Can stronger orders in the core business fully absorb the FY2026 full-year plan?

For the nine months ended FY2026 Q3, consolidated revenue was ¥21,669 million, up 8.4% year on year, while operating profit was ¥1,218 million, up 13.3%. The FY2026 full-year forecasts are revenue of ¥33,000 million and operating profit of ¥2,200 million. On a simple calculation, progress was 65.7% for revenue and 55.4% for operating profit, both below the 75% level expected after nine months. To achieve the full-year plan, the company needs to add ¥11,331 million in revenue and ¥982 million in operating profit in Q4.

The core embedded finance business generated nine-month revenue of ¥17,913 million and segment profit of ¥1,118 million, increases of 10.6% and 8.1%, respectively, from the same period a year earlier. Orders introduced by financial institutions, LED lighting and commercial air-conditioning equipment are growing, as are orders for cubicle-type high-voltage receiving equipment, which typically involves larger contract values. Accordingly, the key issue going forward is not when projects are ordered, but how much revenue and profit can be converted when deliveries and installation work are completed. The earnings presentation states that standalone Q3 sales of air-conditioning equipment reached a record ¥1,884 million, but margins by product and order backlogs by delivery schedule have not been disclosed.

The ¥982 million in operating profit required in Q4 is equivalent to approximately 80.6% of the ¥1,218 million generated in the first nine months. Large equipment projects have long lead times and high contract values, but revenue recognition may be pushed back, so even a record number of introductions does not necessarily mean that revenue will be recognized within FY2026. At the next earnings announcement, investors will need to check delivery status by product, including air-conditioning equipment, cubicle systems and LED lighting, the order backlog for projects introduced by financial institutions, any construction delays and changes in the operating margin. Order intake, order backlogs and profitability by product have not been disclosed quantitatively and remain major gaps in assessing the likelihood of achieving the plan.