Q1 revenue was broadly on track with the full-year plan, but sustainability of growth remains to be confirmed in H1

FY2027-Q1 revenue was ¥788 million, up 17.6% from approximately ¥670 million in the same period of the previous year. With the full-year revenue forecast at ¥3,200 million, progress in Q1 was approximately 24.6%, only about 0.4 percentage points below the simple quarterly elapsed-period benchmark of 25%. At least in terms of revenue, the company is not materially behind the initial plan.

Profit progress, however, needs to be viewed more cautiously than revenue. Q1 operating profit was ¥25 million, representing only about 19% progress against the full-year operating profit forecast of ¥130 million. Although this was a substantial increase from approximately ¥7 million in the same period of the previous year, it was below the ¥32.5 million implied by simply dividing the full-year forecast by four. The H1 results should clarify whether quarterly profitability has a seasonal pattern and whether spending on structural reform investment is concentrated in particular periods.

H1 revenue in the previous fiscal year was ¥1,415 million, up 11.9% year on year, while full-year revenue was ¥3,005 million. Q1 growth has accelerated to 17.6% year on year, but it remains unconfirmed whether the same rate can be maintained across H1. In particular, although new customer development in consulting services was improving in the previous year's H1, the completion of some projects for major customers constrained revenue. It will therefore be necessary to determine whether this year's H1 revenue growth reflects accumulated new orders rather than a rebound from existing projects.

At the next results announcement, H1 revenue of ¥1,600 million will be used as a benchmark for assessing progress against the full-year forecast. In addition, although the company attributes revenue growth to the expansion of Dify- and Databricks-related sales, it has not disclosed a breakdown by contributing factor or the number of contracts. The key to assessing the plan's reproducibility will be whether the H1 results disclose the revenue contributions from these businesses, accumulated orders and contracts, and the timing of expenses required to reach operating profit of ¥65 million.