Profit margin improves despite lower first-half revenue; second-half revenue growth needed to meet the full-year plan

FY2026-H1 consolidated revenue was ¥2,863 million, down 2.2% from ¥2,929 million in the same period of the prior year. Operating profit, however, rose 4.0% to ¥1,115 million from ¥1,071 million, while ordinary profit increased 6.0% to ¥1,146 million. With operating profit rising as revenue contracted, the operating margin improved by approximately 2.3 percentage points, from approximately 36.6% in the same period of the prior year to approximately 38.9%.

The full-year forecasts remain unchanged at ¥6,150 million in revenue, ¥2,350 million in operating profit, ¥2,380 million in ordinary profit and ¥1,660 million in net profit attributable to owners of the parent. First-half progress was 46.6% for revenue, 47.4% for operating profit, 48.2% for ordinary profit and 48.0% for net profit. If 75% of the annual forecast is used as a simple benchmark for cumulative Q3 results, cumulative Q3 revenue of approximately ¥4,613 million and operating profit of approximately ¥1,763 million would provide reference points. From the first-half results, this would require additional Q3 revenue of approximately ¥1,750 million and operating profit of approximately ¥648 million.

The factors behind the improvement in profitability were price revisions in the information platform business, the yen depreciation and foreign-exchange effect, profit growth accompanying changes in revenue, and lower fixed costs following the closure of the Fukuoka call center. The factors affecting first-half operating profit included positive contributions of ¥58 million from profit growth associated with changes in each business's revenue, ¥24 million from foreign-exchange movements and ¥9 million from lower fixed costs related to the Fukuoka call center. These were partly offset by ¥23 million in office relocation costs and ¥24 million in fixed costs, including personnel, maintenance and management expenses. In Q3, we will assess whether the improvement in profitability from price revisions and fixed-cost controls remains after the one-off relocation costs fall away.

The first-half earnings release did not disclose cash flow from operating activities, cash flow from investing activities, cash flow from financing activities or the balance of cash and cash equivalents at the end of the period. For FY2025, cash flow from operating activities was ¥1,809 million, cash flow from investing activities was negative ¥2,489 million, cash flow from financing activities was negative ¥1,590 million, and cash and cash equivalents totaled ¥3,802 million. In Q3, another point of focus will be whether supplementary disclosure is provided on the impact of cash outflows, including share buybacks and the reorganization of operating sites.