The FY2027 plan focuses on earnings recovery rather than revenue growth

In FY2026, revenue increased 16.8% year on year to ¥7,499 million, while operating profit fell 10.2% to ¥524 million, ordinary profit fell 9.5% to ¥529 million, and net income attributable to owners of the parent fell 18.0% to ¥316 million. Although revenue expanded, the operating margin declined to approximately 7.0%, making the failure of revenue growth to translate into earnings growth the starting point for the current outlook.

For FY2027, the company plans revenue of ¥8,000 million, operating profit of ¥700 million, ordinary profit of ¥700 million and net income attributable to owners of the parent of ¥430 million. Operating profit is projected to increase by ¥176 million, or 33.5%, from the FY2026 result, with the ordinary profit margin assumed to improve from 7.1% in FY2026 to 8.8%. Since profit growth is expected to exceed the 6.7% increase in revenue, the next earnings release will need to show whether cost absorption and margin improvement, rather than revenue growth alone, have actually begun.

The company attributed the decline in FY2026 earnings to higher operating expenses, including personnel expenses and equipment procurement costs, as well as an operating loss in the third-party maintenance service within the IT services business. However, it has not disclosed quarterly increases in expenses or the personnel and procurement cost assumptions incorporated into the FY2027 plan. FY2026-Q1 revenue was ¥1,335 million and the company recorded an operating loss of ¥30 million, so the next earnings release will need to show whether expenses are continuing to rise year on year or are being absorbed by revenue growth.

For FY2027-Q1, the first benchmarks will be whether revenue exceeds the year-earlier ¥1,335 million and whether operating income turns positive. As quarterly progress rates against the full-year plan and the profit level required in Q1 have not been disclosed in advance, it will also be important to see how quantitatively the company explains the reasons for maintaining its revenue and operating profit forecasts, changes in operating expenses, and the effects of its margin-improvement measures.