First-quarter progress is ahead of plan on earnings, with sustainability to be assessed through the second quarter cumulative period

Operating revenue in the first quarter of the fiscal year ending February 2027 was ¥2,755 million, up 12.6% year on year, while operating profit was ¥424 million, up 51.6%. Ordinary profit was ¥421 million, and net profit attributable to owners of the parent was ¥226 million, up 40.9% and 177.1%, respectively. Both revenue and earnings increased, with operating profit growth substantially outpacing operating revenue growth. This will be the starting point for monitoring the next earnings results.

The full-year forecasts are ¥10,972 million in operating revenue, ¥1,400 million in operating profit, ¥1,405 million in ordinary profit, and ¥750 million in net profit. The company states that first-quarter progress was 25% for operating revenue, 30% for operating profit, 30% for ordinary profit, and 30% for net profit. Adjusted EBITDA was ¥375 million in the first quarter against a full-year forecast of ¥1,215 million, representing 31% progress. Simply deducting first-quarter results from the full-year forecasts means that the remaining three quarters must generate ¥8,217 million in operating revenue, ¥976 million in operating profit, and ¥840 million in adjusted EBITDA to meet the full-year targets.

The company cites a review of the organisational structure at domestic corporate clients and the development of latent demand among existing customers, increased matching from consulting firms and other sources in Japan and overseas, strong interviews in the United States, and the use of AI and improved profitability as the drivers. However, no earnings bridge showing the increase attributable to each factor, or disclosure separating the first-quarter earnings lead into seasonality and structural improvement, could be confirmed. Accordingly, whether the operating profit progress rate can remain around 30% through the second quarter cumulative period will be a specific benchmark for assessing the repeatability of the margin improvement.

Next time, cumulative operating revenue and operating profit through the second quarter should be compared with the full-year forecasts to determine whether the pattern of 30% earnings progress against 25% revenue progress continues. In addition, the extent to which the ¥375 million increase in adjusted EBITDA translated into operating profit, whether the full-year forecasts of ¥10,972 million and ¥1,400 million will be revised, and whether the plan can be maintained after incorporating weakness among overseas customers will be key points for verification.