The focus in Q3 is balancing progress toward the full-year sales and operating profit targets with maintaining the gross margin.

For the first half of the fiscal year ending December 2026, revenue was ¥3,351.490 million, operating profit was ¥271.799 million and ordinary profit was ¥129.600 million. The company swung from an operating loss of ¥22.038 million and an ordinary loss of ¥73.168 million in the same period of the previous year to operating and ordinary profitability, while recording an interim net loss attributable to owners of the parent of ¥191.987 million. The full-year forecasts are revenue of ¥8,555 million, operating profit of ¥753 million, ordinary profit of ¥619 million and net profit of ¥391 million. First-half progress was approximately 39.2% for revenue and approximately 36.1% for operating profit. As the first half alone did not reach half of the full-year forecasts, a meaningful increase in revenue and profit will be required from Q3 through Q4.

On a standalone quarterly basis, Q2 revenue was ¥2,089.090 million, gross profit was ¥937.912 million, the gross margin was 44.9%, selling, general and administrative expenses were ¥801.406 million and operating profit was ¥136.506 million. The operating margin was 6.5%, and the company said that revenue and gross profit both reached record highs. Compared with Q1 revenue of ¥1,262.400 million and operating profit of ¥135.293 million, Q2 operating profit remained almost unchanged despite the larger revenue base. Q3 will need to confirm how much of the increase in personnel and SG&A expenses following the merger by absorption was absorbed.

The supplementary materials for the first half presented an outlook for cumulative Q3 revenue of ¥5,910.000 million, operating profit of ¥500.000 million, an operating margin of approximately 8.5% and a gross margin of around 45%. To reach these levels, standalone Q3 revenue of approximately ¥2,559 million and operating profit of approximately ¥228 million will be required based on first-half results. It will be important to see whether the company identifies the acceptance of large projects in standalone Q3, the consolidation effects of the BBD Initiative and an increase in AI-agent-related projects as specific drivers of achieving the plan.

In the past, the company said it would strengthen sales efforts targeting loyal clients with annual sales of at least ¥1 trillion and proposal activities for projects starting in April or later to address seasonal fluctuations. As order intake, order backlog and the respective contributions of organic growth and the merger by absorption have again not been disclosed, the Q3 results should clarify whether the increase in revenue was driven by the timing of project acceptance or by increases in the number and average value of projects, and whether the gross margin was maintained at around 45%.