FY2027 Q1 was strong, but progress toward the full-year plan remains at an early stage

Q1 revenue was ¥2,112 million and operating profit was ¥286 million, representing substantial year-on-year increases of 39.9% and 44.0%, respectively. The operating margin was approximately 13.5%, a slight improvement from approximately 13.2% in the same quarter of the previous year. The main factors were steady wins in the CTI business of recurring subscription-based projects and high-margin flow-based projects, growth in stock revenue in other businesses, and the inclusion of revenue from feat, which became a consolidated subsidiary in April.

However, the full-year forecasts are ¥10,000 million for revenue and ¥1,500 million for operating profit, leaving Q1 progress at 21.1% and 19.1%, respectively. A simple even quarterly allocation would imply a benchmark of 25%, making operating profit progress 2.0 percentage points lower than revenue progress. Although the company has not revised its forecasts, achieving the full-year plan will require an additional ¥2,888 million in revenue and ¥1,214 million in operating profit from Q2 onward.

Previous disclosures indicate that shipments and acceptance of flow-based business are concentrated in September and March, while consolidated revenue tends to be weighted toward Q2 and Q4. It is therefore too early to conclude that the plan will be missed based solely on the simple Q1 progress rate. At the same time, in the next report covering Q2, it will be important to assess how closely the company approaches the simple first-half pace of ¥5,000 million in revenue and ¥750 million in operating profit, even after taking seasonality into account. In particular, we will monitor whether CTI's high-margin flow-based projects continue in Q2 and whether profit levels can be maintained through growth in stock revenue alone.