Can the high first-quarter progress rate be repeated in Q2?

In Q1 of FY2027, operating revenue was ¥65.515 billion, up 50.8% year on year, operating profit was ¥43.716 billion, up 73.3%, and profit attributable to owners of the parent was ¥29.567 billion, up 73.6%. Operating profit growth outpaced revenue growth, resulting in a simple operating margin calculation of 66.7%. This is the latest profitability benchmark against which the next interim results should be compared.

The full-year forecasts were raised on 24 September from the 28 July forecasts of ¥241.5 billion in operating revenue, ¥145.5 billion in operating profit and ¥98.5 billion in net income to ¥252.5 billion, ¥154.5 billion and ¥105.0 billion, respectively. The annual dividend forecast was also raised from ¥77 to ¥82, with interim and year-end dividends each expected to be ¥41. The revised targets are substantially above FY2026 results of ¥198.735 billion in operating revenue, ¥116.289 billion in operating profit and ¥79.139 billion in net income.

Allocating Q1 results to the latest full-year forecasts on a simple basis gives progress rates of approximately 26.0% for operating revenue, 28.3% for operating profit and 28.2% for net income. These rates were not disclosed by the company and are mechanical calculations that do not account for seasonality. The current materials do not disclose interim progress against the full-year forecasts or the operating revenue and profit levels required in the second half to achieve the full-year targets.

The next results release should be reviewed for cumulative interim results and whether the company maintains or further revises the full-year forecasts after the upward revision. The assumptions underlying the forecasts were revised from ¥10.2 trillion to ¥11.0 trillion for average daily trading value in stocks and other securities, and from ¥30.0 billion to ¥38.5 billion for Nikkei 225 options trading value, while the Nikkei 225 futures assumption was lowered from 136,000 contracts to 133,000. It will therefore be important to determine whether strength in cash equities and options is offsetting weakness in futures.