First-half return to profitability exceeds the full-year plan, but the key question is the earnings assumption for the second half

Revenue for January through June 2026 was ¥559.672 million, up 10.2% from ¥507.870 million in the same period of the previous year. Operating income was ¥19.082 million, ordinary income was ¥17.900 million and interim net income was ¥8.282 million, all representing a return to profitability from the operating loss of ¥2.759 million, ordinary loss of ¥2.248 million and interim net loss of ¥2.491 million recorded in the same period of the previous year. The company described first-half revenue as a record high for an interim period, increasing confidence in the recovery itself.

Meanwhile, the full-year forecast for the fiscal year ending December 2026 remains revenue of ¥1,008 million, operating income of ¥7 million, ordinary income of ¥5 million and net income of ¥3 million, unchanged at the time of the first-half results. First-half revenue represented 55.5% of the full-year forecast, leaving ¥448.3 million of revenue to be generated in the second half to meet the annual plan, on a simple calculation. First-half operating income of ¥19.1 million has already exceeded the full-year forecast of ¥7.0 million. If the forecast is left unchanged, the calculation implies a second-half operating loss of approximately ¥12.1 million. Possible explanations include a conservative forecast, seasonality, advertising and hiring investments, or acquisition-related costs, but the company did not specify the breakdown in its first-half materials.

As for whether the first-half return to profitability was driven by extraordinary income or the reversal of impairment losses, the interim earnings summary does not show any recognition of extraordinary gains or losses or impairment losses. Depreciation and other amortization totaled ¥3.550 million, unlike the previous year, when a ¥22.050 million impairment loss on software was recognized. The key question for the third quarter is therefore whether the first-half earnings level reflects the ordinary earnings power of the business or whether the company is factoring advertising investment, acquisition-related costs or impairment of software investments into the second half.

At the next earnings announcement, it will be important to review cumulative third-quarter revenue and operating income, whether the full-year forecast has been revised, the second-half cost plan and profit contributions by service. If the full-year operating income forecast remains at ¥7 million, it will be necessary to determine which costs or losses are expected to absorb the gap from first-half operating income of ¥19.1 million. If the forecast is revised upward, it will also be necessary to distinguish whether the basis is growth in the ファクログ service or a recovery in the existing services.