How much will Q1 revenue and profit growth offset the full-year earnings decline plan?

In Q1 from April to June 2026, revenue was ¥686.081 million, up 6.6% year on year, and operating profit was ¥75.373 million, up 8.6%. The operating margin was 11.0% on a calculated basis, a modest improvement from approximately 10.8% in the same period of the previous fiscal year. Both revenue and operating profit increased, indicating that business operations have not deteriorated, at least year on year.

In contrast, revenue and operating profit for the fiscal year ended March 2026 were ¥2,712 million and ¥332 million, respectively, while the company's forecasts for the fiscal year ending March 2027 are ¥2,700 million in revenue and ¥190 million in operating profit. Revenue is expected to decline only 0.5% year on year, whereas operating profit is projected to fall 42.8%, resulting in a calculated decline in the full-year operating margin from 12.2% to 7.0%. Whether the company provides more detail in H1 on the assumption that profit will fall sharply while revenue remains broadly flat will be important.

Q1 revenue and operating profit represented 25.4% and 39.7%, respectively, of the full-year forecasts. Assuming H1 and H2 are evenly weighted, the H1 benchmarks would be revenue of ¥1,350 million and operating profit of ¥95 million, but no comparable disclosure is available on seasonality, so these cannot be treated as strict targets. At a minimum, it will be necessary to confirm whether the pattern of operating profit progress outpacing revenue progress continues in H1.

The Q1 results stated that the full-year earnings forecasts announced on 15 May 2026 remained unchanged. Accordingly, in H1 we will look to see whether the company raises its full-year forecasts following Q1 revenue and profit growth, or maintains the cautious assumption of full-year operating profit of ¥190 million. In particular, if H1 operating profit falls below ¥95 million, the factors behind the decline in profit margins from Q2 onward and the validity of the full-year forecast will be key areas of focus.