What the high-margin growth of the core cloud business will add in the fourth quarter relative to the full-year forecast

For the nine months ended 30 September 2026, revenue was ¥4,627 million and operating profit was ¥1,504 million, up 15.2% and 29.5%, respectively, year on year. The full-year forecasts remain unchanged at revenue of ¥6,350 million and operating profit of ¥2,050 million. On a simple calculation, the company would need to add approximately ¥1,723 million in revenue and ¥546 million in operating profit in the fourth quarter to reach the plan. Revenue progress of 72.9% and operating profit progress of 73.4% are broadly in line, with no significant divergence between revenue and profit progress at this stage.

The medical and nursing-care cloud platform business is the main source of earnings. For the nine months, the business recorded revenue of ¥3,070 million and segment profit of ¥1,414 million, up 15.7% and 27.8%, respectively, year on year. Its segment profit margin was approximately 46.1%, well above the consolidated operating margin of approximately 32.5%. The company has consistently described a model of building new customers on a foundation of recurring revenue from existing customers. In the next earnings release, it will be important to determine whether growth in this recurring revenue is reflected not only in new implementations but also in profit margins.

The operating profit of approximately ¥546 million required in the fourth quarter is below the level that would be expected if the nine-month operating margin were applied unchanged. Accordingly, it will be necessary to examine not only whether the full-year forecast is achieved but also the fourth-quarter revenue mix, additional development costs, system modification costs and changes in personnel expenses. In particular, it is important to determine whether the cloud business's high margin will be maintained or whether changes in the mix of the healthy life expectancy extension business and the solutions development business will dilute the consolidated profit margin.

In addition, the company did not prepare a quarterly consolidated cash flow statement for the third quarter, and cash flow from operating activities and cash flow from investing activities were not disclosed. Even though profit progress is strong, the full-year results should be reviewed alongside operating cash flow, investment in intangible assets, amortisation of goodwill and the cash balance to determine whether profit growth is accompanied by cash generation.