Large-project timing slippage flipped the FY2026 plan into the red

Revenue for the nine months of the fiscal year ending August 2026 was ¥1,184.766 million, representing progress of 51.7% against the previous full-year forecast of ¥2,291 million. This was 23.3 percentage points below simple time-based progress of 75% after nine months, and the presentation materials also assessed revenue as lagging the plan. The fact that only about half of the planned revenue had been recognized by the third quarter was the starting point for the significant deterioration in the feasibility of the full-year plan.

The company explained that the primary reason was the delay until the fourth quarter or later in recognizing revenue from large projects initially expected at its U.S. subsidiary. Standalone third-quarter revenue from the AsReader business was ¥392 million, a record high for the business, but the structural concentration of project recognition around the fiscal year-end has not changed. At the next results announcement, it will be necessary to distinguish whether the large projects were actually delivered and recognized as revenue, or whether they turned into lost or reduced projects rather than merely being delayed between periods.

Following the downward revision on 31 August, the full-year forecasts were revenue of ¥1,450 million, an operating loss of ¥185 million, an ordinary loss of ¥230 million, a net loss attributable to owners of the parent of ¥330 million and negative EPS of ¥41.92. A simple calculation of the difference from nine-month results indicates that fourth-quarter revenue of approximately ¥265.234 million is required, while operating income would incur an additional loss of approximately ¥143.555 million, ordinary income an additional loss of approximately ¥218.880 million and net income an additional loss of approximately ¥316.405 million. The net loss is expected to include the impact of the ¥101 million impairment loss on investment securities, but it is important that the plan still entails a substantial loss at the operating level.

The next results will not be assessed solely on whether revenue reached ¥1,450 million. It will be necessary to check whether the revenue amount, order backlog, recognition timing and project-level profitability of the large U.S. project are disclosed, and to determine whether the downward revision was a temporary accounting-period issue or reflected weaker overseas demand or reduced project execution capacity. It will also be necessary to verify whether the ¥101 million impairment loss was recorded as an extraordinary loss in actual results and whether additional impairment losses or other losses arose, by comparing them with the net loss of ¥330 million.