Revenue is ahead of plan, but earnings progress is heavily dependent on the second half

In the first half of FY2026, revenue was ¥10,944 million, operating profit was ¥196 million, ordinary profit was ¥239 million, and interim net income attributable to owners of the parent was ¥141 million. Compared with first-half revenue of ¥9,486 million and operating profit of ¥179 million a year earlier, revenue increased 15.4% and operating profit increased 9.0%. Operating profit growth was relatively slow compared with the expansion in revenue, and Q3 will need to confirm whether revenue growth is translating into profit growth.

The full-year forecasts are revenue of ¥20,000 million, operating profit of ¥450 million, ordinary profit of ¥510 million, and net income attributable to owners of the parent of ¥370 million. Progress at the end of the first half was 54.7%, 43.6%, 47.0%, and 38.1%, respectively. While revenue is above the simple 50% benchmark at the halfway point of the year, the company needs to generate ¥254 million in operating profit, ¥271 million in ordinary profit, and ¥229 million in net income in the second half to meet the full-year forecasts. In Q3, it will be important to determine whether profit is weighted toward the second half as planned or whether the weak first-half profit progress persists.

By business, Product & Services and Software Sales & Solutions recorded higher revenue and profit, while Consulting & Integration posted lower revenue and profit. In addition, because part of the business was transferred to another segment, the comparative information for the previous fiscal year has also been recast into the revised classification. Accordingly, it is necessary to track not only the increase in consolidated profit but also which segments generated the additional profit, using the same classification.

The first-half presentation materials show cumulative progress for revenue and profit, but do not disclose the standalone Q2 operating margin, cost of sales, selling, general and administrative expenses, or the assumptions underlying the full-year forecast. In Q3, in addition to the extent of cumulative operating profit progress, we will want to confirm the products and segments supporting the ¥254 million required in the second half, the timing of project recognition, and cost trends.