Can the sharp 1Q growth carry through to the FY2027 full-year plan?

First-quarter revenue was ¥8,304 million, up 64.9% year on year. Operating profit was ¥1,727 million, ordinary profit was ¥1,684 million, and net income attributable to owners of the parent was ¥1,148 million, increases of ¥1,145 million, ¥1,120 million, and ¥760 million, respectively, from the same period a year earlier. The operating margin was approximately 20.8% on a simple calculation, up sharply from approximately 11.6% a year earlier. The key point to confirm this time is that the increase in revenue also led to growth in operating profit, not merely an increase in sales volume.

FY2026 actual results were revenue of ¥29,194 million, operating profit of ¥5,515 million, and net income of ¥3,820 million, compared with FY2027 full-year forecasts of ¥32,000 million, ¥6,100 million, and ¥4,200 million, respectively. Simple progress against the company's plan was approximately 26.0% for revenue, 28.3% for operating profit, and 27.3% for net income. However, the timing of revenue recognition for defense-related and large-scale projects could cause substantial quarterly fluctuations, so full-year achievement cannot be judged from these progress rates alone. It will be necessary to confirm whether revenue growth and high margins are reproduced on a cumulative second-quarter basis.

In its first-quarter results, the company stated that there had been no change to the full-year consolidated earnings forecast announced on 12 May 2026. However, the first-quarter disclosure does not adequately break down the details of the full-year forecast or indicate which segments will contribute how much revenue and profit from the second quarter onward. In the second quarter, it will be important to disclose not only revenue but also the operating margin, profit by segment, and the amount of revenue recognized from the order backlog.

The company did not prepare a quarterly consolidated cash flow statement for 1Q, so it is not possible to confirm whether the increase in operating profit converted into operating cash flow. In the second quarter, it will be necessary to check whether earnings are being converted into cash without an increase in trade receivables or inventories, and whether progress in orders, production, and delivery schedules needed to maintain the full-year plan is disclosed.