3Q cumulative revenue on track, while operating profit depends on 4Q seasonality

For the 3Q cumulative period of FY2026, revenue was ¥27,268 million and operating profit was ¥1,468 million, up 9.4% and 92.8%, respectively, year on year. The full-year forecasts are ¥38,000 million for revenue and ¥2,400 million for operating profit, implying progress rates of 71.8% and 61.2%, respectively. Compared with the simple 75% time-based progress rate after nine months, revenue is approximately 3.2 percentage points behind and operating profit approximately 13.8 percentage points behind. The company has explained that 1Q and 4Q seasonality drives operating profit, so it is too early to judge performance against the full-year forecast based on the progress rate alone, but dependence on 4Q is high.

To achieve the full-year forecasts, 4Q revenue of ¥10,732 million and operating profit of ¥932 million will be required. Based on FY2025 full-year revenue of ¥35,127 million and 3Q cumulative revenue of ¥24,915 million, FY2025 4Q revenue was ¥10,212 million on a back-calculated basis. The amount required in FY2026 therefore represents an approximately 5.1% increase from the prior-year 4Q. In contrast, prior-year 4Q operating profit was ¥1,409 million, calculated by subtracting 3Q cumulative operating profit of ¥761 million from FY2025 full-year operating profit of ¥2,170 million. The ¥932 million required in FY2026 is only approximately 66.1% of prior-year 4Q operating profit.

Accordingly, the focus is not whether the 92.8% year-on-year increase in operating profit can be extended directly into the full-year growth rate, but how far costs such as facility expenses, personnel expenses and advertising expenses can be contained while securing 4Q revenue of at least ¥10,732 million. The 3Q earnings presentation describes all progress indicators as positive versus plan, based on the company’s own assessment, but does not provide specific 4Q standalone forecasts for revenue or operating profit.

At the next full-year results announcement, we will look for 4Q standalone revenue and operating profit, actual progress against the full-year forecasts, spring and new-school-year demand at Mori Juku, and new-school opening costs at Shonan Seminar. In addition to whether operating profit exceeded ¥932 million, it will be important to assess the profit level secured relative to the prior-year 4Q figure of ¥1,409 million and, if the full-year forecasts are exceeded, whether this was driven by student numbers, pricing or cost control rather than one-off factors.