A substantial build-up in fourth-quarter profit is needed to achieve the FY2026 full-year forecast

Consolidated revenue for the nine months of FY2026 was ¥10,818 million, up 37.5% year on year. Operating profit was ¥1,014 million, up 380.3%, ordinary profit was ¥594 million, up 112.1%, and net profit attributable to owners of the parent was ¥472 million, up 172.5%. Based on revenue and operating profit, the operating margin was approximately 9.4%, an improvement of approximately 6.7 percentage points from approximately 2.7% in the same period of the previous year. The central improvement in these results was not only revenue growth but also a recovery in profit margins.

Progress against the full-year forecasts was approximately 66.8% for revenue, 59.7% for operating profit, 34.9% for ordinary profit and 39.3% for net profit. Assuming that the normal proportion of the year elapsed by the end of the third quarter is 75%, revenue and operating profit remain below that level, while progress in ordinary profit and net profit is particularly low. To meet the full-year forecast, the company needs to generate approximately ¥1,106 million in ordinary profit and approximately ¥728 million in net profit in the fourth quarter. Profit accumulation, including non-operating income and expenses and the tax burden, therefore needs to be monitored.

Achieving the full-year revenue forecast requires approximately ¥5,382 million in fourth-quarter revenue, while achieving the operating profit forecast requires approximately ¥686 million in fourth-quarter operating profit. Nine-month operating profit in the previous fiscal year was approximately ¥211 million, so the current fiscal year has already substantially exceeded that level. However, achieving the full-year forecast would require the company to generate additional fourth-quarter operating profit equivalent to approximately 68% of nine-month operating profit. A key question is whether the company’s second-half-weighted business structure and demand related to GIGA School will actually translate into profit on this scale.

The third-quarter earnings summary contained no revision to the full-year forecasts, and the annual dividend forecast also remained unchanged at ¥0. In addition, no quarterly consolidated cash flow statement was prepared for the nine months, so the relationship between operating and investing cash flow and profit cannot be verified until the annual results. At the next earnings release, fourth-quarter revenue and operating profit, non-operating income and expenses, taxes, operating cash flow and progress against the full-year forecasts should be reviewed together.