AI solutions are driving a recovery in profitability, while the GPU server business remains loss-making

Revenue for the cumulative 9-month period of the third quarter of FY2026 ending August was ¥4,205.018 million, down 0.3% year on year. Operating profit was ¥143.771 million, turning profitable from an operating loss of ¥412.626 million in the same period of the previous year. Profit for the quarter attributable to owners of the parent also turned profitable at ¥84.664 million, compared with a loss in the same period of the previous year. Despite revenue remaining broadly flat, operating profit and loss improved substantially. The key point in these results is the recovery in profitability rather than revenue growth.

By segment, revenue from the AI solutions business was ¥3,623.784 million, up 5.2% year on year, while segment profit was ¥171.905 million, up 229.3%. The company said this reflected a review of distribution channels, demand for generative AI-related development, the success of web advertising and an increase in projects. By contrast, the GPU server business recorded revenue of ¥590.603 million, down 24.7% year on year, and a segment loss of ¥28.134 million. Although this was a substantial improvement from the ¥464.835 million loss in the same period of the previous year, the business continues to weigh on consolidated profit.

For the cumulative second-quarter period, revenue was ¥2,809.958 million and operating profit was ¥70.309 million. The increase through the cumulative third-quarter period was approximately ¥1,395 million in revenue and approximately ¥73 million in operating profit, suggesting that profitability also improved during the standalone third quarter. However, at the third-quarter results announcement, the full-year earnings forecast for the fiscal year ending August 2026 was withdrawn because it was considered difficult to calculate reasonably. Full-year results therefore cannot be assessed against a forecast achievement rate.

At the next full-year disclosure, it will be necessary to check whether the AI solutions business's operating profit of ¥171.9 million was built not only through one-off cost reductions or the timing of project recognition, but also through recurring orders and productivity improvements. At the same time, it is important to determine whether the GPU server business's ¥28.1 million loss was eliminated for the full year, or whether the business remained loss-making and became structurally dependent on profit from AI solutions. Disclosure that allows consolidated operating profit, segment revenue and segment profit to be reviewed both year on year and for each standalone quarter would be desirable.