Can profit growth despite declining revenue become an established feature of the shift toward higher value-added services?

In FY2026-H1, revenue was ¥11,461 million, down 1.5% year on year, while operating profit rose 6.6% to ¥1,363 million and interim profit before tax rose 4.8% to ¥1,318 million. The operating margin calculated from revenue and operating profit was approximately 11.9%, up approximately 0.9 percentage points from approximately 11.0% in the same period of the previous year. The fact that profit increased despite no growth in revenue indicates that improvements in the business mix and profitability management, rather than a simple recovery in volumes, were effective.

The company attributes the margin improvement to the expanded sales mix of its three core domains, outbound, hybrid and DX fulfillment, growth in new customers outside the telecommunications infrastructure sector, and stronger orders in the outbound and hybrid areas. It also states that it achieved higher customer spending per transaction, reflecting customers’ assessment of productivity, in addition to passing on higher personnel costs through pricing. Accordingly, in FY2026-Q3 it will be necessary to confirm not only whether orders are increasing, but also whether pricing after the revisions, project mix and the reduction in low-margin projects are continuing.

However, the results disclosed this time do not show how many millions of yen operating profit was increased by price pass-through, higher customer spending per transaction, changes in the domain mix and improvements in management costs, respectively. Breakdowns of cost of sales and selling, general and administrative expenses, margins by core domain, and changes in unit prices before and after price pass-through have not been quantitatively disclosed, at least in the earnings summary. Additional confirmation in the Q3 materials will therefore be important to determine whether the margin improvement resulted from fixed-cost reductions, higher prices or a concentration on higher-margin projects.

In FY2026-Q3, the key points will include the year-on-year change in cumulative operating profit, the operating margin and the marketing business margin, as well as the amounts and ratios indicating price pass-through and higher customer spending per transaction. If revenue also exceeds the year-earlier level while the margin remains around 11%, the view that profit growth despite declining revenue reflects structural improvement will gain support. Conversely, if only the margin declines without a recovery in revenue and no factor-by-factor disclosure is provided, the company’s capacity to achieve its full-year forecast will need to be reassessed cautiously.