North American operations drive revenue growth, while regional concentration in the revenue mix increases

Revenue for the six months ended December 2026 was ¥1,648.214 million, up ¥672.340 million, or 68.9%, from ¥975.874 million in the same period of the previous year. By business area, revenue was ¥1,018.388 million from North American operations, ¥233.939 million from defense and security, ¥261.860 million from social infrastructure maintenance and management, and ¥134.026 million from Other. North American operations alone accounted for approximately 61.8% of total company revenue, making it clear that the main source of revenue growth has shifted to North America.

Revenue from North American operations was ¥42.651 million in the same period of the previous year, representing an approximately 24-fold increase in value terms. In contrast, North America accounted for only approximately 4.4% of total company revenue of ¥975.874 million in the same period of the previous year, meaning that the revenue mix changed substantially over one year. The change reflects the expansion of the distributor network, SOTEN sales in the United States, and the capture of replacement demand for Chinese products driven by economic security considerations. However, it is not yet possible to determine whether the increase was temporary, driven by the recognition of individual projects in Q2, or reflects sustained growth in sales volumes.

Revenue from defense and security declined from ¥426.035 million in the same period of the previous year to ¥233.939 million, while social infrastructure maintenance and management declined from ¥298.492 million to ¥261.860 million, and Other declined from ¥208.695 million to ¥134.026 million. Accordingly, without the increase in North America, total company revenue would likely have fallen below the previous year's level, making the lack of a contribution to revenue growth from businesses outside North America significant. The company reports a single segment for its drone-related business and does not disclose operating income or gross profit margins for North America, defense, or social infrastructure.

In FY2026-Q3, we will check whether cumulative revenue from North American operations exceeds the ¥1,018.388 million recorded in the interim period, and whether additional North American revenue reflects new orders or deliveries under existing orders. At the same time, recovery in defense and security from ¥233.939 million and a bottoming-out in social infrastructure maintenance and management at ¥261.860 million will also be important. In addition to revenue by business area, disclosure of sales volumes, average selling prices, gross profit margins, and revenue concentration by major distributor will be key to assessing the quality of North American growth.