Revenue and profit growth continued in the first half, but growth rates are normalizing

Revenue for the first half of the fiscal year ending December 2026 was ¥757.498 billion, up 9.0% year on year, while operating income was ¥53.088 billion, up 8.0%. Ordinary income was ¥54.824 billion, up 9.4%, and net income attributable to owners of the parent was ¥36.982 billion, up 8.4%. Revenue and each profit measure reached record highs for the fourth consecutive year on a first-half consolidated accounting-period basis. At least based on first-half results, the company’s established growth story of capturing corporate IT investment demand remains intact.

However, normalization of growth rates is clear when compared with the previous year. In the first half of the fiscal year ending December 2025, revenue was ¥695.132 billion, up 22.0% year on year, and operating income was ¥49.173 billion, up 26.6%. In the current first half, growth declined to 9.0% for revenue and 8.0% for operating income. Although revenue and operating income continue to increase from ¥569.722 billion and ¥38.843 billion, respectively, in the first half of the fiscal year ending December 2024, an important point to verify in the third quarter will be whether the company can continue growing while absorbing the effect of comparisons with the previous year’s high growth rates.

Compared with the full-year forecast revised on 3 August, first-half progress was approximately 54.9% for revenue, 56.3% for operating income, 57.0% for ordinary income and 57.0% for net income. These figures exceed the simple 50% midpoint, indicating that profit is running slightly ahead of revenue. However, the company still needs to generate ¥621.502 billion in revenue, ¥41.212 billion in operating income, ¥41.276 billion in ordinary income and ¥27.918 billion in net income in the second half, requiring it to build roughly the same level of profit in the second half as in the first.

In the third quarter, it will be important to determine whether replacement demand following the end of Windows 10 support has already peaked, and whether growth in software and AI-related businesses is offsetting fluctuations in hardware. Company materials explain the reasons for revising the full-year forecast and compare results with the first-half plan, but do not sufficiently break down progress against the full-year forecast, the orders and sales volumes required in the second half, or quarterly profit plans. The third-quarter earnings release will need to clarify whether the first-half increases in revenue and profit reflected continuing customer development rather than temporary replacement demand.