Inspection solutions are driving growth, while a higher share of aircraft sales is weighing on margins

FY2026-H1 revenue increased 44.3% year on year to ¥754.538 million. Inspection solutions were the main contributor, generating ¥558.025 million, up 131.0% year on year, and accounting for approximately 74% of company-wide revenue. Revenue growth was driven by simultaneous progress in aircraft sales, including drones for indoor inspections, plant-equipment inspection and implementation support, and development projects, against a backdrop of rising demand for public infrastructure inspections, particularly sewer systems.

However, the increase in revenue has not translated directly into improved profitability. Aircraft sales and development projects boosted revenue, but the gross profit margin fell 4.2 percentage points year on year to 35.9% in FY2026-H1 as the mix shifted toward low-margin hardware sales. The operating loss narrowed to ¥180.321 million from ¥259.456 million in the year-earlier period, but if the decline in the gross margin continues, the extent to which rising inspection demand contributes to a reduction in losses may remain limited.

The earnings presentation showed FY2026-H1 solution revenue of ¥558 million for inspection, ¥85 million for port, and ¥82 million for education. For the education solution, the company also disclosed gross profit of ¥48 million and a gross profit margin of 58.6%, but did not disclose profit or margins for inspection, port, or Next. As a result, company-wide disclosures alone do not show whether the rapid growth in inspection solutions is being driven by high-margin maintenance and software revenue or by low-margin flow revenue such as aircraft sales.

In FY2026-Q3, the focus will be on whether cumulative inspection solutions revenue rises further from ¥558.025 million, how large a share of revenue comes from aircraft sales, and whether the gross profit margin remains at or above 35.9%. It will also be important in assessing the quality of revenue growth to determine whether disaster-prevention and monitoring projects in the port business, and referrals from education to inspection and disaster prevention, are leading to maintenance, operational support, and software usage fees rather than one-off aircraft sales.