Q1 validation of the plan for a significant profit recovery in FY2027

In FY2026, revenue rose 2.9% year on year to ¥38.064 billion, while operating profit fell 46.0% to ¥1.465 billion, ordinary profit fell 46.2% to ¥1.457 billion, and net income attributable to owners of the parent fell 50.8% to ¥945 million. The operating margin also declined to 3.8% from approximately 7.3% in FY2025, providing the starting point for assessing why higher revenue did not translate into profit growth.

The company's FY2027 targets are revenue of ¥39.5 billion, operating profit of ¥2.6 billion, ordinary profit of ¥2.65 billion and net income attributable to owners of the parent of ¥1.84 billion. The operating profit target implies a recovery of ¥1.135 billion, or approximately 71%, from the FY2026 result, requiring margin improvement that cannot be explained by revenue growth alone. In the next Q1, it will be necessary to check not only whether the targets themselves are revised, but also whether the recovery is based on higher sales volume or on the normalization of outsourcing costs, personnel expenses and quality-related costs.

Orders received in FY2026 totaled ¥39.419 billion, with an order backlog of ¥21.422 billion. In Q1, revenue, operating profit, orders received and order backlog should be reviewed together on a year-on-year basis to determine whether orders are converting into revenue. Since the company has not provided a standalone Q1 operating profit forecast, performance should be assessed not only by the simple percentage of the full-year target achieved, but also against the prior-year Q1 and in light of the seasonality of earnings being weighted toward the second half.