With profit falling faster than revenue, full-year progress will be tested in the first half

Revenue was ¥12,360 million, operating income was ¥2,314 million, ordinary income was ¥2,352 million, and net income attributable to owners of the parent was ¥1,480 million in the first quarter. Compared with revenue of ¥15,331 million and operating income of ¥3,526 million in the same quarter of the previous year, revenue decreased by ¥2,971 million and operating income by ¥1,212 million. The operating margin fell by approximately 4.3 percentage points, from approximately 23.0% in the same quarter of the previous year to approximately 18.7% in the current period. The key point to verify in the next earnings release is that the decline in profit exceeded the decline in revenue.

The full-year forecasts were unchanged at revenue of ¥48,000 million, operating income of ¥4,500 million, ordinary income of ¥4,600 million, and net income of ¥3,100 million. First-quarter progress was 25.8% for revenue, compared with 51.4% for operating income, 51.1% for ordinary income, and 47.7% for net income. Reaching first-half revenue of ¥24,000 million, or half of the full-year plan, would require ¥11,640 million in the second quarter alone. Operating income, however, had already reached ¥2,314 million in the first quarter, exceeding the simple 50% benchmark of ¥2,250 million for the first half. It will be necessary to determine whether this profit lead reflects high-margin projects or temporary factors, and whether it can be reproduced in the second half.

In terms of seasonality, revenue for the six months ended September 2025 was ¥30,372 million and operating income was ¥6,985 million. Against full-year revenue of ¥54,337 million and operating income of ¥9,673 million for the fiscal year ended March 2026, 55.9% and 72.2%, respectively, were generated in the first half. Since profit has historically been concentrated in the first half, the fact that operating income has exceeded 50% of the full-year plan in FY2027-H1 alone is not sufficient for reassurance. The company has not disclosed the extent to which it expects to build on the sharply lower first-half profit year on year in the second half.

At the next second-quarter earnings release, it will be important to check not only whether cumulative revenue exceeds ¥24,000 million and cumulative operating income remains at ¥2,250 million, but also which parts of the information systems, amusement, and other businesses created the profit lead. The company has not disclosed quarterly internal plans, product-level revenue drivers, or the margin factors offsetting the decline in revenue. Progress should therefore be assessed together with the cumulative second-quarter operating margin and whether the full-year forecast is revised.