Large projects must be recognized in Q4 to meet the FY2026 full-year forecast

Revenue for the first 9 months of FY2026 was ¥28.405 billion, up 21.2% year on year, while operating profit was ¥2.716 billion, up 151.4%. Ordinary profit was ¥3.225 billion, and net income attributable to owners of the parent was ¥2.081 billion, indicating a significant improvement in profitability. However, the increase in profit also reflects the recognition of projects carried over from the previous fiscal year, growth in projects in Advanced Mobility, EMC/Large Antennas, Defense/Marine, and the consolidation of Sonic Guard.

The full-year forecasts remain unchanged at revenue of ¥39.0 billion, operating profit of ¥3.6 billion, ordinary profit of ¥3.7 billion and net income of ¥2.6 billion. Progress after the first 9 months was 72.8% for revenue and 75.4% for operating profit. Compared with the simple 75% benchmark after 9 months, revenue was approximately 2.2 percentage points below, while operating profit had nearly reached the benchmark. On a simple difference basis, the company needs revenue of ¥10.595 billion and operating profit of ¥884 million in Q4, making the certainty of revenue recognition more important than profit generation.

The company has consistently explained that revenue is concentrated in Q2 and Q4. Based on the simple difference between reported figures, standalone Q3 revenue was approximately ¥6.923 billion and operating profit was a loss of approximately ¥411 million, so it would be inappropriate to conclude that the full-year target will be missed solely because of weak Q3 results. However, if large projects cannot be delivered in the final quarter, the scope for achieving the full-year forecast based on seasonal patterns will quickly narrow.

Orders were ¥29.459 billion, down 6.0% year on year, while the order backlog was ¥25.679 billion, up 3.0%. Although the backlog exceeds the remaining revenue required under the full-year forecast, orders are declining. At the next results announcement, we will want to confirm the portion of the backlog to be recognized as revenue in Q4, amounts not recognized because of customer circumstances or delays in facility construction, and the value of projects carried forward to the next fiscal year.