After the FY2026 earnings upside, the focus for FY2027 is execution of the plan for higher revenue but lower profit

FY2026 revenue was ¥40,480 million, operating profit was ¥3,111 million, and net income attributable to owners of the parent was ¥2,976 million. Revenue was essentially flat compared with ¥40,539 million in the previous fiscal year, but operating profit increased by ¥727 million from ¥2,384 million, improving the operating margin from approximately 5.9% to approximately 7.7%. The FY2026 forecast presented as of FY2025 was revenue of ¥40,000 million, operating profit of ¥2,400 million, and net income of ¥2,250 million. Actual results exceeded those forecasts by ¥480 million, ¥711 million, and ¥726 million, respectively.

By contrast, the FY2027 plan presented at the FY2026 results announcement calls for revenue of ¥42,500 million, operating profit of ¥2,600 million, and net income of ¥2,600 million. Revenue is expected to increase approximately 5.0% from FY2026 actual results, while operating profit is expected to decline by ¥511 million, or approximately 16.4%, reducing the planned operating margin to approximately 6.1%. Since net income is expected to increase, the burden at the operating level may rise from growth investment, research and development expenses, raw material costs, and product mix, among other factors. The difference between operating profit and ordinary profit and net income also needs to be reviewed.

For comparison with FY2027-Q1, FY2026-Q1 recorded revenue of ¥8,409 million, operating profit of ¥367 million, ordinary profit of ¥533 million, and net income of ¥465 million. In the prior-year FY2025-Q1, revenue was ¥8,166 million and operating profit was ¥27 million, so FY2026-Q1 delivered higher revenue and a substantial increase in operating profit. However, the company explains that it operates on an individual-order production model with quarterly fluctuations in results, making it inappropriate to assess full-year plan attainment based solely on the Q1 progress rate.

At the next results announcement, revenue, operating margin, order intake, and progress in deliveries and acceptance testing need to be reviewed together. In particular, the key points are how much of the full-year FY2027 revenue plan of ¥42,500 million has accumulated in Q1 and whether profit progress against the ¥2,600 million operating profit plan exceeds revenue progress. The company’s explanation of the decline from FY2026’s high profit margin to the planned level will also be reviewed, including whether it discloses the breakdown of profitability in the transportation business, design costs in the industrial business, ICT integration costs, and rare-earth-related costs.