Q1 delivered higher revenue and profit, but FY2027-H1 will be important for assessing progress against the full-year plan

FY2027-Q1 revenue was ¥3,930 million and operating profit was ¥1,198 million, up from revenue of ¥3,422 million and operating profit of ¥1,048 million in the same period a year earlier. The operating margin was approximately 30.5%, broadly unchanged from approximately 30.6% a year earlier. Ordinary profit was ¥1,152 million, while net profit attributable to owners of the parent was ¥831 million, representing a 27.5% year-on-year increase and outpacing operating profit growth.

The full-year forecasts are revenue of ¥20,080 million, operating profit of ¥6,100 million, ordinary profit of ¥6,177 million and net profit attributable to owners of the parent of ¥4,200 million. At the end of Q1, progress against the full-year forecast was 19.6% for both revenue and operating profit. This was approximately 5.4 percentage points below the 25% implied by a mechanical even quarterly allocation, but does not by itself indicate that the targets will be missed. In the past, revenue recognition for IRU projects involving C2C circuits has shifted from monthly recognition to once annually in the second half, while the recognition of large carrier-to-carrier projects has been deferred to the fourth quarter. The company’s international communications revenue therefore fluctuates substantially between quarters depending on the timing of customer payments and service activation.

In FY2026-H1, revenue was ¥7,854 million and operating profit was ¥2,351 million. In FY2027-H1, it will be necessary to confirm not only whether cumulative profit has increased, but also whether the high Q1 operating margin has been maintained and whether revenue is building without reliance on large projects in the international communications business. In particular, the remaining revenue and operating profit required to meet the full-year forecasts are ¥16,150 million and ¥4,902 million, respectively. After the end of the first half, it will be important to identify which projects and segments will generate these amounts.

At the next earnings announcement, we will look for disclosure of first-half cumulative revenue and operating profit, progress by segment, and the timing of revenue recognition for IRU and landing-station-related income. Even if the full-year forecasts of ¥20,080 million and ¥6,100 million remain unchanged, the reliability of the plan will depend substantially on whether first-half results exceed those of the same period a year earlier, whether the operating margin remains around 30%, and whether the projects concentrated in the second half are becoming more certain.