Can operating profit reach half of the full-year plan by the first half? Profit is running ahead in Q1

Q1 revenue was ¥29,437 million, up just 0.8% year on year, while operating profit was ¥1,174 million, ordinary profit was ¥1,360 million and net income attributable to owners of the parent was ¥1,107 million. As a percentage of the full-year forecast, revenue was 24.5%, operating profit 26.1%, ordinary profit 28.3% and net income 30.8%, indicating that profit is progressing ahead of revenue.

The full-year forecasts are revenue of ¥120,000 million, operating profit of ¥4,500 million, ordinary profit of ¥4,800 million and net income of ¥3,600 million. The company had not revised its earnings forecasts as of Q1. Actual results for the fiscal year ended March 2026 were revenue of ¥119,378 million and operating profit of ¥2,589 million. Accordingly, the current plan calls for only 0.5% revenue growth but a 73.8% increase in operating profit. Strong profit progress in Q1 is supportive of achieving the plan, but revenue progress is roughly in line with one quarter of the fiscal year, making continued profit improvement through the second half a prerequisite.

The Q1 earnings summary does not explicitly state progress against the full-year forecasts or the company’s own assessment of performance against plan. The 26.1% operating profit progress rate can therefore be calculated from the figures, but it is not possible to confirm whether the company views the business as running ahead of plan. In the first half, actual results should be measured against simple half-year benchmarks of revenue of ¥60,000 million, operating profit of ¥2,250 million, ordinary profit of ¥2,400 million and net income of ¥1,800 million.

The key issue is whether the improvement in the operating margin can continue without revenue growth. The Q1 operating margin was 4.0%, up 1.8 percentage points year on year, while the full-year forecast implies an operating margin of 3.75%. If a margin of around 4.0% can be maintained in the first half, the scope for achieving the plan will increase. Conversely, if first-half revenue falls below ¥60,000 million and operating profit falls below ¥2,250 million, the focus will be on how the company explains the profit level required in the second half and the validity of the full-year forecast.