Q1 profit plunged on the reversal of a one-off payment; H1 focus is on converting the order backlog into sales

FY2027-Q1 revenue was ¥3,011 million, down 17.9% year on year, operating profit was ¥34 million, down 94.2%, ordinary profit was ¥64 million, down 89.2%, and net income attributable to owners of the parent was ¥19 million, down 94.6%. The year-earlier period included a one-off payment under the licensing agreement with Anton Paar GmbH, and the reversal of that payment was cited as the main reason for the declines in revenue and profit. Accordingly, the sharp Q1 decline should not be viewed as a direct deterioration in underlying earning power; the trend in recurring product and service revenue excluding the one-off payment needs to be separated out.

On the demand side, orders received in FY2027-Q1 rose 33.9% year on year to ¥4,632 million, while the order backlog increased 28.9% to ¥6,122 million. Domestic semiconductor-related business and Chinese shipbuilding- and secondary-battery-related business drove the increase in orders, while the company explained that some orders will be recognized as revenue from the following quarter onward. FY2026-H1 revenue was ¥7,373 million and operating profit was ¥919 million, so key points for assessment will be whether FY2027-H1 revenue can recover to the year-earlier level and how much of the order backlog has progressed to shipment and customer acceptance.

The full-year forecasts remain unchanged at revenue of ¥16,000 million, operating profit of ¥1,800 million, ordinary profit of ¥1,900 million, and net income attributable to owners of the parent of ¥1,420 million. Progress against the full-year forecast in Q1 was 18.8% for revenue, 1.9% for operating profit, and 1.3% for net income, all below the 25% implied by a simple even quarterly allocation. We will assess how close H1 results come to revenue of ¥8,000 million, operating profit of ¥900 million, and net income of ¥710 million, which represent half of the full-year forecasts, and whether the company provides a specific explanation for its second-half-weighted plan.

The licensing agreement one-off payment contributed to FY2026-H1 profit, but the latest earnings release does not break out the amount itself or the components comprising the one-off payment, running royalties, and ordinary product revenue. In the H1 results, the key issue will be whether the company discloses the impact of the one-off payment, changes in recurring revenue, and the amount of revenue recognized from the order backlog, to improve comparability with the year-earlier period. In addition, because the Q1 earnings release did not include a quarterly consolidated statement of cash flows, we will also assess in H1 whether the recovery in profit translated into operating cash flow.