Revenue growth continues, while restoring operating profit is the focus for the first half.

First-quarter revenue was ¥976.642 million, up 7.2% year on year, while operating profit was ¥96.993 million, down 25.8%, ordinary profit was ¥105.922 million, down 34.6%, and profit attributable to owners of the parent was ¥64.270 million, down 30.9%. The operating margin was approximately 9.9%, down 4.4 percentage points from approximately 14.4% in the same period last year. The fact that revenue growth has not translated into earnings growth is the first point to verify at the next earnings release.

The company forecasts FY2027 revenue of ¥4,345 million, operating profit of ¥500 million, ordinary profit of ¥511 million and profit attributable to owners of the parent of ¥326 million. It plans to increase operating profit by 31.5% from the ¥380 million recorded in FY2026. As of the first quarter, progress against the full-year forecast was approximately 22.5% for revenue and 19.4% for operating profit, with operating profit 3.1 percentage points behind revenue. The first-quarter results alone do not indicate that the full-year target will be missed, but whether the earnings shortfall can be recovered in the first half will be important.

FY2026-H1, the comparable period, recorded revenue of ¥1,910.840 million and operating profit of ¥205.538 million, for an operating margin of approximately 10.8%. If FY2027-H1 revenue exceeds the prior-year period, operating profit exceeds ¥205.538 million and the operating margin also exceeds 10.8%, it will be easier to conclude that price revisions and contributions from new services are beginning to absorb investment costs. If only revenue grows while the operating margin remains around 9.9%, greater caution will be required regarding the likelihood of achieving full-year operating profit of ¥500 million.

Because revenue and profit by business segment are not disclosed in the earnings summary, the first-half breakdown of revenue and operating profit for Future Shop, Softel, Kidoku and AttendMe in the supplementary materials will be important. In particular, we will assess how close first-half operating profit comes to ¥250.0 million, the simple half-year allocation of the full-year forecast, and how much it improves from ¥205.538 million in the same period last year, separating the effects of investment costs, project completion and price revisions.