Can the rising share of new businesses offset the decline in advertising revenue?

Revenue in Q1 of FY2027 was ¥346.45 million, down 5.8% from ¥367.77 million in the same quarter of the previous year. The earnings briefing explained that traffic to open-web media continued to decline as generative AI search services spread, and overall advertising orders had yet to recover. However, profitability improved through better advertising effectiveness and stronger customer relationships, so the entire revenue decline did not translate directly into a deterioration in profit.

In terms of the business mix, the new businesses accounted for 38.5% of revenue in Q1. The share for FY2026 was 25.6% for the full year, so the ratio alone indicates an increase. However, the full year and Q1 cover different periods, and seasonality has not been disclosed, so the change from 25.6% to 38.5% cannot be treated as a growth rate without adjustment. The company also reports a single segment, the native advertising platform business, and does not disclose the revenue or profit breakdown between the new businesses and the existing advertising business.

The full-year revenue forecast is ¥1,409–1,500 million. Without taking seasonality into account, the simple 50% first-half benchmark is ¥704.5–750.0 million. To reach this benchmark from Q1 revenue of ¥346.45 million, Q2 revenue of ¥358.05–403.55 million would be required. These figures are not the company's disclosed first-half targets, but a reference benchmark calculated by mechanically dividing the full-year range in half. Actual assessment will also need to consider advertising demand in Q2 and the timing of revenue recognition from the new businesses.

For the first-half results, it will be important to see whether the company can disclose not only the new businesses' revenue mix but also the underlying revenue in millions of yen. Without figures for gross profit, operating income/loss and selling, general and administrative expenses from the new businesses, it will not be possible to determine whether they are genuinely offsetting the contraction in the existing advertising business. Absolute revenue and profit figures will be used to assess whether the 38.5% shown in Q1 represents a temporary change in the mix or a business transformation that is being sustained in the first half.