Will the FY2027 year ending June forecast shift to accumulating profits from Q1?

For the FY2026 year ended June, revenue was ¥2,252 million, operating profit was ¥69 million, ordinary profit was ¥33 million and net income was ¥70 million, marking a return to operating profitability from the previous year's ¥80 million operating loss. By contrast, the company's FY2027 year ending June forecast calls for revenue of ¥2,751 million, operating profit of ¥109 million, ordinary profit of ¥69 million and net income of ¥67 million. Revenue is expected to rise 22.2%, operating profit 57.9% and ordinary profit 106.0%, while net income is expected to decline 4.0%. The key issue for the next results announcement will be the plan to raise the operating margin from 3.1% to approximately 4.0%, rather than merely expand revenue.

For the nine months ended March in FY2026, revenue was ¥1,493 million and the company reported an operating loss of ¥78 million, whereas full-year operating profit improved to ¥69 million. On a simple calculation, this means approximately ¥758 million in revenue and ¥148 million in operating profit were recorded in Q4 alone, suggesting that project revenue recognition or profit contributions toward the fiscal year-end may have been significant to the return to full-year profitability. This does not mean that a loss in FY2027-Q1 would immediately indicate a failure to meet the plan, but it will be necessary to determine whether FY2026 profitability reflected balanced earnings power or the timing of project recognition.

The materials provided do not include a standalone FY2027-Q1 earnings forecast or a quarterly plan for project revenue recognition. Accordingly, the approximately ¥688 million and ¥27 million obtained by simply dividing the ¥2,751 million revenue and ¥109 million operating profit forecasts by four are only reference run rates for measuring progress, not company targets. Quarterly fluctuations may in fact arise from terminal delivery schedules, acceptance of commissioned development and the timing of subscription launches. Explanations will therefore be needed not only of the figures but also of whether projects are at the order, delivery or acceptance stage.

The FY2027 net income forecast of ¥67 million is also below the ¥70 million recorded in FY2026. Even if operating profit and ordinary profit are planned to increase, tax expense or changes in tax effects could constrain bottom-line profit. We will therefore want to assess how far the increase in operating profit flows through to pretax profit and net income. In FY2027-Q1, important points will include not only progress in revenue and operating profit, but also whether the full-year forecast is maintained, segment revenue and profit, and disclosure of the value or delivery schedules of large projects remaining for the second half.