Q1 was ahead on profit, but H1 will be the point at which to assess the likelihood of achieving the full-year plan

FY2027-Q1 revenue was ¥1,744 million, up 17.5% year on year, while operating profit was ¥410 million, up 30.9%. The full-year forecasts are revenue of ¥7,383 million and operating profit of ¥1,511 million, putting Q1 progress at approximately 23.6% and 27.1%, respectively. Compared with 25%, the proportion of the three-month period elapsed, revenue was broadly on a time-proportional trajectory, while operating profit was slightly ahead.

Profit was ahead not only because of larger revenue, but also because profitability improved. The Q1 operating margin was 23.5%, up 2.4 percentage points from 21.1% in the same quarter of the previous year. However, the earnings presentation did not indicate the progress rates against the full-year forecasts or the company's own assessment of whether it was above or below plan at the end of Q1. It is therefore too early to regard Q1 progress as a direct indication of the likelihood of achieving the full-year targets.

Assuming H1 represents 50% of the full year, the reference levels are revenue of ¥3,691.5 million and operating profit of ¥755.5 million. However, the company has not disclosed quarterly seasonality or the timing of project recognition, so these figures should be treated as mechanical benchmarks rather than forecasts. Operating profit is particularly important because 27.1% of the full-year forecast had already been achieved in Q1. The key question is whether profit continues to progress faster than revenue in H1.

In the H1 results, we will examine cumulative revenue and operating profit, the operating margin, progress against the full-year forecasts, and whether the forecasts are maintained or revised. The disclosures of segment profit and expenses will also need to show whether the factors cited for Q1 profit growth, including productivity improvements from AI use, a reduction in engineer headcount and cost-structure reform, were temporary or continued into H1.