Achieving full-year profitability in FY2027 will hinge on the repeatability of the shift to profit, rather than revenue progress

The fiscal year ended March 2026 closed with revenue of ¥1,372 million and an operating loss of ¥326 million. By contrast, the company's plan for the fiscal year ending March 2027 calls for revenue of ¥1,850 million, operating profit of ¥3 million, ordinary profit of ¥3 million and net income of ¥441 million. Revenue is expected to increase 34.8% year on year, while operating results are expected to turn from a loss to a small profit. The earnings presentation also targets EBITDA of ¥110 million, making the key to achieving the plan not only revenue growth but also whether selling, general and administrative expenses can be absorbed while retaining profit.

First-quarter revenue was ¥436 million, operating loss was ¥45 million, ordinary loss was ¥41 million and quarterly net loss was ¥51 million. Revenue progress against the full-year forecast was approximately 23.6%, slightly below the 25% implied by simple quarterly allocation, while the company described revenue progress in its earnings presentation as 24% and ahead of plan. However, because the first quarter recorded an operating loss while the full-year forecast is for an operating profit, operating profit progress cannot be compared straightforwardly using the usual progress rate.

For FY2027-H1, ¥925 million, equivalent to 50% of the full-year revenue forecast, is one reference point. Based on first-quarter revenue of ¥436 million, approximately ¥489 million would be required in the second quarter alone. This is not an official quarterly forecast from the company, but a monitoring benchmark based on simple half-year allocation of the full-year plan. In the second-quarter results, it will be necessary to assess not only revenue but also how far operating loss has narrowed from the first-quarter ¥45 million and which expense items are expected to improve toward the full-year operating profit forecast of ¥3 million.

Revenue growth is being driven by increased demand for the laser device business and expansion of contract development in the laser and optical solutions business. Quantum dot lasers, however, have been affected by the suspension of MBE operations associated with the site relocation, and a recovery in revenue after production resumes will be necessary for the company as a whole to turn profitable. In the second quarter, the focus will be on determining by segment whether any improvement in operating profit reflects only a shift in the timing of revenue recognition or also includes structural improvements in gross profit and selling, general and administrative expenses.

The first-quarter summary report states that there has been no revision to the earnings forecasts. However, it is important to determine whether the revenue, operating profit and net income forecasts will be maintained at the H1 stage or formally revised to include the extraordinary gain from the transfer of patent rights. In FY2027-H1, we will track whether the company's assessment of progress ahead of plan can be confirmed not only in revenue but also in operating results.