FY2026 full-year forecast requires a substantial profit recovery in Q4

For the nine months through Q3 of the fiscal year ending September 2026, revenue was ¥8,649 million, operating profit was ¥241 million, ordinary profit was ¥246 million, and net income attributable to owners of the parent was ¥48 million. Revenue increased 3.3% and operating profit increased 5.8% year on year, securing higher revenue and profit, but on a standalone three-month basis for Q3, revenue was ¥2,803 million, operating loss was ¥11 million, ordinary loss was ¥10 million, and net loss was ¥127 million. Judging full-year progress solely from the cumulative profit increase could overlook the weakness in Q4 alone.

The full-year forecast was revised downward in Q3, with projected revenue of ¥11,650 million, operating profit of ¥370 million, ordinary profit of ¥370 million and net income of ¥144 million. Accordingly, the simple calculation indicates that Q4 requires revenue of ¥3,001 million, operating profit of ¥129 million, ordinary profit of ¥124 million and net income of ¥96 million. While revenue progress has reached 74.2%, operating profit stands at only 65.1% and net income at 33.3%, meaning that achieving the full-year forecast will require a sharp recovery in margins or a reversal of one-off losses.

Based on the difference between the full-year results and the cumulative results through Q3 for the fiscal year ended September 2025, last year's Q4 results were revenue of ¥2,773 million, operating profit of ¥56 million and net income of ¥52 million. By comparison, this year's Q4 needs revenue approximately 8.2% higher year on year, operating profit of ¥129 million, ¥73 million higher, and net income of ¥96 million, ¥44 million higher. Operating profit would be approximately 2.3 times last year's Q4 level and net income approximately 1.8 times, so contract recovery, absorption of SG&A expenses and the reversal of impairment losses need to be assessed separately.

The main reasons for the downward revision were the expected shortfall in contracts in the Professional Talent business, lower profitability in the Solutions business and recognition of a ¥113 million impairment loss on goodwill related to Greenroom. In the next earnings release, it will be important to disclose Q4's three-month results separately and confirm whether revenue of ¥3,001 million and operating profit of ¥129 million were actually exceeded, as well as the level of operating profit on an underlying basis excluding the impairment loss.