Revenue growth continues, but margins decline; renewed acceleration in operating profit is the focus for FY2027-Q1

In FY2026, revenue was ¥25,546 million, operating profit was ¥3,053 million and ordinary profit was ¥3,076 million. Revenue and operating profit both reached record highs. However, while revenue increased 5.7% year on year, operating profit rose only 1.3%, and the operating margin declined 0.5 percentage points from 12.5% in the previous fiscal year to 12.0%. The first point to test in FY2027-Q1 is whether the company is moving from a phase in which revenue growth translated directly into profit growth to one in which results are more affected by project mix and growth investment.

Recent quarterly trends show that in FY2026-H1, revenue increased 8.0% year on year to ¥12,753 million, while operating profit declined 1.9% to ¥1,570 million. For the nine months ended FY2026-Q3, revenue increased 6.2% to ¥19,270 million, while operating profit declined 2.9% to ¥2,446 million. Although full-year profit returned to growth, revenue growth accompanied by lower profit continued during the fiscal year. The next results should be assessed against both the previous year and the full-year plan to determine whether revenue and operating profit can exceed the FY2026-Q1 figures of ¥6,245 million and ¥711 million, respectively, and whether the operating margin remains at or above 12.0%.

The FY2027 full-year plan calls for revenue of ¥26,700 million, up 4.5% year on year, and operating profit of ¥3,200 million, up 4.8%. The planned operating margin is approximately 12.0%, so the company is not assuming a major improvement from the 12.0% recorded in FY2026. Accordingly, the key issue for the next Q1 is whether the company can maintain at least the same margin as in the previous year after absorbing strategic investment, personnel costs and additional response costs, rather than simply relying on a recovery in high-value projects.

For FY2027-Q1, the company has not disclosed standalone quarterly revenue or operating profit forecasts, or quarterly profit plans by segment. In addition to revenue, operating profit and the operating margin, disclosure of the profit breakdown for the Software Development and Systems Sales businesses and the amounts attributable to each factor behind the margin decline would allow more precise assessment of the likelihood of achieving the full-year plan.