Profit progress was low in the first quarter, making a sharp recovery in the second quarter a prerequisite for achieving the full-year target.

Revenue in the first quarter of the fiscal year ending March 2027 was ¥607.559 million, down 4.0% from ¥632.793 million in the same period of the previous year. Operating profit was ¥15.241 million, down 42.6% from ¥26.568 million, while ordinary profit was ¥16.302 million and quarterly net income was ¥10.087 million. The decline in operating profit was significantly larger than the decrease in revenue, indicating that a modest deterioration in revenue had a pronounced impact on earnings.

The company’s FY2027 full-year forecasts are revenue of ¥2,800 million, operating profit of ¥320 million, ordinary profit of ¥326 million and net income of ¥223 million. As of the first quarter, progress stood at 21.7% for revenue, 4.8% for operating profit, 4.9% for ordinary profit and 4.5% for net income. The first-quarter results cannot simply be extrapolated to the full year, and achieving the full-year forecasts will require revenue of ¥2,192.441 million and operating profit of ¥304.759 million over the remaining 9 months. This corresponds to average monthly revenue of approximately ¥243.6 million and operating profit of approximately ¥33.9 million over the remaining period.

In the first-half results for previous years, FY2026-H1 revenue was ¥1,287 million and operating profit was ¥137 million. To return to at least this level in FY2027-H1, the company would need approximately ¥680 million in revenue and approximately ¥122 million in operating profit in the second quarter alone. If it is to secure first-half revenue of ¥1,400 million and operating profit of ¥160 million, equivalent to 50% of the full-year forecasts, the second quarter alone would need to generate approximately ¥792 million in revenue and approximately ¥145 million in operating profit. Neither figure is a first-half target disclosed by the company; both are calculated thresholds for measuring progress.

The company attributed the first-quarter revenue decline to factors including a decrease in new deployments to other systems by existing customers, a decline in consulting services and the end of the parallel-operation period for a large-scale system. Cloud services increased, supported by subscription contracts, while lower outsourcing costs and other factors supported expenses. The full-year earnings forecasts had not been revised as of the first quarter. However, because the company has not disclosed its own numerical targets for first-half revenue or operating profit, or the amounts required over the remaining period, the most important points at the next earnings announcement will be second-quarter standalone orders and revenue recognition, and a recovery in profit margins.