Revenue is growing, but profit growth is slowing; the focus in FY2027-H1 is progress toward the full-year plan

FY2027-Q1 revenue was approximately ¥2,368 million, up 10.3% year on year. Operating profit was approximately ¥131 million, up 2.4%; ordinary profit was approximately ¥137 million, up 3.9%; and net income for the quarter was approximately ¥84 million, up 4.3%. Profit growth was modest relative to revenue growth, indicating that as of Q1, the increase in revenue had not translated directly into profit growth.

The FY2027 full-year forecasts are ¥9,600 million in revenue, ¥560 million in operating profit, ¥580 million in ordinary profit and ¥350 million in net income. Calculated against the Q1 results, progress was approximately 24.7% for revenue, 23.5% for operating profit, 23.7% for ordinary profit and 23.9% for net income. Without taking seasonality into account, a simple half-year benchmark would be ¥4,800 million in revenue, ¥280 million in operating profit, ¥290 million in ordinary profit and ¥175 million in net income. However, the company has not provided specific disclosure on seasonality between H1 and the second half. These figures should therefore be treated as benchmarks for seeking an explanation of progress, rather than as mechanical earnings forecasts.

FY2026 full-year revenue was ¥9,200 million and operating profit was approximately ¥599 million, representing an operating margin of approximately 6.52%. The FY2027 plan implies a decline in operating margin to approximately 5.83%. The key question is whether the Q1 operating margin of approximately 5.55% will improve through H1, or whether pressure exceeding the decline assumed in the full-year plan will remain. In H1, we will examine not only cumulative earnings but also Q2 standalone revenue and operating profit, the cost ratio, and changes in personnel expenses and SG&A to assess whether the full-year plan is merely being maintained or remains achievable at this point.