Will the sharp improvement in FY2027 Q1 continue through the interim period?

In FY2027 Q1, revenue was ¥3,147 million, operating profit was ¥371 million, ordinary profit was ¥407 million, and net profit attributable to owners of the parent was ¥289 million. Compared with revenue of ¥2,658 million and operating profit of ¥101 million in the same quarter of the previous year, revenue increased 18.4% and operating profit increased 264.3%. The operating margin rose approximately 8.0 percentage points, from approximately 3.8% in the same quarter of the previous year to approximately 11.8%.

Q1 operating profit of ¥371 million was equivalent to 82% of the ¥452 million operating profit recorded in FY2026 H1. On a simple calculation, operating profit of at least ¥82 million in Q2 would be required for FY2027 H1 operating profit to exceed the ¥452 million recorded in the same period of the previous year. Meanwhile, H1 revenue in the previous year was ¥5,804 million and the operating margin was approximately 7.8%. Accordingly, even if H1 revenue exceeds ¥5,804 million, higher profit than in the same period of the previous year is not assured if the margin declines.

The full-year revenue forecast in the financial summary is ¥11,600 million, putting Q1 revenue progress at approximately 27.1%. To achieve ¥5,800 million in H1, equivalent to a simple half of the full-year forecast, Q2 revenue would need to be at least ¥2,653 million. However, the company does not disclose quarterly seasonality or the timing of project recognition, so 50% progress in H1 cannot be regarded as indicating the probability of achieving the full-year forecast.

At the next earnings release, the focus will be not only on whether Q2 operating profit reaches at least ¥82 million, but also on whether the H1 operating margin exceeds 7.8%. The company has not disclosed a quantitative breakdown by factor showing whether the sharp Q1 improvement was driven by higher sales volumes, product mix, selling prices, or fixed-cost absorption. Full-year operating profit and net profit forecasts also cannot currently be confirmed, so whether profit forecasts are quantified in H1 will distinguish a strong Q1 start from expectations of an upside to full-year results.