Will Q1’s strong growth continue in FY2027-H1?

FY2027-Q1 revenue was ¥18,885 million, up 19.0% year on year, and operating profit was ¥1,606 million, up 26.4%. Profit before tax was ¥1,622 million and profit attributable to owners of the parent was ¥1,060 million, up 26.9% and 24.3%, respectively. The operating margin was approximately 8.5%, an improvement of approximately 0.5 percentage points from approximately 8.0% in the same period of the previous year. Revenue, operating profit, profit before tax, and profit attributable to owners of the parent all reached record highs for a Q1.

The full-year forecast was unchanged at revenue of ¥81,800 million, operating profit of ¥8,200 million, profit before tax of ¥8,280 million, and profit attributable to owners of the parent of ¥5,380 million. Q1 progress against the full-year forecast was approximately 23.1% for revenue and 19.6% for operating profit. Compared simply with the 50% midpoint of the year, H1 revenue of ¥40,900 million and operating profit of ¥4,100 million provide mechanical benchmarks, but these are not company-issued H1 forecasts.

The company has consistently explained that seasonality has eased as its stock-based business has expanded, while the execution of customer budgets and the duration of development projects continue to concentrate the provision of services and recognition of revenue toward the end of March. Therefore, falling below a simple 50% benchmark at H1 does not immediately imply a full-year shortfall. However, through Q3 of FY2026, revenue was ¥50,985 million and operating profit was ¥5,097 million, representing progress of approximately 69.8% and 67.1%, respectively, against the full-year forecasts. FY2026 ended with revenue of ¥71,733 million and operating profit of ¥7,760 million, so performance should be assessed in light of the structure in which recognition progresses in the second half.

At the next earnings announcement, we will assess whether Q1’s strong growth was a temporary increase limited to the Information Infrastructure Business or whether it has spread to the Application & Services Business and Medical Systems Business. In particular, it is important to see whether the company discloses the cumulative H1 operating margin, its own assessment against the full-year forecast, the reasons for leaving the forecast unchanged, and the specific levels of revenue and operating profit required in the second half. Since no quarterly statement of cash flows was prepared in Q1, H1 should also show whether profit growth has been accompanied by increases in working capital or advances paid.