Can the recovery in operating profit for FY2027 translate into full-year results?

Revenue in FY2027 Q1 was ¥1,365.094 million, up 4.6% from ¥1,305.287 million in the same period of the prior year. Operating income turned around from an operating loss of ¥36.419 million in the prior-year quarter to operating profit of ¥173.992 million. The operating margin improved on a simple calculation from negative 2.8% to 12.7%, making this a quarter marked by a significant turnaround in profitability, rather than simply higher revenue.

The current full-year FY2027 forecasts are revenue of ¥5,780.000 million, operating profit of ¥250.000 million and net income attributable to owners of the parent of ¥500.000 million. Progress at the Q1 stage was 23.6% for revenue, 69.6% for operating profit and 63.7% for net income. Based on operating profit alone, the company is relatively close to achieving its plan. However, quarterly results at game companies can fluctuate significantly depending on title release schedules and the timing of royalty recognition, so the high Q1 margin should not be extrapolated directly to the full year.

In the company's past results, operating profit fell 68.3% from ¥458.511 million in FY2025 to ¥145.127 million in FY2026, while the operating margin declined from approximately 7.1% to approximately 2.6%. The company's FY2027 operating profit forecast of ¥250.000 million represents a recovery from FY2026, but remains below the FY2025 result. At the next earnings announcement, it will be important to distinguish whether the return to profitability in Q1 was a temporary effect from new title launches or a sustained recovery accompanied by lower development and marketing expenses and improved profitability from existing titles.

The reported segment is a single Content Business segment. The earnings summary does not break out home console games, smartphone games and royalties as separate segment profit categories. In FY2027 H1, key points to check will include cumulative revenue and operating profit, whether the full-year forecast is maintained, and how much contribution by title and platform the company discloses.