Will cost-cutting-driven progress toward profitability continue in the first half?

Revenue for the first quarter of the fiscal year ending March 2027 was ¥662.157 million, down 7.0% from ¥711.819 million in the same period of the previous year. The full-year revenue forecast is approximately ¥3,040 million, putting first-quarter progress at only 21.8%. This is 3.2 percentage points below the simple time-proportional benchmark of 25.0% after three months, making the extent of any revenue recovery in the first half the first point to monitor.

Meanwhile, the operating loss narrowed from ¥50.083 million in the same period of the previous year to ¥11.287 million, an improvement of approximately ¥38.8 million. The supplementary earnings materials put total first-quarter cost reductions at ¥88.5 million, the effect of initiatives ①–③ at ¥78.9 million, and the year-on-year decrease in depreciation and other expenses at ¥18 million. However, these figures may explain the same earnings improvement from different perspectives, so they should not simply be added together. They need to be examined by expense category, including personnel expenses, outsourcing expenses, subcontracting expenses, temporary staffing costs and depreciation.

The full-year operating profit forecast is approximately ¥5.7 million. Starting from the first-quarter operating loss, the company needs to accumulate approximately ¥17 million in operating profit over the remaining 3 quarters. For revenue, approximately ¥1,520 million, half of the ¥3,040 million full-year forecast, is the simple first-half benchmark. However, the company has not disclosed specific internal first-half plans for revenue and operating profit or its seasonality assumptions. Accordingly, the next results should be assessed not simply on whether the full-year forecast was maintained, but on how far cumulative first-half revenue and operating income or loss have progressed.

The key points to monitor are whether the ¥88.5 million cost-reduction effect continued into the second quarter and how much new projects and referral-based fees contributed to profit in offsetting the first-quarter revenue decline. The first-quarter materials do not show the company’s self-assessment against the consolidated plan, full-year contribution by initiative, or risk-adjusted figures. Whether these items receive additional disclosure in the first-half results will also affect the credibility of the return to profitability.