The focus is whether the strong first quarter can be replicated in the first half

Consolidated revenue in the first quarter of the fiscal year ending March 2027 was ¥10,866 million and operating profit was ¥440 million, a substantial increase from ¥4,373 million and ¥101 million, respectively, in the same period last year. Revenue rose 148.5% year on year and operating profit rose 333.8%, with profit growth outpacing revenue growth.

The operating margin improved by approximately 1.74 percentage points, from around 2.31% in the same period last year to approximately 4.05% in the quarter under review. In addition to simple revenue growth, more appropriate pricing and inventory management in the memory-related business, as well as shipments of large projects in the HPC business, appear to have lifted the margin, although the contribution of each factor has not been disclosed.

First-half cumulative revenue and operating profit in the same period last year were ¥9,414 million and ¥275 million, respectively. At the next results announcement, it will therefore be necessary to assess the extent to which first-half revenue and operating profit exceed these levels. However, full-year revenue, operating profit, ordinary profit and net profit attributable to owners of the parent for the fiscal year ending March 2027 all remain undecided, so progress against the full-year forecast cannot be calculated.

The company cites supply and demand in the memory market, cost fluctuations associated with geopolitical risk and foreign exchange effects as uncertainties. In the second quarter, whether the operating margin can remain around 4%, whether first-half cumulative profit will exceed the same period last year, and whether a full-year forecast will be presented in monetary terms for the first time will be specific tests of the sustainability of the sharp first-quarter expansion.