Delivery of a large delayed payment-terminal project drove profitability in FY2027-Q1

The payment solutions business secured revenue of ¥1,915 million in FY2026, but recorded an operating loss of ¥41 million. The main factors were the slippage into the first quarter of the fiscal year ending March 2027 of a large Incredist Premium Ⅲ project scheduled for delivery at the end of the fiscal year, and the company’s focus on developing and proposing its various solutions. In other words, the FY2026 loss appears to have resulted to a large extent not only from a loss of demand, but also from the combination of delivery timing and upfront development costs.

In FY2027-Q1, company-wide revenue was ¥1,424.957 million, operating profit was ¥301.730 million, ordinary profit was ¥299.243 million and net income was ¥203.325 million, marking a return to profitability from a loss in the same quarter of the previous year. Payment solutions alone generated revenue of ¥1,216.365 million and operating profit of ¥411.316 million, exceeding company-wide operating profit. Payment business revenue accounted for approximately 85.4% of company-wide revenue in Q1, while Q1 operating profit reached approximately 79.4% of the FY2027 full-year operating profit forecast of ¥380 million.

However, Q1 results cannot be treated as a direct indication of full-year earnings power. The FY2027 full-year forecasts are revenue of ¥5,030 million, operating profit of ¥380 million, ordinary profit of ¥370 million and net income of ¥240 million, and Q1 profit includes the impact of the concentrated delivery of projects that slipped between periods. In the latest upward revision, the first-half operating profit forecast was raised to ¥125 million and the first-half ordinary profit forecast to ¥120 million, while the full-year ordinary profit forecast was left unchanged at ¥370 million. The fact that the revised first-half operating profit forecast is below Q1 operating profit of ¥301.730 million also warrants verification of the possibility that development costs and other expenses will be concentrated in Q2.

At the next earnings announcement, it will be necessary to separately confirm the contribution of delivered large projects to gross profit and operating profit, and the delivery timing of the several remaining large projects. The latest earnings summary does not provide sufficient numerical disclosure of order intake, order backlog, scheduled revenue recognition by project, additional development costs or the timing of other expenses. In addition to actual results against the revised first-half forecasts of ¥125 million in operating profit and ¥120 million in ordinary profit, an important point to verify is whether the full-year operating profit forecast of ¥380 million depends on one-off delivery concentration.