Can the strong first-quarter growth be replicated in the first half?

FY2027-Q1 revenue was ¥5,264 million, up 24.6% year on year. Operating profit was ¥797 million, up 82.4%, ordinary profit was ¥813 million, up 81.8%, and net profit attributable to owners of the parent was ¥514 million, up 84.8%. The operating margin also improved by 4.8 percentage points, from 10.3% in the year-earlier quarter to 15.1%, indicating a start accompanied by profit growth rather than revenue growth alone.

The FY2027 full-year forecasts are revenue of ¥24,694 million, operating profit of ¥4,156 million, ordinary profit of ¥4,197 million and net profit of ¥2,875 million. This implies a slowdown in operating profit growth to 7.7% from the previous year's actual result. First-quarter progress against the full-year forecasts was approximately 21.3% for revenue and 19.2% for operating profit, below a simple 25% quarterly benchmark. In its first-quarter earnings presentation, the company did not disclose its own assessment of progress against the full-year forecasts or whether performance was on plan, making FY2027-H1 the first important checkpoint for evaluating first-half results.

The company has consistently explained that back-office procedures such as year-end adjustments and tax returns are concentrated in the second half, potentially causing fluctuations in quarterly revenue and operating profit. Rather than immediately concluding that simple 50% first-half progress has not been achieved, performance should be assessed against FY2026-H1 revenue of ¥8,956 million and operating profit of ¥937 million, with a focus on the extent of the increase in FY2027-H1. Key issues include whether first-quarter profit growth continued into the second quarter and whether underlying earnings are growing even excluding subsidy-related success fees that are dependent on the second half.

By segment in Q1, the Accounting Services business generated revenue of ¥1,177 million and operating profit of ¥349 million, the Consulting business generated revenue of ¥2,342 million and operating profit of ¥781 million, and the Business Solutions business generated revenue of ¥1,648 million and an operating loss of ¥23 million. Next time, it will be important to distinguish whether most of the profit growth was driven by the Consulting business and one-time success fees, or whether recurring revenue from Accounting Services and the cloud business is also increasing. The company did not prepare a cash flow statement for the first quarter, so cash conversion of profit is another undisclosed item to be reviewed in the first-half results.