FY2026 interim results were weighted toward profit growth; Q3 will show whether the company is converging toward its full-year forecasts

For the non-consolidated interim period from January through June FY2026, revenue was ¥4,505 million, operating profit was ¥575.6 million, ordinary profit was ¥582.8 million and interim net income was ¥376.1 million. Year on year, revenue increased 15.1%, while operating profit, ordinary profit and interim net income increased 36.4%, 33.6% and 32.9%, respectively, with profit growth outpacing revenue growth. The supplementary materials state that the interim operating margin was 12.8%, an improvement of 2.0 percentage points year on year.

The full-year forecasts remain unchanged at ¥9,444 million in revenue, ¥1,000 million in operating profit, ¥1,005 million in ordinary profit and ¥700 million in net income. Interim progress was 47.7% for revenue, 57.6% for operating profit, 58.0% for ordinary profit and 53.7% for interim net income, indicating that profit items are ahead of revenue. On a nine-month cumulative basis, although seasonality needs to be taken into account, the basic point to verify in assessing the reliability of the full-year forecasts is where revenue and operating profit stand relative to the simple 75% progress benchmark after nine months.

On a quarterly standalone basis, FY2026-Q2 revenue was ¥2,256 million and operating profit was ¥237 million. Compared with FY2026-Q1 revenue of ¥2,248 million and operating profit of ¥338 million, Q2 revenue was broadly unchanged, while operating profit declined. Along with the standalone Q3 figures, we will assess whether the company explains changes in project acceptance timing, investment in personnel, outsourcing costs and other costs.

The high interim profit progress is positive, but the full-year forecast operating margin is approximately 10.6% on a simple calculation, below the interim result of 12.8%. This suggests that the company may have factored in cost burdens from personnel investment and project mix in the second half. Accordingly, in Q3 we will focus on how much the operating margin has changed from the interim level, whether the company’s assessment of the full-year forecast remains "on track," and whether revisions to the earnings forecasts have become necessary.