Acceleration weighted toward the second half is needed to achieve a full-year operating profit

Revenue in the first quarter of the fiscal year ending March 2027 was ¥2,578 million, down 0.3% year on year. Operating results improved from a ¥90 million loss in the same quarter of the previous year to a ¥6 million loss, but revenue progress against the full-year forecast of ¥19,222 million was approximately 13.4%, while progress against the operating profit forecast of ¥2,131 million was negative. It is too early to conclude from the first quarter alone that the full-year target will be missed, but revenue is ramping up slowly compared with the simple 25% quarterly time-elapsed benchmark.

The company has not disclosed an earnings forecast for FY2027-H1. Accordingly, revenue of ¥9,611 million and operating profit of ¥1,066 million are analytical benchmarks obtained by mechanically allocating 50% of the full-year forecasts to the first half, not the company's own H1 forecasts. Reaching these benchmarks from the first-quarter results would require second-quarter revenue of ¥7,033 million. At the next results announcement, it will be necessary to assess not only whether the full-year forecasts were maintained, but also H1 cumulative results and the amount of revenue and profit still required in the second half.

In the first-quarter supplementary materials' analysis of changes in operating loss, the ¥90 million operating loss in the same quarter of the previous year improved by ¥11 million from the global data intelligence business, ¥81 million from the IT-related business, and ¥42 million from selling, general and administrative expenses and other items. These improvements were partly offset by deterioration of ¥44 million in the entertainment-related business and ¥6 million in the wellness business, resulting in a current-period operating loss of ¥6 million. Gross profit was ¥761 million and the gross margin rose 5.2 percentage points year on year to 29.5%, but SG&A expenses reached ¥768 million.

In FY2027-H1, the focus will be on whether revenue reaches the simple half-year benchmark of ¥9,611 million and whether operating results at least move out of the red. In addition, to maintain the full-year operating profit forecast of ¥2,131 million, the company's explanation of how much profit it expects to secure by H1 and how much will remain to be generated in the second half will be important. As of the first quarter, there had been no revision to the full-year earnings forecasts, and the numerical breakdown of the assumptions underlying the forecasts, including higher revenue from existing businesses, revenue growth from M&A and business alliances, lower cost of sales, and SG&A management, had not been disclosed.