FY2026 revenue and losses remain dependent on 4Q execution even after the full-year downward revision

For the cumulative third quarter of FY2026/8, revenue was ¥2,356 million, operating loss was ¥1,878 million, ordinary loss was ¥1,873 million, and net loss attributable to owners of the parent was ¥1,842 million. Operating loss margin reached approximately 79.8% on a simple calculation, with operating, ordinary and net income all in the red. Since consolidated financial statements have been prepared since the fourth quarter of FY2025/8, consolidated figures and year-on-year comparisons for the same period of the previous year have not been disclosed, limiting straightforward comparisons.

At the interim period, the full-year forecast was revenue of ¥4,348 million and an operating loss of ¥1,546 million. Cumulative 3Q revenue progress was only approximately 54.2%, well below the 75% benchmark for the third quarter. Operating loss, however, had already exceeded the full-year forecast loss by ¥332 million, reaching approximately 121.5% of the forecast loss. The key point at the cumulative 3Q stage is therefore that losses were expanding ahead of revenue accumulation.

In the downward revision on 1 September, the full-year revenue forecast was reduced from ¥4,348 million to ¥3,135 million, a decrease of ¥1,213 million, or 27.9%, while operating loss widened from ¥1,546 million to ¥2,438 million. Net loss attributable to owners of the parent is expected to be ¥2,476 million. Based on the cumulative 3Q results, achieving the revised forecast requires ¥779 million of revenue to be recognized in 4Q, while operating results assume a further ¥560 million loss in 4Q.

The company and media reports have cited delays in establishing the sales structure for Sovereign GaiXer, longer customer approval processes and delays in order timing, resource allocation associated with rebuilding the cloud version of GaiXer, a delayed ramp-up for Medical AI Solutions, failure to meet project-based service bookings, and weak SaaS performance. Resale and managed services are described as relatively strong, but the amounts by which each factor affected revenue, gross profit and operating results, as well as the order backlog, have not been sufficiently disclosed.

The next results release should be used to confirm actual revenue against the revised ¥3,135 million forecast, the amount of Sovereign GaiXer revenue recognized in 4Q, the backlog of projects awaiting customer approval, and whether the delay in establishing the sales structure was temporary. In particular, it will be important to distinguish why revenue was not recognized and whether projects were simply carried forward to the next period or instead lost or changed in scope.