Revenue growth alone does not indicate a recovery, as operating losses are widening due to upfront investment

Revenue in the first half of FY2026 was ¥602 million, up ¥108 million, or 21.9%, from ¥494 million in the same period of the previous year. However, the operating loss widened by ¥248 million to ¥654 million from ¥406 million in the same period. The ordinary loss was also ¥658 million, while the interim net loss attributable to owners of the parent reached ¥740 million, indicating that revenue growth has not yet translated directly into improved profitability.

Through the first 3 quarters, revenue was ¥931 million, the operating loss was ¥1,184 million, the ordinary loss was ¥1,190 million, and the quarterly net loss attributable to owners of the parent was ¥1,293 million. A simple calculation of the difference from the first-half cumulative figures gives third-quarter standalone revenue of ¥329 million and an operating loss of ¥530 million. Although revenue increased in the third quarter, the full-year results need to confirm whether the company has been unable to secure contribution profit or absorb costs at the pace required.

By segment, first-half revenue from the AV-related business rose 6.9% year on year to ¥264 million, while the segment operating loss was ¥78 million. This was narrower than the ¥86 million loss recorded in the same period of the previous year, but the segment has not yet reached profitability. Accordingly, it is necessary to break down whether the increase in consolidated revenue reflects a recovery in volumes in the AV-related business or greater dependence on the home appliance business and new products.

The first-half and third-quarter disclosures currently available do not provide sufficient detail on the cost structure behind the operating losses of ¥654 million and ¥1,184 million, including the amounts of sales promotion expenses, research and development expenses, gross margins by product, and customer acquisition costs. At the next results announcement, it will be necessary to determine whether the increase in revenue reflects temporary product launches or leads to recurring revenue, as well as how much of the operating loss represents upfront investment and how much represents recurring costs.