Q1 profit ahead of full-year plan; H1 will test whether the momentum continues

Q1 revenue for the period from April to June 2026 was ¥184,147 million, and operating profit was ¥32,631 million. Calculated against the full-year forecasts of ¥710,000 million for revenue and ¥107,000 million for operating profit, the progress rates were 25.9% and 30.5%, respectively. Given that 25% of the quarter had elapsed, revenue was progressing at almost an even pace, while operating profit was 4.6 percentage points ahead of revenue.

Profitability also improved. The Q1 operating margin was 17.7%, calculated by dividing ¥32,631 million by ¥184,147 million, approximately 3.4 percentage points above the 14.3% calculated from the year-earlier revenue of ¥166,458 million and operating profit of ¥23,781 million. For FY2027-H1, in addition to comparing results with year-earlier revenue of ¥326,204 million and operating profit of ¥48,700 million, it is necessary to determine whether this margin improvement was simply due to Q1-specific mix effects or reflects improved profitability throughout the first half.

If the full-year plan is simply divided by two, the H1 benchmarks are revenue of ¥355,000 million and operating profit of ¥53,500 million. To achieve the full-year plan after Q1, the company would need to generate an additional ¥525,853 million in revenue and ¥74,369 million in operating profit over the remaining three quarters. The reasons given for Q1 profit growth were limited to qualitative explanations such as automotive demand, semiconductor demand for AI applications, and yen depreciation. Since contribution amounts and volume effects by factor have not been disclosed, key points for H1 are whether the forecasts are revised and whether the margin improvement can be replicated.