The key question is whether the substantial profit growth in the first half will continue from the third quarter onward

Revenue in the first half of FY2026 was ¥17,889.811 million, an increase of ¥784.231 million, or 4.6%, from ¥17,105.580 million in the same period of the previous year. Operating profit, meanwhile, rose ¥396.173 million, from ¥328.838 million to ¥725.011 million, an increase of 120.5% year on year. Operating profit grew faster than revenue, with the simple operating margin calculation showing an increase of approximately 2.13 percentage points, from approximately 1.92% in the same period of the previous year to approximately 4.05%.

Interim profit attributable to owners of the parent also increased, from ¥151 million to ¥505.976 million, an increase of 233.0% year on year. The company explained that, in addition to higher revenue driven by strong performance in the promotion and distribution entertainment businesses, the increase in gross profit resulting from improved profitability absorbed the increase in selling, general and administrative expenses, primarily personnel costs. However, the first-half results did not disclose the amount of the increase in gross profit or the changes in personnel costs, outsourcing expenses and other expenses within SG&A, so the disclosure does not allow the reproducibility of the profit improvement to be assessed by expense category.

The full-year forecast for the fiscal year ending December 2026 is revenue of ¥41,000 million, operating profit of ¥1,700 million and profit attributable to owners of the parent of ¥1,100 million. As of the first-half results, these forecasts had not changed from those announced on 13 February. First-half progress toward the full-year forecasts was 43.6% for revenue, 42.6% for operating profit and 46.0% for profit attributable to owners of the parent. Although profit progress exceeded revenue progress, ¥974.989 million in operating profit still needs to be generated in the second half, making it important to see whether the pace of profit improvement continues through the nine-month period.

The comparable nine-month results for FY2025 were revenue of ¥25,806 million and operating profit of ¥649 million. In the next results release, the focus will be on whether nine-month operating profit exceeds ¥649 million and how far progress toward the full-year forecast of ¥1,700 million has advanced. In particular, to determine whether the improvement in profitability that drove first-half profit growth resulted from SG&A restraint or from an improved service mix and project economics, it will be important to see whether the company provides additional disclosure of gross profit, gross margin, personnel costs and other SG&A expenses.