How much can the first-quarter decline in revenue and profit be recovered in H1?

First-quarter revenue for the fiscal year ending March 2027 was ¥9,854 million, down ¥301 million from ¥10,155 million in the year-earlier quarter, a 3.0% year-on-year decline. Operating profit fell ¥143 million, from ¥878 million to ¥735 million, a 16.3% decline that was substantially greater than the decline in revenue. Ordinary profit was ¥781 million, and net income attributable to owners of the parent was ¥467 million, down 13.6% and 24.8% year on year, respectively.

The full-year forecast remains unchanged at revenue of ¥45,000 million and operating profit of ¥5,450 million. First-quarter progress was 21.9% for revenue and 13.5% for operating profit, with the shortfall in operating profit particularly large compared with a simple 25% quarterly run rate. After the first quarter, ¥35,146 million of revenue and ¥4,715 million of operating profit remained necessary to meet the full-year forecasts. On a simple average for the remaining three quarters, this would require revenue of ¥11,715 million and operating profit of ¥1,572 million per quarter. However, the company has not provided quantitative disclosure on seasonality, so these figures cannot be regarded as quarterly targets under the company’s plan.

The first-quarter operating margin was 7.46%, down 1.19 percentage points from 8.65% in the year-earlier quarter. The comparable period, FY2026-H1, recorded revenue of ¥20,016 million and operating profit of ¥2,205 million, for an operating margin of approximately 11.0%. In FY2027-H1, we will assess not only whether cumulative profit remains positive, but also whether the margin recovers to around 11.0% or remains low because of changes in the product sales mix.

The company attributed the decline in revenue to fewer product sales projects, including software licenses and information equipment. On the profit side, it cited both the decline in profit accompanying lower revenue and an increase in SG&A expenses. However, it has not disclosed a numerical bridge showing the revenue decline by project type, the increase in SG&A expenses, or the contribution to profit. In H1, it will be necessary to assess on a numerical basis not only whether product sales recover, but also whether SG&A expenses continue to rise and how much operating profit improves from ¥735 million.