Profit plunged despite revenue growth, with the FY2026 forecast sharply revised downward

Cumulative third-quarter revenue was ¥6,774 million, up 7.6% year on year, while operating profit was ¥226 million, down 58.6%, ordinary profit was ¥219 million, down 59.5%, and net income attributable to owners of the parent was ¥94 million, down 64.5%. Revenue had reached 67.7% of the original full-year forecast of ¥10,005 million, whereas operating profit had reached only 28.8%, creating a significant divergence between top-line and profit progress.

The revised forecast announced on 15 October calls for revenue of ¥9,432 million, operating profit of ¥420 million, net income attributable to owners of the parent of negative ¥184 million and earnings per share of negative ¥59.52. Compared with the initial forecast, revenue is calculated to be ¥573 million lower, operating profit ¥365 million lower and net income ¥620 million lower, with the operating profit reduction equivalent to 46.5% of the initial forecast. Although the news reports a downward revision to final earnings, the amounts attributable to each revision factor have not been sufficiently disclosed.

Simply reverse-engineering the revised forecast from cumulative results implies that the fourth quarter will require revenue of ¥2,658 million and operating profit of ¥194 million. Meanwhile, final earnings would move from cumulative third-quarter net income of ¥94 million to a full-year net loss of ¥184 million, implying a standalone fourth-quarter net loss of ¥278 million. The causes of this substantial deterioration in final earnings, including extraordinary losses, goodwill, investment-related gains and losses, and tax effects, need to be confirmed.

At the next results announcement, the focus should be not only on revenue recovery but also on whether the operating margin improves from approximately 3.3% in the cumulative third quarter and whether the required fourth-quarter operating profit of ¥194 million can be achieved. It will be particularly important to disclose expenses by category, including whether M&A-related costs and recruitment investment have run their course, whether delays in recording projects have been resolved, and whether the loss factors included in the revised forecast are temporary or recurring.