FY2027 plan assumes large projects, with order backlog conversion the key focus in FY2027-Q1

The company’s plan for the fiscal year ending May 2027 calls for revenue of ¥8,840 million, up 27.2% year on year, and operating profit of ¥1,268 million, up 13.6%. Actual revenue and operating profit for the fiscal year ended May 2026 were ¥6,949 million and ¥1,117 million, respectively, indicating a plan that prioritizes revenue expansion over profit growth. As assumptions underlying the plan, the company cites an increase in large projects, upselling to existing customers and year-end demand, and has also indicated plans to recognize a large project in Q3 of the fiscal year ending May 2027.

Quarterly revenue in the fiscal year ended May 2026 fluctuated substantially, at ¥948 million in Q1, ¥2,134 million in Q2, ¥1,575 million in Q3 and ¥2,289 million in Q4. Full-year revenue reached only 95.1% of the initial plan, and the company explained that some large projects stalled as customers held back orders amid concerns about Trump tariffs. Accordingly, rather than mechanically comparing FY2027-Q1 revenue with 25% of the full-year plan, it is important to assess the improvement from ¥948 million in the previous-year Q1 and whether delays in large-project deliveries have recurred.

The order backlog increased from ¥1,297 million in the fiscal year ended May 2025 to ¥2,230 million in the fiscal year ended May 2026, up 71.9% year on year. This is a specific factor supporting the revenue growth plan for the fiscal year ending May 2027, but the backlog alone does not reveal delivery schedules, gross margins, cancellation risk or customer industries. The latest materials do not disclose order intake itself or quarterly changes in the order backlog. In FY2027-Q1, we want to confirm the remaining backlog, new order intake, the value of projects with delayed delivery and the probability of recognition for projects scheduled for Q3.

The operating profit plan of ¥1,268 million for the fiscal year ending May 2027 represents an increase of ¥151 million from the ¥1,117 million recorded for the fiscal year ended May 2026. Since the plan calls for revenue to increase by nearly ¥2,000 million, the operating profit increase is limited to ¥151 million. It will therefore be necessary to assess not only the timing of project revenue recognition, but also project-level gross margins and the absorption of selling, general and administrative investment. Whether quantitative disclosure on large-project orders, delivery schedules and gross margins increases in FY2027-Q1 will be a key gauge of the full-year plan’s credibility.