Operating profit is lagging revenue growth, making H1 margin recovery the focus

Revenue in Q1 of the fiscal year ending March 2027 was ¥6,152 million, up 80.6% from ¥3,407 million in the same period of the previous year. Operating profit, however, fell 66.3% to ¥31 million from ¥93 million. Operating profit declined despite the substantial increase in revenue, indicating that simple demand growth has not translated into profit growth.

The full-year forecasts are revenue of ¥24,000 million and operating profit of ¥610 million, with Q1 progress rates of 25.6% and 5.1%, respectively. Revenue was broadly in line with the 25% elapsed-quarter benchmark, while operating profit was well below it. At the end of Q1, the remaining amounts required to meet the full-year targets were ¥17,848 million in revenue and ¥579 million in operating profit.

In terms of profitability, the Q1 operating margin was approximately 0.5%, down approximately 2.2 percentage points from approximately 2.7% in the same period of the previous year. The operating margin for FY2026 was also 3.2%, down 0.8 percentage points from 4.0% in the previous fiscal year. Accordingly, in H1 it will be important to determine not only whether revenue expands, but also whether the operating margin approaches at least the level recorded in the same period of the previous year.

Using a simple half-year allocation as a benchmark, H1 revenue of ¥12,000 million and operating profit of ¥305 million provide reference lines. However, the company has not disclosed an H1 plan incorporating seasonality, so these figures are not company forecasts. At the next results announcement, it will be necessary to check cumulative operating profit, the operating margin, whether the ¥610 million full-year forecast is maintained or revised, and whether Q1's low profitability was temporary.