Can the company show progress toward turning profitable on an operating basis in the first half of FY2027?

In FY2026, revenue was ¥4.731 billion, up just 1.0% year on year, while operating results reversed from an operating profit of ¥126 million in the previous fiscal year to an operating loss of ¥78 million, ordinary results reversed from a profit of ¥84 million to a loss of ¥83 million, and net income attributable to owners of the parent reversed from a profit of ¥89 million to a loss of ¥149 million. In contrast, the company's FY2027 forecast calls for revenue of ¥5.547 billion, operating profit of ¥192 million, ordinary profit of ¥123 million and net profit of ¥75 million, representing simultaneous planned improvements of ¥816 million in revenue and ¥270 million in operating profit.

FY2027-Q1 results were revenue of ¥1.245 billion, an operating loss of ¥132 million, an ordinary loss of ¥139 million and a quarterly net loss attributable to owners of the parent of ¥109 million. Revenue increased 36.0% year on year, reaching 22.4% of the full-year forecast, but operating results remained in the red. If the annual forecast is simply allocated evenly between the two half-years, FY2027-H1 revenue of ¥2.774 billion and operating profit of ¥96 million provide reference benchmarks. Reaching this half-year operating profit from the Q1 operating loss of ¥132 million would require standalone operating profit of approximately ¥228 million in Q2, making it important to determine whether inventory costs and depreciation expense are normalizing, in addition to a recovery in sales volume.

Under the medium-term management plan GROWTH28, the company is targeting consolidated revenue of ¥10 billion and an operating margin of at least 10% for the fiscal year ending March 2029. Growing from FY2026 revenue of ¥4.731 billion to ¥10 billion entails roughly doubling revenue over three years, and the FY2027 forecast of ¥5.547 billion represents the foundation for the first year of that plan. In FY2027-H1, it will be necessary to confirm not only whether the full-year forecast is being maintained, but also whether revenue from growth areas such as heat-dissipating substrates, glass polarizers and new light-guide devices is structured to offset declines in projector-related business.

At the next earnings release, it will be necessary to confirm whether the full-year forecast has been revised, as well as first-half revenue and profit by segment and the assumptions for sales volume and profitability in the second half. In particular, if the company maintains its targets of higher revenue and operating profitability, it will be important to determine whether it can record cumulative operating profit for the half-year, rather than merely reduce its operating loss. Conversely, if revenue falls below ¥2.774 billion or operating results deviate materially from the ¥96 million benchmark, dependence on the second half to achieve FY2027 operating profit of ¥192 million will increase.