FY2027 forecast assumes a substantial build-up in H2

For FY2026, revenue was ¥685.631 million, operating profit was ¥44.659 million, ordinary profit was ¥106.309 million and net income was ¥85.994 million, representing a return to profitability from the previous year's losses. By contrast, the company's FY2027 forecasts are revenue of ¥705 million, operating profit of ¥37 million, ordinary profit of ¥34 million and net income of ¥31 million. Although revenue is expected to increase 2.8%, ordinary profit is planned to decline 68.0% year on year and net income 64.0%. Continued revenue growth and the maintenance of profit levels therefore need to be assessed separately.

Revenue for the first quarter of FY2027 was ¥95.841 million, down 1.8% from ¥97.615 million in the same period of the previous year. The company reported an operating loss of ¥51.494 million, an ordinary loss of ¥49.401 million and a quarterly net loss of ¥50.134 million. Although the losses narrowed from the previous year, the company remained loss-making from the operating level through to the bottom line. First-quarter progress against the full-year revenue forecast of ¥705 million was only about 13.6%, meaning that, on a simple calculation, revenue of ¥609.159 million is required over the remaining three quarters. For operating profit, the company needs to generate approximately ¥88.5 million over the remaining period to cover the first-quarter loss of ¥51.494 million and achieve full-year operating profit of ¥37 million.

The company explains that the fiscal year-ends of its major customers are concentrated mainly in September and March, resulting in revenue being weighted toward H2, particularly the second and fourth quarters, while selling, general and administrative expenses do not fluctuate significantly from quarter to quarter. It is therefore not appropriate to judge the achievability of the full-year forecast based solely on the first-quarter loss. However, H1 of the previous year also produced revenue of ¥281 million and an operating loss of approximately ¥50 million. The focus next time will therefore be whether revenue growth and the absorption of fixed costs can be confirmed in H1, rather than relying solely on seasonality as an explanation.

At the next interim results, we will check whether H1 revenue exceeds the ¥281 million reported in the same period of the previous year and how much the operating loss has narrowed from approximately ¥50 million. We also need to establish whether the FY2027 full-year forecasts of ¥705 million in revenue, ¥37 million in operating profit, ¥34 million in ordinary profit and ¥31 million in net income are maintained or lowered. If revenue remains below the previous year's level in the first quarter and the timing of revenue recognition for orders is pushed back, the back-end-loaded pattern may indicate uncertainty over project recognition rather than simple seasonality.