Revenue growth continues with Qool's contribution, but a return to operating profitability is still some way off

FY2027-Q1 revenue was ¥1,239 million, up ¥337 million, or 37.3%, from ¥902 million in the same period of the previous year. Despite the increase in revenue, the company reported an operating loss of ¥111 million, an ordinary loss of ¥76 million and a quarterly net loss attributable to owners of the parent of ¥79 million, leaving all profit measures in the red. The operating margin was approximately negative 9.0%, an improvement from approximately negative 13.5% in the same period of the previous year, confirming that the increase in revenue provided some absorption of fixed costs.

The full-year forecasts are revenue of ¥5,079 million, operating profit of ¥86 million, ordinary profit of ¥15 million and a net loss attributable to owners of the parent of ¥98 million. No forecast revisions had been made as of Q1. To move from the Q1 operating loss of ¥111 million to full-year operating profit of ¥86 million, the company will need to generate a combined ¥197 million in operating profit from Q2 through Q4 on a simple calculation. Because of seasonality, this cannot be assessed by allocating profit evenly across quarters, but if a substantial loss remains at the end of H1, the assumption of full-year profitability will depend more heavily on the second half.

The substance of the acquisition benefits also requires review. In FY2027-Q1, the overseas other rental business generated revenue of ¥283.978 million and segment profit of ¥17.974 million. For FY2026 as a whole, the business generated revenue of ¥790.725 million and segment profit of ¥65.601 million, indicating that Qool's contribution to the consolidated results extends beyond revenue to segment profit. However, the full-year earnings release does not provide a sufficient breakdown of the Q1 revenue increase between the acquisition contribution, growth in existing businesses and higher expenses.

In FY2027-H1, the key points will be not only whether revenue exceeds ¥2,539.5 million, equivalent to 50% of the full-year forecast, but also how far operating performance improves. In particular, it will be important to determine whether Qool can maintain segment profit at around ¥18 million, absorb the decline in domestic business profit and provide additional explanation of the profit required over the remaining period to achieve the full-year operating profit forecast of ¥86 million. No quarterly cash flow statement was prepared for Q1, and Qool's cash-generation capacity has therefore yet to be confirmed.