Confirming progress toward turning profitable in the first half of the fiscal year ending March 2027

Revenue in Q1 of the fiscal year ending March 2027 was ¥205.906 million, down 31.5% year on year. The operating loss was ¥90.812 million, the ordinary loss was ¥92.179 million, and the net loss attributable to owners of the parent was ¥47.717 million. By contrast, the company’s full-year forecasts are revenue of ¥1,740 million, operating profit of ¥100 million, ordinary profit of ¥100 million, and net income attributable to owners of the parent of ¥150 million.

A simple calculation based on Q1 results shows that ¥1,534.094 million in revenue must be generated over the remaining three quarters to achieve the full-year revenue forecast. For operating profit, ¥190.812 million must be generated during the remaining period to offset the Q1 loss of ¥90.812 million and achieve full-year operating profit of ¥100 million. This is not the company’s quarterly plan, but a mechanical difference between Q1 results and the full-year forecast, and does not take into account the timing of project recognition or seasonality.

For the fiscal year ended March 2026, revenue was ¥1,463.177 million and the operating loss was ¥595.127 million. Accordingly, the forecast for the fiscal year ending March 2027 assumes revenue growth of ¥276.823 million, or 18.9%, from the previous year’s actual results, and an improvement of ¥695.127 million in operating income. Q1 revenue represented approximately 11.8% of the full-year forecast, while the operating loss was moving in the opposite direction from the full-year operating profit target. As a result, first-half results will be the first quantitative hurdle for assessing the achievability of the full-year forecast, rather than merely confirming progress.

The Q1 earnings presentation included the full-year forecast figures, but did not provide progress rates against the forecasts, management’s own assessment of progress, the assumptions underlying the earnings forecasts, or the amount of risk incorporated into the forecasts. In the first-half results, it will be necessary to confirm not only cumulative revenue and operating income or loss, but also when AI video and alternative video projects will be recognized as revenue, how far fixed-cost reductions needed for profitability have progressed, and the basis for maintaining the full-year forecasts.