Q1 earnings are ahead of plan; H1 will test the sustainability of high margins

Q1 revenue was ¥2,371 million and operating profit was ¥280 million, representing progress of 23.7% and 62.2%, respectively, against the full-year forecasts. Based on a simple calculation using the full-year forecasts, the company would reach its targets by recording ¥7,629 million in revenue and ¥170 million in operating profit over the remaining 9 months. Operating profit has already exceeded half of the full-year plan in Q1 alone, making the first point to confirm whether additional profit in H1 will push operating profit above the full-year forecast.

The Q1 operating margin was approximately 11.8% based on the disclosed revenue and operating profit, about 1.9 percentage points above the 9.9% achieved for the full fiscal year ending March 2026. Operating profit growth of 119.4% substantially exceeded revenue growth of 18.0%, suggesting that factors such as product mix, project profitability, and the burden of costs and SG&A may have contributed in addition to higher revenue. However, no bridge breaking down the increase in profit by price, volume, product mix, and cost factors could be confirmed.

Q1 orders were also ¥4,549 million, up 26.4% year on year, making it important to assess how much of the order intake has accumulated toward H1 sales recognition. At the same time, the order backlog has not been disclosed, so it is not possible to determine how much the ¥4,549 million in orders will support sales and profit from Q2 onward. H1 order intake, order backlog, and recognized revenue should be reviewed together to determine whether the 11.8% margin is temporary or sustainable.

Ordinary profit was ¥292 million, and profit attributable to owners of the parent was ¥199 million, representing progress of 64.9% and 66.3%, respectively, against the full-year forecasts. The key issue is not only whether H1 net profit will exceed ¥150 million, half of the ¥300 million full-year forecast, but also whether the increase in operating profit will continue into the second half. At the next earnings announcement, it will be important to confirm whether the full-year forecasts will be maintained or whether any of revenue, operating profit, and net profit will be revised.