A return to profitability despite lower revenue is well above the full-year forecast, but the revenue forecast has been cut

For the FY2026 3Q cumulative period, revenue was ¥3,359.332 million, down 2.6% year on year, while operating profit was ¥35.175 million and ordinary profit was ¥28.367 million, both turning positive from losses in the same period of the previous year. The quarterly net loss attributable to owners of the parent was limited to ¥13.035 million. Although this represents a significant improvement from the substantial final loss in the same period of the previous year, the operating profit has not translated directly into a net profit.

The full-year forecast is revenue of ¥4,416 million, operating profit of ¥10 million, ordinary profit of ¥1 million, and a net loss attributable to owners of the parent of ¥26 million. The 3Q cumulative progress rates are 76.1% for revenue and 351.8% for operating profit. On a simple subtraction basis, revenue of ¥1,056.668 million is required in 4Q to achieve the full-year revenue forecast, slightly below the standalone 3Q revenue of ¥1,109.688 million calculated from the difference between the 3Q cumulative and interim cumulative figures. Operating profit, meanwhile, would still reach the full-year forecast of ¥10 million even with a standalone 4Q loss of ¥25.175 million, leaving substantial headroom against the profit target alone.

However, the revenue plan has been clearly revised downward. The forecast as of 3Q is ¥4,416 million, ¥815 million, or 15.6%, below the ¥5,231 million full-year revenue forecast at the interim stage. Compared with FY2025 actual revenue of ¥4,588 million, the latest FY2026 forecast is also down 3.7%. Accordingly, this return to profitability should not be viewed as being driven by revenue growth, but as the result of improved margins through cost optimisation, reductions in selling, general and administrative expenses, and a review of advertising allocation.

At the full-year results, we will look at standalone 4Q revenue and operating profit and determine whether cost optimisation and reductions in SG&A represent temporary cost controls or structural improvements that will continue into the next fiscal year. In addition, grants of up to ¥94 million have not been included in the revised forecast as of 3Q because the timing of approval and receipt remains uncertain. It is important to confirm the impact on operating profit and net income if the grants are recognised, the company’s recurring earning power excluding the grants, and whether there are any extraordinary gains or losses or impairment losses.