Revenue growth is concentrated in digital marketing support, while profit has yet to recover

Consolidated revenue for the first quarter of the fiscal year ending March 2027 was ¥2,971 million, an increase of ¥242 million from ¥2,729 million in the prior-year quarter. Operating profit, however, swung from a profit of ¥70 million in the prior-year quarter to an operating loss of ¥44 million. Revenue alone indicates continued growth, but the company’s ability to convert revenue into profit has clearly deteriorated from the prior-year quarter. The first-half results will show whether revenue growth and a return to profitability can be achieved at the same time.

By business, ad platform revenue fell 12.2% year on year to ¥1,391 million, while digital marketing support revenue rose 37.0% to ¥1,374 million and Other revenue rose 45.3% to ¥205 million. The factors behind the change in consolidated revenue were a ¥193 million negative contribution from lower ad platform revenue, a ¥371 million positive contribution from digital marketing support, and a ¥64 million positive contribution from Other. The ¥242 million increase in revenue appears to have resulted mainly from digital marketing support and Other absorbing the decline in ad platform revenue.

In the analysis of changes in operating profit, however, the ad platform was a ¥127 million negative factor, exceeding the ¥70 million profit contribution from digital marketing support. Investment in human capital was an additional ¥92 million negative factor. Although revenue by business is disclosed, operating profit by business, operating margin by business, and gross margin are not. It is therefore not possible to determine the margin at which digital marketing support achieved its revenue growth.

In the first half, the key points will be whether growth in digital marketing support continues, the impact of lower ad platform revenue diminishes, and the company absorbs its investment in human capital and returns to operating profitability. The ¥350 million equivalent to half of the ¥700 million full-year operating profit forecast is not the company’s first-half forecast, but merely a simple six-month benchmark. If first-half results diverge significantly from this level, the likelihood of achieving the full-year plan will need to be reassessed.