Overseas IT talent is driving growth, while Japan is flat and Seed Tech's losses are widening

In the first quarter of the fiscal year ending March 2027, consolidated revenue was ¥6,968 million and operating profit was ¥204 million, up 9.3% and 11.2% year on year, respectively. The earnings presentation materials described operating profit as making steady progress toward the full-year plan weighted toward the second half, with progress of 61.0% against the first-half plan. However, this progress rate is not based on a simple 25% benchmark against the full-year forecast; it uses the first-half plan stated in the materials as the denominator. In the second quarter, both the actual amount and the full-year forecast will need to be presented for confirmation.

By segment, revenue from the domestic IT talent business was ¥4,144.6 million and segment profit was ¥360.3 million, both up 2.7% year on year. As the domestic business generates most of consolidated operating profit, the key question is whether margins can be maintained through higher-value projects and improved take rates even if domestic revenue growth remains slow. Next time, we will check whether domestic billable man-months, contract rates and the breakdown by project price band have improved from first-quarter levels.

The overseas IT talent business generated revenue of ¥2,660.9 million and segment profit of ¥27.7 million. Revenue rose 23.0% year on year, while profit turned positive from a ¥4.15 million loss in the same quarter of the previous year. According to the materials, the overseas IT talent business had profit progress of 46.2%, well above revenue progress of 26.6%. The issue is whether the effects of fixed-cost reductions and a focus on high-margin projects are temporary, or whether the margin improvement can be reproduced in the second quarter.

Meanwhile, Seed Tech generated revenue of ¥184.98 million, down 1.9% year on year, and posted a segment loss of ¥25.57 million, widening from ¥10.87 million in the same quarter of the previous year. Looking only at consolidated profit growth makes differences between the businesses difficult to see, so the second quarter will require separate verification of continued overseas profitability, domestic profit growth and Seed Tech's loss. For segment progress rates, we will also check whether the company again discloses figures using consistent denominators, either the first-half plan or the full-year plan.