Losses widen despite revenue growth, requiring a sharp second-half turnaround to achieve full-year profitability

FY2026-H1 revenue was ¥1,500 million, up 15.8% from ¥1,296 million in the same period of the previous year. However, operating results deteriorated from an operating loss of ¥65 million to an operating loss of ¥570 million, while ordinary results worsened from an ordinary loss of ¥54 million to a loss of ¥1,422 million. Interim net income attributable to owners of the parent was also a loss of ¥1,417 million, indicating that revenue growth and earnings deterioration are occurring simultaneously.

The full-year forecast remains unchanged at revenue of ¥4,383 million, operating profit of ¥103 million, an ordinary loss of ¥184 million and net income attributable to owners of the parent of ¥111 million. H1 revenue progress was only 34.2%, 15.8 percentage points below the 50% implied by simple time apportionment. To achieve the full-year forecast mechanically, the company would need second-half revenue of ¥2,883 million, operating profit of ¥673 million, ordinary profit of ¥1,238 million and net profit of ¥1,528 million. The hurdle for a recovery in earnings is therefore extremely high relative to that for revenue.

The main drivers of the earnings deterioration were the ¥494.455 million operating loss in the crypto asset and blockchain business and lower profit in the solutions business. In the former, the company cited impairment losses on crypto assets held for its own account and weak market conditions. In the latter, it cited periods of inactivity among mid-career hires and delays in securing external resources. Accordingly, FY2026-Q3 will require improvement not merely in revenue recognition, but also in underlying earnings excluding impairment losses, engineer utilization and fixed-cost absorption.

At the next earnings release, the first points to check will be whether cumulative Q3 revenue exceeds ¥3,287 million, equivalent to 75% of the full-year forecast, and whether the operating loss has narrowed from ¥570 million. If the full-year forecast remains unchanged, it will also be important to see whether the company can quantify the effects of crypto asset valuation losses, flow and stock revenue, and personnel utilization in the solutions business, as well as whether it revises its earnings forecast or dividend forecast.