Q1 operating profit is tracking well, but sustainability in H1 is the key focus

In Q1, from April to June 2026, revenue was ¥10,339 million, operating profit was ¥1,011 million, ordinary profit was ¥490 million, and net income was ¥335 million. The full-year forecasts are ¥38,000 million, ¥2,000 million, ¥1,500 million, and ¥1,050 million, respectively, implying progress rates of 27.2% for revenue, 50.6% for operating profit, 32.7% for ordinary profit, and 31.9% for net income. Revenue increased 45.8% year on year, while operating profit rose 215.0%, indicating that improvement in operating profitability is leading the increase in revenue rather than the result being simply higher sales.

As Q1 represents one-quarter of the full year, revenue progress is approximately 2.2 percentage points ahead of the time elapsed. Operating profit, meanwhile, is already ¥11 million above half of the full-year forecast. If 50% of the full-year forecast is used as a simple H1 benchmark, Q2 operating profit of at least negative ¥11 million would mathematically put H1 above that benchmark. This is a mechanical standard that does not account for seasonality, however, and should be treated as a checkpoint for assessing the repeatability of earnings.

Using the same benchmark for revenue gives an H1 target of ¥19,000 million, requiring ¥8,661 million in Q2 based on Q1 results. Ordinary profit was ¥490 million against an H1 benchmark of ¥750 million, while net income was ¥335 million against an H1 benchmark of ¥525 million. Q2 would therefore need approximately ¥260 million and ¥190 million, respectively. As operating profit is the only metric showing exceptionally strong progress, H1 results need to be assessed for the conversion of operating profit into profit after non-operating income and expenses.

The full-year earnings forecast was revised with the Q1 results, but the pre-revision revenue and profit forecasts and the size of the revision cannot be confirmed. As a result, it is not possible to fully verify externally what assumptions underpin the latest forecasts of ¥38,000 million in revenue, ¥2,000 million in operating profit, ¥1,500 million in ordinary profit, and ¥1,050 million in net income. At the next results announcement, it will be important to see whether the company discloses not only H1 results but also the changes before and after the revision, the factors driving the difference between operating profit and ordinary profit, and the revenue and profit required in the second half.