Will FY2027-Q1's substantial profit growth carry through to the FY2027 full-year plan?

In FY2027-Q1, revenue rose 10.2% year on year to ¥11,366 million, operating profit rose 64.2% to ¥1,589 million, and quarterly net income attributable to owners of the parent rose 67.1% to ¥1,082 million. Operating profit grew faster than revenue, lifting the operating margin from approximately 9.4% in the same period of the previous year to approximately 14.0%. At the next interim results announcement, the first point to verify will be whether this approximately 4.6-percentage-point margin improvement continues into the second quarter.

The full-year forecasts are revenue of ¥49,100 million, operating profit of ¥4,095 million, and net income attributable to owners of the parent of ¥2,810 million. As of the first quarter, progress was 23.2% for revenue versus 38.8% for operating profit, with profit ahead of revenue. In FY2026, revenue was ¥44,642 million and operating profit was ¥3,895 million, with the operating margin recovering to approximately 8.7%, but FY2027-Q1's 14.0% is higher still. The company attributed the improvement in profit to lower cost of sales for contracted projects for local governments, reductions in expenses such as advertising and promotion costs, and revisions to staffing-unit prices. In H1, it will be necessary to determine whether these effects resulted from a temporary project mix or represent lasting improvements in business operations.

In FY2027-H1, we will assess not only the amount of operating profit but also how much disclosure is provided on changes in individual expense items, including cost of sales, registrant recruitment costs, advertising and promotion costs, and recruitment expenses. Key issues will be whether the operating margin can remain above FY2026's full-year level of 8.7% and whether SG&A expenses swell again as hiring of highly skilled personnel and IT investment increase in the second half. No cash flow statement was prepared for the first quarter, so cash conversion of profit cannot be verified; the interim results should also be reviewed to determine whether profit growth and cash generation are occurring together.