FY2026-Q3: Focus on whether the second-half recovery scenario is becoming reality

Revenue for the interim period of the fiscal year ending December 2026 was ¥1,688.989 million, down 0.6% from ¥1,699.915 million in the same period of the previous year. Operating profit was ¥231.101 million, down 22.1% from ¥296.618 million a year earlier. The decline in profit was larger than the decline in revenue, with the operating margin on revenue falling approximately 3.7 percentage points, from approximately 17.4% in the same period of the previous year to approximately 13.7% in the current interim period. The latest condensed financial results did not provide a breakdown quantifying the decline in margin by sales volume, unit price, outsourcing costs, personnel expenses or other factors.

The full-year forecasts remain unchanged at revenue of ¥3,800 million, operating profit of ¥530 million, ordinary profit of ¥530 million and net profit of ¥362 million. Interim progress was 44.4% for revenue, 43.6% for operating profit, 44.5% for ordinary profit and 44.9% for net profit, below the 50% implied by the passage of six months. In particular, ¥299 million of operating profit remains to be generated after the interim period, confirming from the figures that the plan concentrates profit generation in the second half.

Using FY2025 Q4 results as a simple comparison base, FY2025 Q4 revenue was approximately ¥834 million, calculated by subtracting nine-month cumulative revenue of ¥2,487 million from full-year revenue of ¥3,320.879 million. Operating profit was approximately ¥154 million, calculated by subtracting ¥432 million from full-year operating profit of ¥586.394 million. Assuming this level can also be secured in FY2026 Q4, revenue of approximately ¥2,966 million and operating profit of approximately ¥376 million will be required by the end of cumulative FY2026 Q3. This would represent approximately 19% year-on-year growth in cumulative Q3 revenue, meaning that the full-year forecast assumes more than a simple second-half recovery: it requires revenue growth accompanied by projects entering full-scale operation.

Accordingly, in Q3 we will monitor not only the absolute levels of cumulative revenue and operating profit, but also whether the margin decline seen in the first half has begun to reverse. It will be important to see whether the delays in project launches anticipated by the company were resolved in Q3 and whether increases in personnel-related costs and outsourcing costs are continuing. At a minimum, additional disclosure of the revenue mix for prime projects and FIS, gross margin, and the factors behind changes in SG&A expenses or personnel expenses will be important.