The focus is whether FY2027 can deliver both revenue growth and a doubling of adjusted profit.

FY2026 revenue was ¥42,441 million, up 27.6% year on year, while adjusted operating profit was ¥2,663 million, up 41.3%. Reported operating profit also rose 78.6% to ¥1,091 million, improving the operating margin to 2.6%. However, operating cash flow was ¥1,519 million, so it is necessary to separately assess whether the increase in profit is translating directly into cash generation.

The company’s FY2027 plan calls for revenue of ¥52,210 million, up 23.0% year on year, and adjusted operating profit of ¥5,750 million, up 115.9%. Dividing ¥5,750 million by ¥52,210 million gives a planned adjusted operating margin of approximately 11.0%, a substantial increase from approximately 6.3% in FY2026. In FY2027-Q1, it will be necessary to distinguish whether the increase in adjusted operating profit reflects improvements in workforce and sales efficiency or merely the timing of expense recognition, rather than focusing only on revenue growth.

The FY2027 full-year forecasts presented in the earnings summary focus on revenue and adjusted operating profit, and do not include forecasts for reported operating profit, ordinary profit or net profit attributable to owners of the parent. Accordingly, the adjusted operating profit forecast of ¥5,750 million cannot be treated as the outlook for reported operating profit. In FY2027-Q1, we should review the amounts of adjustment items such as software amortization and share-based compensation, the bridge to reported operating profit, and whether a full-year outlook based on reported operating profit is provided.

The company identifies product development investment to improve functionality, customer acquisition through accounting firms, cross-selling to existing customers and the adoption of AI-related services as growth drivers. Raising the adjusted operating margin to 11% while continuing these initiatives will require keeping expense growth below revenue growth. In Q1, we will review the revenue growth rate, adjusted operating margin and R&D and sales and marketing expenses as a percentage of revenue together to assess whether margin improvement is progressing as planned.

Over the medium to long term, the company has set a target for the fiscal year ending June 2028 of a Rule of 40 result of at least 40%, based on the sum of revenue growth and adjusted operating margin, an adjusted operating margin of at least 15%, and adjusted free cash flow at a level comparable to adjusted operating profit. An important point to check is whether the FY2027-Q1 disclosure indicates the company’s position relative to these targets, the expense-ratio assumptions, and whether the full-year plan is being maintained or changed.