FY2027: Revenue growth continues, but earnings growth slows; Q1 will test the low level of progress against the plan

FY2026 ended with revenue of ¥24,479 million, operating profit of ¥5,244 million, ordinary profit of ¥5,456 million and net income attributable to owners of the parent of ¥3,806 million. Revenue increased 4.1% year on year and operating profit rose 16.1%, while the operating margin increased 2.2 percentage points, from 19.2% in the previous year to 21.4%. Earnings growth outpaced revenue growth, which has been the defining feature of the company's recent performance.

By contrast, the company's FY2027 forecast calls for revenue of ¥25,800 million, operating profit of ¥5,400 million, ordinary profit of ¥5,500 million and net income of ¥3,850 million. The increases from the FY2026 results amount to only ¥1,321 million in revenue and ¥156 million in operating profit. The forecast operating margin is approximately 20.9%, below FY2026's 21.4%. Revenue is expected to increase 5.4%, while operating profit, ordinary profit and net income are expected to rise only 3.0%, 0.8% and 1.1%, respectively. As a result, the quality of revenue growth and the maintenance of margins will be important areas of focus in Q1.

Under Medium-Term Vision 2026, the company targets a gross margin of at least 60% and revenue growth of at least 10% in 3 years as performance indicators for its AI initiatives. FY2026 revenue growth of 4.1% was below this medium-term target, and the 5.4% forecast for FY2027 is still short of 10%. In the next earnings release, it will be necessary to review year-on-year changes in Q1 revenue and operating profit, as well as gross margin, AI-related expenses, advertising investment and personnel costs, to determine whether the full-year plan is simply set at a low hurdle or based on cautious assumptions that incorporate growth investment.