Revenue is tracking the full-year plan, but first-half operating profit progress is the next focus

In the first quarter of the fiscal year ending March 2027, revenue was ¥3,772 million, up 1.0% year on year, while operating profit was ¥409 million, up 7.6%. Ordinary profit was ¥428 million and net income attributable to owners of the parent was ¥288 million, up 8.2% and 6.9% year on year, respectively. With full-year forecasts of ¥15,660 million in revenue and ¥1,980 million in operating profit, first-quarter progress was 24.1% for revenue and 20.7% for operating profit.

Revenue progress was close to the 25.0% level implied by simply dividing the year into four quarters, while operating profit was 4.3 percentage points lower. Revenue progress against the full-year forecast exceeded operating profit progress by 3.4 percentage points, so it cannot be said that revenue growth is translating directly into higher profit. Even so, compared with first-quarter revenue of ¥3,735 million and operating profit of ¥380 million a year earlier, the operating margin improved from approximately 10.18% to approximately 10.85%, a 0.67 percentage-point improvement. Profitability itself has therefore not deteriorated.

For FY2027-H1, as the company has not disclosed standalone first-half targets, revenue of ¥7,830 million and operating profit of ¥990 million are comparison benchmarks derived by simply halving the full-year forecasts. Actual quarterly seasonality may affect the results, so these 50% benchmarks should not be treated as the company's own targets. However, with profit progress below revenue progress as of the first quarter, how far cumulative first-half operating profit catches up will be a useful indicator of the likelihood of achieving the ¥1,980 million full-year forecast.

At the next earnings release, we will examine not only cumulative first-half revenue and operating profit, but also whether the operating margin improved further from the first-quarter level of 10.85% or declined because of higher costs. It will also be important to see whether the full-year forecasts of ¥15,660 million in revenue, ¥1,980 million in operating profit, ¥2,060 million in ordinary profit and ¥1,400 million in net income are maintained. The company made no changes to its earnings forecasts in the first-quarter results, so whether it revises them based on first-half progress will be the next disclosure point.