FY2027 is planned to deliver continued revenue growth alongside a sharp decline in margins

The fiscal year ended May 2026 was the first year in which consolidated financial statements were prepared. Revenue was ¥1,500 million, operating income was ¥289 million, ordinary income was ¥307 million and net income attributable to owners of the parent was ¥227 million. Because year-on-year comparisons on a consolidated basis have not been disclosed, the FY2027 first quarter should be read not only through a simple comparison with the year-earlier period, but also with regard to changes in the scope of consolidation since the fiscal year ended May 2026 and the contribution from the Taiwanese subsidiary.

The full-year forecasts for the fiscal year ending May 2027 are revenue of ¥1,793 million, operating income of ¥212 million, ordinary income of ¥199 million and net income of ¥137 million. Revenue is expected to increase 19.5%, while operating income is expected to decline by ¥77 million, or 26.6%. Against the 19.3% operating margin for the fiscal year ended May 2026, the forecast operating margin for the fiscal year ending May 2027 is approximately 11.8%, or 12% in the company’s materials, representing a decline of approximately 7.5 percentage points. The decline in earnings is explained not only by weaker demand, but also as a plan incorporating additional personnel, investment in the existing business, product development and investment in the Taiwanese operations.

For the FY2027 first quarter, check how much revenue has accumulated against the full-year forecast of ¥1,793 million and how far operating income has progressed against the ¥212 million forecast. However, because quarterly seasonality and quarterly budgets have not been disclosed, there is no basis for concluding that 25% must be achieved. The key questions are whether revenue growth is being maintained, whether the operating margin is close to the company’s plan of around 12%, and whether front-loaded investment has caused it to fall materially below 12%.

In previous results, the factors driving changes in revenue and operating income were not sufficiently broken down by expense category, such as personnel and product development, and disclosure of gross margin, total SG&A and product-development costs was also limited. In the next results release, the verifiability of the earnings-decline plan will depend on whether, in addition to standalone first-quarter revenue and operating income, the company can disclose amounts for personnel expenses, advertising and promotional expenses, development costs and Taiwan-related expenses.