Q1 saw lower revenue and a wider operating loss despite the full-year plan calling for a return to profitability

FY2027-Q1 revenue was ¥2,204 million, down ¥106 million, or approximately 4.6%, from ¥2,310 million in FY2026-Q1. The operating result deteriorated from an operating loss of ¥42 million in the year-earlier period to an operating loss of ¥115 million, widening the loss by ¥73 million. The ordinary loss was also ¥113 million, making this a quarter in which the deterioration in profitability was more pronounced than the decline in the top line.

Meanwhile, the company’s FY2027 full-year forecasts are revenue of ¥10,305 million, operating profit of ¥57 million and net income of ¥8 million. Revenue progress at the end of Q1 was approximately 21.4%, below the 25% implied by an even quarterly run rate. To achieve the full-year forecast, the company must record ¥8,101 million in revenue over the remaining period, excluding Q1, and must first offset Q1’s ¥115 million loss before generating a further ¥57 million in operating profit. Accordingly, cumulative operating profit of ¥172 million is required over the remaining period.

In the previous year, FY2026-H1 revenue was ¥4,538 million and the operating loss was ¥145 million. FY2026 full-year revenue was ¥9,551 million and the operating loss was ¥133 million, so the FY2027 plan assumes both a recovery in revenue from the declining trend and a return to operating profitability. Unless FY2027-H1 revenue recovers to at least the year-earlier level and the ¥145 million operating loss narrows substantially, it will be difficult to assess the likelihood of achieving the full-year operating profit target of ¥57 million.

In the next earnings release, Q2 standalone revenue and operating profit need to be confirmed in a form that allows them to be calculated from cumulative figures. In particular, it will be important to determine which factors drove the recovery in revenue, including the recovery in utilization after FC closures, shipment volumes from existing customers, contributions from new projects, and other revenue such as Northmall. Although the Q1 disclosure provided the full-year forecasts, details of the quarterly achievement plan and the breakdown of the amounts required for profit recovery were limited. Whether specific progress commentary is added in FY2027-H1 will also be a key point to monitor.