First-quarter earnings growth heavily dependent on one-off deal origination and referral fees

First-quarter revenue was ¥6,327 million, operating profit was ¥4,843 million, ordinary profit was ¥5,011 million, and net income attributable to owners of the parent was ¥3,913 million. However, ¥5,578 million of revenue consisted of deal origination and referral fee income associated with the termination of contracts for additional order projects. On a simple calculation, these fees alone accounted for approximately 88.2% of first-quarter revenue, leaving approximately ¥749 million in revenue excluding fees.

These fees were not accumulated monthly from AI data center GPU usage charges. They were income recognized following the withdrawal from and termination of contracts for additional order projects. According to reported explanations, the contracts were cancelled retroactively effective 1 April 2026, and the amount was determined based on 18 months of estimated profit, while the first domestic project and first Australian project were excluded from the cancellations. Accordingly, not all AI data center-related projects have disappeared, but the ¥5,578 million in fees cannot be assessed as having the same characteristics as ordinary usage-fee revenue.

In FY2027-H1, it will be important to determine whether the ¥749 million in revenue excluding fees came from the existing data science, systems integration, and marketing solutions businesses or from actual AI data center usage. At present, the segment attribution of the fees, monthly trends in usage-fee revenue, project-level gross margins, and the amount of future revenue lost due to the cancellations have not been disclosed. Unless these items are provided in the interim results, there will remain little basis for viewing operating profit of ¥4,843 million as a sustainable earnings level.