operating profit was ¥334 million, resulting in an operating margin of approximately 19.1%. By contrast, the company's FY2027 forecast calls for revenue of ¥2,136 million and operating profit of ¥160 million. Revenue is planned to increase 22%, while operating profit is expected to decline 52.1%. The forecast operating margin is approximately 7.5%, a decrease of approximately 11.6 percentage points from the previous fiscal year's actual result.

In the first quarter of FY2027, revenue was ¥480 million and operating profit was ¥102 million. Revenue progress against the full-year forecast was approximately 22.5%, slightly below the 25% implied if each quarter accounted for one-fourth of the year. Operating profit progress, however, reached approximately 63.8%, with the first quarter alone accounting for most of the full-year operating profit forecast. The first-quarter operating margin was approximately 21.3%, well above the 7.5% full-year forecast, suggesting that a considerable decline in margins from future growth investment and expense recognition is already factored into the plan.

Simply deducting the first-quarter results from the full-year forecast means that the company would reach its forecast by recording revenue of ¥1,656 million and operating profit of approximately ¥58 million over the remaining 3 quarters. In other words, substantial revenue accumulation is required during the remaining period, whereas the first-quarter operating profit of ¥102 million already represents approximately 64% of the annual plan. In the next first-half results, it will be necessary to check not only whether revenue has reached approximately ¥1,068 million, but also whether operating profit exceeds the ¥160 million full-year forecast.

In the cumulative first half of FY2026, revenue was ¥827.447 million, operating profit was ¥162.475 million and the operating margin was approximately 19.6%. Compared with past first-half results, the FY2027 company forecast also represents a plan with a significantly lower profit margin. The company describes development of AI functions, hiring, marketing investment and platform integration as growth investments, but has not yet disclosed the amount allocated to each investment, the timing of expense recognition or when the investments are expected to translate into revenue or customer growth.

Accordingly, in the next results announcement, we will focus less on simple revenue growth and more on the first-half operating margin, the increase in SG&A expenses, the breakdown of AI, hiring and brand investments, and whether the full-year forecast is maintained or revised. The company needs to explain whether the high first-quarter profit progress was due to temporary differences in the timing of expense recognition or whether management has set a conservative profit forecast.