The FY2027 plan for higher revenue and earnings will be tested for sustained demand recovery in Q1

FY2026 full-year results were revenue of ¥1,682 million, operating income of ¥235 million, ordinary income of ¥287 million and net income of ¥200 million. Revenue growth was limited to 5.7%, while operating income increased 178.6% year on year and ordinary income increased 140.1%. The operating margin also rose 8.7 percentage points, from 5.3% in the prior year to 14.0%. The swing from a net loss of ¥221 million in the prior year to net income also demonstrates the extent of the earnings recovery.

However, quarterly recovery has not been uniform across revenue and earnings. Revenue was ¥395 million and operating income was ¥14 million in FY2025-Q1, compared with revenue of ¥383 million and operating income of ¥37 million in FY2026-Q1. Despite a ¥12 million, or 3.0%, decline in revenue, operating income increased by ¥23 million, suggesting that price revisions, product mix and fixed-cost absorption may have driven the improvement in earnings. Next time, it will be necessary to determine whether only earnings are improving without a recovery in revenue, or whether an increase in orders is translating into shipments and revenue.

For FY2027, the company forecasts revenue of ¥1,914 million, operating income of ¥340 million, ordinary income of ¥362 million and net income of ¥253 million. The increases from FY2026 actual results are ¥232 million in revenue and ¥104 million in operating income. The 44.3% increase in operating income assumes continued strong growth even after the sharp recovery in the prior year. Since the company has not disclosed a Q1 earnings target, ¥478.5 million in revenue and ¥85 million in operating income are merely mechanical benchmarks obtained by dividing the full-year forecasts by four. They are not company projections that take seasonality into account.

In its explanation of FY2026 results, the company cited the recovery in operating rates at domestic manufacturers, semiconductor and electronic component-related demand, higher overseas orders, price increases for collet chucks and increased orders for custom cutting tools as recovery factors. It has not disclosed the value or volume of leading KPIs such as orders received, order backlog, machine operating rates or product volumes. In Q1, in addition to revenue exceeding the ¥383 million recorded in the prior-year quarter and operating income exceeding ¥37 million, we will look for information on which products and regions generated the increase in orders and whether the full-year forecasts of ¥1,914 million and ¥340 million will be maintained.