Confirm whether earnings turn positive in the second half after the first half saw a wider operating loss despite higher revenue

Revenue in FY2026-H1 was ¥376.167 million, up 30.7% from ¥287.806 million in the same period of the previous year. Gross profit also increased 27.8% year on year to ¥255.664 million, but SG&A expenses rose 13.9% to ¥512.189 million, resulting in an operating loss of ¥256.525 million. The loss widened by ¥6.715 million from the operating loss of ¥249.810 million in the same period of the previous year, indicating that revenue growth has not translated directly into an improvement in operating earnings.

The company’s forecasts are revenue of ¥1,466 million and an operating loss of ¥30 million. A simple calculation based on first-half results puts progress against the full-year revenue forecast at only 25.7%, requiring ¥1,089.833 million of revenue in the second half. In addition, reducing the operating loss from ¥256.525 million in the first half to ¥30 million for the full year requires approximately ¥226.525 million of operating profit in the second half. This is not merely a matter of checking progress rates; the key issue is whether Q3 cumulative results confirm both revenue accumulation and fixed-cost absorption.

The first-half gross margin is calculated at approximately 68.0%, compared with approximately 69.5% in the same period of the previous year, so the margin has not improved as much as revenue has increased. While the company attributes higher gross margins for related products to platform development investment, it cites recruitment and development investment as factors behind the first-half increase in SG&A expenses. In Q3, the breakdown of SG&A expenses, including recruitment, development and personnel costs, and the extent to which investment has contributed to lower future cost ratios will be more important than in the first half.

The company has consistently explained that a large proportion of its transactions are completed and delivered in the second half, creating significant seasonality between first-half and second-half revenue. It is therefore too early to conclude that the plan will be missed based solely on the low first-half revenue progress rate. However, if the operating loss has not narrowed on a Q3 cumulative basis, the company will need to achieve more than ¥226 million of operating improvement in the remaining fourth quarter alone. In Q3, we will assess quarterly revenue, cumulative operating earnings, delivery and acceptance timing for projects, and whether the full-year forecasts can be maintained together.