Reconfirm FY2027 growth investments and margin targets in Q1

In FY2026, revenue rose 24.4% year on year to ¥53,761 million, while adjusted operating profit increased 137.0% to ¥8,427 million. Reported operating profit was also ¥8,185 million. Profit growth was driven not only by higher revenue, but also by an improved gross margin and a lower personnel expense ratio. In the next Q1, it will be important to confirm whether this high rate of profit growth will continue into FY2027 rather than representing a rebound from temporary cost reductions.

The FY2027 full-year plan calls for revenue of ¥63,706-65,319 million, adjusted operating profit of ¥12,741-14,696 million, and an adjusted operating margin of 20.0-22.5%. The revenue range represents growth of approximately 18.5-21.5% from FY2026 actual revenue, while even the lower end of the adjusted operating profit range represents an increase of approximately 51%. In the next earnings release, it will be important to see whether the company can disclose adjusted operating profit and margins alongside Q1 revenue and explain which point in the full-year range it is targeting.

The factors behind the change in FY2026 adjusted operating profit were a ¥10,558 million increase in revenue, a ¥705 million increase in cost of sales, a ¥2,539 million increase in personnel expenses, a ¥1,663 million increase in advertising expenses, and a ¥1,271 million increase in other SG&A expenses. These were partly offset by a ¥493 million decrease in rent and relocation-related expenses and a ¥511 million decrease in share-based compensation-related expenses. Since the FY2027 plan assumes personnel expenses of approximately ¥21,300 million and advertising expenses of approximately ¥7,300 million, the next Q1 will need to show whether these investment costs can be absorbed while maintaining the gross margin and adjusted operating margin.

In its previous earnings summaries, the company did not disclose specific full-year forecasts below reported operating profit, citing the difficulty of reasonably estimating items such as share-based compensation-related expenses. Accordingly, the key items to confirm in the next Q1 are not the disclosure of a reported operating profit forecast itself, but cumulative quarterly adjusted operating profit, share-based compensation-related expenses, advertising expenses, and personnel expenses, together with the profit contribution from the Sansan/Bill One and Eight businesses.