Operating loss narrowed despite lower revenue, but ordinary and net losses worsened due to crypto asset valuation losses

Revenue in FY2026-H1 was ¥1,381.056 million, down ¥56.292 million, or approximately 3.9%, from ¥1,437.348 million in the same period of the prior year. Gross profit also declined by ¥19.171 million, from ¥857.253 million to ¥838.082 million, indicating that both the top line and gross profit contracted. In the next earnings release, it will be necessary to determine, using both cumulative and standalone three-month figures, whether the decline in revenue continued into the third quarter or whether revenue recovered on a quarterly basis.

Operating loss, meanwhile, was ¥141.634 million, narrowing by ¥23.114 million from ¥164.748 million in the same period of the prior year. On a loss basis, this represents an improvement of approximately 14.0%. Previous disclosures have attributed earnings improvement to cost reductions in fixed costs, personnel expenses, outsourcing costs, and purchasing and inventory management. It will be important to confirm, with amounts, which expenses actually declined in FY2026-Q3 and why the loss was contained despite lower revenue.

Deterioration is more pronounced below the operating line. Ordinary loss widened by ¥133.837 million, from ¥167.684 million in the same period of the prior year to ¥301.521 million, while interim net loss attributable to owners of the parent widened by ¥129.163 million, from ¥185.559 million to ¥314.722 million. A crypto asset valuation loss of ¥148.697 million was recorded for the interim period, equivalent to approximately 49% of ordinary loss on a simple comparison. In the next release, it will be necessary to determine, together with the breakdown of non-operating expenses, whether the valuation loss was a one-off mark-to-market fluctuation or a recurring expense associated with increased holdings or a change in valuation methodology.

In FY2026-Q3, the key issue is whether the improvement in operating results has flowed through to ordinary results. Specifically, we will review the year-on-year change in operating loss, the direction of the gross margin, total SG&A expenses and the amount of fixed-cost reductions, and whether crypto asset valuation losses have recurred. Even if operating loss narrows, a renewed large charge for crypto asset valuation losses or stock acquisition rights issuance expenses would limit improvement in ordinary and net income. Accordingly, a bridge disclosure including non-operating and extraordinary gains and losses will be a focus.