Can record-high orders translate into revenue and profit?

First-quarter orders rose 156.3% year on year to ¥12,266 million, a record high for a first quarter. Orders on hand also increased 34.3% year on year to ¥24,509 million. The company attributed the increase to growing orders and inquiries for hard-disk-related products, driven by AI-related data-center investment; an organization-wide sales approach with each company president serving as chief sales officer; and the acceleration of orders ahead of anticipated component delivery delays.

However, the strength of orders has not yet translated into revenue and profit at the same pace. First-quarter revenue increased 28.2% year on year to ¥6,021 million, while operating income was a loss of ¥52 million. The company explained that weakness in some industries, including automotive, and delayed acceptance of large projects contributed to the operating loss. This indicates that increased orders do not necessarily lead directly to acceptance, shipment and profit recognition in the current period.

Compared with the previous fiscal year, orders in the fiscal year ending March 2026 were ¥26,562 million, with orders on hand of ¥18,264 million. Including preliminary orders, orders totaled ¥31,544 million and orders on hand were ¥23,246 million, but the ¥24,509 million in orders on hand at the end of the first quarter also exceeded the previous year-end level including preliminary orders. At the same time, delivery schedules, profitability, the customer and product mix, and cancellation risk by project have not been disclosed. The volume of orders on hand alone therefore does not allow future profit to be estimated directly.

At the first-half results, it will be necessary to confirm not only whether additional orders were accumulated beyond the ¥12,266 million recorded in the first quarter, but also how many millions of yen of the ¥24,509 million in orders on hand were transferred to revenue. Of particular importance is whether the company discloses the amounts and scheduled acceptance months for large projects subject to delayed acceptance, the allocation to semiconductor and mechatronics-related business and environmental and social infrastructure-related business, and the average profitability of orders on hand.