FY2027 Q1 is tracking in line with the full-year plan, but can the company maintain strong profit progress through FY2027 H1?

FY2027 Q1 consolidated revenue was ¥12,019 million, operating profit was ¥1,073 million, ordinary profit was ¥1,069 million, and net profit attributable to owners of the parent was ¥681 million. Year on year, revenue increased 19.0%, operating profit 52.8%, ordinary profit 51.2%, and net profit 47.2%, with profit growth outpacing revenue growth. The full-year forecasts are revenue of ¥48,000 million, operating profit of ¥4,000 million, ordinary profit of ¥4,000 million, and net profit of ¥2,500 million. Progress at the end of Q1 was 25.0%, 26.8%, 26.7%, and 27.2%, respectively.

Subtracting Q1 results from the full-year forecasts leaves required revenue of ¥35,981 million and operating profit of ¥2,927 million from Q2 onward. If H1 is simply compared with 50% of the full-year plan, revenue of ¥24,000 million and operating profit of ¥2,000 million would serve as reference points for FY2027 H1. However, seasonality and the timing of revenue recognition differ by segment, so these figures should not be treated as the company’s plan itself. It will be necessary to determine whether the reason operating profit led revenue growth in Q1 will continue in Q2.

The increase in Q1 operating profit was driven primarily by operating profit of ¥866 million in the Worldview Business and ¥841 million in the Girls Trend Business, while the Fleury New Business recorded an operating loss of ¥90 million. The two major segments generated combined profit of ¥1,707 million, absorbing the Fleury New Business loss and company-wide expenses to secure consolidated operating profit of ¥1,073 million. Accordingly, in FY2027 H1 it will be necessary to assess simultaneously whether the Worldview Business can sustain its strong profit progress, whether the decline in volumes in the Girls Trend Business can be offset by the effects of price standardization, and whether the Fleury New Business loss will remain within plan.

Meanwhile, the Q1 earnings summary did not include a quarterly consolidated cash flow statement, and cash flow from operating activities and cash flow from investing activities were not disclosed. The operating margin was also not disclosed on the cover page. In H1, in addition to profit progress, we will assess whether maintaining the full-year forecasts is consistent with the underlying business, including the impact of Guangzhou Fuyou Entertainment Co., Ltd. (广州芙游娯楽有限公司) and the anime subsidiary added to the scope of consolidation, foreign-exchange costs, and the cash burden from capital expenditure and strategic investment.