Low earnings progress through the first half; the focus is on a recovery from FY2026-Q3 onward

Revenue in the first half of the fiscal year ending December 2026 was ¥789 million, down 16.1% from ¥940 million in the same period a year earlier. Operating profit was ¥67 million, down 67.4% from ¥207 million, while the operating margin fell to approximately 8.5% from approximately 22.0%. Ordinary profit was ¥48 million, and interim net profit attributable to owners of the parent was ¥30 million. Although the company remained profitable, the decline in profit was significantly greater than the decline in revenue.

On a quarterly basis, the company recorded an operating loss of ¥42 million in Q1, followed by operating profit of ¥110 million in Q2. Accordingly, the low cumulative progress for the first half reflects seasonality and quarterly fluctuations in earnings. However, first-half progress against the full-year operating profit forecast of ¥500 million was only 13.5%, leaving ¥433 million to be generated during the remainder of the year. Revenue was also at 37.6% of the full-year forecast of ¥2,100 million, leaving ¥1,311 million still required.

Applying a simple assumption of even progress across the four quarters, cumulative revenue of ¥1,575 million and operating profit of ¥375 million by FY2026-Q3 would provide one benchmark for assessment. This would require standalone Q3 revenue of approximately ¥786 million and operating profit of approximately ¥308 million. However, company materials indicate that revenue recognition tends to be weighted toward Q4, so these are mechanical benchmarks and failure to reach them alone would not imply a downward revision to the full-year plan.

As of the first half, the company left its full-year forecast unchanged and stated that it was in line with, or broadly in line with, the initial plan. In FY2026-Q3, the key points will be whether operating profit increases further from the ¥110 million recorded in standalone Q2, how much of the increase in revenue converts into gross profit and operating profit, and whether the company provides additional support for maintaining its ¥500 million full-year operating profit forecast.