Can strong Q1 results translate into full-year achievement in FY2027-H1?

In the first quarter of the fiscal year ending March 2027, revenue was ¥2,132 million, operating profit was ¥406 million, ordinary profit was ¥408 million and quarterly profit attributable to owners of the parent was ¥269 million. Year on year, revenue increased 12.0%, operating profit 31.4%, ordinary profit 30.5% and net income 116.1%, securing growth at least in profit that exceeded revenue growth. The fact that Q1 revenue and operating profit were record highs for a first quarter is also an important starting point for the next H1 results.

The full-year forecasts are revenue of ¥9,250 million, operating profit of ¥1,860 million, ordinary profit of ¥1,867 million and profit attributable to owners of the parent of ¥1,240 million. Q1 progress was 23.1% for revenue, 21.8% for operating profit, 21.9% for ordinary profit and 21.7% for net income. Although this is broadly close to one-quarter progress, operating profit progress was 1.3 percentage points below revenue progress, so it will be necessary to see whether profit progress catches up with revenue progress in H1.

For reference, revenue in the previous fiscal year’s H1 was ¥3,916 million and operating profit was ¥699 million. Applying the current full-year forecast revenue growth rate of 10.6% and operating profit growth rate of 12.8% mechanically to H1 gives approximately ¥4,331 million of revenue and ¥789 million of operating profit as benchmarks. After subtracting Q1 results, Q2 standalone revenue of approximately ¥2,199 million and operating profit of approximately ¥383 million would be required, but these are not H1 targets provided by the company; they are calculated benchmarks based on applying the full-year forecast growth rates to H1.

The full-year forecasts were not revised in the Q1 results. Accordingly, in H1 the issue to confirm is not simply whether cumulative profit exceeds the year-earlier level, but whether the assumptions remain in place for generating revenue of ¥7,118 million and operating profit of ¥1,454 million over the remaining three quarters. Seasonal fluctuations caused by customers’ fiscal year-ends being concentrated in March have long been an issue. Although seasonality is said to be moderating as the recurring revenue ratio rises, the timing of acceptance for contracted development and large projects may affect Q2 figures.