Revenue growth continues, but seasonality and the lag before growth investments generate returns will be the focus in FY2027-H1

Revenue in 1Q of FY2027 was ¥1,164 million, up 15.2% from ¥1,011 million in the same period of the previous year. Meanwhile, the operating loss widened from ¥283 million to ¥389 million, and the operating margin deteriorated by approximately 5.5 percentage points, from approximately negative 28.0% to negative 33.5%. The fact that the increase in revenue has not translated directly into short-term profit growth is the first point to examine in FY2027-H1.

The company explains that orders under the OfferBox early fixed-fee model are concentrated in the first quarter, while revenue is allocated over the service period, resulting in accounting revenue being weighted toward the second half. Revenue from the early fixed-fee model rose to 78.0% of total revenue in FY2026, indicating a high degree of concentration in the core service. The 1Q loss is therefore consistent with seasonality, but it will be important to determine whether the ¥106 million year-on-year increase in the loss can be absorbed through revenue recognition and cost control from 2Q onward.

The full-year forecasts are revenue of ¥6,910 million, operating profit of ¥840 million and net income attributable to owners of the parent of ¥553 million. Assuming an operating loss of ¥389 million in 1Q, the company will need to generate a total operating profit of ¥1,229 million in 2Q through 4Q, setting a significant hurdle for the shift to profitability in the second half. The company says that 1Q revenue, at 16.8% of the full-year forecast, is in line with a plan that reflects seasonality. In FY2027-H1, it will therefore be necessary to assess not only revenue progress but also whether the loss improves year on year.

At the next earnings release, we want to confirm at a minimum first-half revenue, revenue by OfferBox plan, the operating result, and whether the full-year forecasts have been maintained or revised. In particular, unless the company discloses the amounts or year-on-year changes in HR-related expenses, recruitment costs, personnel expenses, promotion expenses, software development costs and head-office relocation costs, which it identified as factors behind the larger 1Q operating loss, there will remain limited information with which to assess the full-year operating profit forecast of ¥840 million.