Losses are narrowing, but a full-year return to profitability remains a significant hurdle

In the first quarter of the fiscal year ending December 2026, revenue was ¥286.7 million, the operating loss was ¥37.5 million, the ordinary loss was ¥32.3 million, and the net loss attributable to owners of the parent was ¥24.7 million. For the six months ended June, revenue was ¥536.4 million, the operating loss was ¥80.5 million, the ordinary loss was ¥86.7 million, and the interim net loss attributable to owners of the parent was ¥77.5 million. Red ink therefore remains at all three levels: operating, ordinary and net income.

By comparison with the adjusted figures for the same period of the previous year, the operating loss narrowed from ¥201.4 million to ¥80.5 million. This was helped by an improvement in cost of sales because impairment losses on legacy products recorded in the previous fiscal year did not recur, as well as by a review of fixed costs across the group, which brought SG&A expenses to ¥363.6 million. However, the elimination of impairment losses is different from a sustained improvement in gross margin. At the next results announcement, it will be necessary to check the cost-of-sales ratio, normalized gross margin and the breakdown of fixed and variable costs within SG&A expenses.

The full-year forecast presented on 26 October was revenue of ¥847.6 million, an operating loss of ¥60.1 million, with details of ordinary income or loss not confirmed in the forecast materials, a net loss attributable to owners of the parent of ¥72.0 million, and a net loss per share of ¥5.21. A simple comparison with first-half results implies second-half revenue of ¥311.2 million and a second-half operating profit of ¥20.4 million. The 26 October preliminary update indicated a reduction in the cumulative operating deficit through Q3 and an expected return to profitability in the third quarter. We will therefore assess whether profit was actually secured on a standalone FY2026-Q3 basis and whether the return to profitability depended solely on improvements at overseas subsidiaries.