The plan to return to operating profitability in the fiscal year ending June 2027 assumes a sharp recovery in gross margin and project mix

FY2026 was a 15-month fiscal period due to a change in the fiscal year-end, resulting in revenue of ¥1,057 million, an operating loss of ¥927 million, an ordinary loss of ¥948 million and a net loss of ¥964 million. Because a simple year-on-year comparison with the previous fiscal year has not been disclosed, FY2027-Q1 should be assessed based not only on year-on-year comparisons but also on progress toward the full-year plan and the extent to which the assumptions for a return to profitability are being realized. The ¥977 million improvement from an operating loss of ¥927 million to operating profit of ¥50 million is too large to be explained by a simple recovery in revenue alone.

Under the company's FY2027 forecast, the ¥1,512 million revenue consists of ¥1,262 million from the microwave solutions business and ¥250 million from the DualPore Solution business. Against the 33.5% gross margin achieved in FY2026, FY2027 assumes a 59.9% gross margin, an improvement of 26.4 percentage points. Achieving this assumption will require the simultaneous normalization of low-margin projects involving equipment production, a change in the Phase mix, and normalization of raw-material and equipment procurement.

FY2027 microwave solutions revenue is expected to comprise ¥245 million from Phase 1, ¥847 million from Phase 2, ¥120 million from Phase 3 and ¥50 million from Phase 4. In FY2026, Phase-based revenue totaled ¥1,050 million, with revenue from the commercial deployment and actual-equipment introduction stages from Phase 2 onward remaining limited. In addition, following the change in the fiscal year-end, customer acceptance has tended to be concentrated from October to March, namely in the second and third quarters. Therefore, even if FY2027-Q1 revenue is low, that alone does not indicate that the full-year plan is off track. However, it will be important to determine whether the schedule for project acceptance and the gross-margin assumption remain unchanged as of Q1.

In the next results announcement, it will be necessary to determine whether the company maintains its full-year plan for revenue of ¥1,512 million and operating profit of ¥50 million, and whether it maintains the 59.9% gross-margin assumption. In addition, disclosure of standalone Q1 revenue, gross profit, SG&A expenses, R&D expenses and revenue by business would allow investors to assess whether the return to profitability depends solely on a second-half concentration or whether the cost structure is improving from the early part of the year.