Profit margins are expected to decline through the FY2027 forecast despite accelerating sales growth

In FY2026, revenue was ¥5,412 million, up 4.2% from ¥5,194 million the previous year. However, operating profit fell 13.4% from ¥780 million to ¥675 million, while the operating margin declined 2.5 percentage points from approximately 15.0% to 12.5%. Ordinary profit also fell from ¥976 million to ¥916 million, and net income attributable to owners of the parent declined from ¥702 million to ¥603 million. The increase in revenue has not translated sufficiently into profit at the operating-profit level or below.

In the most recent first quarter, FY2026-Q1 revenue was ¥1,323 million and operating profit was ¥184 million. Compared with revenue of ¥1,255 million and operating profit of ¥205 million in the same quarter of the previous year, revenue rose approximately 5.4%, while operating profit fell approximately 10.2%. Accordingly, in FY2027-Q1, the key issue will not be simply whether revenue exceeds the ¥1,323 million reported in the same quarter of the previous year, but whether operating profit exceeds ¥184 million and the pattern of higher revenue but lower profit reverses.

The company’s FY2027 full-year forecast is revenue of ¥5,820 million, operating profit of ¥603 million, ordinary profit of ¥880 million, and net income attributable to owners of the parent of ¥611 million. Revenue is expected to increase 7.5% from the FY2026 actual result, while operating profit is planned to decline 10.7%, resulting in a forecast operating margin of approximately 10.4%. This represents a further 2.1-percentage-point decline from the 12.5% achieved in FY2026, meaning that the company’s own plan incorporates both continued sales growth and lower margins.

Because quarterly forecasts for FY2027 have not been disclosed, the first-quarter result cannot be mechanically applied to the full-year plan at the next earnings announcement. However, if the operating margin declines despite year-on-year revenue growth, it will be necessary to determine whether the burden of personnel expenses, subcontracting and processing costs, depreciation, and research and development expenses that continued from FY2026 is temporary or a structural factor that will persist throughout the year.