FY2026-H1 saw lower revenue and profit, making a sharp recovery in H2 necessary to meet the full-year targets

FY2026-H1 revenue was ¥3,376 million, down 7.9% year on year, while operating profit was ¥345 million, down 38.4%. Compared with revenue of ¥3,667 million and operating profit of ¥561 million in the same period of the previous year, profit declined more sharply than revenue. The operating margin is calculated to have fallen by approximately 5.1 percentage points, from approximately 15.3% in the previous-year period to approximately 10.2% in the current interim period. The key point is that profitability deteriorated alongside the decline in revenue, rather than the decline being merely a reduction in scale.

The full-year forecast remains unchanged at revenue of ¥7,500 million and operating profit of ¥950 million. A simple subtraction from these forecasts means that H2 will require revenue of ¥4,124 million and operating profit of ¥605 million. Based on FY2025 results, the previous H2 generated approximately ¥3,448 million in revenue and approximately ¥340 million in operating profit. Meeting the current forecast will therefore require revenue growth of approximately 19.6% and operating profit growth of approximately 78% from the previous H2. The recovery hurdle is higher for profit than for revenue, so it will be necessary to confirm whether margins have begun to recover in Q3.

Progress against the full-year forecast in FY2026-H1 was 45.0% for revenue and 36.3% for operating profit, indicating that operating profit is lagging revenue. The company cites search traffic, advertising rates, the loss of one-off revenue and revised contract terms as factors behind the decline in profit, but has not disclosed a monetary breakdown by factor or the amount of risk incorporated into the H2 forecast. Although the full-year forecast has been confirmed as unchanged, the company has not clearly stated whether H1 results were above or below plan.

For the next earnings release, the simple 75% progress benchmarks of ¥5,625 million in nine-month cumulative revenue and ¥712.5 million in operating profit will be useful reference points. However, these are mechanical benchmarks that do not account for seasonality. More important is whether standalone FY2026-Q3 operating profit can exceed the approximately ¥241 million calculated as the difference between operating profit of ¥802 million for the previous Q3 cumulative period and ¥561 million in H1. If the operating margin does not improve in Q3, achieving H2 operating profit of ¥605 million will require additional contributions from recurring revenue and a recovery in the advertising environment.